[Congressional Record Volume 142, Number 117 (Friday, August 2, 1996)]
[Senate]
[Pages S9555-S9607]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

       By Mr. GORTON:
  S. 2017. A bill to authorize the Secretary of Agriculture to exchange 
certain lands in the Wenatchee National Forest, Washington, for certain 
lands owned by Public District No. 1 of Chelan County, Washington, and 
for other purposes; to the Committee on Energy and Natural Resources.


                       Land Exchange Legislation

  Mr. GORTON. Mr. President, today I introduce legislation to authorize 
a land exchange between the Chelan County PUD, in Washington State and 
the U.S. Forest Service. The land exchange legislation will consolidate 
land for a wastewater treatment facility onto Chelan County PUD land. 
Chelan PUD would in turn own and operate the wastewater treatment 
facility, which serves both the Forest Service and some of the local 
community.
  The legislation was carefully negotiated between the Forest Service 
and the Chelan County PUD. The Forest Service supports the legislation, 
and I hope that the legislation can be enacted this year.
                                 ______
                                 
      By Mr. GORTON:
  S. 2018. A bill to approve a settlement agreement between the Bureau 
of Reclamation and the Oroville-Tonasket Irrigation District; to the 
Committee on Energy and Natural Resources.


                         settlement legislation

  Mr. GORTON. Mr. President, today I introduce legislation that will 
authorize settlement between the Bureau of Reclamation and the 
Oroville-Tonasket Irrigation District in Washington state. Congressman 
Doc Hastings has introduced identical legislation on this subject in 
the House of Representatives.
  This legislation will authorize a carefully negotiated settlement 
between the BOR and the Oroville-Tonasketi Irrigation District. If 
enacted, this legislation will save the BOR, and therefore the Nation's 
taxpayers, money that would otherwise be spent fighting with the 
irrigation district in court. Briefly, the legislation directs the 
irrigation district to release and discharge all past and future claims 
against the United States associated with the project--such claims are 
estimated at $4.5 million. The irrigation district will assume full 
responsibility to indemnify and defend the United States against any 
third-party claims associated with the project. The irrigation district 
will make a cash payment of $350,000 to the United States--a condition 
that has already been met. The irrigation district will release the 
United States from its obligation to remove existing dilapidated 
facilities--cost estimated at $150,000 in 1978. The district will also 
be solely responsible for the operations and maintenance of the 
project, and will agree to continue to deliver water to and provide for 
O&M of the wildlife Mitigation facilities at its own expense.
  The legislation directs the BOR to release and discharge the 
irrigation district's construction charge obligation under the 1979 
repayment contract--present value estimated at $4.2 million. Within 180 
days of the date of enactment, the BOR will transfer the title of the 
irrigation works to district at no additional cost to the district. The 
BOR will continue to provide power and energy for water pumping for the 
project for a period of 50 years--starting October 1990--as provided 
for in the irrigation discount provision in the Northwest Power Act. At 
the end of that 50 year period, the irrigation district will have to 
purchase its power at nonirrigation discount rates.
  Mr. President, this legislation will resolve a long standing dispute 
between the irrigation district and the Bureau of Reclamation that will 
save the taxpayers the expense of financing a long, drawn out court 
fight. I will work with my colleagues on the Energy and Natural 
Resources Committee to see that this legislation is enacted this year.
                                 ______
                                 
      By Mr. CRAIG (for himself, Mr. Simon, Mr. Thomas, Mr. Reid, Mr. 
        Graham, Mr. Akaka, and Mr. Cohen):
  S. 2019. A bill to provide for referenda to resolve the political 
status of Puerto Rico, and for other purposes; to the Committee on 
Energy and Natural Resources.


                        puerto rico legislation

  Mr. CRAIG. Mr. President, today I am introducing legislation which 
would establish a congressionally recognized self-determination process 
to resolve the political status of Puerto Rico. This proposal is made 
in light of the formal request of the Legislature of Puerto Rico, 
expressly directed to the 104th Congress, for a response to the 1993 
plebiscite on Puerto Rico's future political status conducted under 
local law.
  Puerto Rico Legislature Resolution 62, adopted by the elected 
representatives of the residents of Puerto Rico on November 14, 1994, 
specifically calls upon this Congress to state the ``specific 
alternatives that it is willing to consider, and the measures it 
recommends the people of Puerto Rico should take as part of the process 
to solve the problem of their political status.'' Even though time is 
running out on the 104th Congress, this Senator believes it would be 
wrong to adjourn

[[Page S9556]]

later this year without introducing in the Senate a proposal which 
addresses the manner in which Puerto Rico's status can be resolved 
consistent with both self-determination and the national interest.
  The solution to Puerto Rico's status cannot be one which imposes a 
result on the residents of Puerto Rico or on the United States. The 
process we are proposing recognizes the right of self-determination on 
both sides of the relationship. Let me explain why my colleagues should 
support the bill I am offering.
  Puerto Rico has been an unincorporated territory of the United States 
for almost 100 years, subject to the plenary powers of Congress under 
the territorial clause of the U.S. Constitution, article IV, section 3, 
clause 2. Congressional authorization for the adoption of a local 
constitution and delegation of authority for internal self-government 
in 1952 represented progress in the evolution of the territory's 
status, but the 3.8 million U.S. citizens residing in Puerto Rico do 
not yet have equal legal and political rights with their fellow 
citizens living in the States, or a guaranteed permanent status 
protected by the U.S. Constitution.
  Puerto Ricans have a statutory citizenship status prescribed by 
Congress in 1917, with less than equal legal standing and political 
rights while residing in Puerto Rico because it is not a State. In 1980 
the U.S. Supreme Court ruled in Harris v. Rosario (446 U.S. 651) that 
as long as Puerto Rico is an unincorporated territory subject to the 
territorial clause it does not violate the fundamental rights which all 
U.S. citizens have under the Constitution for Congress to treat the 
U.S. citizens residing in Puerto Rico differently than their fellow 
citizens in the 50 States as long as there is a rational basis for such 
unequal treatment.
  While any self-determination process we establish should allow the 
people in Puerto Rico to express approval of this present status, the 
idea that perpetual territorial status for such a large and populous 
area is desirable for either Puerto Rico or the nation as a whole needs 
to be examined closely. To begin with we need to recognize that 
Americans from Puerto Rico have served with valor along side their 
fellow citizens in every war this century, but Congress never has 
afforded the people an opportunity to express their wishes as to the 
options for full self-government and a permanent status outside the 
territorial clause--either as a state or through separate nationhood.

  In 1953 the U.N. recognized the Resolution 748 (VIII) that 
establishment of internal constitutional self-government with the 
consent of the residents was consistent with self-determination 
principles of the U.N. Charter, and on that basis the United States 
stopped reporting to the United Nations on the status of Puerto Rico. 
While Puerto Rico is no longer a non-self-governing for purposes of 
Article 73(e) of the U.N. Charter, Puerto Rico remains an 
unincorporated territory under the U.S. constitutional process. In 
1956, 4 years after the commonwealth structure for local self-
government was established, the U.S. Supreme Court recognized in Reid 
v. Covert (354 U.S. 1), that the status of all such unincorporated 
territories, results from the exercise of the territorial clause 
authority and ``. . . the power of Congress to provide rules and 
regulations to govern temporarily territories with wholly dissimilar 
traditions and institutions . . . '' (emphasis added).
  The traditions and institutions in Puerto Rico most relevant to the 
political status of the people there are no longer wholly dissimilar to 
those of the United States. Puerto Ricans have been U.S. nationals 
since 1899, with U.S. citizenship for 80 years. Puerto Rico has been 
within the U.S. legal and political system and customs territory for 
nearly a century. A republican form of constitutional internal self-
government was instituted through a democratic process 45 years ago.
  Clearly, the time has come to establish a process through which the 
current territorial status can be ended in favor of a constitutionally 
guaranteed permanent status consistent with full self-government, full 
political participation and equal citizenship rights. That means full 
integration into the United States on the basis of equality, or full 
citizenship and a constitutionally protected political status through 
separate nationhood.
  Again, if the residents of Puerto Rico prefer to remain in an 
unincorporated status and continue the present commonwealth structure 
for local government, any congressionally recognized self-determination 
process should enable them freely to express their wishes in this 
regard. But they will not be able to make a free and informed choice 
unless the legal and political nature of the current status is defined 
in a constitutionally valid and intellectually honest manner.
  Therein lies the problem with the 1993 plebiscite, in which the 
status options were formulated by the local political parties. The 
commonwealth option on the 1993 ballot included elements which were 
simply unconstitutional, and policy proposals that were so implausible 
and misleading as to make the voting results highly ambiguous. For 
example, commonwealth received the lowest voter approval ever at 48 
percent, while statehood received the highest vote ever at 46 percent. 
But the commonwealth ballot definition include permanent union, the 
same citizenship rights as persons born in the States, increased 
Federal programs, and parity with the States in Federal budget outlay--
features which are constitutional guaranteed and/or politically 
possible only with statehood.
  At the same time, the commonwealth option also called for Federal tax 
exemptions, fiscal autonomy, a local veto over Federal laws passed by 
Congress under a so-called bilateral pact, and other features more 
consistent with independence than territorial status. Independence 
received 4 percent voter approval. The combined vote for the have it 
both ways definition of commonwealth and independence was 52 percent, 
but the combined vote for statehood and commonwealth as options which 
involved guaranteed permanent union and U.S. citizenship was over 95 
percent.
  I doubt that the 103d Congress would have adjourned more than a year 
after the 1993 vote without breaking a deafening silence regarding the 
results of the plebiscite if the ballot definitions had not rendered 
those results both ambiguous and confusing.
  Apparently due in large part to Resolution 62, in this Congress the 
House committees with primary jurisdiction with respect to Puerto 
Rico's status conducted hearings on the 1993 voting results on October 
17, 1995. Each of Puerto Rico's political parties were given a full and 
fair hearing regarding their views on the 1993 vote.
  Based on the record of that hearing, the leadership of the concerned 
House committees transmitted a comprehensive statement to the leaders 
of the Puerto Rico Legislature on February 29, 1996, setting forth 
authoritative policy statements and points of law regarding the 1993 
voting results. On March 6, 1996, legislation consistent with the 
principles set forth in the February 29 policy statement was introduced 
in the House. After hearings in San Juan Puerto Rico in which all 
parties were heard once again regarding H.R. 3024--United States-Puerto 
Rico Political Status Act--the bill was amended to meet certain 
concerns that had been raised and unanimously approved by the Committee 
on Resources on June 26, 1996.

  On June 28, 1996, senior minority members on the two House committees 
which had conducted the hearings on the 1993 vote also transmitted 
views to leaders in the Puerto Rico Legislature regarding the results 
thereof. In addition, on July 18, 1996, 11 members of the minority in 
the House, including some of the most knowledgeable and experienced 
Members of Congress where the issue of Puerto Rico's status is 
concerned, wrote to that body's minority leader expressing their 
support for the Puerto Rico status bill reported unanimously by the 
Resources Committee on June 26, 1996.
  What the measures taken by House committees and members to date 
demonstrate is that there is some important new thinking in Congress 
about the Puerto Rico status issue. There is an emerging bipartisan 
consensus that the time has come for Congress to recognize that a 
process which makes definitive self-determination and permanent full 
self-government available to Puerto Rico is in the U.S. national 
interest, as well as that of the residents of Puerto Rico.

[[Page S9557]]

  In particular, I want to point out that the July 18, 1996 letter from 
concerned members of the minority to House Minority Leader Gephardt 
defends the specific approach to legitimate self-determination for 
Puerto Rico set forth in H.R. 3024 against criticism generated by 
supporters of the fatally-flawed and discredited definition of 
commonwealth presented on the 1993 plebiscite ballot. Specifically, the 
July 18 letter notes that:

       Some have tried to revive discussion over the language and 
     citizenship provisions of the bill, even though these issues 
     were dealt with in the reported text of H.R. 3024. Others 
     claim that the ballot process is unfairly skewed toward one 
     option or another, hoping to revert back to the three-way 
     ballot in 1993 which yielded no clear majority. More than 
     just attempts to amend the legislation, these efforts are 
     aimed at delaying its consideration or tainting its language 
     so that it will never see the light of day.

  I have described the response in the House to Resolution 62 of the 
Puerto Rico Legislature in some detail so that my Senate colleagues can 
better appreciate the need for some demonstration that Members of this 
body have an interest in the issues raised by the formal request 
directed by the local constitutional authorities to the 104th Congress. 
The bill we are introducing today is not a definitive or final formal 
response to that request, but it sends an important message to the 
House and to Puerto Rico that the Senate also will address this matter 
consistent with the principles of self-determination and the national 
interest.
  Accordingly, the legislation we are proposing, like the House 
version, recognizes that the commonwealth option can and should be 
presented accurately and fairly on a status referendum ballot. The 
voters must be able to evaluate the current status and the commonwealth 
structure for local government on the merits. But those who think that 
Congress is required to adopt the same 3-option ballot format employed 
in the 1993 local plebiscite format need to think again. While we need 
to respect, study, and consider the 1993 vote despite obvious flaws in 
the ballot, Congress cannot restrict itself to considering only past 
practices in Puerto Rico or the approach previously considered by 
Congress.
  We need to keep an open mind, and this bill proposes a new approach 
consistent with that being developed in the House. It recognizes that 
Congress may determine that it could be misleading to present the 
status quo option without distinguishing it in any way from the options 
for ending territorial status and instituting fundamental changes that 
would be required to establish permanent full self-government and a 
constitutionally guaranteed status.
  Only when the people who live in Puerto Rico are allowed to vote in a 
referendum process which defines the choices in a way that is valid and 
accurate will Congress be able to understand the meaning of the 
results. Then Congress can respond to those results by proposing the 
terms under which the preferred option would be possible, after which 
an additional informed stage of self-determination can take place. If 
the terms for change are not approved by the people, or the people vote 
for the option of continued commonwealth, then Congress will have to 
consider its response to that result as well.
  Before my colleagues, or those responsible for these issues in the 
administration, attempt to defend the approach of the 1993 plebiscite 
ballot, I suggest they review all of the congressional documents 
responding to Puerto Rico Legislature Resolution 62 referred to above. 
To facilitate an openminded consideration of what we are proposing, 
those documents are included here in the order mentioned above.
  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:
                                         House of Representatives,


                                       Committee on Resources,

                                Washington, DC, February 29, 1996.
     Hon. Roberto Rexach-Benitez,
     President of the Senate.
     Hon. Zaida Hernandez-Torres,
     Speaker of the House, of the Commonwealth of Puerto Rico, San 
         Juan, PR.
       Dear Mr. Rexach-Benitez and Ms. Hernandez-Torres: The 
     Committee on Resources and the Committee on International 
     Relations are working cooperatively to establish an official 
     record which we believe will enable the House to address the 
     subject-matter of Concurrent Resolution 62, adopted by the 
     Legislature of Puerto Rico on December 14, 1994. While the 
     specific measures addressing Puerto Rico's status which the 
     104th Congress will consider are still being developed, we 
     believe the history of the self-determination process in 
     Puerto Rico, as well as the record of the Joint Hearing 
     conducted on October 17, 1995 by the Subcommittee on Native 
     American and Insular Affairs and the Subcommittee on Western 
     Hemisphere, lead to the following conclusions with respect to 
     the plebiscite conducted in Puerto Rico on November 14, 1993:
       1. The plebiscite was conducted under local law by local 
     authorities, and the voting process appears to have been 
     orderly and consistent with recognized standards for lawful 
     and democratic elections. This locally organized self-
     determination process was undertaken within the authority of 
     the constitutional government of Puerto Rico, and is 
     consistent with the right of the people of Puerto Rico freely 
     to express their wishes regarding their political status and 
     the form of government under which they live. The United 
     States recognizes the right of the people of Puerto Rico to 
     self-determination, including the right to approve any 
     permanent political status which will be established upon 
     termination of the current unincorporated territory status. 
     Congress will take cognizance of the 1993 plebiscite results 
     in determining future Federal policy toward Puerto Rico.
       2. The content of each of the three status options on the 
     ballot was determined by the three major political parties in 
     Puerto Rico identified with those options, respectively. The 
     U.S. Congress did not adopt a formal position as to the 
     feasibility of any of the options prior to presentation to 
     the voters. Consequently, the results of the vote necessarily 
     must be viewed as an expression of the preferences of those 
     who voted as between the proposals and advocacy of the three 
     major political parties for the status option espoused by 
     each such party.
       3. None of the status options presented on the ballot 
     received a majority of the votes cast. While the commonwealth 
     option on the ballot received a plurality of votes, this 
     result is difficult to interpret because that option 
     contained proposals to profoundly change rather than continue 
     the current Commonwealth of Puerto Rico government structure. 
     Certain elements of the commonwealth option, including 
     permanent union with the United States and guaranteed U.S. 
     citizenship, can only be achieved through full integration 
     into the U.S. leading to statehood. Other elements of the 
     commonwealth option on the ballot, including a government-to-
     government bilateral pact which cannot be altered, either are 
     not possible or could only be partially accomplished through 
     treaty arrangements based on separate sovereignty. While the 
     statehood and independence options are more clearly defined, 
     neither of these options can be fully understood on the 
     merits, unless viewed in the context of clear Congressional 
     policy regarding the terms under which either option could be 
     implemented if approved in a future plebiscite recognized by 
     the federal government. Thus, there is a need for Congress to 
     define the real options for change and the true legal and 
     political nature of the status quo, so that the people can 
     know what the actual choices will be in the future.
       4. Although there is a history of confusion and ambiguity 
     on the part of some in the U.S. and Puerto Rico regarding the 
     legal and political nature of the current ``commonwealth'' 
     local government structure and territorial status, it is 
     incontrovertible that Puerto Rico's present status is that of 
     an unincorporated territory subject in all respects to the 
     authority of the United States Congress under the Territorial 
     Clause of the U.S. Constitution. As such, the current status 
     does not provide guaranteed permanent union or guaranteed 
     citizenship to the inhabitants of the territory of Puerto 
     Rico, nor does the current status provide the basis for 
     recognition of a separate Puerto Rican sovereignty or a 
     binding government-to-government status pact.
       5. In light of the foregoing, the results the November 14, 
     1993 vote indicates that it is the preference of those who 
     cast ballots to change the present impermanent status in 
     favor of a permanent political status based on full self-
     government. The only options for a permanent and fully self-
     governing status are: 1) separate sovereignty and full 
     national independence, 2) separate sovereignty in free 
     association with the United States; 3) full integration into 
     the United States political system ending unincorporated 
     territory status and leading to statehood.
       6. Because each ballot option in the 1993 plebiscite 
     addressed citizenship, we want to clarify this issue. First, 
     under separate sovereignty Puerto Ricans will have their own 
     nationality and citizenship. The U.S. political status, 
     nationality, and citizenship provided by Congress under 
     statues implementing the Treaty of Paris during the 
     unincorporated territory period will be replaced by the new 
     Puerto Rican nationhood and citizenship status that comes 
     with separate sovereignty. To prevent hardship or unfairness 
     in individual cases, the U.S. Congress may determine the 
     requirements for eligible persons to continue U.S. 
     nationality and citizenship, or be naturalized, and this will 
     be governed by U.S. law, not Puerto Rican law. If the voters 
     freely choose separate sovereignty, only those born in Puerto 
     Rico who have acquired U.S. citizenship on some other

[[Page S9558]]

     legal basis outside the scope of the Treaty of Paris 
     citizenship statutes enacted by Congress during the 
     territorial period will not be affected. Thus, the automatic 
     combined Puerto Rican and U.S. citizenship described under 
     the definition of independence on the 1993 plebiscite ballot 
     was a proposal which is misleading and inconsistent with the 
     fundamental principles of separate nationality and non-
     interference by two sovereign countries in each other's 
     internal affairs, which includes regulation of citizenship. 
     Under statehood, guaranteed equal U.S. citizenship status 
     will become a permanent right. Under the present Commonwealth 
     of Puerto Rico government structure, the current limited U.S. 
     citizenship status and rights will be continued under Federal 
     law enacted under the Territorial Clause and the Treaty of 
     Paris, protected to the extent of partial application of the 
     U.S. Constitution during the period in which Puerto Rico 
     remains an unincorporated territory.
       7. The alternative to full integration into the United 
     States or a status based on separate sovereignty is 
     continuation of the current unincorporated territory status. 
     In that event, the present status quo, including the 
     Commonwealth of Puerto Rico structure for local self-
     government, presumably could continue for some period of 
     time, until Congress in its discretion otherwise determines 
     the permanent disposition of the territory of Puerto Rico and 
     the status of its inhabitants through the exercise of its 
     authority under the Territorial Clause and the provisions of 
     the Treaty of Paris. Congress may consider proposals 
     regarding changes in the current local government structure, 
     including those set forth in the ``Definition of 
     Commonwealth'' on the 1993 plebiscite ballot. However, in our 
     view serious consideration of proposals for equal treatment 
     for residents of Puerto Rico under Federal programs will not 
     be provided unless there is an end to certain exemptions from 
     federal tax laws and other non-taxation in Puerto Rico, so 
     that individuals and corporations in Puerto Rico have the 
     same responsibilities and obligations in this regard as the 
     states. Since the ``commonwealth'' option on the 1993 
     plebiscite ballot called for ``fiscal autonomy,'' which is 
     understood to mean, among other things, continuation of the 
     current exemptions from federal taxation for the territory, 
     this constitutes another major political, legal and economic 
     obstacle to implementing the changes in Federal law and 
     policy required to fulfill the terms of the ``Definition of 
     Commonwealth.''
       8. In addition, it is important to recognize that the 
     existing Commonwealth of Puerto Rico structure for local 
     self-government, and any other measures which Congress may 
     approve while Puerto Rico remains an unincorporated 
     territory, are not unalterable in a sense that is 
     constitutionally binding upon a future Congress. Any 
     provision, agreement or pact to the contrary is legally 
     unenforceable. Thus, the current Federal laws and policies 
     applicable to Puerto Rico are not unalterable, nor can they 
     be made unalterable, and the current status of the 
     inhabitants is not irrevocable, as proposed under the 
     ``commonwealth'' option on the 1993 plebiscite ballot. 
     Congress will continue to respect the principle of self-
     determination in its exercise of Territorial Clause powers, 
     but that authority must be exercised within the framework of 
     the U.S. Constitution and in a manner deemed by Congress to 
     best serve the U.S. national interest. In our view, promoting 
     the goal of full self-government for the people of Puerto 
     Rico, rather than remaining in a separate and unequal status, 
     is in the best interests of the United States. This is 
     particularly true due to the large population of Puerto Rico, 
     the approach of a new century in which a protracted status 
     debate will interfere with Puerto Rico's economic and social 
     development, and the domestic and international interest in 
     determining a path to full self-government for all 
     territories with a colonial history before the end of this 
     century.
       9. The record of the October 17, 1995 hearing referred to 
     above makes it clear that the realities regarding 
     constitutional, legal and political obstacles to implementing 
     the changes required to fulfill the core elements of the 
     ``commonwealth'' option on the ballot were not made clear and 
     understandable in the public discussion and political debate 
     leading up to the vote. Consequently, Congress must determine 
     what steps the Federal government should take in order to 
     help move the self-determination process to the next stage, 
     so that the political status aspirations of the people can be 
     ascertained through a truly informed vote in which the wishes 
     of the people are freely expressed within a framework 
     approved by Congress. Only through such a process will 
     Congress then have a clear basis for determining and 
     resolving the question of Puerto Rico's future political 
     status in a manner consistent with the national interest.
       Ultimately, Congress alone can determine Federal policy 
     with respect to self-government and self-determination for 
     the residents of Puerto Rico. It will not be possible for the 
     local government or the people to advance further in the 
     self-determination process until the U.S. Congress meets its 
     moral and governmental responsibility to clarify Federal 
     requirements regarding termination of the present 
     unincorporated territory status of Puerto Rico in favor of 
     one of the options for full self-government.
       The results of the locally administered 1993 vote are 
     useful in this regard, but in our view are not definitive 
     beyond what has been stated above. The question of Puerto 
     Rico's political status remains open and unresolved.
           Sincerely,
     Don Young,
       Chairman, Committee on Resources.
     Elton Gallegly,
       Chairman, Subcommittee on Native American and Insular 
     Affairs.
     Ben Gilman,
       Chairman, Committee on International Relations.
     Dan Burton,
       Chairman, Subcommittee on the Western Hemisphere.


                                Congress of the United States,

                                    Washington, DC, June 28, 1996.
     Senator Charlie Rodriguez,
     Majority Leader, Puerto Rico Senate, the Capitol, San Juan, 
         PR.
       Dear Senator Rodriguez: As the senior democrats on the 
     House Resources and International Relations Committees we 
     have always been concerned about the economic and political 
     future of Puerto Rico. As the 104th Congress considers 
     proposed legislation regarding the process of self-
     determination for Puerto Rico, we believe that it is time to 
     reexamine the status issue in light of the 1993 plebiscite.
       On December 14, 1994 the Legislature of Puerto Rico adopted 
     Concurrent Resolution 62 which sought congressional guidance 
     regarding the results of the 1993 status plebiscite. 
     Recently, the Chairman of the relevant committees and 
     subcommittees that deal with Puerto Rico's political status 
     responded to this important resolution. Although we agree 
     with many portions of the letter, we would like to outline 
     some of our views on the issue as well.
       We believe that the definition of Commonwealth on the 1993 
     plebiscite ballot was difficult given Constitutional, and 
     current fiscal and political limitations. Through numerous 
     Supreme Court and other Federal Court decisions, it is clear 
     that Puerto Rico remains an unincorporated territory and is 
     subject to the authority of Congress under the territorial 
     clause. Another aspect of this definition called for the 
     granting of additional tax breaks to Section 936 companies 
     and an increase in federal benefits in order to achieve 
     parity with all the states without having to pay federal 
     taxes. It is important that any judgment on the future of 
     Puerto Rico be based on sound options that reflect the 
     current budgetary context in the United States. This context 
     should also reflect the bi-partisan agreement being worked on 
     by Congress which reduces Section 936 benefits.
       Since Congress has neither approved nor resolved the 1993 
     plebiscite results, we are in favor of legislation that will 
     establish a future process of self-determination for the 
     people of Puerto Rico. This legislation should include a 
     requirement for status plebiscites to take place within a 
     certain number of years and define various status options in 
     a realistic manner.
       In two years, Puerto Rico will celebrate its 100th year as 
     part of the United States. Congress has both a political and 
     moral responsibility to ensure that the 3.5 million Americans 
     living in Puerto Rico have a right to express their views on 
     the important issue of political status on a regular basis.
       We hope this additional response to Concurrent Resolution 
     62 is helpful.
           Sincerely,
     Robert Torricelli,
     Bill Richardson,
     Lee Hamilton,
     Dale Kildee,
                                                                    ____

                                    Congress of the United States,


                                     House of Representatives,

                                    Washington, DC, July 18, 1996.
     Hon. Richard Gephardt,
     Minority Leader, the Capitol, Washington, DC.
       Dear Minority Leader Gephardt: Given the short time before 
     the adjournment of the 104th Congress, we are eagerly trying 
     to secure floor time for a bill that is of great importance 
     to us, H.R. 3024, the United States-Puerto Rico Political 
     Status Act. Unfortunately, we understand that certain 
     Representatives have approached you in recent days in hopes 
     of derailing this legislative effort.
       After nearly 100 years as a territory of the United States, 
     Puerto Rico must be provided with the opportunity to 
     determine its future. While some would have you believe that 
     there is no need for a self-determination process, it must be 
     clear that the existing ``Commonwealth'' structure was never 
     meant to be a permanent solution for Puerto Rico, 
     particularly since the 3.8 million U.S. citizens in Puerto 
     Rico are disenfranchised under the current arrangement. Just 
     as the United Nations has called for an end to colonialism by 
     the year 2000, the United States must lead by example by 
     putting an end to the disenfranchisement of its own citizens 
     and allowing Puerto Rico to resolve, once and for all, its 
     status dilemma.
       As you know, H.R. 3024 establishes a process whereby the 
     U.S. citizens of Puerto Rico would be allowed to vote on 
     self-determination by the end of 1998. On the first ballot, 
     the voters would choose to either change their status or 
     maintain the status quo. Then, assuming the majority votes to 
     change their status, they would then again vote to choose 
     between a path toward separation (independence or free 
     association) or a path

[[Page S9559]]

     toward integration (statehood). In each instance, the results 
     would be definitive and would produce a majority.
       With over sixty cosponsors in the House, H.R. 3024 has 
     strong bipartisan support. During the full Resources 
     Committee markup last month, the bill was reported 
     unanimously after adopting only minor perfecting amendments. 
     It is now before the Rules Committee and we are hopeful that 
     it will soon proceed to the House floor. Opponents of H.R. 
     3024, however, are using a number of tactics to try to delay 
     this process and confuse the issue.
       Some have tried to revive discussions over the language and 
     citizenship provisions of the bill, even though these issues 
     were dealt with in the reported text of H.R. 3024. Others 
     claim that the ballot process is unfairly skewed toward one 
     option or another, hoping to revert back to the three-way 
     ballot in 1993 which yielded no clear majority. More than 
     just attempts to amend the legislation, these efforts are 
     aimed at delaying its consideration or tainting its language 
     so that it will never see the light of day this year on the 
     House floor.
       All told, these efforts should not obscure the original 
     intent of the legislation: to provide Puerto Rico with a fair 
     process of self-determination for the first time in the 
     Island's history. Your support for this effort is needed and 
     would help Congress give the U.S. citizens of Puerto Rico the 
     voice and participation in the democratic process which they 
     are entitled to and deserve.
       Thank you for your interest in the affairs of Puerto Rico. 
     If you would like to discuss this matter further, please do 
     not hesitate to contact us.
           Sincerely,
         Carlos A. Romero-Barcelo, Robert A. Underwood, Nick 
           Rahall, Sam Farr, Esteban E. Torres, Bill Richardson, 
           Patrick J. Kennedy, Jose E. Serrano, Dale E. Kildee, 
           Pat Williams, Neil Abercrombie.

  Mr. CRAIG. Mr. President, I am proud to be an original cosponsor of 
the legislation introduced by my colleague from Idaho, Senator Craig, 
with whom I have worked closely on many issues over the years.
  This important bill establishes a process whereby the people of 
Puerto Rico can vote for a retention or a change of their current 
Commonwealth status, a status preserved as a result of the November 14, 
1993 plebiscite. If Puerto Ricans choose change, they can select a path 
toward separation--independence or free association--or a path toward 
incorporation--statehood. In short, the bill establishes an orderly 
path toward true self-determination in the true democratic spirit of 
our Nation.
  One might ask why such legislation is necessary given that less than 
3 years ago, a plurality of U.S. citizens in Puerto Rico chose the 
Commonwealth option on the November 14 ballot. This option--drafted by 
the Commonwealth party itself, under the agreed-upon terms of the 
plebiscite--presented the people of Puerto Rico with utterly inflated 
and unrealistic expectations regarding the island's future relationship 
with the United States. In effect, the Commonwealth option guaranteed 
United States citizens of Puerto Rico many of the benefits of statehood 
and many of the benefits of separation without any of the accompanying 
responsibilities of either. Given these pie-in-the-sky promises, it is 
no wonder that a plurality of Puerto Ricans--though, important, not a 
majority--chose the Commonwealth option. However, the future of Puerto 
Rico's relationship with the United States remains unclear, and 
congressional action providing Puerto Ricans with the power to 
determine their fate through a fair and orderly process is long 
overdue.
  It is time that Congress' silence on the results of the November 14, 
1993 Puerto Rican plebiscite end, and that we afford United States 
citizens in Puerto Rico realistic and just options for determining 
Puerto Rico's future relationship with the United States of America. 
The Puerto Rican Government has asked that we do as much. On December 
14, 1994, the legislature of Puerto Rico adopted Concurrent Resolution 
62 which formally requested congressional guidance regarding the 
results of the 1993 status plebiscite. This legislation provides this 
guidance.
  The process established by this legislation would be unprecedented 
and long overdue, affording Puerto Ricans for the first time a fair 
process of self-determination that is consistent with everything 
America stands for. We owe Puerto Rico--which in 2 years will have been 
part of the United States for 100 years--at least this much.
  For decades, we have treated the right to self-determination as a 
cornerstone of our foreign policy. It is time that we practice what we 
preach.
                                 ______
                                 
      By Mr. GRASSLEY (for himself and Mr. Harkin):
  S. 2020. A bill to establish America's Agricultural Heritage 
Partnership in Iowa, and for other purposes; to the Committee on Energy 
and Natural Resources.


           the agricultural heritage partnership act of 1996

  Mr. GRASSLEY. Mr. President, today I am introducing the America's 
Agricultural Heritage Partnership Act of 1996. This legislation would 
authorize the designation of several counties in northeast Iowa as 
America's Agricultural Heritage Partnership. This project is more 
commonly known as Silos and Smokestacks.
  The story of agriculture in the United States is not only one of 
national progress and bounty, but is also a story of world progress and 
bounty. American agriculture is a national and a world treasure. It is 
a story that needs to be told. That is the silos part of Silos and 
Smokestacks. The smokestacks are the industrial base that supports our 
country's agriculture. The mission of America's Agricultural Heritage 
Partnership--Silos and Smokestacks--is to tell their combined story, 
through traditional exhibits and by designed routes through the 
countryside highlighting areas of importance and interest.
  Community leaders in Waterloo, IA, the surrounding communities, and 
the rural area began meeting several years ago to determine how best to 
tell the agricultural story, especially how it relates to our country's 
great industrial history. Because of their interest, the National Park 
Service was then requested to conduct a study to develop 
recommendations as to the location of a heritage area and how to 
present the history.
  That study recommended that northeast Iowa be the location for an 
agricultural heritage partnership area. Since that time, the 
communities have continued their work to lay a proper foundation for 
the project pending congressional authorization for Silos and 
Smokestacks.
  Waterloo is located in the center of some of the richest, most 
productive agricultural land in the world. It is also home to John 
Deere and other farm equipment manufacturers and other related 
agricultural industries. Waterloo is an ideal location to tell the 
combined story of American agriculture and the industry associated with 
it.
  This legislation would authorize the Secretary of Agriculture to make 
grants or enter into cooperative agreements to further this project. He 
may also provide necessary technical assistance.
  This is a worthwhile endeavor to tell an important American story to 
our citizens and the World. I strongly encourage enactment of this 
legislation.
  Mr. HARKIN. Mr. President, I rise as cosponsor of America's 
Agricultural Heritage Partnership Act of 1996. This bill would 
establish America's Agricultural Heritage Partnership in northeast Iowa 
in order to promote the story of agriculture in our Nation's rich 
history.
  A few years ago, leaders from Waterloo and other communities in 
northeast Iowa developed an initiative called Silos and Smokestacks. 
Silos and Smokestacks is a private organization that has worked to 
remodel and renovate old, and often abandoned, buildings in Waterloo. 
This effort is a wonderful example of communities and concerned 
citizens working together to preserve a unique part of American 
history.
  The hard work by Silos and Smokestacks has provided the foundation 
for a unique heritage park that would combine the stories of our 
Nation's agricultural and industrial development. In the past, the 
focus of the National Park Service has been to create and administer 
the so-called natural areas, commonly known as our National Park 
System. A heritage park involves local, State, Federal, and private 
interests in recognizing and preserving sites of cultural and 
historical significance. Heritage areas are something like a large 
interactive museum in which people have the opportunity to gain 
firsthand knowledge of an important facet of our Nation's history.
  The National Park Service has determined that northeast Iowa is an 
ideal

[[Page S9560]]

location for a heritage park. This park would tell the nationally 
significant, but often overlooked, story of American agriculture. 
Northeast Iowa combines the rich histories of our Nation's farming and 
industrial sectors. In the area surrounding Waterloo one will find some 
of the most productive and fertile land in the Nation. Boasting the 
production lines of John Deere and other farm equipment manufacturers 
and some of the largest meatpacking operations in the Midwest, the city 
of Waterloo represents our Nation's industrial strength. Taken 
together, this area represents nearly every aspect of agricultural and 
food production.
  The National Park Service has suggested that four principal topics of 
the heritage area could include: the amazing science of agriculture, 
agriculture as a way of life, organizing for survival, and crops from 
the field to the table.
  The legislation introduced today would authorize the Secretary of 
Agriculture to make grants and provide technical and management 
assistance to those entities developing the introductory heritage park. 
This assistance would be the critical impetus to see this unique 
project through to completion. A heritage project in northeast Iowa 
would provide countless Americans with a valuable insight into one of 
the most fascinating, and important, aspects of American society.
                                 ______
                                 
      By Mrs. FEINSTEIN (for herself and Mrs. Boxer):
  S. 2021. A bill to suspend temporarily the duty on certain chemicals 
used in the formulation of an HIV protease inhibitor; to the Committee 
on Finance.


               drug development acceleration legislation

  Mrs. FEINSTEIN. Mr. President, as a nation, we must do everything we 
can to find a cure for HIV/AIDS. However, until we have a cure for this 
urgent health priority, we need to find effective treatments and put 
them in the hands of people with needs.
  I rise today to introduce legislation, joined by my colleague Senator 
Boxer, to eliminate the tariff for several chemical compounds. These 
compounds are required for the manufacture of an AIDS drug, nelfinavir 
mesylate, which has produced promising test results.


                          protease inhibitors

  Nelfinavir is one of a new class of AIDS drugs called protease 
inhibitors. The drugs are designed to block an enzyme, called protease, 
that appears to play a crucial role in the replication of HIV.
  As the Wall Street Journal reported in its coverage of the recently 
concluded 11th International Conference on AIDS in Vancouver, BC, 
researchers have evidence that protease inhibitor drugs, when taken in 
combination with existing therapies, can reduce levels of the AIDS-
causing virus in blood to levels so low that the virus is undetectable 
by even the most sensitive tests. AIDS researchers at the conference 
describe this new drug therapy as a major and unprecedented step in 
combating AIDS, one that may represent a treatment approach that may 
delay the onset of AIDS, extend patients' lives, and transform AIDS 
into a long-term, manageable disease.
  Mr. President, HIV/A is a critical public health issue, requiring the 
Nation's full attention. In America today, AIDS is the leading cause of 
death for young Americans between the ages of 25 and 44.
  More than 220,700 American men, women and children have died of AIDS 
by the end of 1993. While the number of deaths trails other urgent 
health priorities such as cancer or heart disease, AIDS is nearly 
equally debilitating to the Nation when measured by the years of 
potential and productive life lost due to the disease.
  In my State of California, 1 of every 200 Californians is HIV 
positive, while 1 of every 25 is HIV positive in my home of San 
Francisco.
  AIDS is a paramount public health concern and every effort should be 
made to ensure that drugs are made available as swiftly and at as low a 
cost as possible. We simply cannot delay or waste time in providing 
drugs, treatments or materials. This tariff legislation represents a 
modest, but important step.


                    zero tariff for pharmaceuticals

  Under the 1994 GATT agreement, most pharmaceutical products are 
entitled to enter the country without a tariff. However, the zero 
tariff does not apply to many new pharmaceutical products or their 
chemical ingredients. As a result, the chemicals needed to make 
nelfinavir mesylate, an AIDS protease inhibitor currently undergoing 
research testing, but not yet a recognized pharmaceutical product under 
GATT, would be ineligible for the pharmaceutical zero tariff.
  During negotiations with World Trade Organization nations to 
implement the pharmaceutical zero tariff, the administration 
successfully added the chemical compounds needed to manufacture the 
AIDS drug. As a result, the tariff will drop to zero on April 1, 1997.
  Nelfinavir is on the Food and Drug Administration's fast-track 
approval process for AIDS drugs. Commercial production of the drug will 
begin well before April 1, in order that the drug can be immediately 
available to AIDS patients upon FDA approval. Although currently 
imported duty-free for use in clinical research trials, the imported 
chemicals will soon be used for commercial production. During the 
period of commercial production prior to April 1, the chemical 
compounds will face a 12 percent tariff, which will only add to the 
cost and delay the drug's production and distribution to individuals in 
need.
  This proposed legislation would eliminate the tariff for two of the 
essential and unique chemical inputs, as well as for the active 
ingredient nelfinavir (Acid Chloride, Chloroalcohol and AG 1346), from 
August 1 when the drug production increases, until April 1, 1997 when 
the tariff drops to zero under the WTO pharmaceutical agreement. 
Without this legislation, the manufacturer would face a 12 percent 
tariff for its chemicals, which are not available in the United States, 
as the drug proceeds into production. This tariff reduction will allow 
for the acceleration of drug production, providing more timely relief 
for the public.
  The Federal Government needs to do everything it can to expedite the 
development and distribution of AIDS drugs. Without this legislation to 
remove the tariff, we will be tolerating needless hurdles and delay, 
rather than needed relief.

  The Congressional Budget Office is reviewing the cost of the proposed 
legislation. However, because the WTO negotiations will already provide 
a zero tariff for the chemical compounds on April 1, the legislation 
may have a de minimis impact on tariff revenue. For AIDS patients, 
their families and those at risk, it's a step Congress should take.
  I have also requested various Federal agencies and other 
organizations to review the legislation and ensure that other important 
Federal policies, like narcotics enforcement or maintaining a strong, 
domestic chemical industry, are not undermined. The Drug Enforcement 
Agency and U.S. Customs Service indicate the chemicals present no risk 
for law enforcement or anti-narcotics enforcement priorities. 
Similarly, the U.S. Trade Representative's Industry Sector Advisory 
Committee for chemicals and the International Trade Commission also 
reviewed and approved the administration's efforts to include the 
chemicals in the pharmaceutical appendix negotiations. PhRMA, the 
Pharmaceutical Research and Manufacturers of America, also has reviewed 
the proposal and does not oppose the legislation.
  The administration deserves tremendous credit for extending a zero 
tariff for these chemical components. It is my hope that miscellaneous 
tariff legislation, which is currently pending before the Finance 
Committee, could accommodate this noncontroversial tariff issue, which 
can accelerate the development and production of an AIDS drug, with the 
potential to provide meaningful relief.
  As a matter of public policy, we should do everything we can to 
develop AIDS drugs and treatments. Patients and their families cannot 
wait for the next round of drugs to be approved and added to the zero-
tariff list, scheduled for review in 1999. By importing the chemical 
compounds without a tariff, we can accelerate the drug development 
process.
  I am pleased to introduce this tariff legislation, along with my 
colleague Senator Boxer, and will work with the chairman and ranking 
members of the Finance Committee to pursue the legislation.

[[Page S9561]]

  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2021

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

     SECTION 1. TEMPORARY DUTY SUSPENSION.

       (a) In General.--Subchapter II of chapter 99 of the 
     Harmonized Tariff Schedule of the United States is amended by 
     inserting in numerical sequence the following new headings:

``9902.30.6  3-acetoxy-2-                                               
 3.           methylbenzoyl                                             
              chloride (CAS No.                                         
              167678-46-8)                                              
              (provided for in                                          
              subheading                                                
              2918.29.65).........  Free       No change    On or before
                                                             3/30/97    
9902.30.64.  2S, 3R-N-Cbz-3-amino-                                      
              1-chloro-4-                                               
              phenylsulfanyl-butan-                                     
              2-ol (CAS No. 159878-                                     
              02-1) (provided for                                       
              in subheading                                             
              2922.19.60).........  Free       No change    On or before
                                                             3/30/97    
9902.30.65.  N-(1,1-                                                    
              dimethylethyl)deca-                                       
              hydro-2-[2-hydroxy-                                       
              3[(3-hydroxy-2-                                           
              methylbenzoyl)                                            
              amino]-4-                                                 
              (phenylthio)butyl]-3-                                     
              isoquinolinecarboxam                                      
              ide, [3S-                                                 
              [2(2S*,3S*),                                              
              3.a.,4a.b.,8a.b.]]                                        
              (CAS No. 159989-64-                                       
              7) (provided for in                                       
              subheading                                                
              2933.40.60).........  Free       No change    On or before
                                                             3/30/97''. 
                                                                        

       (b) Effective Date.--
       (1) In general.--The amendment made by subsection (a) 
     applies with respect to goods entered, or withdrawn from 
     warehouse for consumption, on or after the date that is 15 
     days after the date of the enactment of this Act.
       (2) Retroactive application.--Notwithstanding section 514 
     of the Tariff Act of 1930 (19 U.S.C. 1514) or any other 
     provision of law, upon proper request filed with the Customs 
     Service, before the 90th day after the date of the enactment 
     of this Act, any entry, or withdrawal from warehouse for 
     consumption, of an article described in heading 9902.30.63, 
     9902.30.64, or 9902.30.65 of the Harmonized Tariff Schedule 
     of the United States (as added by subsection (a)), that was 
     made--
       (A) on or after August 1, 1996, and
       (B) before the date that is 15 days after the date of the 
     enactment of this Act,

     shall be liquidated or reliquidated as though such entry or 
     withdrawal was made on the 15th day after such date of 
     enactment.
                                 ______
                                 
      By Mr. THURMOND (for himself, Mr. Faircloth, Mr. Hollings, Mr. 
        Coats, and Mr. Helms):

  S. 2022. A bill to amend title 23, United States Code, to modify the 
minimum allocation formula under the Federal-aid highway program, to 
provide reimbursement to each State with respect to which the highway 
users in the State paid into the highway trust fund an amount in excess 
of the amount received by the State from the highway trust fund, and 
for other purposes; to the Committee on Environment and Public Works.


                 The Surface Transportation Equity Act

  Mr. THURMOND. Mr. President, I rise today to introduce legislation, 
on behalf of myself and Senators Faircloth, Hollings, Coats, and Helms, 
to correct one of the most inequitable and unfair policies of our 
Government--the Federal aid to highways distribution formulas. 
Currently, our Federal Aid to Highways Program collects 18.3 cents tax 
on each gallon of gasoline. That money is then sent to the Federal 
Treasury where deductions are made for deficit reduction and other 
Department of Transportation programs. The remainder is then 
apportioned among the States by statutory formulas which is used for 
infrastructure projects. In 1995, South Carolina received 52 cents for 
each dollar its citizens contributed to the fund. Other States were 
allocated $2 or more for each dollar contributed. This disparity is 
inexcusable.
  This donor State system was originally devised to build the 
Interstate Highway System. In order to build highways across the vast 
expanses of the less populated Western States, it was necessary to 
incorporate a system in which some States contribute more than they 
receive. Next year, the last segment of the Interstate System will be 
completed. Subsequently, all our surface transportation priorities will 
then be local, but the donor/donee system with its unfair formulas will 
still be in place.

  The statutory formulas are largely based on 1950's population data. 
Needless to say, there have been great population shifts in this 
country since that time. As a result, high-growth States have become 
desperate to find money to cope with the growing demand for highway 
construction and maintenance. Other States, however, are allocated such 
an excess amount that some of their funds go unused. In some cases they 
seek legislation to use the money for more exotic transportation 
purposes. We should not be building roads where people have been--we 
shoud build them where they are or where they are going. The present 
situation is equivalent to laying railroad tracks behind the train. It 
is inefficient, wasteful, and does not address the transportation needs 
of our Nation.
  Unlike other programs, our Federal aid highway system was intended to 
be a user fee system where the gas taxes motorists pay go to maintain 
and improve the roads on which they drive. Unfortunately, the current 
system does not work in that manner. For example, when a school teacher 
in Mt. Pleasant, SC, buys gas to commute to her job in Charleston, she 
should expect that the tax she has paid is going to pay part of the 
cost of replacing the Cooper River Bridge which is in danger of 
collapse. Instead, 48 cents of each dollar she pays in gas tax goes to 
finance projects in other States. On the other hand, when a school 
teacher in one of the donee States does the same thing, she receives 
more than double her money back in road improvements. This is simply 
unfair.
  The donor States have made tremendous sacrifices to build the 
Interstate System from which we all benefit. They have for years 
postponed addressing critical highway needs at home. The time has come 
for our national policy to recognize this contribution and address this 
issue fairly.
  Mr. President, the bill we are introducing is simple. It stipulates 
that the portion of the Federal highway distribution to a State in each 
year shall be equal to its percentage of all contributions to the fund. 
In other words, if South Carolina contributes 1.8 percent of the trust 
fund in a year, it would get back 1.8 percent of whatever amount is 
appropriated out of the fund that year. Further, my bill would 
establish a 5-year program to bring the historic donor States into 
parity with the rest of the country. After implementation of this bill 
then we will have a Federal Highway Program that is fair to all.
  Mr. President, if we are to reauthorize a Federal Highway Program, it 
must be a fair one. My bill presents a fair and equitable formula for 
doing this. I urge my colleagues to join us in support of this 
legislation.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2022

       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 ``Surface Transportation 
     Equity Act of 1996''.

     SEC. 2. MINIMUM ALLOCATION.

       (a) Fiscal Year 1998 and Thereafter.--Section 157(a) of 
     title 23, United States Code, is amended by adding at the end 
     the following:
       ``(5) Fiscal year 1998 and thereafter.--In fiscal year 1998 
     and each fiscal year thereafter, the Secretary, after making 
     the allocations described in section 3 of the Surface 
     Transportation Equity Act of 1996, shall allocate among the 
     States amounts sufficient to ensure that a State's percentage 
     of the total apportionments in each fiscal year and 
     allocations for the prior fiscal year from funds made 
     available out of the Highway Trust Fund is not less than 100 
     percent of the percentage of estimated tax payments 
     attributable to highway users in the State paid into the 
     Highway Trust Fund in the latest fiscal year for which data 
     are available.''.
       (b) Conforming Amendment.--Section 157(a)(4) of title 23, 
     United States Code, is amended by striking the paragraph 
     designation and all that follows before ``on October 1'' and 
     inserting the following:
       ``(4) Fiscal years 1992-1997.--In each of fiscal years 1992 
     through 1997,''.

     SEC. 3. DONOR STATE REIMBURSEMENT.

       (a) Allocation.--Over the period consisting of fiscal years 
     1998 through 2002, the Secretary of Transportation shall 
     proportionally allocate to each eligible State described in 
     subsection (b) the total amount of the excess described in 
     subsection (b).
       (b) Eligible States.--For the purpose of this section, an 
     eligible State is a State with respect to which the highway 
     users in the State paid into the Highway Trust Fund, during 
     the period consisting of July 1, 1957, through the end of the 
     latest fiscal year for which data are available, an amount in 
     excess of the amount received by the State from the Highway 
     Trust Fund during that period.
       (c) Formula.--For each fiscal year, the Secretary of 
     Transportation shall allocate the amounts made available 
     under subsection (a) for the fiscal year in such a way

[[Page S9562]]

     as to bring each successive eligible State, or eligible 
     States, with the lowest dollar return on dollar paid into the 
     Highway Trust Funding during the period described in 
     subsection (b) up to the highest common return on dollar paid 
     that can be funded with the amounts made available under 
     subsection (a).
       (d) Applicability of Chapter 1 of Title 23.--Funds 
     allocated under this section shall be available for 
     obligation in the same manner and for the same purposes as if 
     the funds were apportioned for the surface transportation 
     program under chapter 1 of title 23, United States Code, 
     except that the funds shall remain available until expended.
       (e) Administrative Expenses.--
       (1) Deduction.--For each fiscal year, prior to making 
     allocations under this section, the Secretary of 
     Transportation shall deduct such amount, not to exceed 3\3/4\ 
     percent of the amount made available under subsection (f) for 
     the fiscal year, as the Secretary determines is necessary to 
     pay the administrative expenses of carrying out this section. 
     Amounts so deducted shall remain available until expended.
       (2) Consideration of prior deductions.--In determining each 
     amount to be deducted under paragraph (1), the Secretary of 
     Transportation shall take into consideration the unexpended 
     balance of any amounts deducted for prior fiscal years under 
     paragraph (1).
       (f) Authorization of Appropriations.--There are authorized 
     to be appropriated out of the Highway Trust Fund such sums as 
     are necessary to carry out this section.

  Mr. HOLLINGS. Mr. President, 5 years ago I opposed legislation 
extending our Nation's Highway Program. I did that, not because we do 
not need highways--they have been a fine investment--but because the 
funding distribution to States had become so egregiously unfair that it 
threatened support for any highway program at all. It is interesting to 
note that today we have proposals in the Congress essentially to follow 
that logic by repealing most of the program to the States on the basis 
that the Federal funding pattern is so incredibly wrong. As such, I 
make the case again today for a fair and rational distribution of 
highway funds and put the Senate on notice that the distribution must 
change when the Congress considers highway program revisions next year. 
The U.S. General Accounting Office has studied highway spending again 
since the 1991 ISTEA legislation, and reported in November 1995 what 
Senators have long known--a formula that provided South Carolina 52 
cents this year for a dollar of taxes contributed is unfair and 
untenable.
  This is not just a matter of my State receiving less. It is a matter 
of how best to distribute funds for our Nation's highway needs. 
Objective studies have found that our current funding pattern is wrong, 
outdated, and unconnected to highway needs. As the GAO put it, ``the 
States' funding shares for the four major programs are divorced from 
current conditions,'' and the underlying factors for the two largest 
programs are ``irrelevant to the highway system's needs.''
  Particularly, the current distribution to States includes 
significant, indirect influences from earlier, unfair funding patterns. 
It includes postal road factors from the 1921 formula, population data 
from the 1980 census, and bridge costs reported from States nearly a 
decade ago which were wildly disparate. Why should South Carolina have 
gotten $38 per square foot to replace bridges while the District of 
Columbia received $223 per square foot? Why should these amounts be 
grandfathered into today's allocations?
  Not only did the GAO declare last year that these formula factors are 
``irrelevant,'' it suggested better factors more than 10 years ago. At 
that time, the GAO recommended making a transition to a more fair 
formula in a way that did not hurt states that had been receiving a 
greater than equitable share of highway formulas. But as the GAO 
reported last year, ``However, the Congress elected not to change the 
basic formula structure.''
  Mr. President, I voted against ISTEA because of the objective, well-
documented unfairness of the highway formula, and will vigorously 
oppose any highway bill next year that does not provide fairness. The 
legislation we are introducing here today is a good starting point to 
better address our Nation's highway needs.
                                 ______
                                 
      By Mr. REID:
  S. 2023. A bill to provide for travelers' rights in air commerce, and 
for other purposes; to the Committee on Commerce, Science, and 
Transportation.


                   The Travelers' Rights Act of 1996

  Mr. REID. Mr. President, as our open society has evolved, the 
Government has consistently, though in varying degrees, had to define 
the rights of consumers and citizens. In this regard, I introduce today 
the Travelers' Rights Act. This bill is to expedite access to 
information to airline customers and broaden the choices that air 
travelers have through greater information. Additionally, through the 
Victims Rights Program we call for greater coordination of governmental 
agencies and American Red Cross in providing facts to victims and 
survivors of victims.
  Mr. President, air travel in America is a fundamental of American 
transportation. I cannot imagine spanning the distances of Nevada, much 
less the Western United States to come back here and represent my State 
without the convenience of air travel. Perhaps we take many things 
about travel for granted; for instance, I do not know nor can I fathom 
the many details involved in getting a 747, the size of 12 city busses, 
into the sky. But, Mr. President, I believe that there are some basic 
rights of the half-billion passengers of airlines that need to be 
protected. I have searched the current statutes and regulations and am 
confident that the Federal Aviation Administration has many of the 
tools necessary to continue to make our skies safe. I am not convinced, 
however, that passengers, are receiving sufficient information about 
the aircraft and the many involved personnel and accessibility to the 
aircraft. Daily, pilots, mechanics, air tower controllers, and others 
dedicate themselves to meeting the needs of air travelers, but still 
the trust relationship requires some understanding that the FAA 
certificate requirements are being met by the personnel who serve the 
airline customers.
  While some may argue that requires a lot of information. I consider 
it to be the nature of the information not the quantity to be 
significant, because the traveler on the airlines are putting their 
lives in the airlines' hands and should be allowed the knowledge that 
bestows security, understanding and choice. There is information that 
ought to be available and if the customer seeks the information the 
airlines should expeditiously provide it. This bill is not to scare 
travelers about the safety and security of air travel, rather on the 
contrary, I believe this bill will inspire confidence through openness 
and knowledge. Additionally, if customers of air travel exercise their 
right to know about certain elements about the airlines, aircraft and 
crew then that too will enhance the trust between customers and the 
airlines.
  The second principle element of the bill is the Victims Rights 
Program, which is essential in alleviating some of the criticism of the 
airlines and restoring the confidence of airline customers. Increased 
coordination of the agencies and the American Red Cross in opening up 
communication between the investigating parties and the victims, 
appears to me, to be the least that we can do and an essential right of 
those who place their trust in air travel.
  This legislation is vital in making sure that these fundamental 
rights of information and knowledge are preserved. As airplane 
accidents occur and the airplanes are sabotaged, the sense of security 
that airplane passengers have paid for is undermined. This bill does 
not try to second guess the Federal Aviation Administration and the 
inspector general in safety investigations and security methods, 
because they have been given both the mission and the means of working 
with the airlines.

  Mr. President, last May a ValuJet DC-9 crashed into a Florida swamp, 
and before that in December an American Airlines aircraft flew into a 
South American mountainside. Then over 200 individuals died off the 
coast of New York and the Federal authorities have still not identified 
all the victims. Indeed, I have heard repeatedly that the survivors of 
victims cannot get information from the airlines and the National 
Transportation Safety Board and FBI. I believe that in the past couple 
of years, air travel have suffered terrible accidents and the American 
public who travel by air do not seem to get any more consideration, as 
far as information and education are concerned.
  We do hear, Mr. President, that security might be enhanced at the 
airports,

[[Page S9563]]

and that more screening of passengers might take place at airplane 
boarding and other draconian measures are being considered. Those 
issues need tremendous study and intensive deliberation of classified 
information among those who have the expertise. This bill focuses on 
the prerogatives of the traveler and through access of information the 
choices of the traveler expand and trust is preserved.
  I urge my colleagues to act quickly on this legislation so that this 
fundamental way of travel is not undermined by the airline industry's 
own protective silence and guarded communication. When unfortunate 
accidents or harm occurs, trust is best established by allowing the 
victims open access. Through this legislation the rights of travelers 
will be firmly preserved.
                                 ______
                                 
      By Ms. SNOWE (for herself and Mrs. Feinstein):
  S. 2024. A bill to amend the Public Health Service Act to provide a 
one-stop shopping information service for individuals with serious or 
life-threatening diseases; to the Committee on Labor and Human 
Resources.


         The one-stop shopping information service act of 1996

  Ms. SNOWE. Mr. President, today, I rise to introduce a vital piece of 
legislation which will help people with serious or life-threatening 
diseases obtain the information they desperately need about clinical 
trials. Easy access to this information is critical, because clinical 
trials provide cancer patients with potentially promising treatments 
which are otherwise unavailable and which may be on the cutting edge of 
medical research.
  In June of this year, I convened an important hearing with my 
colleagues, Senators Connie Mack and Dianne Feinstein, Cochairs of the 
Senate Cancer Coalition, to address recent developments in breast 
cancer treatments and research. We convened our hearing on the eve of 
the Seventh Annual National Race for the Cure, a race that raises 
millions of dollars each year for breast cancer research and education 
efforts.
  During the hearing, we heard testimony from breast cancer advocates 
on the difficulty patients and physicians face in learning about 
ongoing clinical trials. One witness, representing Breast Cancer Action 
in California, testified about the need for ``One Stop Shopping'' to 
find out what is available in terms of clinical trials for cancer 
treatments. She testified that the existing Cancer Information Service 
at the National Cancer Institute is helpful but underfunded, and 
provides only partial information because it lists only publicly funded 
trials. It does not list, however, the 300-plus clinical trials of 
private pharmaceutical companies, producing a major knowledge gap.
  This witness contrasted this difficulty faced by cancer patients with 
the ease with which AIDS patients obtain information about clinical 
trials. As the result of a 1988 amendment to the Public Health Service 
Act, AIDS patients need only dial a 1-800 number in order to obtain 
information about all clinical trials--both Government financed and 
private pharmaceutical trials. If you have cancer or some other life-
threatening illness, however, you must rely upon your doctor's 
knowledge about clinical trials, which is likely to be limited. 
Moreover, information contained on commercial databases are costly to 
access, difficult to use or understand, and often incomplete.
  Since this hearing, I have heard similar complaints not only from 
cancer patients, but from patients suffering from a wide range of 
severe or life-threatening illnesses. Today, I rise to introduce 
legislation to rectify this knowledge gap.
  My bill is based closely on the existing language in the Public 
Health Service Act which created the AIDS database and which has been 
so successful in making information about AIDS clinical trials 
available to those who need it. Modeled on that language, my bill 
establishes a data bank of information on clinical trials and 
experimental treatments for all serious or life-threatening illnesses. 
The one stop shopping information service will include a registry of 
all private and public clinical trials, and will contain information 
describing the purpose of the trial, eligibility criteria for 
participating in the trial, as well as the location of the trial. The 
bill also requires HHS to set up information systems, including a toll-
free number, for patients, doctors, and others to access this critical 
information. The database will also include information on the results 
of experimental trials, enabling patients to make fully informed 
decisions about medical treatment.

  Imagine facing a deadly disease and not having access to information 
about the latest treatment options. Imagine enduring great pain and not 
having access to a centralized source of information about existing 
clinical trials which may relieve your suffering or extend your life. 
Imagine the arduous effort needed to gather information about these 
clinical trials in order to potentially benefit from cutting-edge 
treatments.
  Then consider what this legislation will do for Americans. People 
with cancer, Alzheimers' disease, Parkinsons, cystic fibrosis, advanced 
heart disease, multiple sclerosis, or any other serious disease will be 
able to dial a 1-800 number from their home phone and access the 
information they need about clinical trials underway across the Nation. 
They will also be able to obtain information about the results of 
experimental trials, helping them to make treatment decisions.
  All parties will benefit from this legislation. First and foremost, 
it encourages patient choice and informed decisions. But pharmaceutical 
companies will also benefit, because this legislation will allow for 
easier and quicker recruitment of individuals willing to participate in 
experimental trials, expediting the approval process for 
investigational new drugs. And the National Institutes of Health and 
the Food and Drug Administration will be better able to serve the 
public.
  This one-stop shopping service will provide hope to countless 
Americans. But most importantly, it will help to save lives and reduce 
the suffering of Americans who are stricken by serious or life-
threatening illnesses. We know from experience that this language 
works. I call for the speedy enactment of this legislation which will 
be of enormous benefit to countless Americans in times of extraordinary 
need, and I urge my colleagues to support this important bill.
  Mrs. FEINSTEIN. Mr. President, today, with Senator Snowe, I am 
introducing a bill to set up a toll-free service so that people with 
life-threatening diseases can find out about research projects that 
might help them.
  Today there are thousands of serious and life-threatening diseases, 
diseases for which we have no cure. For genetic diseases alone, there 
are 3,000 to 4,000. Some of these are familiar, like cancer, 
Parkinson's disease, and multiple sclerosis. Others are not so common, 
like cystinosis, Tay-Sachs disease, Wilson's disease, and Sjogren's 
syndrome. Indeed, there are over 5,000 rare diseases, diseases most of 
us have never heard of, affecting between 10 and 20 million Americans.
  Cancer kills half a million Americans per year. Diabetes afflicts 15 
million Americans per year, half of whom do not know they have it. 
Arthritis affects 40 million Americans every year. 15,000 American 
children die every year. Among children, the rates of chronic 
respiratory diseases--asthma, bronchitis, and sinusitis--heart murmurs, 
migraine headaches, anemia, epilepsy, and diabetes are increasing. Few 
families escape illness today.


                                The Bill

  The bill we introduce requires the Secretary of Health and Human 
Services to establish a ``one-stop shopping'' database, including a 
toll-free telephone number, so that patients and physicians can find 
out what clinical research trials are underway on experimental 
treatments for various diseases. Callers would be able to learn the 
purpose of the study, eligibility requirements, research sites, and a 
contact person for the research project. Information would have to be 
presented in plain English, not medicalese, so that the average person 
could understand it.


                        A Constituent Suggestion

  The suggestion for this information center came from Nancy Evans, of 
San Francisco's Breast Cancer Action, in a June 13 hearing of the 
Senate Cancer Coalition, which I cochair with Senator Mack. She 
described the difficulty that patients have in trying to find out

[[Page S9564]]

what experimental treatments might be available, research trials 
sponsored by the Federal Government, and by private companies. Most of 
them are desperate; most have tried everything. She testified that the 
National Cancer Institute has established 1-800-4-CANCER, but their 
information is incomplete. It does not include all trials and the 
information is often difficult for the lay person to understand.
  In addition, the National Kidney Cancer Association has called for a 
central database.


                         People in Serious Need

  To understand the importance of this bill, we have to stop and think 
about the plight of the individuals it is intended to help. These are 
people who have a terminal illness, whose physicians have tried every 
treatment they can find. Cancer patients, for example, have probably 
had several rounds of chemotherapy, which has left them debilitated, 
virtually lifeless. These patients cling to slim hopes. They are 
desperate to try anything. But step one is finding out what is 
available.
  One survey found that a majority of patients and families are willing 
to use investigational drugs--drugs being researched but not approved--
but find it difficult to locate information on research projects. A 
similar survey of physicians found that 42 percent of physicians are 
unable to find printed information about rare illnesses.


                          Help for Physicians

  Physicians, no matter how competent and well trained, also do not 
necessarily know about experimental treatments currently being 
researched. And most Americans do not have sophisticated computer 
hookups that provide them instant access to the latest information 
through commercial, government, or medical databases. Our witness, 
Nancy Evans, testified that she can find out more about a company's 
clinical trials by calling her stockbroker than by calling existing 
services.
  I have had many desperate families call me, their U.S. Senator, 
seeking help. Others have lodged their pleas at the White House. Others 
call lawyers, 911, the local medical society, the local chamber of 
commerce, anything they can think of. Getting information on health 
research projects should not require a fishing expedition of futile 
calls, good connections, or the involvement of elected officials.
  In 1988, Congress directed HHS to establish an AIDS Clinical Trials 
Information Service. It is now operational, 1-800-TRIALS-A, so that 
patients, providers, and their families can find out more about AIDS 
clinical trials. All calls are confidential and experienced 
professionals at the service can tell people about research trials 
underway which are evaluating experimental drugs and other therapies at 
all stages of HIV infection.


                       Improving Health, Research

  Facilitating access to information can also strengthen our health 
research effort. With a national database enabling people to find 
research trials, more people could be available to participate in 
research. This can help researchers broaden their pool of research 
participants.


                        Modest Help for the Ill

  The bill we introduce does not guarantee that anyone can participate 
in a clinical research trial. Researchers would still control who 
participates and set the requirements for the research. But for people 
who cling to hopes for a cure, for people who want to live longer, for 
people who want to feel better, this database can offer a little help.
  It should not take political or other connections, computer 
sophistication or access to top-flight university medical schools to 
find out about research on treatments of disease when you have a life-
threatening illness.
  Mr. President, I hope this bill will offer some hope to the millions 
who are suffering today and I hope Congress will act on the bill 
promptly.
                                 ______
                                 
      By Mr. FEINGOLD:
  S. 2025. A bill to amend the Communications Act of 1934 to authorize 
the States to regulate interference with radio frequencies; to the 
Committee on Commerce, Science, and Transportation.


              cb radio frequency interference legislation

  Mr. FEINGOLD. Mr. President, I rise today to introduce legislation 
which creates a commonsense solution to a growing problem in U.S. 
cities and towns--the Federal preemption of State and municipal 
regulation of citizens band [CB] radio frequency interference with 
residential home electronic or telephone equipment. This problem can be 
extremely distressing for residents who cannot have a telephone 
conversation or watch television without being interrupted by a 
neighbor's citizen band radio [CB] conversation. Under the current law, 
those residents have little recourse.
  Interference of CB radio signals with household electronic equipment 
such as telephones, radios, and televisions has been regulated by the 
Federal Communications Commission [FCC] for nearly 30 years. Up until 
recently, the FCC has enforced rules outlining what equipment may or 
may not be used for CB radio transmissions, what content may or may not 
be transmitted, how long transmissions may be broadcast, what channels 
may be used, as well as many other technical details. FCC also 
investigated complaints that a personal radio enthusiast's 
transmissions interfered with a neighbor's use of home electronic and 
telephone equipment. FCC receives nearly 45,000 such complaints 
annually.
  Mr. President, for the past 3 years I have worked with constituents 
who have been bothered by persistent interference of nearby CB radio 
transmissions. In each case, the constituents have sought my help in 
securing an FCC investigation of the complaint. In each case, Mr. 
President, the FCC indicated that due to a lack of resources, the 
Commission no longer investigates radio frequency interference 
complaints. Instead of investigation and enforcement, the FCC is able 
to provide only a packet of self-help information for the consumer to 
limit the interference on their own.
  Municipal residents, after being denied investigative or enforcement 
assistance from the FCC, frequently contact their city or town 
government and ask them to police the interference. However, the 
Communications Act of 1934 provides exclusive authority to the Federal 
Government for the regulation of radio, preempting municipal ordinances 
or State laws regulating radio frequency interference. This has created 
an interesting dilemma for municipal governments. They can neither pass 
their own ordinances to control CB radio interference, nor can they 
rely on the agency with exclusive jurisdiction over interference to 
enforce the very Federal law which preempts them.
  In Beloit, WI, as in many Wisconsin communities, this dilemma has 
been extremely frustrating for local residents who have been powerless 
to prevent the transmissions of a neighboring CB enthusiast from 
interfering with their home electronic equipment. One Beloit resident, 
after having adopted every form of filtering technology for her 
telephone and other electronic equipment, still experienced persistent 
interference. Her answering machine picks up calls for which there is 
no audible ring, and at times records ghost messages. Often, she cannot 
get a dial tone when she or her family members wish to place an 
outgoing call. During telephone conversations, the content of the 
nearby CB transmission can frequently be heard and on occasion, her 
phone conversations are inexplicably cur off. Her neighbors have 
experienced similar problems and have complained to the Beloit City 
Council.
  Last month, the Beloit City Council, exasperated by FCC inaction on 
this matter, passed an ordinance allowing the city to enforce FCC 
regulations on this type of inference. While the council knew that, if 
challenged under current law, their ordinance would likely not be 
upheld by the courts, they felt they had little choice if they wished 
to address their constituents concerns.
  Mr. President, it is not fair that municipalities and their residents 
should be hamstrung by an outdated Federal preemption of laws the 
Federal Government no longer has the resources to enforce.
  The legislation I am introducing today will help the city of Beloit, 
and many other municipalities like it, to regulate CB radio 
transmissions and to enforce those regulations. My bill provides a 
limited exception to the Federal preemption of State or local laws on 
radio frequency interference. It simply allows State and local 
governments

[[Page S9565]]

to regulate CB radio interference when that interference results from a 
violation of FCC rules. Thus, States and municipalities can use their 
enforcement resources to investigate and enforce Federal law thereby 
protecting the rights of their residents. Even the FCC recognizes that 
States and localities need to be able to protect their citizens.
  Mr. President, this bill simply allows common sense to prevail. If 
Federal regulators cannot enforce the rules over which they have 
exclusive jurisdiction, States and localities should be given the 
authority to investigate and enforce those regulations for them. I hope 
my colleagues will support this important legislation.
  Mr. President, I ask unanimous consent that the bill be printed in 
the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2025

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

     SECTION 1. AUTHORITY OF STATES TO REGULATE RADIO FREQUENCY 
                   INTERFERENCE.

       Section 302 of the Communications Act of 1934 (47 U.S.C. 
     302) is amended by adding at the end the following:
       (e) Where radio frequency interference to home electronic 
     equipment is caused by a CB Radio Station through the use of 
     a transmitter or amplifier that is not authorized for use by 
     a CB Radio Station pursuant to Commission rules, the state, 
     county, municipal, or other local government shall not be 
     preempted from exercising its police powers to resolve the 
     interference by prohibiting the use of such unauthorized 
     equipment or by imposing fines or other monetary sanctions. 
     For purposes of this subsection, home electronic equipment 
     includes, but is not limited to, television receivers, radio 
     receivers, stereo components or systems, video cassette 
     recorders, audio recorders, loud speakers, telephone 
     equipment, and other electronic devices normally used in the 
     home. Any action taken by the state, county, municipal, or 
     local government shall not preclude concurrent action by the 
     Commission. Nothing in this subsection shall be construed to 
     diminish the Commission's exclusive jurisdiction over radio 
     frequency interference in any matter outside the scope of 
     this subsection.
                                 ______
                                 
      By Mr. FAIRCLOTH (for himself, Mrs. Kassebaum, Mr. Coats, Mr. 
        Ashcroft, Mr. DeWine, Mr. Frist, and Mr. Gorton):
  S. 2026. A bill to amend the Fair Labor Standards Act of 1938 to make 
uniform the application of the overtime exemption for inside sales 
personnel, and for other purposes; to the Committee on Labor and Human 
Resources.


                     overtime exemption legislation

  Mr. FAIRCLOTH. Mr. President, in 1961, Congress amended the Fair 
Labor Standards Act to provide a narrow overtime exemption for 
commissioned employees in retail and service establishments. Under 
section 207(i) of the FLSA, outside commissioned sales employees are 
treated as professional employees and are thus exempt from the act. In 
contrast, most commissioned inside sales employees are not treated as 
professionals regardless of the similarly of their duties with regard 
to outside sales employees.
  Despite dramatic changes in the workplace since 1961, the FLSA 
continues to subject professional commissioned sales employees to an 
outdated, static view of the economy. Therefore, today I am introducing 
legislation to extend the limited FLSA exemption to all commissioned 
inside sales personnel. This bill is identical to H.R. 1226 which was 
introduced by Representative Harris Fawell.
                                 ______
                                 
      By Mr. LAUTENBERG:
  S. 2027. A bill to provide for a 5-year extension of Hazardous 
Substance Superfund, and for other purposes; to the Committee on 
Finance.


               the superfund taxes extension act of 1996

  Mr. LAUTENBERG. Mr. President, I rise today to introduce legislation 
to extend the Superfund taxes, which have been in place since 1980.
  Mr. President, the Superfund program provides for cleaning-up those 
toxic waste sites that pose the most serious threats to our environment 
and to our health. The program is largely funded by a chemical and oil 
feedstock tax and by taxes on corporate environmental entities, such as 
petrochemical companies.
  Mr. President, few of us may be aware of the fact that these taxes 
expired in December of 1995. Since that time, not one single penny has 
been assessed to replenish the Superfund, and so protect our ability to 
cleanup toxic sites in the future.
  The failure to extend the Superfund tax is causing us to lose $4 
million dollars a day. That is $4 million a day which could be used to 
expedite the cleanup at existing Superfund sites, or fund the 
revitalization of additional sites.
  It has been argued that we have sufficient monies in the Superfund 
trust fund to carry us for the next few years, although there is 
disagreement concerning how long the money will last. However, 
Superfund monies are used for long-term construction projects. By 
utilizing these funds for other purposes, we squander our ability to do 
long range planning and to continue cleanups without interruption.
  Mr. President, as someone who spent most of my life as a businessman, 
I recognize the importance of long term planning. And I understand the 
real costs associated with stopping and restarting a project; it is 
never efficient or cost effective.
  Mr. President, I and the citizens of New Jersey, lived through the 
funding crisis of 1984-1985. The subsequent disruption of cleanups 
caused unnecessary hardships for the citizens of my state. I don't want 
to go through that again.
  We need to ensure that we have sufficient financial resources to plan 
for, contract and continue Superfund cleanups without interruption. 
After all, we owe it to our children to do whatever is possible to 
preserve the environment, to protect the public health and to provide 
for the future.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2027

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

     SECTION 1. 5-YEAR EXTENSION OF HAZARDOUS SUBSTANCE SUPERFUND.

       (a) Extension of Taxes.--
       (1) The following provisions of the Internal Revenue Code 
     of 1986 are each amended by striking ``January 1, 1996'' each 
     place it appears and inserting ``January 1, 2001'':
       (A) Section 59A(e)(1) (relating to application of 
     environmental tax).
       (B) Paragraphs (1) and (3) of section 4611(e) (relating to 
     application of Hazardous Substance Superfund financing rate).
       (2) Paragraph (2) of section 4611(e) of such Code is 
     amended--
       (A) by striking ``1993'' and inserting ``1998'',
       (B) by striking ``1994'' each place it appears and 
     inserting ``1999'', and
       (C) by striking ``1995'' each place it appears and 
     inserting ``2000''.
       (b) Increase in Aggregate Tax Which May Be Collected.--
     Paragraph (3) of section 4611(e) of such Code is amended by 
     striking ``$11,970,000,000'' each place it appears and 
     inserting ``$22,000,000,000'' and by striking ``December 31, 
     1995'' and inserting ``December 31, 2000''.
       (c) Extension of Repayment Deadline for Superfund 
     Borrowing.--Subparagraph (B) of section 9507(d)(3) of such 
     Code is amended by striking ``December 31, 1995'' and 
     inserting ``December 31, 2000''.
       (d) Extension of Trust Fund Purposes.--Subparagraph (A) of 
     section 9507(c)(1) of such Code is amended--
       (1) by striking clause (i) and inserting the following:
       ``(i) paragraphs (1), (2), (5), (6), (7), (8), (9), and 
     (10) of section 111(a) of CERCLA as in effect on the date of 
     the enactment of the Superfund Reform Act of 1995,'', and
       (2) by striking clause (iii) and inserting the following:
       ``(iii) subsections (m), (n), (q), (r), (s), and (t) of 
     section 111 of CERCLA (as so in effect), or''.
       (e) Extension of Authorization of Appropriations to Trust 
     Fund.--Subsection (b) of section 517 of the Superfund Revenue 
     Act of 1986 (26 U.S.C. 9507 note) is amended by striking 
     ``and'' at the end of paragraph (8), by striking the period 
     at the end of paragraph (9) and inserting a comma, and by 
     adding at the end the following new paragraphs:
       ``(10) 1996, $250,000,000,
       ``(11) 1997, $250,000,000,
       ``(12) 1998, $250,000,000, and
       ``(13) 1999, $250,000,000,''.
       (f) Coordination With Other Provisions.--Paragraph (2) of 
     section 9507(e) of the Internal Revenue
                                 ______
                                 
      By Mr. LAUTENBERG (for himself, Mr. Baucus, Mr. Reid, Mr. 
        Moynihan, and Mr. Graham):
  S. 2028. A bill to assist the States and local governments in 
assessing and remediating brownfields and encouraging environmental 
cleanup programs, and for other purposes; to the Committee on 
Environment and Public Works.

[[Page S9566]]

         the brownfields and environmental cleanup act of 1996

  Mr. LAUTENBERG. Mr. President, today, along with Senators Baucus and 
Reid, I am introducing the Brownfields and Environmental Cleanup Act of 
1996. This legislation is designed to foster the cleanup and reuse of 
thousands of lightly contaminated and abandoned properties across the 
country.
  Mr. President, I have long been interested in the issue of abandoned, 
underutilized and contaminated industrial properties, commonly known as 
brownfields.
  For years, decaying industrial plants have defined the skyline and 
contaminated the land in many of our urban, suburban, and rural areas.
  Their rusting frames, like aging skyscrapers, are a silent reminder 
of the manufacturers that left, taking jobs--and often hope--with them.
  Yet, in these fallow fields may lie the seeds of economic 
revitalization. I continue to feel, as I did when I introduced similar 
legislation in 1993, that a brownfields' cleanup program can spur 
significant economic development and create jobs. Such a cleanup 
initiative makes good environmental sense, and good business sense.
  In fact, if one picture is worth a thousand words, then we need only 
look at a few of the brownfields' success stories in my State of New 
Jersey.
  In Hackensack, the city's department of public works yard, and an 
adjacent oil tank farm, have been redeveloped as a Price Club discount 
store, complete with riverwalk and park area. The site is now estimated 
to be worth about $15 million dollars, and the project has created 350 
jobs.
  Near Elizabeth, NJ, a withering brownfield has been converted into a 
thriving IKEA furniture store.
  The story is the same across the country, where unused, unattractive 
land is being transformed into valuable community assets.
  A pilot project in Cleveland resulted in $3.2 million in private 
investment, a $1 million increase in the local tax base, and more than 
170 new jobs. And in Buffalo, NY, a hydroponic tomato farm was built on 
a former Republic Steel site, bringing 300 new jobs to the area.
  In fact, the potential for job creation is enormous. And every 
revitalized brownfield may represent a field of dreams to an unemployed 
worker.
  Mr. President, while fostering jobs, brownfields' cleanup also means 
that dangerous contaminants are removed from our environment. The 
subsequent benefit to our--and our children's--health could be 
enormous. Furthermore, the scars of decades of neglected industrial 
waste, which disfigure our cities and suburbs, may finally be allowed 
to heal.
  Brownfield initiatives are important, because the Superfund Program 
only provides for cleaning-up those abandoned waste sites that pose the 
most serious threats. However, there are over 100,000 brownfields that 
don't fall under Superfund, because of lower levels of contamination.
  The risks posed by many of these sites may be relatively low. But 
their full economic use is being stymied, because there's no ready 
mechanism for fostering and financing cleanups--even when the property 
owner is ready, willing and eager to do so. In addition, prospective 
purchasers, developers and bankers are reluctant to invest in 
brownfields because they could be held liable for cleaning up the 
contamination.
  This is unfortunate because, as I noted these abandoned or 
underutilized sites have enormous potential for economic development.
  To unleash this potential, several States--including New Jersey--have 
developed expedited procedures to clean-up sites that do not pose a 
significant threat to public health or the environment.
  Under these cleanup programs, owners can volunteer to pay for the 
costs of remediation and State oversight. In return, they get a letter 
from the State which assures prospective buyers and lenders that the 
property has been cleaned up to the Government's satisfaction, and that 
other parties need not worry about potential liability. This so-called 
clean bill of health removes a major impediment to economic 
development, and it can help revitalize stagnant local economies.
  In New Jersey, 550 parties signed up for the State's voluntary 
cleanup program in just the first 18 months of its existence. The 
economic benefits, in terms of jobs and economic development, are 
undeniable.
  But if we are to move forward, if we are to foster economic 
revitalization and economic renewal, if we are to continue this public-
private partnership for progress, then we must remove all major 
roadblocks to brownfields' cleanup and reuse.
  My legislation addresses the major barriers preventing redevelopment 
of brownfields sites.
  This bill would provide financial assistance, in the form of grants, 
to local and State governments to evaluate brownfields sites. 
Consequently, interested parties would know what is required to clean 
the site, and what reuse would best suit the property.
  My bill would also provide grants to State and local governments to 
establish and capitalize low-interest loan programs for cleanups. These 
funds could be lent to current owners, prospective purchasers, and 
municipalities.
  The minimal seed money envisioned by this program would leverage 
substantial economic payoffs, and turn lands which may be of negative 
worth into assets for the future.
  This legislation would also place limits on the potential liability 
of innocent property buyers. So long as purchasers or landowners made 
reasonable inquires, they would be exempt from Superfund liability.
  The bill also limits the liability of banks and other lending 
institutions, which hold title merely as a result of their security 
interest in the property. As long as they did not participate in the 
management of the site, the institutions could not be held liable.
  My bill would make similar reforms in the area of fiduciary 
liability, and would limit the liability for those who merely act as 
trustees or executors.
  Cleaning up brownfields means a safer environment in the future, and 
more jobs for places that need them in the present.
  Mr. President, the introduction of this bill is not a substitute for 
a Superfund bill. Throughout this session of Congress, Senators Baucus, 
Smith, Chafee, and I have worked long and hard to try and craft a 
Superfund bill which we could all agree on and the President could sign 
into law.
  However, I am forced to acknowledge that the calendar is against us 
at this point. Consequently, I think it is important to use the time 
remaining to focus on one of the areas where there is general 
consensus--the desire to facilitate the cleanup and development of 
blighted areas, and to provide the legislative framework to make this 
possible.
  Interest in fostering the cleanup of brownfields has been bipartisan, 
and it exists in both in our own body and among our colleagues on the 
other side of the Capitol. It also has the strong backing of the EPA, 
and I want to thank Director Carol Browner for her support.
  Moreover, this bill is largely based on S. 773, which was unanimously 
reported by the Environment and Public Works Committee in the 103d 
Congress, and on the lender, prospective purchaser and innocent 
landowner provisions in S. 1285 and S. 1834, that was reported by the 
Environment and Public Works Committee last Congress.
  Mr. President, as ranking Democratic member of the Superfund 
Subcommittee of the Environment and Public Works Committee, I am 
committed to continuing the quest to reform the Superfund program. But 
I believe that we should move ahead, now, to cleanup thousands of 
priority sites not governed by the Superfund.
  This is an area where we can--and should--put aside our differences 
and work for a goal which we all embrace.
  Mr. President, our citizens want progress on both the environmental 
and economic fronts. The Brownfields legislation that I introduce today 
supports both goals. It creates a vehicle for cleanups which can help 
keep us on-board for environmental improvement and on-track for 
economic growth.
  Mr. President, I ask unanimous consent to print a copy of the bill in 
the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

[[Page S9567]]

                                S. 2028

       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 ``Brownfields and 
     Environmental Cleanup Act of 1996''.

     SEC. 2. FINDINGS AND PURPOSE.

       (a) Findings.--Congress finds that--
       (1) past uses of land in the United States for industrial 
     and commercial purposes have created many sites throughout 
     the United States that have environmental contamination;
       (2) Congress and the governments of States and political 
     subdivisions of States have enacted laws to--
       (A) prevent environmental contamination; and
       (B) carry out response actions to correct past instances of 
     environmental contamination;
       (3) many sites are minimally contaminated, do not pose 
     serious threats to human health or the environment, and can 
     be satisfactorily remediated expeditiously with little 
     government oversight;
       (4) promoting the assessment, cleanup and redevelopment of 
     contaminated sites could lead to significant environmental 
     and economic benefits, particularly in any case in which a 
     cleanup can be completed quickly and during a period of time 
     that meets short-term business needs;
       (5) the private market demand for sites affected by 
     environmental contamination frequently is reduced, often due 
     to uncertainties regarding liability or potential cleanup 
     costs of innocent landowners, lenders, fiduciaries, and 
     prospective purchasers under Federal law:
       (6) the abandonment or underutilization of affected sites 
     impairs the ability of the Federal Government and the 
     governments of States and political subdivisions of States to 
     provide economic opportunities for the people of the United 
     States, particularly the unemployed and economically 
     disadvantaged;
       (7) the abandonment or underuse of affected sites also 
     results in the inefficient use of public facilities and 
     services, as well as land and other natural resources, and 
     extends conditions of blight in local communities;
       (8) cooperation among Federal agencies, departments and 
     agencies of State and political subdivisions of States, local 
     community development organizations, and current owners and 
     prospective purchasers of affected sites is required to 
     accomplish timely response actions and the redevelopment or 
     reuse of affected sites;
       (9) there is a need for a program to--
       (A) encourage cleanups of affected sites; and
       (B) facilitate the establishment and enhancement of 
     programs by States and local governments to foster cleanups 
     of affected site though capitalization of loan programs; and
       (10) there is a need to provide financial incentives and 
     assistance to characterize certain affected sites and 
     facilitate the cleanup of the sites so that the sites may be 
     redeveloped for beneficial uses.
       (b) Purpose.--The purpose of this Act is to create new 
     business and employment opportunities through the economic 
     redevelopment of affected sites that generally do not pose a 
     serious threat to human health or the environment and to 
     stimulate the assessment and cleanup of affected sites by--
       (1) encouraging States and local governments to provide for 
     characterization and cleanup of sites that may not be 
     remediated under other environmental laws (including 
     regulations) in effect on the date of enactment of this Act;
       (2) encouraging local governments and private parties, 
     including local community development organizations, to 
     participate in programs, such as State cleanup programs, that 
     facilitate expedited response actions that are consistent 
     with business needs at affected sites;
       (3) directing the Administrator to establish programs that 
     provide financial assistance to--
       (A) facilitate site assessments of certain affected sites;
       (B) encourage cleanup of appropriate sites through 
     capitalization of loan programs; and
       (C) encouraging workforce development in areas adversely 
     affected by contaminated properties; and
       (4) reducing transaction costs and paperwork, and 
     preventing needless duplication of effort and delay at all 
     levels of government.

     SEC. 3. DEFINITIONS.

       As used in this Act (unless the context clearly requires 
     otherwise):
       (1) Administrative costs.--The term ``administrative 
     costs'' means eligible costs that are not nonadministrative 
     costs.
       (2) Administrator.--The term ``Administrator'' means the 
     Administrator of the Environmental Protection Agency.
       (3) Affected site.--
       (A) In general.--Except as provided in subparagraph (B), 
     the term ``affected site'' means a facility that has or is 
     suspected of having environmental contamination that--
       (i) could prevent the timely use, reuse, or redevelopment 
     of the facility; and
       (ii) is relatively limited in scope or severity and can be 
     comprehensively characterized and readily analyzed.
       (B) Exceptions.--The term does not include--
       (i) any facility that is the subject of a planned or an 
     ongoing response action under the Comprehensive Environmental 
     Response, Compensation, and Liability Act of 1980 (42 U.S.C. 
     9601 et seq.), except that the term includes a facility for 
     which a preliminary assessment, site investigation or removal 
     action has been completed and with respect to which the 
     Administrator has decided not to take further response 
     action, including cost recovery action;
       (ii) any facility included, or proposed for inclusion, on 
     the National Priorities List maintained by the Administrator 
     under such Act;
       (iii) any facility with respect to which a record of 
     decision, other than a no-action record of decision, has been 
     issued by the President under section 104 of the 
     Comprehensive Environmental Response, Compensation, and 
     Liability Act of 1980 (42 U.S.C. 9604) with respect to the 
     facility;
       (iv) any facility that is subject to corrective action 
     under section 3004(u) or 3008(h) of the Solid Waste Disposal 
     Act (42 U.S.C. 6924(u) or 6928(h)) at the time that an 
     application for loan assistance with respect to the facility 
     is submitted under this title, including any facility with 
     respect to which a corrective action permit or order has been 
     issued or modified to require the implementation of 
     corrective measures;
       (v) any land disposal unit with respect to which a closure 
     notification under subtitle C of the Solid Waste Disposal Act 
     (42 U.S.C. 6921 et seq.) has been submitted and closure 
     requirements have been specified in a closure plan or permit;
       (vi) any facility at which there has been a release of 
     polychlorinated biphenyls and that is subject to the 
     requirements of the Toxic Substances Control Act (15 U.S.C. 
     2601 et seq.);
       (vii) any facility with respect to which an administrative 
     order on consent or a judicial consent decree requiring 
     cleanup has been entered into by the President and is still 
     in effect under-
       (I) the Comprehensive Environmental Response, Compensation, 
     and Liability Act of 1980 (42 U.S.C. 9601 et seq.);
       (II) the Solid Waste Disposal Act (42 U.S.C. 6901, et 
     seq.);
       (III) the Federal Water Pollution Control Act (33 U.S.C. 
     1251 et seq.);
       (IV) the Toxic Substances Control Act (15 U.S.C. 2601 et 
     seq.); or
       (V) title XIV of the Public Health Service Act (commonly 
     known as the ``Safe Drinking Water Act'') (42 U.S.C. 300f et 
     seq.);
       (viii) any facility at which assistance for response 
     activities may be obtained pursuant to subtitle I of the 
     Solid Waste Disposal Act (42 U.S.C. 6991 et seq.) from the 
     Leaking Underground Storage Tank Trust Fund established by 
     section 9508 of the Internal Revenue Code of 1986; and
       (ix) a facility owned or operated by a department, agency 
     or instrumentality of the United States, except for lands 
     held in trust by the United States for Indian tribes.
       (4) Contaminant.--The term ``contaminant'' includes any 
     hazardous substance (as defined in section 101(14) of the 
     Comprehensive Environmental Response, Compensation, and 
     Liability Act of 1980 (42 U.S.C. 9601(14)).
       (5) Current owner.--The term ``current owner'' means, with 
     respect to a voluntary cleanup, an owner of an affected site 
     or facility at the time of the cleanup.
       (6) Disposal.--The term ``disposal'' has the meaning 
     provided the term in section 1004(3) of the Solid Waste 
     Disposal Act (42 U.S.C. 6903(3)).
       (7) Environment.--The term ``environment'' has the meaning 
     provided the term in section 101(8) of the Comprehensive 
     Environmental Response, Compensation, and Liability Act of 
     1980 (42 U.S.C. 9601(8)).
       (8) Environmental contamination.--The term ``environmental 
     contamination'' means the existence at a facility of 1 or 
     more contaminants that may pose a threat to human health or 
     the environment.
       (9) Facility.--The term ``facility'' has the meaning 
     provided the term in section 101(9) of the Comprehensive 
     Environmental Response, Compensation, and Liability Act of 
     1980 (42 U.S.C. 9601(9)).
       (10) Grant.--The term ``grant'' includes a cooperative 
     agreement.
       (11) Ground water.--The term ``ground water'' has the 
     meaning provided the term in section 101(12) of the 
     Comprehensive Environmental Response, Compensation, and 
     Liability Act of 1980 (42 U.S.C. 9601(12)).
       (12) Indian tribe.--The term ``Indian tribe'' has the 
     meaning provided the term in section 101(36) of the 
     Comprehensive Environmental Response, Compensation, and 
     Liability Act of 1980 (42 U.S.C. 9601(36)).
       (13) Local government.--The term ``local government'' has 
     the meaning provided the term ``unit of general local 
     government'' in the first sentence of section 102(a)(1) of 
     the Housing and Community Development Act of 1974 (42 
     U.S.C. 5302(a)(1)), except that the term includes Indian 
     tribe.
       (14) Natural resources.--The term ``natural resources'' has 
     the meaning provided the term in section 101(16) of the 
     Comprehensive Environmental Response, Compensation, Liability 
     Act of 1980 (42 U.S.C. 9601(16)).
       (15) Nonadministrative costs.--The term ``nonadministrative 
     costs'' includes the cost of--
       (A) inventorying and classifying properties with probable 
     contamination;
       (B) oversight for a cleanup at an affected site by a 
     contractor, current owner, or prospective purchaser;
       (C) identifying the probable extent and nature of 
     environmental contamination at the

[[Page S9568]]

     affected site, and the preferred manner of carrying out a 
     cleanup at the affected site;
       (D) the cleanup, including onsite and off-site treatment of 
     contaminants; and
       (E) monitoring ground water or other natural resources at 
     the affected site.
       (16) Owner.--The term ``owner'' has the meaning provided 
     the term in section 101(20) of the Comprehensive 
     Environmental Response, Compensation, and Liability Act of 
     1980 (42 U.S.C. 9601(20)).
       (17) Person.--The term ``person'' has the meaning provided 
     the term in section 101(21) of the Comprehensive 
     Environmental Response, Compensation, and Liability Act of 
     1980 (42 U.S.C. 9601(21)).
       (18) Prospective purchaser.--The term ``prospective 
     purchaser'' means a prospective purchaser of an affected 
     site.
       (19) Release--The term ``release'' has the meaning provided 
     the term in section 101(22) of the Comprehensive 
     Environmental Response, Compensation, and Liability Act of 
     1980 (42 U.S.C. 9601(22)).
       (20) Response action.--The term ``response action'' has the 
     meaning provided the term ``response'' in section 102(25) of 
     such Act (42 U.S.C. 9601(25)).
       (21) Site characterization.--
       (A) In general.--The term ``site characterization'' means 
     an investigation that determines the nature and extent of a 
     release or potential release of a hazardous substance at a 
     site and meets the requirements referred to in 
     subparagraph (B).
       (B) Investigation.--For the purposes of this paragraph, an 
     investigation that meets the requirements of this 
     subparagraph--
       (i) shall include--
       (I) an onsite evaluation; and
       (II) sufficient testing, sampling, and other field data 
     gathering activities to accurately determine whether the site 
     is contaminated and the threats to human health and the 
     environment posed by the release of contaminants at the site; 
     and
       (ii) may also include--
       (I) review of existing information regarding the site and 
     previous uses (available at the time of the review); and
       (II) an offsite evaluation, if appropriate.
       (22) State.--The term ``State'' has the meaning provided 
     the term under section 101(27) of the Comprehensive 
     Environmental Response, Compensation, and Liability Act of 
     1980 (42 U.S.C. 9601(27)).

       TITLE I--BROWNFIELD REMEDIATION AND ENVIRONMENTAL CLEANUP

     SEC. 101. SITE CHARACTERIZATION GRANT PROGRAM.

       (a) In General.--The Administrator shall establish a 
     program to provide grants to local governments to inventory 
     brownfield sites and to conduct site characterizations of 
     affected sites at which cleanups are being conducted or are 
     proposed to be conducted under a State voluntary cleanup 
     program, State superfund program, or other State cleanup 
     program.
       (b) Scope of Program.--
       (1) Grant awards.--In carrying out the program establish 
     under subsection (a), the Administrator may award a grant to 
     the head of each local government that submits to the 
     Administrator an application (that is approved by the 
     Administrator) to conduct an inventory of sites and a site 
     characterization at an affected site or sites within the 
     jurisdiction of the local government.
       (2) Grant application.--An application for a grant under 
     this section shall include, at a minimum, each of the 
     following:
       (A) An identification of the brownfield areas for which 
     assistance is sought and a description of the effect of the 
     brownfields on the community, including a description of the 
     nature and extent of any known or suspected environmental 
     contamination within the areas.
       (B) The need for Federal support.
       (C) A demonstration of the potential of the assistance to 
     stimulate economic development, including the extent to which 
     the assistance will stimulate the availability of other funds 
     for site characterization, site identification, or 
     environmental remediation and subsequent redevelopment of the 
     areas in which eligible brownfields sites are situated.
       (D) The existing local commitment, which shall include a 
     community involvement plan that demonstrates meaningful 
     community involvement.
       (E) A plan that shows how the site characterization, site 
     identification, or environmental remediation and subsequent 
     development shall be implemented, including an environmental 
     plan that ensures the use of sound environmental procedures, 
     an explanation of the existing appropriate government 
     authority and support for the project, proposed funding 
     mechanisms for any additional work, and the proposed land 
     ownership plan.
       (F) A statement on the long-term benefits and the 
     sustainability of the proposed project that includes the 
     national replicability and measures of success of the project 
     and, to the extent known, the potential of the plan for the 
     areas in which eligible brownfields sites are situated to 
     stimulate economic development of the area on completion of 
     the environmental remediation.
       (G) A statement that describes how the proposed site 
     inventory and characterization program will analyze the 
     extent to which the project or projects will reduce potential 
     health and environmental threats caused by the presence of or 
     potential releases of contaminants at or from the site or 
     sites.
       (H) A plan for the distribution of the grant monies among 
     sites within the jurisdiction of the State or local 
     government, including mechanisms to ensure a fair 
     distribution of the grant monies.
       (I) Such other factors as the Administrator considers 
     relevant to carry out the purposes of this title.
       (3) Approval of application.--
       (A) In general.--In making a decision whether to approve an 
     application submitted under paragraph (1) the Administrator 
     shall consider the criteria in the application, and--
       (i) the financial need of the State or local government for 
     funds to conduct a characterization of the site or sites;
       (ii) the demonstrable potential of the affected site or 
     sites for stimulating economic development on completion of 
     the cleanup of the affected site if the cleanup is necessary;
       (iii) to the extent information is available, the estimated 
     fair market value of the site or sites (4) after cleanup;
       (iv) to the extent information is available, other 
     economically viable, commercial activity on real property--
       (I) located within the immediate vicinity of the affected 
     site at the time of consideration of the application; or
       (II) projected to be located within the immediate vicinity 
     of the affected site by the date that is 5 years after the 
     date of the consideration of the application;
       (v) the potential of the affected site for creating new 
     business and employment opportunities on completion of the 
     cleanup of the site;
       (vi) whether the affected site is located in an 
     economically distressed community; and
       (vii) such other factors as the Administrator considers 
     relevant to carry out the purposes of the grant program under 
     this section.
       (B) Grant conditions.--As a condition for awarding a grant 
     under this section, the Administrator may, on the basis of 
     the criteria considered under subparagraph (A), attach such 
     conditions to the grant award as the Administrator determines 
     appropriate.
       (4) Grant amount.--The amount of a grant awarded to any 
     local government under subsection (a) for characterization of 
     an affected site or sites shall not exceed $200,000.
       (5) Termination of grants.--If the Administrator determines 
     that a local government that receives a grant under this 
     subsection is in violation of a condition of a grant award 
     referred to in paragraph (3), the Administrator may terminate 
     the grant made to the local government and require full or 
     partial repayment of the grant award.

     SEC. 102. ECONOMIC REDEVELOPMENT ASSISTANCE GRANTS FOR LOAN 
                   PROGRAMS.

       (a) Establishment of Program.--The Administrator shall 
     establish a program to provide grants to be used by State or 
     local governments to capitalize loan programs for the cleanup 
     of affected sites. These loans may be provided by the State 
     or local government to finance cleanups of affected sites by 
     the State or local government, or by an owner or a 
     prospective purchaser of an affected site (including a local 
     government) at which a cleanup is being conducted or is 
     proposed to be conducted under Federal or State authority, 
     including a State voluntary clean-up program.
       (b) Scope of Program.--
       (1) In general.--
       (A) Grants.--The Administrator may award a grant to a local 
     or State government that is an eligible applicant described 
     in subsection (a)(1) that submits an application to the 
     Administrator that is approved by the Administrator. The 
     grant monies shall be used by the local or State government 
     to capitalize a loan fund to be used for cleanup of an 
     affected site or affected sites.
       (B) Grant application.--An application for a grant under 
     this section shall be in such form as the Administrator 
     determines appropriate. At a minimum, the application 
     submitted by the State or local government to establish a 
     revolving loan program shall include the following:
       (i) Insofar as the sites within their jurisdiction have 
     been identified and information as to the contaminated sites 
     is known, a description of the affected site or sites, 
     including the nature and extent of any known or suspected 
     environmental contamination at the affected site or sites.
       (ii) Identification of the criteria to be used by the local 
     or State government in providing for loans under the program. 
     This criteria shall include the financial standing of the 
     applicants for the loans, the use to which the loans will be 
     put, and the provisions to be used to ensure repayment of the 
     funds. These criteria shall also include:
       (I) A complete description of the financial standing of the 
     applicant that includes a description of the assets, cash 
     flow, and liabilities of the applicant.
       (II) A written certification that attests that the 
     applicant has attempted, and has been unable, to secure 
     financing from a private lending institution for the cleanup 
     action that is the subject of the loan application.
       (III) The proposed method, and anticipated period of time 
     required, to clean up the environmental contamination at the 
     affected site.
       (IV) An estimate of the proposed total cost of the cleanup 
     to be conducted at the site.
       (V) An analysis that demonstrates the potential of the 
     affected site for stimulating economic development on 
     completion of the cleanup of the site.

[[Page S9569]]

       (2) Grant approval.--In determining whether to award a 
     grant under this section, the administrator shall consider--
       (A) the need of the local or State government for financial 
     assistance to clean up the affected site or sites that are 
     the subject of the application, taking into consideration the 
     financial resources available to the local or State 
     government;
       (B) the ability of the local or State government to ensure 
     that the applicants repay the loans in a timely manner;
       (C) the extent to which the cleanup of the affected site or 
     sites would reduce health and environmental risks caused by 
     the release of contaminants at, or from, the affected site or 
     sites;
       (D) the demonstrable potential of the affected site or 
     sites for stimulating economic development on completion of 
     the cleanup;
       (E) the demonstrated ability of the local or State. 
     Government to administer such a loan program;
       (F) the demonstrated experience of the local or State 
     government regarding brownfields and the reuse of 
     contaminated land, including whether or not the government 
     has received grant monies under the Comprehensive 
     Environmental Response, Compensation, and Liability Act of 
     1980 (42 U.S.C. 9601 et seq.) to characterize brownfields 
     sites provided however that applicants who have not 
     previously received such grant monies may also be considered 
     for awards under this section;
       (G) the efficiency of having the loan administered by the 
     applicant entity level of government;
       (H) the experience of administering any loan programs by 
     the entity, including the loan repayment rates;
       (I) the demonstrations made regarding the ability of the 
     local or State government to ensure a fair distribution of 
     grant monies among sites within their jurisdiction; and
       (J) such other factors as the Administrator considers 
     relevant to carry out the purposes of the loan program 
     established under this section.
       (3) Grant amount--The amount of a grant made to a local or 
     State applicant under this section shall not exceed $500,000.
       (4) State approval.--Each application for a grant under 
     this section shall, as a condition for approval by the 
     Administrator, include a written statement by the local or 
     State government that cleanups to be funded under their loan 
     programs shall be conducted under the auspices of and 
     compliant with the State voluntary cleanup program or State 
     Superfund program or Federal authority, and that--
       (A) the cleanup or proposed voluntary cleanup is cost-
     effective; and
       (B) the estimated total cost of the cleanup is reasonable.
       (c) Grant Agreements.--Each grant under this section shall 
     be made pursuant to a grant agreement. At a minimum, the 
     grant agreement shall include provisions that ensure the 
     following:
       (1) The grant recipient shall include in all loan 
     agreements a requirement that the loan recipient shall comply 
     with all applicable Federal and State laws applicable to the 
     cleanup and shall ensure that the cleanup is protective of 
     human health and the environment.
       (2) The local or State government shall require and ensure 
     repayment of the loan consistent with this title.
       (3) The State or local government shall use the funds 
     solely for the purposes of establishing and capitalizing a 
     loan program pursuant to the provisions of this title and of 
     cleaning up the environmental contamination at the affected 
     site or sites.
       (4) The State or local government shall require in each 
     loan agreement, and take necessary steps to ensure, that the 
     loan recipient shall use the loan funds solely for the 
     purposes stated in paragraph (3), and shall require the 
     return any excess funds immediately on a determination by the 
     appropriate State or local official that the cleanup has been 
     completed.
       (5) The funds shall not be transferable, unless the 
     Administrator agrees to the transfer in writing.
       (6) Lien.--
       (A) In general.--A lien in favor of the State shall arise 
     on the contaminated property subject to a loan under this 
     section. The lien shall cover all real property included in 
     the legal description of the property at the time the loan 
     agreement provided for in this section is signed, and all 
     rights to the property, and shall continue until the terms 
     and conditions of the loan agreement have been fully 
     satisfied. The lien shall arise at the time a security 
     interest is appropriately recorded in the real property 
     records of the appropriate office of the State, county, or 
     other governmental subdivision, as designated by State law, 
     in which the real property subject to the lien is located, 
     and shall be subject to the rights of any purchaser, holder 
     of a security interest, or judgment lien creditor whose 
     interest is or has been perfected under applicable State law 
     before the notice has been filed in the appropriate office 
     within the State, county, or other governmental subdivision, 
     as designated by State law, in which the real property 
     subject to the lien is located.
       (B) Definitions.--In this paragraph, the terms ``security 
     interest'' and ``purchaser'' have the meanings provided in 
     section 6323(h) of the Internal Revenue Code of 1986.
       (7) Such other terms and conditions that the Administrator 
     determines to be necessary to protect the financial interests 
     of the United States or to protect human health and the 
     environment.
       (e) Audits.--The Inspector General of the Environmental 
     Protection Agency shall audit a portion of the grants awarded 
     under this section to ensure that all funds are used for the 
     purposes set forth in this section. The result of the audit 
     shall be taken into account in awarding any future grant 
     monies to the entity of State or local government.

     SEC. 103. REGULATIONS.

       The Administrator may promulgate such regulations as are 
     necessary to carry out this Act. The regulations shall 
     include the procedures and standards that the Administrator 
     considers necessary, including procedures and standards for 
     evaluating an application for a grant or loan submitted under 
     this Act.

     SEC. 104. ECONOMIC REDEVELOPMENT GRANTS.

       (a) Expenditures From the Superfund.--Amounts in the 
     Superfund shall be made available, consistent with and for 
     the purposes of carrying out the grant program established 
     under sections 101 and 102.
       (b) Authority To Award Grants.--There are authorized to be 
     appropriated from the Superfund, as grants to local and State 
     governments as provided for in sections 101 and 102, an 
     amount equal to $25,000,000 for each of fiscal years 1997, 
     1998, 1999, 2000, and 2001.

     SEC. 105. AUTHORIZATION OF APPROPRIATIONS

       (a) Site Characterization Program.--There are authorized to 
     be appropriated to the Environmental Protection Agency to 
     carry out section 101, an amount not to exceed $10,000,000 
     for each of fiscal years 1997 through 2001.
       (b) Economic Redevelopment Assistance Program.--There are 
     authorized to be appropriated to the Environmental Protection 
     Agency to carry out section 102 an amount not to exceed 
     $15,000,000 for each of fiscal years 1997 through 2001.
       (c) Availability of Funds.--The amounts appropriated 
     pursuant to this section shall remain available until 
     expended.

     SEC. 106. REPORTS.

       (a) In General.--Not later than 1 year after the date of 
     enactment of this Act, and not later than January 31 of each 
     of the 3 calendar years thereafter, the Administrator shall 
     prepare and submit a report describing the achievements of 
     each program established under this title to--
       (1) the Committee on Environment and Public Works of the 
     Senate; and
       (2) the Committee on Energy and Commerce of the House of 
     Representatives.
       (b) Contents of Report.--Each report shall, with respect to 
     each of the programs established under this title, include a 
     description of--
       (1) the number of applications received by the 
     Administrator during the preceding calendar year;
       (2) the number of applications approved by the 
     Administrator during the preceding calendar year; and
       (3) the allocation of assistance under sections 101 and 102 
     among the States and local governments for assistance under 
     this title.

     SEC. 107. FUNDING.

       (a) Administrative Cost Limitation.--Not more than 15 
     percent of the amount of a grant made pursuant to this title 
     may be used for administrative costs. No grant made pursuant 
     to this title may be used to pay for fines or penalties owed 
     to a State or the Federal Government, or for Federal cost-
     sharing requirements.
       (b) Other Limitations.--Funds made available to a State or 
     local government pursuant to the grant programs established 
     under sections 101 and 102 shall be used only for 
     inventorying, assessing, and characterizing sites as 
     authorized by this Act, and for capitalizing a loan program 
     as authorized by this Act. Funds made available under this 
     title may not be used to relieve a local government or State 
     of the commitment or responsibilities of the local government 
     or State under State law to assist or carry out cleanup 
     actions at affected sites.

     SEC. 108. STATUTORY CONSTRUCTION.

       Nothing in this title is intended to affect the liability 
     or response authorities for environmental contamination of 
     any other law (including any regulation), including--
       (1) the Comprehensive Environmental Response, Compensation, 
     and Liability Act of 1980 (42 U.S.C. 9601 et seq.);
       (2) the Solid Waste Disposal Act (42 U.S.C. 6901 et seq.);
       (3) the Federal Water Pollution Control Act (33 U.S.C. 1251 
     et seq.);
       (4) the Toxic Substances Control Act (15 U.S.C. 2601 et 
     seq.); and
       (5) title XIV of the Public Health Service Act (commonly 
     known as the ``Safe Drinking Water Act'') (42 U.S.C. 300f et 
     seq.).

                    TITLE II--PROSPECTIVE PURCHASERS

     SEC. 201. LIMITATIONS ON LIABILITY FOR RESPONSE COSTS FOR 
                   PROSPECTIVE PURCHASERS.

       (a) Limitations on Liability.--Section 107 of the 
     Comprehensive Environmental Response, Compensation, and 
     Liability Act of 1980 (42 U.S.C. 9607) is amended by adding 
     at the end the following new subsection:
       ``(n) Limitations on Liability for Prospective 
     Purchasers.--Notwithstanding paragraphs (1) through (4) of 
     subsection (a), a person who does not impede the performance 
     of response actions or natural resource restoration at a 
     facility shall not be liable under this Act, to the extent 
     liability is based solely on subsection (a)(1) for a release 
     or threat of release from a facility, and the person is a 
     bona fide prospective purchaser of the facility.

[[Page S9570]]

       (b) Prospective Purchaser and Windfall Lien.--Section 107 
     of the Comprehensive Environmental Response, Compensation, 
     and Liability Act of 1980 (as amended by subsection (a)) is 
     further amended by inserting after subsection (n) the 
     following new subsection:
       ``(o) Prospective Purchaser and Windfall Lien.--
       ``(1) Lien.--In any case in which there are unrecovered 
     response costs at a facility for which an owner of the 
     facility is not liable by reason of subsection (n), and the 
     conditions described in paragraph (2) are met, the United 
     States shall have a lien upon such facility, or may obtain 
     from the appropriate responsible party or parties, a lien on 
     other property or other assurances of payment satisfactory to 
     the Administrator, for such unrecovered costs. Such lien--
       ``(A) shall not exceed the increase in fair market value of 
     the property attributable to the response action at the time 
     of a subsequent sale or other disposition of the property;
       ``(B) shall arise at the time costs are first incurred by 
     the United States with respect to a response action at the 
     facility;
       ``(C) shall be subject to the requirements for notice and 
     validity established in paragraph (3) of subsection (l); and
       ``(D) shall continue until the earlier of satisfaction of 
     the lien or recovery of all response costs incurred at the 
     facility.
       ``(2) Conditions.--The conditions referred to in paragraph 
     (1) are the following:
       ``(A) Response action.--A response action for which there 
     are unrecovered costs is carried out at the facility.
       ``(B) Fair market value.--Such response action increases 
     the fair market value of the facility above the fair market 
     value of the facility that existed 180 days before the 
     response action was taken.''.
       (c) Section 101 of the Comprehensive Environmental 
     Response, Compensation, and Liability Act of 1980 (42 U.S.C. 
     9601) is amended by adding at the end the following new 
     paragraph:
       ``(39) Bona fide prospective purchaser.--The term `bona 
     fide prospective purchaser' means a person who acquires 
     ownership of a facility after the date of enactment of the 
     Brownfields and Environmental Cleanup Act of 1996, or a 
     tenant of such a person, who can establish each of the 
     following by a preponderance of the evidence:
       ``(A) Disposal prior to acquisition.--All active disposal 
     of hazardous substances at the facility occurred before that 
     person acquired the facility.
       ``(B) Inquiry.--The person made all appropriate inquiry 
     into the previous ownership and uses of the facility and its 
     real property in accordance with generally accepted good 
     commercial and customary standards and practices. The 
     standards and practices issued by the Administrator pursuant 
     to paragraph (35)(B)(ii) shall satisfy the requirements of 
     this subparagraph. In the case of property for residential or 
     other similar use purchased by a nongovernmental or 
     noncommercial entity, a site inspection and title search that 
     reveal no basis for further investigation satisfy the 
     requirements of this subparagraph.
       ``(C) Notices.--The person provided all legally required 
     notices with respect to the discovery or release of any 
     hazardous substances at the facility.
       ``(D) Care.--The person exercised appropriate care with 
     respect to hazardous substances found at the facility by 
     taking reasonable steps to stop on-going releases, prevent 
     threatened future releases of hazardous substances, and 
     prevent or limit human or natural resource exposure to 
     hazardous substances previously released into the 
     environment.
       ``(E) Cooperation, assistance, and access.--The person 
     provides full cooperation, assistance, and facility access to 
     those persons that are responsible for response actions at 
     the facility, including the cooperation and access necessary 
     for the installation, integrity, operation, and maintenance 
     of any complete or partial response action at the facility.
       ``(F) Relationship.--The person is not liable, or is not 
     affiliated with any other person that is potentially liable, 
     for response costs at the facility, through any direct or 
     indirect familial relationship, or any contractual, 
     corporate, or financial relationship other than that created 
     by the instruments by which title to the facility is conveyed 
     or financed.''.

               TITLE III--FIDUCIARY AND LENDER LIABILITY

     SEC. 301. FIDUCIARY LIABILITY.

       (a) Definitions.--Section 101 of the Comprehensive 
     Environmental Response, Compensation, and Liability Act of 
     1980 (42 U.S.C. 9601) (as amended by section 201(c)) is 
     amended by adding at the end the following:
       ``(40) Fiduciary.--The term `fiduciary'--
       ``(A) means a person acting for the benefit of another 
     party as a bona fide--
       ``(i) trustee;
       ``(ii) executor;
       ``(iii) administrator of an estate;
       ``(iv) custodian;
       ``(v) guardian of estates or guardian ad litem;
       ``(vi) court-appointed receiver;
       ``(vii) conservator;
       ``(viii) committee of estates of incapacitated persons or 
     other incapacitated persons;
       ``(ix) personal representative; or
       ``(x) representative in any other capacity that the 
     Administrator, pursuant to public notice, determines to be 
     similar to those listed in clauses (i) through (ix); and
       ``(B) does not include any person who--
       ``(i) had a role in establishing a trust, estate, or 
     fiduciary relationship if such trust, estate, or fiduciary 
     relationship has no objectively reasonable or 
     substantial purpose apart from the avoidance or limitation 
     of liability under this Act; or
       ``(ii) is acting as a fiduciary with respect to a trust or 
     other fiduciary estate that--
       ``(I) was not created as part of, or to facilitate, 1 or 
     more estate plans or pursuant to the incapacity of a natural 
     person; and
       ``(II) was organized for the primary purpose of, or is 
     engaged in, activity carrying on a trade or business for 
     profit.
       ``(41) Fiduciary capacity.--The term ``fiduciary 
     capacity'', in reference to an act of a person with respect 
     to a vessel or facility, means a capacity in which the person 
     holds title to a vessel or facility, or otherwise has control 
     of or an interest in a vessel or facility, pursuant to the 
     exercise of the responsibilities of the person as a 
     fiduciary.''.
       (b) Liability of Fiduciaries.--Title I of the Comprehensive 
     Environmental Response, Compensation, and Liability Act of 
     1980 (42 U.S.C. 9601 et seq.) is amended by adding at the end 
     the following new section:

     ``SEC. 127. LIABILITY OF FIDUCIARIES.

       ``(a) In General--The liability of a fiduciary that is 
     liable under any other provision of this Act for the release 
     or threatened release of a hazardous substance at, from, or 
     in connection with a vessel or facility held in a fiduciary 
     capacity, may not exceed the assets held in such fiduciary 
     capacity that are available to indemnify the fiduciary.
       ``(b) Exclusion.--Subsection (a) does not apply to the 
     extent that a person is liable under this Act independent of 
     such person's ownership or actions taken in a fiduciary 
     capacity.
       ``(c) Limitation--Subsections (a) and (d) shall not limit 
     the liability of a fiduciary whose failure to exercise due 
     care caused or contributed to the release of a hazardous 
     substance.
       ``(d) Safe Harbor.--A fiduciary shall not be liable in its 
     personal capacity under this Act for--
       ``(1) undertaking or directing another to undertake a 
     response action under section 107(d)(1) or under the 
     direction of an on-scene coordinator;
       ``(2) undertaking or directing another to undertake any 
     other lawful means of addressing hazardous substances in 
     connection with the vessel or facility;
       ``(3) terminating the fiduciary relationship;
       ``(4) including in the terms of a fiduciary agreement 
     covenant, warranty, or other terms of conditions that relate 
     to compliance with environmental laws, or monitoring or 
     enforcing such terms;
       ``(5) monitoring or undertaking 1 or more inspections of 
     the vessel or facility;
       ``(6) providing financial or other advice or counseling to 
     any other party to the fiduciary relationship, including the 
     settler or beneficiary;
       ``(7) restructuring, renegotiating, or otherwise altering a 
     term or condition of the fiduciary relationship;
       ``(8) acting in a fiduciary capacity with respect to a 
     vessel or facility that was contaminated before the 
     fiduciary's period of service; or
       ``(9) declining to take any of the actions described in 
     paragraphs (2) through (8).
       ``(e) Savings Clause.--Nothing in this section shall affect 
     the rights or immunities or other defenses that are available 
     under this Act or other applicable law to any person subject 
     to the provisions of this section. Nothing in this section 
     shall create any liability for any party. Nothing in this 
     section shall create a private right of action against a 
     fiduciary or any other party.
       ``(f) No Effect on Certain Persons.--Nothing in this 
     section shall be construed to affect the liability, if any, 
     of a person who--
       ``(1)(A) acts in a capacity other than a fiduciary 
     capacity; and
       ``(B) directly or indirectly benefits from a trust or 
     fiduciary relationship; or
       ``(2) who--
       ``(A) is a beneficiary and a fiduciary with respect to the 
     same fiduciary estate; and
       ``(B) as a fiduciary, receives benefits that exceed 
     customary or reasonable compensation, and incidental 
     benefits, permitted under other applicable law.
       ``(g) Regulatory Authority.--
       ``(1) In general.--The Administrator may--
       ``(A) issue such regulations as the Administrator deems 
     necessary to carry out this section; and
       ``(B) delegate and assign any duties or powers imposed upon 
     or assigned to the Administrator by this section, including 
     the authority to issue regulations.
       ``(2) Authority to clarify.--The authority under paragraph 
     (1) includes authority to clarify or interpret all terms, 
     including those used in this section, and to implement any 
     provision of this section.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to any claim that has not been fully adjudicated 
     as of the date of enactment of this Act.

     SEC. 302. LIABILITY OF LENDERS.

       (a) Definition of Participation in Management.--Section 
     101(20) of the Comprehensive Environmental Response, 
     Liability, and Compensation Act of 1980 (42 U.S.C. 9601(20)) 
     is amended--
       (1) in subparagraph (A), by striking the second sentence;
       (2) by amending paragraph (A)(iii) to read as follows:

[[Page S9571]]

       ``(iii) any person who owned, operated or otherwise 
     controlled activities at a vessel or facility immediately 
     before the United States (including any department, agency or 
     instrumentality), a unit of State or local government, or 
     their agents or appointees, acquired title or control of such 
     vessel or facility in any of the following ways:
       ``(I) through bankruptcy, tax delinquency, abandonment, or 
     escheat;
       ``(II) through foreclosure that is connected with the 
     provision of loans, discounts, advances, guarantees, 
     insurance, or other financial assistance, if the United 
     States or unit of State or local government meets the 
     requirements of paragraph (F)(ii) (I) and (II) of this 
     section;
       ``(III) through the exercise of statutory receivership or 
     conservatorship authority, including any liquidating or 
     winding up the affairs of any person or any subsidiary 
     thereof, if the governmental entity did not participate in 
     management of the vessel or facility prior to acquiring title 
     or control and meets the requirements of paragraph 
     (F)(ii)(II) of this section;
       ``(IV) through the exercise of any seizure or forfeiture 
     authority;
       ``(V) in any civil, criminal, or administrative enforcement 
     proceeding, whether by order or settlement, in which an 
     interest in a vessel or facility is conveyed to satisfy a 
     claim of the governmental entity, and the governmental entity 
     meets the requirements of this section; and
       ``(VI) temporarily in connection with a law enforcement 
     operation.'';
       (3) by amending paragraph (D) to read as follows:
       ``(D)(i) The term `owner or operator' does not include the 
     United States (including any department, agency, or 
     instrumentality) or a unit of State or local government that 
     acquires title or control of a vessel or facility in a manner 
     described in paragraph (A)(iii), or in any other 
     circumstances in which the government involuntary acquires 
     title by virtue of its function as sovereign.
       ``(ii) Notwithstanding subparagraph (i), if the United 
     States or a unit of State or a unit of State or local 
     government caused or contributed to the release or threatened 
     release of a hazardous substance from the facility, this Act 
     (including section 107) shall apply in the same manner and to 
     the same extent, procedurally and substantively, as the Act 
     does to any non-governmental entity.''; and
       (4) by adding at the end the following:
       ``(E) Exclusion of persons not participants in 
     management.--
       ``(i) Indicia of ownership to protect security interest.--
     The term `owner or operator' does not include--
       ``(I) a person, including a successor or assign of such 
     person, who, without participating in the management of a 
     vessel or facility, holds indicia of ownership primarily to 
     protect such person's security interest in the vessel or 
     facility; or
       ``(II) a successor or assign of a person described in 
     subclause (I).
       ``(ii) Nonparticipation in management prior to 
     foreclosure.--The term `owner or operator' does not include a 
     person that forecloses on a vessel or a facility even if such 
     person forecloses on such vessel or facility, sells, re-
     leases (in the case of a lease finance transaction), or 
     liquidates the vessel or facility, maintains business 
     activities, winds up operations, or undertakes any response 
     action under section 107(d)(1) or under the direction of an 
     on-scene coordinator, with respect to the vessel or facility, 
     or takes other measures to preserve, protect, or prepare the 
     vessel or facility prior to sale or disposition, if--
       ``(I) the person did not participate in management prior to 
     foreclosure; and
       ``(II) such person seeks to sell, re-lease (in the case of 
     a lease finance transaction), or otherwise divest such vessel 
     or facility at the earliest practical, commercially 
     reasonable time, on commercially reasonable terms, taking 
     into account market conditions and legal and regulatory 
     requirements.
       ``(F) Participation in management.--For purposes of 
     subparagraph (E)--
       ``(i) the term `participate in management' means actually 
     participating in the management or operational affairs of the 
     vessel or facility, and does not include merely having the 
     capacity to influence, or the unexercised right to control, 
     vessel or facility operations;
       (ii) a person shall be considered to `participate in 
     management' only if, while the borrower is still in 
     possession of the vessel or facility encumbered by the 
     security interest, such person--
       ``(I) exercises decisionmaking control over the 
     environmental compliance of a borrower, such that the person 
     has undertaken responsibility for the hazardous substance 
     handling or disposal practices of the borrower; or
       ``(II) exercises control at a level comparable to that of a 
     manager of the enterprise of the borrower, such that the 
     person has assumed or manifested responsibility for the 
     overall management of the enterprise encompassing day-to-day 
     decisionmaking with respect to environmental compliance, or 
     with respect to all or substantially all of the operational 
     aspects (as distinguished from financial or administrative 
     aspects) of the enterprise, other than environmental 
     compliance;
       ``(iii) the term `participate in management' does not 
     include conducting an act or failing to act prior to the time 
     that a security interest is created in a vessel or facility; 
     and
       ``(iv) the term `participate in management' does not 
     include-
       ``(I) holding such a security interest or, prior to 
     foreclosure, abandoning or releasing such a security 
     interest;
       ``(II) including in the terms of an extension of credit, or 
     in a contract or security agreement relating to such an 
     extension, covenant, warranty, or any other term or condition 
     that relates to environmental compliance;
       ``(III) monitoring or enforcing the term or condition of 
     the extension of credit or security interest;
       ``(IV) monitoring or undertaking 1 or more inspections of 
     the vessel or facility;
       ``(V) requiring the borrower to undertake response action 
     or other lawful means of addressing the release or threatened 
     release of a hazardous substance in connection with the 
     vessel or facility prior to, during, or upon the expiration 
     of the term of the extension of credit;
       ``(VI) providing financial or other advice or counseling in 
     an effort to mitigate, prevent, or cure default or diminution 
     in the value of the vessel or facility;
       ``(VII) restructuring, renegotiating, or otherwise agreeing 
     to alter a term or condition of the extension of credit or 
     security interest;
       ``(VIII) exercising other remedies that may be available 
     under applicable law for the breach of any term or condition 
     of the extension of credit or security agreement; or
       ``(IX) conducting a response action under section 107(d)(1) 
     or under the direction of an on-scene coordinator,

     if such actions do not rise to the level of participation in 
     management, as defined in clauses (i) and (ii).
       ``(G) Other terms.--As used in subparagraph (E), 
     subparagraph (F), and this subparagraph, the following 
     definitions shall apply:
       ``(i) Borrower.--The term ``borrower'' means a person whose 
     vessel or facility is encumbered by a security interest.
       ``(ii) Extension of credit.--The term `extension of credit' 
     includes a lease finance transaction--
       ``(I) in which the lessor does not initially select the 
     leased vessel or facility and does not during the lease term 
     control the daily operation or maintenance of the vessel or 
     facility; or
       ``(II) that conforms with regulations issued by the 
     appropriate Federal banking agency or the appropriate State 
     bank supervisor (as those terms are defined in section 3 of 
     the Federal Deposit Insurance Act (12 U.S.C. 1813)) or with 
     regulations issued by the National Credit Union 
     Administration Board, as appropriate.
       ``(iii) Financial or administrative aspect.--The term 
     `financial or administrative aspect' includes a function such 
     as a function of a credit manager, accounts payable officer, 
     accounts receivable officer, personnel manager, comptroller, 
     or chief financial officer, or any similar function.
       ``(iv) Foreclosure; foreclose.--The term `foreclosure' and 
     `foreclose' mean, respectively, acquiring, and to acquire 
     from a nonaffiliated party for subsequent disposition, a 
     vessel or facility through--
       ``(I) purchase at sale under a judgment or decree, a power 
     of sale, a nonjudicial foreclosure sale, or from a trustee, 
     deed in lieu of foreclosure, or similar conveyance, or 
     through repossession, if such vessel or facility was security 
     for an extension of credit previously contracted;
       ``(II) conveyance pursuant to an extension of credit 
     previously contracted, including the termination of a lease 
     agreement; or
       ``(III) any other formal or informal manner by which the 
     person acquires, for subsequent disposition, possession of 
     collateral in order to protect the security interest of the 
     person.
       ``(v) Operational aspect.--The term `operational aspect' 
     includes a function such as a function of a facility or plant 
     manager, operations manager, chief operating officer, or 
     chief executive officer.
       ``(vi) Security interest.--The term `security interest' 
     includes a right under a mortgage, deed of trust, assignment, 
     judgment lien, pledge, security agreement, factoring 
     agreement, or lease, or any other right accruing to a person 
     to secure the repayment of money, the performance of a duty, 
     or some other obligation.''.
       (b) Effective Date.--The amendments made by this section 
     shall be applicable with respect to any claim that has not 
     been finally adjudicated as of the date of enactment of this 
     Act.
       (c) Lender Liability Rule.--(1) Effective on the date of 
     enactment of this section, the final rule issued by the 
     Administrator of the Environmental Protection Agency on April 
     29, 1992 (57 Stat. Fed. Reg. 18344), shall be deemed to have 
     been validly issued pursuant to the authority of the 
     Comprehensive Environmental Response, Compensation, and 
     Liability Act of 1980, and to have been effective according 
     to the final rule's terms. No additional administrative or 
     judicial proceedings shall be necessary with respect to such 
     final rule.
       (2) Notwithstanding section 113(a) of the Comprehensive 
     Environmental Response, Compensation and Liability Act of 
     1980, no court shall have jurisdiction to review the final 
     rule issued by the Administrator of the Environmental 
     Protection Agency on April 29, 1992 (57 Fed. Reg. 18344).
       (3) Nothing in this subsection shall be construed to limit 
     the authority of the President or his delegate to amend the 
     final rule issued by the Administrator of the Environmental 
     Protection Agency on April 29, 1992

[[Page S9572]]

     (57 Fed. Reg. 18344), in accordance with applicable 
     provisions of law.
       (d) Regulatory Authority.--
       (1) In general.--The Administrator may--
       (A) issue such regulations as the Administrator deems 
     necessary to carry out the amendments made by this section; 
     and
       (B) delegate and assign any duties or powers imposed upon 
     or assigned to the Administrator by the amendments made by 
     this section, including the authority to issue regulations.
       (2) Authority to clarify.--The authority under paragraph 
     (1) includes authority to clarify or interpret all terms, 
     including those used in this section, and to implement any 
     provision of the amendments made by this section.

                     TITLE IV--INNOCENT LANDOWNERS

     SEC. 401. INNOCENT LANDOWNERS.

       (a) Environmental Site Assessment.--Section 107 (as amended 
     by section 201(b)) is amended by adding at the end the 
     following new subsection:
       ``(p) Innocent Landowners.--
       ``(1) Conduct of environmental assessment.--A person who 
     has acquired real property shall have made all appropriate 
     inquiry within the meaning of subparagraph (B) of section 
     101(35) if the person establishes that, within 180 days prior 
     to the time of acquisition, an environmental site assessment 
     of the real property was conducted which meets the 
     requirements of paragraph (2).
       ``(2) Definition of environmental site assessment.--For 
     purposes of this subsection, the term `environmental site 
     assessment' means an assessment conducted in accordance with 
     the standards set forth in the American Society for Testing 
     and Materials (ASTM) Standard E1527-94, titled `Standard 
     Practice for Environmental Site Assessments: Phase I 
     Environmental Site Assessment Process' or with alternative 
     standards issued by rule by the President or promulgated or 
     developed by others and designated by rule by the President. 
     Before issuing or designating alternative standards, the 
     President shall first conduct a study of commercial and 
     industrial practices concerning environmental site 
     assessments in the transfer of real property in the United 
     States. Any such standards issued or designated by the 
     President shall also be deemed to constitute commercially 
     reasonable and generally accepted standards and practices for 
     purposes of this paragraph. In issuing or designating any 
     such standards, the President shall consider requirements 
     governing each of the following:
       ``(A) Interviews or owners, operators, and occupants of the 
     property to determine information regarding the potential for 
     contamination.
       ``(B) Review of historical sources as necessary to 
     determine previous uses and occupancies of the property since 
     the property was first developed. For purposes of this 
     subclause, the term `historical sources' means any of the 
     following, if they are reasonably ascertainable: recorded 
     chain of title documents regarding the real property, 
     including all deeds, easements, leases, restrictions, and 
     covenants, aerial photographs, fire insurance maps, property 
     tax files, USGS 7.5 minutes topographic maps, local street 
     directories, building department records, zoning/land use 
     records, and any other sources that identify past uses and 
     occupancies of the property.
       ``(C) Determination of the existence of recorded 
     environmental cleanup liens against the real property which 
     have arisen pursuant to Federal, State, or local statutes.
       ``(D) Review of reasonably ascertainable Federal, State, 
     and local government records of sites or facilities that are 
     likely to cause or contribute to contamination at the real 
     property, including, as appropriate, investigation reports 
     for such sites or facilities; records of activities likely to 
     cause or contribute to contamination at the real property, 
     including landfill and other disposal location records, 
     underground storage tank records, hazardous waste handler and 
     generator records and spill reporting records; and such other 
     reasonably ascertainable Federal, State, and local government 
     environmental records which could reflect incidents or 
     activities which are likely to cause or contribute to 
     contamination at the real property.
       ``(E) A visual site inspection of the real property and all 
     facilities and improvements on the real property and a visual 
     inspection of immediately adjacent properties, including an 
     investigation of any hazardous substance use, storage, 
     treatment, and disposal practices on the property.
       ``(F) Any specialized knowledge or experience on the part 
     of the defendant.
       ``(G) The relationship of the purchase price to the value 
     of the property if uncontaminated.
       ``(H) Commonly known or reasonably ascertainable 
     information about the property.
       ``(I) The obviousness of the presence or likely presence of 
     contamination at the property, and the ability to detect such 
     contamination by appropriate investigation.

     A record shall be considered to be `reasonably ascertainable' 
     for purposes of this paragraph if a copy or reasonable 
     facsimile of the record is publicly available by request 
     (within reasonable time and cost constraints) and the record 
     is practically reviewable.
       ``(3) Appropriate inquiry.--A person shall not be treated 
     as having made all appropriate inquiry under paragraph (1) 
     unless--
       ``(A) the person has maintained a compilation of the 
     information reviewed and gathered in the course of the 
     environmental site assessment;
       ``(B) the person exercised appropriate care with respect to 
     hazardous substances found at the facility by taking 
     reasonable steps to stop on-going releases, prevent 
     threatened future releases of hazardous substances, and 
     prevent or limit human or natural resource exposure to 
     hazardous substances previously released into the 
     environment; and
       ``(C) the person provides full cooperation, assistance, and 
     facility access to persons authorized to conduct response 
     actions at the facility, including the cooperation and access 
     necessary for the installation, integrity, operation, and 
     maintenance of any complete or partial response action at the 
     facility.
       ``(4) Definition of contamination.--For the purposes of 
     this subsection and section 101(35), the term `contamination' 
     means an existing release, a past release, or the threat of a 
     release of a hazardous substance.''.
       (b) Section 101(35) of the Comprehensive Environmental 
     Response, Compensation, and Liability act of 1980 (42 U.S.C. 
     9601(35)) is by striking subparagraph (B) and inserting the 
     following new subparagraph:
       ``(B) Knowledge of inquiry requirement.--
       ``(i) In general.--To establish that the defendant had no 
     reason to know, as provided in subparagraph (A)(i), 
     the defendant must have undertaken, at the time of the 
     acquisition, all appropriate inquiry (in accordance with 
     section 107(p)) into the previous ownership and uses of 
     the facility and its real property in accordance with 
     generally accepted good commercial and customary standards 
     and practices. For the purposes of the preceding sentence 
     and until the Administrator issues or designates standards 
     and practices as provided in clause (ii), the court shall 
     take into account any specialized knowledge or experience 
     on the part of the defendant, the relationship of the 
     purchase price to the value of the property if 
     uncontaminated, commonly known or reasonably ascertainable 
     information about the property, the obviousness of the 
     presence or likely presence of contamination at the 
     property, and the ability to detect such contamination by 
     appropriate investigation.
       ``(ii) Rule.--Within 1 year after the date of enactment of 
     this Act, the Administrator shall, by rule, issue standards 
     and practices or designate standards and practices 
     promulgated or developed by others, that satisfy the 
     requirements of this subparagraph. In issuing or designating 
     such standards and practices, the Administrator shall 
     consider each of the following:
       ``(I) Conduct of an inquiry by an environmental 
     professional.
       ``(II) Inclusion of interviews with past and present 
     owners, operators, and occupants of the facility and its real 
     property for the purpose of gathering information regarding 
     the potential for contamination at the facility and its real 
     property.
       ``(III) Inclusion of a review of historical sources, such 
     as chain of title documents, aerial photographs, building 
     department records, and land use records, to determine 
     previous uses and occupancies of the real property since it 
     was first developed.
       ``(IV) Inclusion of a search for recorded environmental 
     cleanup liens, filed under Federal, State, or local law, 
     against the facility or its real property.
       ``(V) Inclusion of a review of Federal, State, and local 
     government records (such as waste disposal records), 
     underground storage tank records, and hazardous waste 
     handling, generation, treatment, disposal, and spill records, 
     concerning contamination at or near the facility or its real 
     property.
       ``(VI) Inclusion of a visual inspection of the facility and 
     its real property and of adjoining properties.
       ``(VII) Any specialized knowledge or experience on the part 
     of the defendant.
       ``(VIII) The relationship of the purchase price to the 
     value of the property if uncontaminated.
       ``(IX) Commonly known or reasonably ascertainable 
     information about the property.
       ``(X) The obviousness of the presence or likely presence of 
     contamination at the property, and the ability to detect such 
     contamination by appropriate investigation.
       ``(iii) Site inspection and title search.--In the case of 
     property for residential use or other similar use purchased 
     by a nongovernmental or noncommercial entity, a site 
     inspection and title search that reveal no basis for further 
     investigation satisfy the requirements of this 
     subparagraph.''; and
       (c) Regulatory Authority.--
       (1) In general.--The Administrator may--
       (A) issue such regulations as the Administrator deems 
     necessary to carry out the amendments made by this section; 
     and
       (B) delegate and assign any duties or powers imposed upon 
     or assigned to the Administrator by the amendments made by 
     this section, including the authority to issue regulations.
       (2) Authority to clarify.--The authority under paragraph 
     (1) includes authority to clarify or interpret all terms, 
     including those used in this section, and to implement any 
     provision of the amendments made by this section.
                                 ______
                                 
      By Mr. WYDEN (for himself and Mr. D'Amato):
  S. 2029. A bill to make permanent certain authority relating to self-
employment assistance programs; to the Committee on Finance.


                the self-employment reauthorization act

  Mr. WYDEN. Mr. President, I rise today to introduce legislation with

[[Page S9573]]

Senator D'Amato to reauthorize the Self-Employment Act. As waves of 
economic change turn our economy into a high-wire act, the Self-
Employment Act has helped turn the unemployment safety net into a 
trampoline of opportunity for the unemployed. The Self-Employment 
Assistance Program takes an innovative and cost-effective approach to 
helping eligible dislocated workers become self-sufficient; it enables 
them to use their weekly unemployment checks to start their own 
businesses.
  Harvard Business School reported earlier this year that from 1978 to 
the present, 22 percent of the work force, or 3 million workers, at the 
country's top 100 companies had been laid off, and that 77 percent of 
all the layoffs involved white-collar workers. Many of these highly 
skilled workers will never be able to return to their former positions, 
but some are highly motivated to start their own firms. In 40 out of 50 
States, however, those who start their own businesses are forced to 
give up their weekly unemployment compensation checks as soon as the 
company starts generating revenue--but before it provides enough income 
to support the worker. It is exactly this problem the Self-Employment 
Assistance Program is designed to correct.
  In a few short years, the Self-Employment Act (Public Law 103-182; 
title V) has already enabled thousands of unemployed Americans to use 
their unemployment compensation to establish new businesses. Two 
experimental programs, in Massachusetts and Washington, have already 
shown that self-employment programs can create jobs at no cost to the 
taxpayer. Using existing funds, the Massachusetts program created 
dozens of new businesses but actually paid $1,400 less unemployment per 
worker than the State average. The Washington program created more than 
600 new jobs and the firms were paying an average of $10.50 an hour to 
workers they had hired.
  The legislation we introduce today reauthorize a program that 
allows--but does not require--State to establish self-employment 
assistance [SEA] programs as part of their unemployment insurance [UI] 
programs. It permits States to provide income support payments to the 
unemployed in the same weekly amount as the worker's regular 
unemployment insurance [UI] benefits would otherwise be, so that they 
may work full time on starting their own business instead of searching 
for traditional wage and salary jobs. In effect, this legislation 
removes a high hurdle facing those who have the ingenuity, motivation, 
and energy to start their own businesses. It eliminates a barrier in 
the law that has forced workers interested in self-employment to 
choose between receiving UI benefits and starting a new business.

  Self-employment assistance has not only proved to be a viable 
reemployment option for unemployed workers; its benefits have exceeded 
its costs as well. While the law is not a panacea for all of our 
Nation's unemployed, it's an opportunity for many skilled workers to 
get back to work faster and helps create new jobs as well.
  In a recent tour around Oregon, my State SEA officials found 
tremendous enthusiasm for this program. They reported to me: ``* * * 
the SEA Program in Oregon is meeting the goal of providing Oregon 
dislocated workers--as identified through worker profiling--with access 
to entrepreneurial training and financial assistance while pursuing 
self-employment and the establishment of a business.'' Among the 
examples of businesses developed under the Oregon SEA Program this year 
are a marine maintenance and repair company, drop-in day care centers 
at shopping malls and a handmade hats, quilts, and bags business 
working to develop a mail-order firm.
  The 1993 SEA law is based upon self-employment programs that have 
worked well in 17 other industrialized nations. As the author of two 
laws, in 1987 and 1993, that have promoted self-employment, I can 
attest to the dramatic success of the self-employment concept. 
According to a June 1995 Department of Labor [DOL] evaluation of the 
Washington State and Massachusetts pilot programs, the two projects 
``clearly demonstrate that self-employment is a viable reemployment 
option for some unemployed workers . . . about one-half of those 
interested actually do start a business and an average of two-thirds 
were still in business 3 years later.'' In addition, the DOL report 
found that self-employment assistance programs increased business 
starts among project participants, reduced the length of their 
unemployment periods and increased their total time in employment. Both 
the Washington and Massachusetts models proved to be cost effective for 
the participants as well as for taxpayers.
  Over the past 2\1/2\ years, 10 States used the 1993 legislation to 
create self-employment programs: California, Connecticut, Delaware, 
Maine, Maryland, Minnesota, New Jersey, New York, Oregon, and Rhode 
Island. To date, DOL has approved six State plans--California, 
Delaware, Maine, New Jersey, New York, and Oregon--and four of these--
Delaware, Maine, New York and Oregon--have actually implemented their 
SEA programs.
  Let me briefly describe how the program works. The law directs the 
DOL to review and approve State SEA Program plans. In States that 
operate SEA programs, new UI claimants identified through worker 
profiling--automated systems that use a set of criteria to identify 
those claimants who are likely to exhaust their UI benefits and need 
reemployment assistance--will be eligible for self-employment 
assistance. State SEA programs provide participants with periodic--
weekly or biweekly--self-employment allowances while they are getting 
their businesses off the ground. These support payments are the same 
weekly amount as the worker's regular UI benefits. The SEA participants 
are required to participate in technical assistance programs--
entrepreneurial training--accounting, cash flow, finances, taxes, 
etc.--business counseling--business plans, marketing, legal 
requirements, insurance, etc.--and finance--to ensure they have the 
skills necessary to operate a business. Finally, SEA programs are 
required to operate at no additional cost to the unemployment trust 
fund: The law stipulates that the payment of SEA allowances may not 
result in any additional benefits charges to the unemployment trust 
fund. Individuals may choose at any time to opt out of the SEA Program; 
they may resume collection of regular unemployment compensation until 
the total amount of regular unemployment compensation paid and the SEA 
paid equals the maximum benefit amount. States are responsible for the 
costs of providing basic SEA Program services, like business counseling 
and technical assistance, but may allow participants to pay for more 
intensive counseling and technical assistance.

  Mr. President, as we move into the global economy of the 21st 
century, it is imperative that the Government adopt fresh strategies so 
that our many skilled buy unemployed workers can start anew in the 
private sector. Congress should extend the Self-Employment Assistance 
Program so that States will have the continued flexibility to help 
unemployed workers create their own businesses. Our bipartisan bill 
promotes the spirit of entrepreneurship. It carries forward a 
reasonable, and sensible reform of the unemployment insurance system 
that bears no cost to the taxpayer.
  I would like to thank Senator D'Amato for joining me as an original 
cosponsor of this bill. New York has a very active and successful Self 
Employment Assistance Program, and I look forward to working closely 
with him to see this important program reauthorized.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2029

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

     SECTION 1. SELF-EMPLOYMENT ASSISTANCE PROGRAMS.

       (a) In General.--Paragraph (2) of section 507(e) of the 
     North American Free Trade Agreement Implementation Act (26 
     U.S.C. 3306 note) is hereby repealed.
       (b) Conforming Amendments.--Subsection (e) of section 507 
     of such Act is further amended--
       (1) by amending the heading after the subsection 
     designation to read ``Effective Date.--''; and
       (2) by striking ``(1) Effective Date.--'' and by running in 
     the remaining text of subsection (e) immediately after the 
     heading therefor, as amended by paragraph (1).
                                 ______
                                 

[[Page S9574]]


      By Mr. LOTT (for himself and Mr. Exon):
  S. 2030. A bill to establish nationally uniform requirements 
regarding the titling and registration of salvage, nonrepairable, and 
rebuilt vehicles, and for other purposes; to the Committee on Commerce, 
Science, and Transportation.


    the national motor vehicle safety, antitheft, title reform, and 
                    consumer protection act of 1996

  Mr. LOTT. Mr. President, I rise today to introduce legislation to 
establish national requirements regarding the titling and registration 
of salvage, nonrepairable and rebuilt vehicles. I am proud to have 
Senator Exon as my principle cosponsor on this bipartisan bill. Senator 
Exon has done yeoman's work in previous Congresses to address this 
issue.
  Several years ago, Congress formed a group to study this issue. My 
bill responds to the recommendations made by that Federal task force 
regarding the disclosure of vehicle conditions. This consumer safety 
bill will protect used car consumers from unknowingly purchasing 
rebuilt automobiles that have not been restored to safe operating 
conditions. The legislation requires the vehicle title to be branded to 
show that it has been totaled.
  This legislation would create a uniform national policy concerning 
the disclosure of vehicle conditions. Forty-eight States require some 
sort of disclosure on the vehicle title. Insistency among these States, 
however, permits those unscrupulous few to take advantage of 
unsuspecting consumers.
  I hope my colleagues in the Senate will join me as cosponsors of this 
legislation, which addresses this consumer safety issue in a direct and 
straightforward manner.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2030

       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 Motor Vehicle 
     Safety, Antitheft, Title Reform, and Consumer Protection Act 
     of 1996''.

     SEC. 2. FINDINGS.

       The Congress finds that--
       (1) many States do not have specific requirements regarding 
     the disclosure of the salvage history of a motor vehicle and 
     some States never require that the title to a motor vehicle 
     be stamped or branded to indicate that the motor vehicle is, 
     or has been, a salvage vehicle;
       (2) as of the date of enactment of this Act, State 
     disclosure requirements regarding the salvage history of a 
     motor vehicle--
       (A) are inconsistent in scope and content;
       (B) require the use of different forms and administrative 
     procedures;
       (C) will undercut the effectiveness of the National 
     Automobile Title Information System created by the Anti Car 
     Theft Act of 1992;
       (D) are burdensome on interstate commerce; and
       (E) do not provide a significant deterrent to unscrupulous 
     sellers of rebuilt vehicles who mislead potential wholesale 
     and retail buyers concerning the condition and value of such 
     vehicles;
       (3) the fact that a motor vehicle is salvage, 
     nonrepairable, water damaged, or rebuilt after incurring 
     substantial damage is material in any subsequent purchase or 
     sale of that motor vehicle;
       (4) some salvage and nonrepairable vehicles become involved 
     in illegal commerce in stolen vehicles and parts;
       (5) in some jurisdictions, the lack of theft inspections 
     prior to allowing a rebuilt motor vehicle back on the road 
     provides an opportunity for an unscrupulous person to use 
     stolen parts in the rebuilding of motor vehicles;
       (6) according to the National Highway Traffic Safety 
     Administration, rebuilt motor vehicles--
       (A) may not have passed any safety inspection; and
       (B) may pose a public safety risk and consumers who 
     unknowingly buy rebuilt motor vehicles face an increased risk 
     of death or serious injury;
       (7) statistics prepared by the American Association of 
     Motor Vehicle Administrators indicate that 71 percent of the 
     States require some form of safety inspection before a 
     rebuilt salvage vehicle may be registered for use on the 
     road;
       (8) the promulgation of a safety inspection program by the 
     Secretary of Transportation may assist the States in 
     expanding and standardizing their inspection programs for 
     rebuilt vehicles;
       (9) duplicate or replacement titles play an important role 
     in many vehicle thefts and various types of vehicle fraud;
       (10) State controls on the issuance of such titles must 
     therefore be strengthened and made uniform across the United 
     States;
       (11) large quantities of motor vehicles are exported from 
     United States ports to foreign countries without proper 
     documentation of ownership in violation of applicable law; 
     and
       (12) in view of the threats to public safety and consumer 
     interests described in paragraphs (1) through (10), the Motor 
     Vehicle Titling, Registration and Salvage Advisory Committee, 
     which was convened by the Secretary of Transportation under 
     section 140(a) of the Anti Car Theft Act of 1992 (15 U.S.C. 
     2041 note), recommended that--
       (A) Federal laws be enacted to require certain definitions 
     to be used nationwide to describe seriously damaged vehicles; 
     and
       (B) all States be required to--
       (i) use the definitions referred to in subparagraph (A) in 
     determining appropriate title designations;
       (ii) use certain motor vehicle titling and control methods; 
     and
       (iii) take certain other measures to protect the integrity 
     of the titling process.

     SEC. 3. MOTOR VEHICLE TITLING AND DISCLOSURE REQUIREMENTS.

       (a) In General.--Subtitle VI of title 49, United States 
     Code, is amended by adding at the end the following new 
     chapter:

   ``CHAPTER 333--AUTOMOBILE SAFETY, ANTITHEFT, AND TITLE DISCLOSURE 
                              REQUIREMENTS

``Sec.
``33301. Definitions.
``33302. Passenger motor vehicle titling.
``33303. Petitions for extensions of time.
``33304. Effect on State law.
``33305. Civil and criminal penalties.

     ``Sec. 33301. Definitions

       ``For the purposes of this chapter the following 
     definitions and requirements shall apply:
       ``(1) Passenger motor vehicle.--
       ``(A) In general.--The term `passenger motor vehicle' means 
     any vehicle driven or drawn by mechanical power manufactured 
     primarily for use on the public streets, roads, and highways.
       ``(B) Passenger motor vehicles and light trucks included.--
     Such term includes a multipurpose passenger vehicle or light 
     duty truck if the vehicle or truck is rated at not more than 
     7,500 pounds gross vehicle weight.
       ``(C) Motorcycles not included.--Such term does not include 
     a motorcycle.
       ``(2) Salvage vehicle.--
       ``(A) In general.--Subject to subparagraph (E), the term 
     `salvage vehicle' means any passenger motor vehicle that has 
     been wrecked, destroyed, or damaged to the extent that the 
     total estimated or actual cost of parts and labor to rebuild 
     or reconstruct the passenger motor vehicle to its preaccident 
     condition for legal operation on the roads or highways 
     exceeds 75 percent of the retail value of the passenger motor 
     vehicle, as set forth in the most recent edition of any 
     nationally recognized compilation (including automated 
     databases) of current retail values that is approved by the 
     Secretary.
       ``(B) Vehicles excluded.--Such term does not include any 
     passenger motor vehicle that has a model year designation of 
     a calendar year that precedes that calendar year in which the 
     vehicle was wrecked, destroyed, or damaged by 5 or more 
     years.
       ``(C) Determination of value of repair parts.--For purposes 
     of subparagraph (B), the value of repair parts shall be 
     determined by using--
       ``(i) the published retail cost of the original equipment 
     manufacturer parts; or
       ``(ii) the actual retail cost of the repair parts to be 
     used in the repair.
       ``(D) Determination of labor costs.--For purposes of 
     subparagraph (B), the labor cost of repairs shall be computed 
     by using the hourly labor rate and time allocations that are 
     reasonable and customary in the automobile repair industry in 
     the community in which the repairs are performed.
       ``(E) Certain vehicles included.--The term `passenger 
     vehicle' includes, without regard to whether the passenger 
     motor vehicle meets the 75 percent threshold specified in 
     subparagraph (B)--
       ``(i) any passenger motor vehicle with respect to which an 
     insurance company acquires ownership under a damage 
     settlement (except for a settlement in connection with a 
     recovered theft vehicle that did not sustain a sufficient 
     degree of damage to meet the 75 percent threshold specified 
     in subparagraph (B)); or
       ``(ii) any passenger motor vehicle that an owner may wish 
     to designate as a salvage vehicle by obtaining a salvage 
     title, without regard to the extent of the damage and 
     repairs.
       ``(F) Special rule.--A designation of a passenger motor 
     vehicle by an owner under subparagraph (E)(ii) shall not 
     impose any obligation on--
       ``(i) the insurer of the passenger motor vehicle; or
       ``(ii) an insurer processing a claim made by or on behalf 
     of the owner of the passenger motor vehicle.
       ``(3) Salvage title.--
       ``(A) In general.--The term `salvage title' means a 
     passenger motor vehicle ownership document issued by a State 
     to the owner of a salvage vehicle.
       ``(B) Transfer of ownership.--Ownership of a salvage 
     vehicle may be transferred on a salvage title.
       ``(C) Prohibition.--The salvage vehicle may not be 
     registered for use on the roads or

[[Page S9575]]

     highways unless the salvage vehicle has been issued a rebuilt 
     salvage title.
       ``(D) Requirement for a rebuilt salvage title.--A salvage 
     title shall be conspicuously labeled with the word `salvage' 
     across the front of the document.
       ``(4) Rebuilt salvage vehicle.--The term `rebuilt salvage 
     vehicle' means--
       ``(A) for passenger motor vehicles subject to a safety 
     inspection in a State that requires such an inspection under 
     section 33302(b)(2)(H), any passenger motor vehicle that 
     has--
       ``(i) been issued previously a salvage title;
       ``(ii) passed applicable State antitheft inspection;
       ``(iii) been issued a certificate indicating that the 
     passenger motor vehicle has--

       ``(I) passed the antitheft inspection referred to in clause 
     (ii); and
       ``(II) been issued a certificate indicating that the 
     passenger motor vehicle has passed a required safety 
     inspection under section 33302(b)(2)(H); and

       ``(iv) affixed to the door jamb adjacent to the driver's 
     seat a decal stating `Rebuilt Salvage Vehicle--Antitheft and 
     Safety Inspections Passed'; or
       ``(B) for passenger motor vehicles in a State other than a 
     State referred to in subparagraph (A), any passenger motor 
     vehicle that has--
       ``(i) been issued previously a salvage title;
       ``(ii) passed an applicable State antitheft inspection;
       ``(iii) been issued a certificate indicating that the 
     passenger motor vehicle has passed the required antitheft 
     inspection referred to in clause (ii); and
       ``(iv) affixed to the door jamb adjacent to the driver's 
     seat, a decal stating `Rebuilt Salvage Vehicle--Antitheft 
     Inspection Passed/No Safety Inspection Pursuant to National 
     Criteria'.
       ``(5) Rebuilt salvage title.--
       ``(A) In general.--The term `rebuilt salvage title' means 
     the passenger motor vehicle ownership document issued by a 
     State to the owner of a rebuilt salvage vehicle.
       ``(B) Transfer of ownership.--Ownership of a rebuilt 
     salvage vehicle may be transferred on a rebuilt salvage 
     title.
       ``(C) Registration for use.--A passenger motor vehicle for 
     which a rebuilt salvage title has been issued may be 
     registered for use on the roads and highways.
       ``(D) Requirement for salvage title.--A rebuilt salvage 
     title shall be conspicuously labeled, either with `Rebuilt 
     Salvage Vehicle--Antitheft and Safety Inspections Passed' or 
     `Rebuilt Salvage Vehicle--Antitheft Inspection Passed/No 
     Safety Inspection Pursuant to National Criteria', as 
     appropriate, across the front of the document.
       ``(6) Nonrepairable vehicle.--
       ``(A) In general.--The term `nonrepairable vehicle' means 
     any passenger motor vehicle that--
       ``(i)(I) is incapable of safe operation for use on roads or 
     highways; and
       ``(II) has no resale value, except as a source of parts or 
     scrap only; or
       ``(ii) the owner irreversibly designates as a source of 
     parts or scrap.
       ``(B) Certificate.--Each nonrepairable vehicle shall be 
     issued a nonrepairable vehicle certificate.
       ``(7) Nonrepairable vehicle certificate.--
       ``(A) In general.--The term `nonrepairable vehicle 
     certificate' means a passenger motor vehicle ownership 
     document issued by the State to the owner of a nonrepairable 
     vehicle.
       ``(B) Transfer of ownership.--Ownership of the passenger 
     motor vehicle may be transferred not more than 2 times on a 
     nonrepairable vehicle certificate.
       ``(C) Prohibition.--A nonrepairable vehicle that is issued 
     a nonrepairable vehicle certificate may not be titled or 
     registered for use on roads or highways at any time after the 
     issuance of the certificate.
       ``(D) Requirement for nonrepairable vehicle certificate.--A 
     nonrepairable vehicle certificate shall be conspicuously 
     labeled with the term `Nonrepairable' across the front of the 
     document.
       ``(8) Flood vehicle.--
       ``(A) In general.--The term `flood vehicle' means any 
     passenger motor vehicle that has been submerged in water to 
     the point that rising water has reached over the door sill of 
     the motor vehicle and has entered the passenger or trunk 
     compartment.
       ``(B) Requirement for disclosure.--Disclosure that a 
     passenger motor vehicle has become a flood vehicle shall be 
     made by the person transferring ownership at the time of 
     transfer of ownership. After such transfer is completed, the 
     certificate of title shall be conspicuously labeled with the 
     term `flood' across the front of the document.
       ``(9) Secretary.--The term `Secretary' means the Secretary 
     of Transportation.

     ``Sec. 33302. Passenger motor vehicle titling

       ``(a) Carryforward of Certain Title Information if a 
     Previous Title Was Not Issued in Accordance With Certain 
     Nationally Uniform Standards.--
       ``(1) In general.--If--
       ``(A) records that are readily accessible to a State 
     indicate that a passenger motor vehicle with respect to which 
     the ownership is transferred on or after the date that is 1 
     year after the date of enactment of the National Motor 
     Vehicle Safety, Antitheft, Title Reform, and Consumer 
     Protection Act of 1996, has been issued previously a title 
     that bore a term or symbol described in paragraph (2); and
       ``(B) the State licenses that vehicle for use,
     the State shall disclose that fact on a certificate of title 
     issued by the State.
       ``(2) Terms and symbols.--
       ``(A) In general.--A State shall be subject to the 
     requirements of paragraph (1) with respect to the following 
     terms on a title that has been issued previously to a 
     passenger motor vehicle (or symbols indicating the meanings 
     of those terms):
       ``(i) `Salvage'.
       ``(ii) `Unrebuildable'.
       ``(iii) `Parts only'.
       ``(iv) `Scrap'.
       ``(v) `Junk'.
       ``(vi) `Nonrepairable'.
       ``(vii) `Reconstructed'.
       ``(viii) `Rebuilt'.
       ``(ix) Any other similar term, as determined by the 
     Secretary.
       ``(B) Flood damage.--A State shall be subject to the 
     requirements of paragraph (1) if a term or symbol on a title 
     issued previously for a passenger vehicle indicates that the 
     vehicle has been damaged by flood.
       ``(b) Nationally Uniform Title Standards and Control 
     Methods.--
       ``(1) In general.--Not later than 18 months after the date 
     of the enactment of the National Motor Vehicle Safety, 
     Antitheft, Title Reform, and Consumer Protection Act of 1996, 
     the Secretary shall issue regulations that require each State 
     that licenses passenger motor vehicles with respect to which 
     the ownership is transferred on or after the date that is 2 
     years after the issuance of final regulations, to apply with 
     respect to the issuance of the title for any such motor 
     vehicle uniform standards, procedures, and methods for--
       ``(A) the issuance and control of that title; and
       ``(B) information to be contained on such title.
       ``(2) Contents of regulations.--The titling standards, 
     control procedures, methods, and information covered under 
     the regulations issued under this subsection shall include 
     the following:
       ``(A) Indication of status.--Each State shall indicate on 
     the face of a title or certificate for a passenger motor 
     vehicle, as applicable, if the passenger motor vehicle is a 
     salvage vehicle, a nonrepairable vehicle, a rebuilt salvage 
     vehicle, or a flood vehicle.
       ``(B) Subsequent titles.--The information referred to in 
     subparagraph (A) concerning the status of the passenger 
     vehicle shall be conveyed on any subsequent title, including 
     a duplicate or replacement title, for the passenger motor 
     vehicle issued by the original titling State or any other 
     State.
       ``(C) Security standards.--The title documents, the 
     certificates and decals required by section 33301(4), and the 
     system for issuing those documents, certificates, and decals 
     shall meet security standards that minimize opportunities for 
     fraud.
       ``(D) Identifying information.--Each certificate of title 
     referred to in subparagraph (A) shall include the passenger 
     motor vehicle make, model, body type, year, odometer 
     disclosure, and vehicle identification number.
       ``(E) Uniform layout.--The title documents covered under 
     the regulations shall maintain a uniform layout, that shall 
     be established by the Secretary, in consultation with each 
     State or an organization that represents States.
       ``(F) Nonrepairable vehicles.--A passenger motor vehicle 
     designated as nonrepairable--
       ``(i) shall be issued a nonrepairable vehicle certificate; 
     and
       ``(ii) may not be retitled.
       ``(G) Rebuilt salvage title.--No rebuilt salvage title may 
     be issued to a salvage vehicle unless, after the salvage 
     vehicle is repaired or rebuilt, the salvage vehicle complies 
     with the requirements for a rebuilt salvage vehicle under 
     section 33301(4).
       ``(H) Inspection programs.--Each State inspection program 
     shall be designed to comply with the requirements of this 
     subparagraph and shall be subject to approval and periodic 
     review by the Secretary. Each such inspection program shall 
     include the following:
       ``(i) Each owner of a passenger motor vehicle that submits 
     a vehicle for an antitheft inspection shall be required to 
     provide--

       ``(I) a completed document identifying the damage that 
     occurred to the vehicle before being repaired;
       ``(II) a list of replacement parts used to repair the 
     vehicle;
       ``(III) proof of ownership of the replacement parts 
     referred to in subclause (II) (as evidenced by bills of sale, 
     invoices or, if such documents are not available, other proof 
     of ownership for the replacement parts); and
       ``(IV) an affirmation by the owner that--

       ``(aa) the information required to be submitted under this 
     subparagraph is complete and accurate; and
       ``(bb) to the knowledge of the declarant, no stolen parts 
     were used during the rebuilding of the repaired vehicle.
       ``(ii) Any passenger motor vehicle or any major part or 
     major replacement part required to be marked under this 
     section or the regulations issued under this section that--

       ``(I) has a mark or vehicle identification number that has 
     been illegally altered, defaced, or falsified; or
       ``(II) cannot be identified as having been legally obtained 
     (through evidence described in clause (i)(III)),

     shall be contraband and subject to seizure.

[[Page S9576]]

       ``(iii) To avoid confiscation of parts that have been 
     legally rebuilt or manufactured, the regulations issued under 
     this subsection shall include procedures that the Secretary, 
     in consultation with the Attorney General of the United 
     States, shall establish--

       ``(I) for dealing with parts with a mark or vehicle 
     identification number that is normally removed during 
     remanufacturing or rebuilding practices that are considered 
     acceptable by the automotive industry; and
       ``(II) deeming any part referred to in clause (i) to meet 
     the identification requirements under the regulations if the 
     part bears a conspicuous mark of such type, and is applied in 
     such manner, as may be determined by the Secretary to 
     indicate that the part has been rebuilt or remanufactured.

       ``(iv) With respect to any vehicle part, the regulations 
     issued under this subsection shall--

       ``(I) acknowledge that a mark or vehicle identification 
     number on such part may be legally removed or altered, as 
     provided under section 511 of title 18, United States Code; 
     and
       ``(II) direct inspectors to adopt such procedures as may be 
     necessary to prevent the seizure of a part from which the 
     mark or vehicle identification number has been legally 
     removed or altered.

       ``(v) The Secretary shall establish nationally uniform 
     safety inspection criteria to be used in States that require 
     such a safety inspection. A State may determine whether to 
     conduct such safety inspection, contract with a third party, 
     or permit self-inspection. Any inspection conducted under 
     this clause shall be subject to criteria established by the 
     Secretary. A State that requires a safety inspection under 
     this clause may require the payment of a fee for such 
     inspection or the processing of such inspection.
       ``(I) Duplicate titles.--No duplicate or replacement title 
     may be issued by a State unless--
       ``(i) the term `duplicate' is clearly marked on the face of 
     the duplicate or replacement title; and
       ``(ii) the procedures issued are substantially consistent 
     with the recommendation designated as recommendation 3 in the 
     report issued on February 10, 1994, under section 140 of the 
     Anti Car Theft Act of 1992 (15 U.S.C. 2041 note) by the task 
     force established under such section.
       ``(J) Titling and control methods.--Each State shall employ 
     the following titling and control methods:
       ``(i) If an insurance company is not involved in a damage 
     settlement involving a salvage vehicle or a nonrepairable 
     vehicle, the passenger motor vehicle owner shall be required 
     to apply for a salvage title or nonrepairable vehicle 
     certificate, whichever is applicable, before the earlier of 
     the date--

       ``(I) on which the passenger motor vehicle is repaired or 
     the ownership of the passenger motor vehicle is transferred; 
     or
       ``(II) that is 30 days after the passenger motor vehicle is 
     damaged.

       ``(ii) If an insurance company, under a damage settlement, 
     acquires ownership of a passenger motor vehicle that has 
     incurred damage requiring the vehicle to be titled as a 
     salvage vehicle or nonrepairable vehicle, the insurance 
     company shall be required to apply for a salvage title or 
     nonrepairable vehicle certificate not later than 15 days 
     after the title to the motor vehicle is--

       ``(I) properly assigned by the owner to the insurance 
     company; and
       ``(II) delivered to the insurance company with all liens 
     released.

       ``(iii) If an insurance company does not assume ownership 
     of a passenger motor vehicle of an insured person or claimant 
     that has incurred damage requiring the vehicle to be titled 
     as a salvage vehicle or nonrepairable vehicle, the insurance 
     company shall, as required by the applicable State--

       ``(I) notify--

       ``(aa) the owner of the owner's obligation to apply for a 
     salvage title or nonrepairable vehicle certificate for the 
     passenger motor vehicle; and
       ``(bb) the State passenger motor vehicle titling office 
     that a salvage title or nonrepairable vehicle certificate 
     should be issued for the vehicle; or

       ``(II) withhold payment of the claim until the owner 
     applies for a salvage title or nonrepairable vehicle 
     certificate.

       ``(iv) If a leased passenger motor vehicle incurs damage 
     requiring the vehicle to be titled as a salvage vehicle or 
     nonrepairable vehicle, the lessor shall be required to apply 
     for a salvage title or nonrepairable vehicle certificate not 
     later than 21 days after being notified by the lessee that 
     the vehicle has been so damaged, except in any case in which 
     an insurance company, under a damage settlement, acquires 
     ownership of the vehicle. The lessee of such vehicle shall be 
     required to inform the lessor that the leased vehicle has 
     been so damaged not later than 30 days after the occurrence 
     of the damage.
       ``(v)(I) Any person who acquires ownership of a damaged 
     passenger motor vehicle that meets the definition of a 
     salvage or nonrepairable vehicle for which a salvage title or 
     nonrepairable vehicle certificate has not been issued, shall 
     be required to apply for a salvage title or nonrepairable 
     vehicle certificate, whichever is applicable.
       ``(II) An application under subclause (I) shall be made the 
     earlier of--

       ``(aa) the date on which the vehicle is further 
     transferred; or
       ``(bb) 30 days after ownership is acquired.

       ``(III) The requirements of this clause shall not apply to 
     any scrap metal processor that--

       ``(aa) acquires a passenger motor vehicle for the sole 
     purpose of processing the motor vehicle into prepared grades 
     of scrap; and
       ``(bb) carries out that processing.

       ``(vi) State records shall note when a nonrepairable 
     vehicle certificate is issued. No State shall issue a 
     nonrepairable vehicle certificate after 2 transfers of 
     ownership in violation of section 33301(b)(7)(B).
       ``(vii)(I) In any case in which a passenger motor vehicle 
     has been flattened, baled, or shredded, whichever occurs 
     first, the title or nonrepairable vehicle certificate for the 
     vehicle shall be surrendered to the State not later than 30 
     days after that occurrence.
       ``(II) If the second transferee on a nonrepairable vehicle 
     certificate is unequipped to flatten, bale, or shred the 
     vehicle, such transferee shall be required, at the time of 
     final disposal of the vehicle, to use the services of a 
     professional automotive recycler or professional scrap 
     processor. That recycler or reprocessor shall have the 
     authority to--

       ``(aa) flatten, bale, or shred the vehicle; and
       ``(bb) effect the surrender of the nonrepairable vehicle 
     certificate to the State on behalf of the second transferee.

       ``(III) State records shall be updated to indicate the 
     destruction of a vehicle under this clause and no further 
     ownership transactions for the vehicle shall be permitted 
     after the vehicle is so destroyed.
       ``(IV) If different from the State of origin of the title 
     or nonrepairable vehicle certificate, the State of surrender 
     shall notify the State of origin of the surrender of the 
     title or nonrepairable vehicle certificate and of the 
     destruction of such vehicle.
       ``(viii)(I) In any case in which a salvage title is issued, 
     the State records shall note that issuance. No State may 
     permit the retitling for registration purposes or issuance of 
     a rebuilt salvage title for a passenger motor vehicle with a 
     salvage title without a certificate of inspection that--

       ``(aa) complies with the security and guideline standards 
     established by the Secretary under subparagraphs (C) and (G), 
     as applicable; and
       ``(bb) indicates that the vehicle has passed the 
     inspections required by the State under subparagraph (H).

       ``(II) Nothing in this clause shall preclude the issuance 
     of a new salvage title for a salvage vehicle after a transfer 
     of ownership.
       ``(ix) After a passenger motor vehicle titled with a 
     salvage title has passed the inspections required by the 
     State, the inspection official shall--

       ``(I) affix a secure decal required under section 33301(4) 
     (that meets permanency requirements that the Secretary shall 
     establish by regulation) to the door jamb on the driver's 
     side of the vehicle; and
       ``(II) issue to the owner of the vehicle a certificate 
     indicating that the passenger motor vehicle has passed the 
     inspections required by the State.

       ``(x)(I) The owner of a passenger motor vehicle titled with 
     a salvage title may obtain a rebuilt salvage title and 
     vehicle registration by presenting to the State the salvage 
     title, properly assigned, if applicable, along with the 
     certificate that the vehicle has passed the inspections 
     required by the State.
       ``(II) If the owner of a rebuilt salvage vehicle submits 
     the documentation referred to in subclause (I), the State 
     shall issue upon the request of the owner a rebuilt salvage 
     title and registration to the owner. When a rebuilt salvage 
     title is issued, the State records shall so note.
       ``(K) Flood vehicles.--
       ``(i) In general.--A seller of a passenger motor vehicle 
     that becomes a flood vehicle shall, at or before the time of 
     transfer of ownership, provide a written notice to the 
     purchaser that the vehicle is a flood vehicle. At the time of 
     the next title application for the vehicle--

       ``(I) the applicant shall disclose the flood status to the 
     applicable State with the properly assigned title; and
       ``(II) the term `Flood' shall be conspicuously labeled 
     across the front of the new title document.

       ``(ii) Leased vehicles.--In the case of a leased passenger 
     motor vehicle, the lessee, within 15 days after the 
     occurrence of the event that caused the vehicle to become a 
     flood vehicle, shall give the lessor written disclosure that 
     the vehicle is a flood vehicle.
       ``(c) Electronic Procedures.--A State may employ electronic 
     procedures in lieu of paper documents in any case in which 
     such electronic procedures provide levels of information, 
     function, and security required by this section that are at 
     least equivalent to the levels otherwise provided by paper 
     documents.

     ``Sec. 33303. Petitions for extensions of time

       ``(a) In General.--Subject to subsection (b), if a State 
     demonstrates to the satisfaction of the Secretary, a valid 
     reason for needing an extension of a deadline for compliance 
     with requirements under section 33302(a), the Secretary may 
     extend, for a period determined by the Secretary, an 
     otherwise applicable deadline with respect to that State.
       ``(b) Limitation.--No extension made under subsection (a) 
     shall remain in effect on or after the applicable compliance 
     date established under section 33302(b).

     ``Sec. 33304. Effect on State law

       ``(a) In General.--Beginning on the effective date of the 
     regulations issued under section 33302, this chapter shall 
     preempt any

[[Page S9577]]

     State law, to the extent that State law is inconsistent with 
     this chapter or the regulations issued under this chapter 
     (including the regulations issued under section 33302), 
     that--
       ``(1) establish the form of the passenger motor vehicle 
     title;
       ``(2)(A) define, in connection with a passenger motor 
     vehicle (but not in connection with a passenger motor vehicle 
     part or part assembly separate from a passenger motor 
     vehicle)--
       ``(i) any term defined in section 33301;
       ``(ii) the term `salvage', `junk', `reconstructed', 
     `nonrepairable', `unrebuildable', `scrap', `parts only', 
     `rebuilt', `flood', or any other similar symbol or term; or
       ``(B) apply any of the terms referred to in subparagraph 
     (A) to any passenger motor vehicle (but not in connection 
     with a passenger motor vehicle part or part assembly separate 
     from a passenger motor vehicle); and
       ``(3) establish titling, recordkeeping, antitheft 
     inspection, or control procedures in connection with any 
     salvage vehicle, rebuilt salvage vehicle, nonrepairable 
     vehicle, or flood vehicle.
       ``(b) Rule of Construction.--
       ``(1) Additional disclosures.--Additional disclosures of 
     the title status or history of a motor vehicle, in addition 
     to disclosures made concerning the applicability of terms 
     defined in section 33301, may not be considered to be 
     inconsistent with this chapter.
       ``(2) Inconsistent terms.--When used in connection with a 
     passenger motor vehicle (but not in connection with a 
     passenger motor vehicle part or part assembly separate from a 
     passenger motor vehicle), any definition under Federal or 
     State law of a term defined in section 33301 that is 
     different from the definition provided for in that section or 
     any use of any other term listed in subsection (a), shall be 
     considered to be inconsistent with this chapter.
       ``(3) Rule of construction.--Nothing in this chapter shall 
     preclude a State from disclosing on a rebuilt salvage title 
     that a rebuilt salvage vehicle has passed a State safety 
     inspection that differed from the nationally uniform criteria 
     promulgated under section 33302(b)(2)(H)(v).

     ``Sec. 33305. Civil and criminal penalties

       ``(a) Prohibited Acts.--It shall be unlawful for any person 
     knowingly and willfully to--
       ``(1) make or cause to be made any false statement on an 
     application for a title (or duplicate title) for a passenger 
     motor vehicle;
       ``(2) fail to apply for a salvage title in any case in 
     which such an application is required;
       ``(3) alter, forge, or counterfeit--
       ``(A) a certificate of title (or an assignment thereof);
       ``(B) a nonrepairable vehicle certificate;
       ``(C) a certificate verifying an antitheft inspection or an 
     antitheft and safety inspection; or
       ``(D) a decal affixed to a passenger motor vehicle under 
     section 33302(b)(2)(J)(ix);
       ``(4) falsify the results of, or provide false information 
     in the course of, an inspection conducted under section 
     33302(b)(2)(H);
       ``(5) offer to sell any salvage vehicle or nonrepairable 
     vehicle as a rebuilt salvage vehicle; or
       ``(6) conspire to commit any act under paragraph (1), (2), 
     (3), (4), or (5).
       ``(b) Civil Penalty.--Any person who commits an unlawful 
     act under subsection (a) shall be subject to a civil penalty 
     in an amount not to exceed $2,000.
       ``(c) Criminal Penalty.--Any person who knowingly commits 
     an unlawful act under subsection (a) shall, upon conviction, 
     be--
       ``(1) subject to a fine in an amount not to exceed $50,000;
       ``(2) imprisoned for a term not to exceed 3 years; or
       ``(3) subject to both fine under paragraph (1) and 
     imprisonment under paragraph (2).''.
       (b) Conforming Amendment.--The analysis for subtitle VI of 
     title 49, United States Code, is amended by adding at the end 
     the following new item:

``333. Automobile Safety, Antitheft, and Title Disclosure R33301''.nts.

                                 ______
                                 
      By Mr. KERRY (for himself and Mr. KENNEDY):
  S. 2032. A bill to designate a portion of the Sudbury, Assabet, and 
Concord Rivers as a component of the National Wild And Scenic Rivers 
System; to the Committee on Energy and Natural Resources.


      THE SUDBURY, ASSABET, AND CONCORD WILD AND SCENIC RIVERS ACT

  Mr. KERRY.
  Mr. President, I am pleased to join my distinguished colleague from 
Massachusetts, Senator Kennedy, in introducing the Sudbury, Assabet, 
and Concord [SuAsCo] Wild and Scenic Rivers Act. This is the companion 
bill to H.R. 3405, sponsored by Representatives Meehan, Markey, and 
Torkildsen.
  The Sudbury, Assabet, and Concord river area is rich in history and 
literary significance. It has been the location of many historical 
events, most notably the Battle of Concord in the Revolutionary War, 
that gave our great Nation its independence. The Concord River flows 
under the North Bridge in Concord, MA, where, on April 18, 1775, 
colonial farmers fired the legendary ``shot heard around the world'' 
which signaled the start of the Revolutionary War.
  In later years, this scenic area was also home to many of our 
literary heroes including, Ralph Waldo Emerson, Henry David Thoreau, 
and Louisa May Alcott. Their writing often focused on the bucolic 
rivers. Thoreau spent most of his life in Concord, MA, where he passed 
his days immersed in his writing and enjoying the natural surroundings. 
He spoke of the Concord River when he wrote ``the wild river valley and 
the woods were bathed in so pure and bright a light as would have waked 
the dead, if they had been slumbering in their graves, as some suppose. 
There needs no strong proof of immortality.'' This area was held close 
to many an author's heart. It was a place of relaxation and inspiration 
for many.
  The Sudbury, Assabet, and Concord Wild Rivers Act would amend the 
Wild and Scenic Rivers Act to include a 29 mile segment of the Assabet, 
Concord, and Sudbury Rivers. Based on a report authorized by Congress 
in 1990 and issued by the National Park Service in 1995, these river 
segments were determined worthy of inclusion in the Wild and Scenic 
Rivers Program. In its report, the SuAsCo Wild and Scenic Study 
Committee showed that this area has not only the necessary scenic, 
recreational, and ecological value, but also the historical and 
literary value to merit the Wild and Scenic River designation. All 
eight communities in the area traversed by these river segments are 
supporting his important legislation.
  Our legislation is of minimal cost to the Federal Government but by 
using limited Federal resources we can leverage significant local and 
State effort. Provisions in the bill limit the Federal Government's 
contribution to just $100,000 annually, with no more than a 50 percent 
share of any given activity. This is a concept that merits the support 
of Congress. Should our bill become law, the SuAsCo River stewardship 
council, in cooperation with Federal, State, and local governments 
would manage the land.
  We now have the opportunity to protect the precious 29-mile section 
of the Assabet, Sudbury, and Concord Rivers. This area is not only rich 
in ecological value but also in historical and literary value. I urge 
my colleagues to support this bill and through it to preserve this wild 
river valley for the enjoyment and instruction of all who live and work 
there, for visitors from throughout the nation and, perhaps most 
importantly, for generations yet to come.
  I ask unanimous consent that a copy of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2032

       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 ``Sudbury, Assabet and Concord 
     Wild and Scenic Rivers Act''.

     SEC. 2. FINDINGS.

       The Congress finds the following:
       (1) Title VII of Public Law 101-628--
       (A) designated segments of the Sudbury, Assabet, and 
     Concord Rivers in the Commonwealth of Massachusetts, totaling 
     29 river miles, for study of potential addition to the 
     National Wild and Scenic Rivers System, and
       (B) directed the Secretary of the Interior to establish the 
     Sudbury, Assabet, and Concord River Study Committee (in this 
     Act referred to as the ``Study Committee'') to advise the 
     Secretary of the Interior in conducting the study and 
     concerning management alternatives should the river be 
     included in the National Wild and Scenic Rivers System.
       (2) The study determined that:
       --the 16.6 mile segment of the Sudbury River beginning at 
     the Danforth Street Bridge in the Town of Framingham, to its 
     confluence with the Assabet River
       --the 4.4 mile segment of the Assabet River from 1000 feet 
     downstream from the Damon Mill Dam in the Town of Concord to 
     the confluence with the Sudbury River at Egg Rock in Concord, 
     and
       --the 8 mile segment of the Concord River from Egg Rock at 
     the confluence of the Sudbury and Assabet Rivers to the Route 
     3 Bridge in the Town of Billerica

     are eligible for inclusion in the National Wild and Scenic 
     Rivers System based upon their free-flowing condition and 
     outstanding scenic, recreation, wildlife, literary, and 
     historic values.
       (3) The towns that directly abut the segments, including 
     Framingham, Sudbury, Wayland, Lincoln, Concord, Bedford, 
     Carlisle, and Billerica, Massachusetts, have each

[[Page S9578]]

     demonstrated their desire for National Wild and Scenic River 
     Designation through town meeting votes endorsing designation.
       (4) During the study, the Study Committee and the National 
     Park Service prepared a comprehensive management plan for the 
     segments, entitled ``Sudbury, Assabet and Concord wild and 
     Scenic River Study, River Management Plan'', dated March 16, 
     1995, which establishes objectives, standards, and action 
     programs that will ensure long-term protection of the rivers' 
     outstanding values and compatible management of their land 
     and water resources.
       (5) The river management plan does not call for federal 
     land acquisition for Wild and Scenic River purposes and 
     relies upon state, local and private entities to have the 
     primary responsibility for ownership and management of the 
     Sudbury, Assabet and Concord Wild and Scenic River resources.
       (6) The Study Committee voted unanimously on February 23, 
     1995, to recommend that the Congress include these segments 
     in the National Wild and Scenic Rivers System for management 
     in accordance with the River Conservation Plan.

     SEC. 3. WILD, SCENIC, AND RECREATIONAL RIVER DESIGNATION.

       Section 3(a) of the *Wild and Scenic Rivers Act (16 U.S.C. 
     1274(a)) is amended by adding at the end the following new 
     paragraph:
       ``(  ) Sudbury, Assabet and Concord Rivers, 
     Massachusetts.--
       ``(A) In general.--The 29 miles of river segments in 
     Massachusetts consisting of the Sudbury River from the 
     Danforth Street Bridge in Framingham downstream to its 
     confluence with the Assabet River at Egg Rock; the Assabet 
     River from a point 1,000 feet downstream of the Damondale Dam 
     in Concord to its confluence with the Sudbury River at Egg 
     Rock; and the Concord River from its origin at Egg Rock in 
     Concord downstream to the route 3 bridge in Billerica (in 
     this paragraph referred to as `segments'), as scenic and 
     recreational river segments. The segments shall be 
     administered by the Secretary of the Interior through 
     cooperative agreements between the Secretary of the Interior 
     and the Commonwealth of Massachusetts and its relevant 
     political subdivisions (including the Towns of Framingham, 
     Wayland, Sudbury, Lincoln, Concord Carlisle, Bedford, and 
     Billerica) pursuant to Section 10(e) of this Act. The 
     segments shall be managed in accordance with the plan 
     entitled ``Sudbury, Assabet and Concord Wild and Scenic 
     River Study, River Conservation Plan'' dated March 16, 
     1995 (in this paragraph referred to as the `Plan'). The 
     Plan is deemed to satisfy the requirement for a 
     comprehensive management plan under section 3(d) of this 
     Act.''

     SEC. 4. MANAGEMENT.

       (a) Committee.--The Director of the National Park Service 
     (in this paragraph referred to as the `Director'), or his or 
     her designee, shall represent the Secretary of the Interior 
     on the SUASCO River Stewardship Council provided for in the 
     ``Sudbury, Assabet and Concord Wild and Scenic River Study, 
     River Management Plan'' (the `Plan').
       (b) Federal Role.--(i) The Director represent the Secretary 
     of the Interior in the implementation of the Plan and the 
     provisions of the Wild and Scenic Rivers Act with respect to 
     the segments, including the review of proposed federally 
     assisted water resources projects which could have a direct 
     and adverse effect on the values for which the segments are 
     established, as authorized under section 7(a) of the Wild and 
     Scenic Rivers Act.
       (ii) Pursuant to section 10(e) and section 11(b)(1), the 
     Director shall offer to enter into cooperative agreements 
     with the Commonwealth of Massachusetts, its relevant 
     political subdivisions, the Sudbury Valley Trustees, and the 
     Organizations for the Assabet River. Such cooperative 
     agreements shall be consistent with the Plan and may include 
     provisions for financial or other assistance from the United 
     States to facilitate the long-term protection, conservation 
     and enhancement of the segments.
       (iii) The Director may provide technical assistance, staff 
     support, and funding to assist in the implementation of the 
     Plan, except that the total cost to the Federal Government of 
     activities to implement the Plan may not exceed $100,000 each 
     fiscal year.
       (iv) Notwithstanding the provisions of 19(c) of the Wild 
     and Scenic Rivers Act, any portion of the segments not 
     already within the National Park System shall not under this 
     Act)
       (I) become a part of the National Park System;
       (II) be managed by the National Park Service; or
       (III) be subject to regulations which govern the National 
     Park System.
       (c) Water Resources Projects.--(i) In determining whether a 
     proposed water resources project would have a direct and 
     adverse effect on the values for which the segments were 
     included in the National Wild and Scenic Rivers System, the 
     Secretary shall specifically consider the extent to which the 
     project is consistent with the Plan.
       (ii) The Plan, including the detailed Water Resources Study 
     incorporated by reference therein and such additional 
     analysis as may be incorporated in the future, shall serve as 
     the primary source of information regarding the flows needed 
     to maintain instream resources and potential compatibility 
     between resource protection and possible additional water 
     withdrawals.
       (d) Land Management.--(i) The zoning bylaws of the towns of 
     Framingham, Sudbury, Wayland, Lincoln, Concord, Carlisle, 
     Bedford, and Billerica, Massachusetts, as in effect on the 
     date of enactment of this paragraph, are deemed to satisfy 
     the standards and requirements under section 6(c) of the Wild 
     and Scenic Rivers Act. For the purpose of section 6(c) of the 
     Wild and Scenic Rivers Act, the towns are deemed to be 
     `villages' and the provisions of that section which prohibit 
     Federal acquisition of lands shall apply.
       (ii) the United States Government shall not acquire by any 
     means title to land, easements, or other interests in land 
     along the segments for the purposes of designation of the 
     segments under this Act or the Wild and Scenic Rivers Act. 
     Nothing in this Act or the Wild and Scenic Rivers Act shall 
     prohibit federal acquisition of interests in land along the 
     segments under other laws for other purposes.

     SEC. 5. FUNDING AUTHORIZATION.

       There are authorized to be appropriated to the Secretary of 
     the Interior to carry out the purposes of this Act no more 
     than $100,000 for each fiscal year.

  Mr. KENNEDY. Mr. President, it is a privilege to join Senator Kerry 
today in sponsoring legislation to designate a 29-mile segment of the 
Sudbury, Assabet, and Concord Rivers in Massachusetts as a component of 
the National Wild and Scenic Rivers system. Our proposal has the 
bipartisan support of Congressmen Martin T. Meehan, Peter G. 
Torkildsen, and Edward J. Markey, who introduced an identical bill in 
the House of Representatives on May 7, 1996.
  The Sudbury, Assabet, and Concord Rivers have witnessed many 
important events in the Nation's history. Stone's Bridge and Four 
Arched Bridge over the Sudbury River date from the pre-Revolutionary 
War days. On Old North Bridge over the Concord River, the ``shot heard 
'round the world'' was fired on April 19, 1775, to begin the 
Revolutionary War. At Lexington and Concord, the Colonists began their 
armed resistance against British rule, and the first American 
Revolutionary War soldiers fell in battle.
  In the 19 century, the Sudbury, Assabet, and Concord Rivers earned 
their lasting fame in the works of Ralph Waldo Emerson, Nathaniel 
Hawthorne, and Henry David Thoreau, all of whom lived in this area and 
spent a great deal of time on the rivers. Emerson cherished the Concord 
River as a place to leave ``the world of villages and personalities 
behind, and pass into a delicate realm of sunset and moonlight.''
  Hawthorne wrote ``The Scarlet Letter'' and ``Mosses from an Old 
Manse'' in an upstairs study overlooking the Concord River. He also 
enjoyed boating on the Assabet River, of which he said that ``a more 
lovely stream than this, for a mile above its junction with the 
Concord, has never flowed on earth.''
  Thoreau delighted in long, solitary walks along the banks of the 
rivers amidst the ``straggling pines, shrub oaks, grape vines, ivy, 
bats, fireflies, and alders,'' contemplating humanity's relationship to 
nature. His journals describing his detailed observations of the flora 
and fauna in the area have inspired poets and naturalists to the 
present day, and helped to give birth to the modern environmental 
movement. By protecting the rivers, a future Thoreau, Emerson, or 
Hawthorne may one day walk along their shores and gain new inspiration 
from these priceless natural resources.
  In 1990, Congress authorized the National Park Service to issue a 
report to determine whether the three rivers are eligible for 
designation as Wild and Scenic Rivers. Under the National Park 
Service's guidelines, a river is considered eligible for the 
designation if it possesses at least one ``outstandingly remarkable 
resource value.'' In fact, the three rivers were found to possess five 
outstanding resource values--scenic, recreational, ecological, 
historical, and literary. The report also concluded that the rivers are 
suitable for designation based upon the existing local protection of 
their resources and the strong local support for their preservation.
  Our bill will protect a 29-mile segment of the Sudbury, Assabet, and 
Concord Rivers that runs through or along the borders of eight 
Massachusetts towns--Framingham, Sudbury, Wayland, Concord, Lincoln, 
Bedford, Carlisle, and Billerica. A River Stewardship Council will be 
established to coordinate the efforts of all levels of government to 
strengthen protections for the river and address future threats to the 
environment. The legislation

[[Page S9579]]

also requires at least a one-to-one non-Federal match for any Federal 
expenditures, and contains provisions which preclude federal takings of 
private lands.
  Thoreau wrote in 1847 that rivers ``are the constant lure, when they 
flow by our doors, to distant enterprise and adventure. . . . They are 
the natural highways of all nations, not only leveling the ground and 
removing obstacles, from the path of the traveler, but conducting him 
through the most interesting scenery.'' Standing on the banks of the 
Sudbury, Assabet, and Concord Rivers, as Thoreau often did, citizens 
today gain a greater sense of the ebb and flow of the nation's history 
and enjoy the benefit of some of the most beautiful scenery in all of 
America. I urge my colleagues to support this legislation, so that 
these three proud rivers will be protected for the enjoyment and 
contemplation of future generations.
                                 ______
                                 
      By Mr. DOMENICI (for himself, Mr. Wellstone, Mr. Simpson, Mr. 
        Conrad, Mr. Warner, Mr. Specter, Mr. Reid, Mr. Dodd, Mr. 
        Grassley, Mrs. Kassebaum, Mr. Kennedy, Mr. Burns, Mr. Harkin, 
        Mr. Chafee, and Mr. Moynihan):
  S. 2031. A bill to provide health plan protections for individuals 
with a mental illness; to the Committee on Labor and Human Resources.


                  THE MENTAL HEALTH PARITY ACT OF 1996

  Mr. DOMENICI. Mr. President, I regret that it was not possible to 
retain this eminently fair and simple compromise in the conference 
agreement on health insurance reform.
  Though this attempt to create fundamental fairness for the mentally 
ill was not completed, this issue will not go away.
  The Americans who would have been helped by our compromise will not 
go away.
  Nor will I.
  As long as I am in this body, I will continue to fight to end 
discrimination against Americans with a mental illness.
  I am therefore introducing the compromise I offered the conference 
committee as a free-standing bill.
  The measure I am introducing today with the support and cosponsorship 
of Senators Wellstone, Warner, Specter, Reid, Simpson, and Conrad, is a 
vast departure from what the Senate originally passed during 
consideration of health insurance reform legislation.
  The Senate passed full parity for mental illness--full parity means 
that mental illnesses are treated as equals to physical illnesses in 
all respects of health coverage--copays, deductibles, inpatient 
hospital days, outpatient visits, out-of-pocket protections, and 
overall lifetime and annual expenditure limits.
  The measure I present today, however, covers parity only for lifetime 
and annual caps.
  I would very much like to introduce the Senate-passed measure 
providing full parity, or perhaps even something more than I am now.
  But in the interests of time, simplicity, and underlying, basic 
fairness, I believe this measure is a necessary step toward making 
health coverage equitable for all Americans, regardless of the nature 
of their illness.
  I believe this measure provides the fundamentals upon which better 
understanding and treatment can be built, and I believe the Senate 
should not miss this opportunity to do the right thing and end 
discrimination against Americans suffering from a mental illness.


                               What it is

  Let me again tell you what this bill will and will not do.
  This bill simply states that health plans wishing to offer a mental 
health benefit--this is their option, there is nothing in this 
provisions saying that they must offer any mental health benefits at 
all--if they choose to offer a mental health benefit, they must provide 
the same overall financial protection to people with a mental illness 
that they provide to people with a physical illness.
  If they have a $1 million lifetime limit for someone with cancer, or 
diabetes, or heart disease, they cannot have a lifetime limit of 
$50,000 for someone with schizophrenia or manic depression--they must 
provide $1 million for the person with a mental illness.
  They do not have to create another, separate $1 million for mental 
illness--they can include these treatments in their overall cap if they 
like.
  But they cannot impost a separate, lower overall limit for mental 
illness.
  This same arrangement applies to annual financial caps, as well.
  Since this compromise provides equal catastrophic protections, it 
protects Americans with the most severe and debilitating forms of 
mental illness.
  It does not apply to the constellation of disorders and problems that 
concern some of my colleagues such as marital problems, or behavioral 
problems, or maladjustments.


                             WHAT IT IS NOT

  It should be made clear what this bill does not do.
  This bill does not mandate mental health benefits;
  It does not include substance abuse or chemical dependency;
  It does not dictate what a plan can or must charge for services--
whether they be copays, deductibles, out-of-pocket limits, and so 
forth;
  It does not set or dictate how many inpatient hospital days or 
outpatient visits must be provided or covered.
  It does not, in any way, restrict a health plan's ability to manage 
care, such as preadmission screening, preauthorization of services, 
limiting coverage based on medical necessity, and so forth.
  It does not apply to employers of 25 or less.


                           WHAT IT WILL COST

  According to the CBO, this bill will not cost much. Frankly, I 
believe that even their cost estimates, even though practically 
inconsequential, are too high.
  CBO says this bill will cause a 0.4-percent increase in overall 
premiums, ultimately resulting in a 0.16-percent increase in employer 
contributions to employee health plans.
  Even though these costs are small--in a typical plan, a $0.60 to 
$0.67 increase per member per month--these projections are based on an 
assumption of increased utilization.
  This estimate does not even factor in the effects of managed care.
  We all know how managed care arrangements affect utilization and 
overall health care spending.
  Of the 99 percent of ERISA plans offering mental health benefits, 75 
percent already provide this care through a managed care arrangement--
this number is growing each day.
  If managed care were included in these assumptions, this provision 
would not likely cost anything at all.
  And the percentage of Americans ever reaching these new limits will 
be incredibly small--less than 5 percent of beneficiaries.
  So you can see why I do not believe this bill will cost even the 
small amount predicted by CBO.


       experiences of states that have already implemented parity

  Some of my colleagues might be skeptical of these claims
  Let me just outline the experiences of a few States that have already 
implemented parity.
  Texas--Full parity and chemical dependency benefits for State and 
local government employees, including all school districts and 
university employees (over 230,000 lives)--a 47.9-percent reduction in 
overall yearly mental health expenditures.
  Maryland--Full parity for all State-regulated plans--(over 400,000 
covered lives)--an increase in cost of 0.6 percent per member per month 
[PMPM].
  Rhode Island--Full parity for severe illnesses and chemical 
dependency--an increase in cost of 0.33 percent PMPM.
  Massachusetts--Full parity for severe illnesses--a 5-percent increase 
in utilization, but a 22-percent reduction in mental health 
expenditures.
  These numbers are for parity in the general sense, not the very 
limited balance included in the measure I am introducing today.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2031

       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 ``Mental Health Parity Act of 
     1996''.

[[Page S9580]]

     SEC. 2. PLAN PROTECTIONS FOR INDIVIDUALS WITH A MENTAL 
                   ILLNESS.

       (a) Permissible Coverage Limits Under a Group Health 
     Plan.--
       (1) Aggregate lifetime limits.--
       (A) In general.--With respect to a group health plan 
     offered by a health insurance issuer, that applies an 
     aggregate lifetime limit to plan payments for medical or 
     surgical services covered under the plan, if such plan also 
     provides a mental health benefit such plan shall--
       (i) include plan payments made for mental health services 
     under the plan in such aggregate lifetime limit; or
       (ii) establish a separate aggregate lifetime limit 
     applicable to plan payments for mental health services under 
     which the dollar amount of such limit (with respect to mental 
     health services) is equal to or greater than the dollar 
     amount of the aggregate lifetime limit on plan payments for 
     medical or surgical services.
       (B) No lifetime limit.--With respect to a group health plan 
     offered by a health insurance issuer, that does not apply an 
     aggregate lifetime limit to plan payments for medical or 
     surgical services covered under the plan, such plan may not 
     apply an aggregate lifetime limit to plan payments for mental 
     health services covered under the plan.
       (2) Annual limits.--
       (A) In general.--With respect to a group health plan 
     offered by a health insurance issuer, that applies an annual 
     limit to plan payments for medical or surgical services 
     covered under the plan, if such plan also provides a mental 
     health benefit such plan shall--
       (i) include plan payments made for mental health services 
     under the plan in such annual limit; or
       (ii) establish a separate annual limit applicable to plan 
     payments for mental health services under which the dollar 
     amount of such limit (with respect to mental health services) 
     is equal to or greater than the dollar amount of the annual 
     limit on plan payments for medical or surgical services.
       (B) No annual limit.--With respect to a group health plan 
     offered by a health insurance issuer, that does not apply an 
     annual limit to plan payments for medical or surgical 
     services covered under the plan, such plan may not apply an 
     annual limit to plan payments for mental health services 
     covered under the plan.
       (b) Rule of Construction.--
       (1) In general.--Nothing in this section shall be construed 
     as prohibiting a group health plan offered by a health 
     insurance issuer, from--
       (A) utilizing other forms of cost containment not 
     prohibited under subsection (a); or
       (B) applying requirements that make distinctions between 
     acute care and chronic care.
       (2) Nonapplicability.--This section shall not apply to--
       (A) substance abuse or chemical dependency benefits; or
       (B) health benefits or health plans paid for under title 
     XVIII or XIX of the Social Security Act.
       (c) Small Employer Exemption.--
       (1) In general.--This section shall not apply to plans 
     maintained by employers that employ less than 26 employees.
       (2) Application of certain rules in determination of 
     employer size.--For purposes of this subsection--
       (A) Application of aggregation rule for employers.--all 
     persons treated as a single employer under subsection (b), 
     (c), (m), or (o) of section 414 of the Internal Revenue Code 
     of 1986 shall be treated as 1 employer.
       (B) Employers not in existence in preceding year.--In the 
     case of an employer which was not in existence throughout the 
     preceding calendar year, the determination of whether such 
     employer is a small employer shall be based on the average 
     number of employees that it is reasonably expected such 
     employer will employ on business days in the current calendar 
     year.
       (C) Predecessors.--Any reference in this subsection to an 
     employer shall include a reference to any predecessor of such 
     employer.

     SEC. 3. DEFINITIONS.

       For purposes of this Act:
       (1) Group health plan.--
       (A) In general.--The term ``group health plan'' means an 
     employee welfare benefit plan (as defined in section 3(1) of 
     the Employee Retirement Income Security Act of 1974) to the 
     extent that the plan provides medical care (as defined in 
     paragraph (2)) and including items and services paid for as 
     medical care) to employees or their dependents (as defined 
     under the terms of the plan) directly or through insurance, 
     reimbursement, or otherwise.
       (B) Medical care.--The term ``medical care'' means amounts 
     paid for--
       (i) the diagnosis, cure, mitigation, treatment, or 
     prevention of disease, or amounts paid for the purpose of 
     affecting any structure or function of the body,
       (ii) amounts paid for transportation primarily for and 
     essential to medical care referred to in clause (i), and
       (iii) amounts paid for insurance covering medical care 
     referred to in clauses (i) and (ii).
       (2) Health insurance coverage.--The term ``health insurance 
     coverage'' means benefits consisting of medical care 
     (provided directly, through insurance or reimbursement, or 
     otherwise and including items and services paid for as 
     medical care) under any hospital or medical service policy or 
     certificate, hospital or medical service plan contract, or 
     health maintenance organization contract offered by a health 
     insurance issuer.
       (3) Health insurance issuer.--The term ``health insurance 
     issuer'' means an insurance company, insurance service, or 
     insurance organization (including a health maintenance 
     organization, as defined in paragraph (4)) which is licensed 
     to engage in the business of insurance in a State and which 
     is subject to State law which regulates insurance (within the 
     meaning of section 514(b)(2) of the Employee Retirement 
     Income Security Act of 1974). Such term does not include a 
     group health plan.
       (4) Health maintenance organization.--The term ``health 
     maintenance organization'' means--
       (A) a Federally qualified health maintenance organization 
     (as defined in section 1301(a) of the Public Health Service 
     Act),
       (B) an organization recognized under State law as a health 
     maintenance organization, or
       (C) a similar organization regulated under State law for 
     solvency in the same manner and to the same extent as such a 
     health maintenance organization.
       (5) State.--The term ``State'' means each of the several 
     States, the District of Columbia, Puerto Rico, the Virgin 
     Islands, Guam, American Samoa, and the Northern Mariana 
     Islands.
                                 ______
                                 
      By Mr. JOHNSTON:
  S. 2033. A bill to repeal requirements for unnecessary or obsolete 
reports from the Department of Energy, and for other purposes; to the 
Committee on Energy and Natural Resources.


        the doe reports elimination and streamlining act of 1996

  Mr. JOHNSTON. Mr. President, today I am introducing the DOE Reports 
Elimination and Streamlining Act of 1996, to implement a number of 
recommendations that have been received from the administration for the 
repeal of requirements for unnecessary or obsolete reports to Congress 
from the Department of Energy. A number of my colleagues, particularly 
Senators Levin, McCain, and Cohen, have devoted considerable effort 
over the past few years to relieving executive branch agencies from the 
unnecessary burden of reporting requirements that have outlived their 
usefulness. It has been a difficult task, and these colleagues and 
their staff deserve our thanks for what they have been able to 
accomplish in terms of crafting a long-term solution to the problem. I 
believe that it remains incumbent, though, on authorizing committees to 
review statutory reports required of agencies within their jurisdiction 
and to act to modify or repeal such requirements, where needed. That is 
what the present bill does. This bill also repeals legislative 
authorization for two now-defunct offices in the Department of Energy.
  Mr. President, I would now like to briefly describe the rationale 
behind the specific provisions of the bill. Section 1 is the short 
title. Section 2 is composed of 12 subsections relating to reports and 
one subsection relating to two obsolete offices in the Department.
  Subsection (a) eliminates the need for ongoing reports on the topics 
of process-oriented industrial energy efficiency and industrial 
insulation and audit guidelines. The DOE Office of Industrial 
Technology has worked with seven process-oriented industries to develop 
industry visions, which include identification of technology needs for 
industrial energy efficiency and technology barriers. The resulting 
individual technology road maps, with their associated implementation 
plans, make these ongoing reports redundant.
  Subsection (b) repeals a requirement for a study and report on 
vibration reduction technologies. Vibration reduction is only tenuously 
related to energy conservation. It is not a prime DOE mission, and work 
in this area has not been funded by any appropriations bill. Given the 
many constraints on the DOE energy conservation budget, initiating work 
in this area is a low priority.
  Subsection (c) repeals a requirement for a study to determine the 
means by which electric utilities may invest in, own, lease, service, 
or recharge batteries used to power electric vehicles. The electric 
utility companies have been working cooperatively with the automobile 
manufacturers, component industry, and standards setting organizations 
for several years to determine the infrastructure requirements 
necessary for recharging and servicing electric vehicle batteries. 
Another

[[Page S9581]]

study would not add meaningful information to the body of knowledge 
that already exists.
  Subsection (d) eliminates biennial reports on the status of actions 
identified under the initial one-time reporting requirements of section 
1301 of the Energy Policy Act of 1992. Development of these 
technologies is not fast paced. Significant reportable change is not 
likely to occur in 2-year increments. In addition, the program has 
sustained a significant decrease in funding, and will likely receive 
less in the future. Under these circumstances it is appropriate to 
change this requirement to a one-time report, to be submitted upon 
completion of the entire project.
  Subsection (e) changes the frequency with which a comprehensive 5-
year program plan for electric motor vehicles must be updated. 
Currently, this comprehensive plan must be updated annually for a 
period of not less than 10 years after the date of enactment of the 
Energy Policy Act of 1992. The first plan was prepared and submitted to 
the Congress in March 1994. Because programs do not change 
significantly on an annual basis, and because the cost of preparing and 
approving new plans for congressional submittal is extensive, annual 
updates are not justified. Changing the frequency of updates to every 2 
years is a cost-savings measure.
  Subsection (f) strikes the requirement for biennial updates to a 5-
year program plan for a National Advanced Materials Initiative. This 
program plan was prepared and submitted to Congress as required, but 
the program was never funded. With no funding, there are no Department-
supported programs or projects, and, thus, no need to update the 
initial program plan.
  Subsection (g) eliminates a biennial report on the implementation of 
the Alaska SWAP Act. The purpose of the act was to take advantage of 
oil conservation opportunities by expanding the use of coal-fired 
plants and realizing economies of scale in several remote communities. 
These opportunities were not numerous and all have been taken advantage 
of for some time. No need exists for further reports.
  Subsection (h) repeals a report that triggered a legislative veto 
provision governing DOE shipments of special nuclear materials to 
foreign countries. This legislative veto was exercised by a concurrent 
resolution and thus would be unconstitutional under the Supreme Court's 
ruling in INS v. Chadha, 1983, 103 S. Ct. 2764, 462 U.S. 919. The 
report requirement and the related legislative veto should be repealed.
  Subsection (i) converts an annual report requirement in the 
Continental Scientific Drilling and Exploration Act to a periodic 
report. DOE's role in this multiagency program has become less 
prominent, and there is no longer a need for a separate DOE report.
  Subsection (j) converts a free-standing report requirement on steel 
and aluminum research and development activities into a requirement 
that such activities be described in the annual budget submission of 
the Department.
  Subsection (k) converts a free-standing report requirement on metal 
casting research and development activities into a requirement that 
such activities be described in the annual budget submission of the 
Department.
  Subsection (l) converts the National Energy Policy Plan from a 
biennial report to a quadrennial report. The timing called for this 
report in the DOE Act requires that a new Presidential Administration 
submit a National Energy Policy Plan less than 3 months after taking 
office. This is unrealistic. In recent years, an Assistant Secretary of 
Energy for Policy has often not even been confirmed by that point in 
time. The biennial requirement also does not make sense from the point 
of view of requiring any given administration to generate such a report 
twice during each term of office. It would be more sensible to make 
this requirement a quadrennial one, in which case each new 
administration would have two full years to conduct its analysis and 
policy development process. The resulting energy policy plan would be 
released in April of the third year of its term.
  Subsection (m) repeals the authorization for two offices that no 
longer exist in the Department of Energy.
  The Office of Subseabed Disposal Research was established in 1982 to 
conduct research on subseabed disposal of nuclear waste. Such disposal 
is not ever likely to occur, and no such research has ever been 
proposed by the Department or funded through appropriations acts.
  The Office of Alcohol Fuels was established by subtitle A of title II 
of the Energy Security Act (P.L. 96-294), and during the early 1980's 
it played a vital role in support of the emerging alcohol fuels 
industry. In 1985, the last of three loans made to subsidize the 
construction of grain-based ethanol plants was guaranteed by the 
Department of Energy, and on June 30, 1987, the Department's loan 
guarantee authority expired. Only one of the loan guarantee recipients, 
the New Energy Co. of Indiana, continues to produce alcohol fuels. 
Other than this plant, all other commercial ethanol plants in operation 
were built without government financial assistance. A statutory office 
within the DOE, headed by an Executive Level IV Presidential appointee, 
is no longer needed simply to manage one loan guarantee. Indeed, the 
functions of the Office of Alcohol Fuels have already been transferred 
within the Department to the Assistant Secretary for Energy Efficiency 
and Renewable Energy, and the Office itself has been closed. Under this 
proposed amendment to the Energy Security Act, which is essentially 
technical in nature, the DOE would continue to manage the New Energy 
Company loan guarantee until the loan is repaid.
  Mr. President, there is nothing controversial about this bill. It is 
simply good government. I look forward to receiving comments on the 
bill from the Department of Energy and to its speedy passage.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2033

       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 ``DOE Reports Elimination and 
     Streamlining Act of 1996''.

     SEC. 2. REPEALS AND MODIFICATIONS.

       (a) Reports on Industrial Energy Efficiency Programs.--
       (1) Section 132(d) of the Energy Policy Act of 1992 (42 
     U.S.C. 6349(d)) is amended by striking ``and annually 
     thereafter,''.
       (2) Section 133(c) of the Energy Policy Act of 1992 (42 
     U.S.C. 6350(c)) is amended by striking ``and biennially 
     thereafter,''.
       (b) Study and Report on Vibration Reduction Technologies.--
     Section 173 of the Energy Policy Act of 1992 (42 U.S.C. 13451 
     note) is repealed.
       (c) Report on Potential Financial Investments by Electric 
     Utilities in Electric Batteries for Motor Vehicles.--Section 
     825 of the Energy Policy Act of 1992 (42 U.S.C. 13295) is 
     repealed.
       (d) Biennial Reports on Coal Research, Development, and 
     Demonstration Projects.--Section 1301(d) of the Energy Policy 
     Act of 1992 (42 U.S.C. 13331(d)) is amended by striking 
     ``every two years thereafter for a period of 6 years'' and 
     inserting ``not later than 6 years thereafter''.
       (e) Change of Updates to Five-Year Program Plan for 
     Electric Motor Vehicles to a Biennial Basis.--Section 
     2025(b)(4) of the Energy Policy Act of 1992 (42 
     U.S.C. 13435(b)(4)) is amended by striking ``Annual'' and 
     inserting ``Biennial''.
       (f) Biennial Update to National Advanced Materials 
     Initiative Five-Year Program Plan.--Section 2201(b) of the 
     Energy Policy Act of 1992 (42 U.S.C. 13501(b)) is amended by 
     striking the last sentence.
       (g) Biennial Report on Implantation of the Alaska SWAP 
     Act.--Section 6(a) of the Alaska Federal-Civilian Energy 
     Efficiency Swap Act of 1980 (40 U.S.C. 795d) is repealed.
       (h) Repeal of Unconstitutional Legislative Veto and Related 
     Report.--Section 54(a) of the Atomic Energy Act of 1954 (42 
     U.S.C. 2074(a)) is amended--
       (1) by striking the colon at the end of the first proviso 
     and inserting a period; and
       (2) by striking the second, third, and fourth provisos.
       (i) Conversion of Annual Report on Scientific Drilling 
     Program to Periodic Joint Report.--Section 4(6) of the 
     Continental Scientific Drilling and Exploration Act (P.L. 
     100-441; 102 Stat. 1762) is amended to read as follows:
       ``(6) submitting to the Congress periodic joint reports on 
     significant accomplishments of, and plans for, the drilling 
     program.''
       (j) Incorporation of Annual Report on Steel and Aluminum 
     Research and Development Activities Into the President's 
     Budget.--Section 8 of the Steel and Aluminum Conservation and 
     Technology Competitiveness Act of 1988 (15 U.S.C. 5107) is 
     amended to read as follows:

     ``SEC. 8. REPORTS.

       ``As part of the annual budget submission of the President 
     under section 1105 of title 31, United States Code, the 
     Secretary shall provide to Congress a description of research

[[Page S9582]]

     and development activities to be carried out under this Act 
     during the fiscal year involved, together with such 
     legislative recommendations as the Secretary may consider 
     appropriate.''
       (k) Incorporation of Annual Report on Metal Casting 
     Research and Development Activities, Into the President's 
     Budget.--Section 10 of the DOE Metal Casting Competitiveness 
     Research Act of 1990 (15 U.S.C. 5309) is amended to read as 
     follows:

     ``SEC. 10. REPORTS.

       ``As part of the annual budget submission of the President 
     under section 1105 of title 31, United States Code, the 
     Secretary shall provide to Congress a description of research 
     and development activities to be carried out under this Act 
     during the fiscal year involved, together with such 
     legislative recommendations as the Secretary may consider 
     appropriate.''
       (l) Conversion of National Energy Policy Plan From Biennial 
     Report to Quadrennial Report.--Section 801(b) of the 
     Department of Energy Organization Act (42 U.S.C. 7321(b)) is 
     amended by striking ``biennially'' and inserting ``every 4 
     years''.
       (m) Repeal of Authorizations for DOE Offices No Longer in 
     Existence.--
       (1) Office of Subseabed Disposal Research.--Section 224 of 
     the Nuclear Waste Policy Act of 1982 (42 U.S.C. 10204 is 
     repealed.
       (2) Office of Alcohol Fuels.--(A) Subtitle A of title II of 
     the Energy Security Act (42 U.S.C. 8811 through 8821) is 
     repealed.
       (B) Any existing loan guarantee under section 214 of the 
     Energy Security Act shall remain in effect until the loan is 
     repaid; and the Department of Energy shall continue to 
     administer an existing loan guarantee under section 214 as if 
     subtitle A had not been repealed.
       (C) The table of contents for the Energy Security Act is 
     amended by striking the item relating to subtitle A of title 
     II and the matters relating to sections 211 through 221.
                                 ______
                                 
      By Mr. BREAUX (for himself, Mr. Mack, Mr. Graham, and Mr. Cohen):
  S. 2034. A bill to amend title XVIII of the Social Security Act to 
make certain changes to hospice care under the Medicare program; to the 
Committee on Finance.


            the medicare hospice benefit amendments of 1996

  Mr. BREAUX. Mr. President, I rise today to introduce legislation to 
make technical changes to the Medicare hospice benefit which will 
ensure that high quality hospice services will be available to all 
terminally ill Medicare beneficiaries. Senators Mack, Graham, and Cohen 
join me in sponsoring this legislation, which is identical to H.R. 3714 
introduced last month. This legislation is endorsed by both the 
National Hospice Organization and the National Association for Home 
Care, and I urge my colleagues to support it.
  Hospices help care for and comfort terminally ill patients at home or 
in home-like settings. There are more than 2,450 operational or planned 
hospice programs in all 50 States. In 1994, approximately 1 out of 
every 10 people in America who died were tended to by a hospice 
program, and 1 out of every 3 people who died from cancer or AIDS were 
cared for by hospice. Services provided under the Medicare hospice 
benefit include physician services, nursing care, drugs for symptom 
management and pain relief, short term inpatient and respite care, and 
counseling both for the terminally ill and their families. Terminally 
ill patients who elect hospice opt-out of most other Medicare services 
related to their terminal illness.
  Hospice services permit terminally ill people to die with dignity, 
usually in the comforting surroundings of their own homes with their 
loved ones nearby. Hospice is also a cost-effective form of care. At a 
time when Medicare is pushing to enroll more beneficiaries in managed 
care plans, hospice is already managed care. Hospices provide patients 
with whatever palliative services are needed to manage their terminal 
illness, and they are reimbursed a standard per diem rate, based on the 
intensity of care needed and whether the patient is an inpatient or at 
home.
  With 28 percent of all Medicare costs now going toward the care of 
people in their last year of life, and almost 50 percent of those costs 
spent during the last 2 months of life, cost-effective alternatives are 
needed. Studies show hospices do reduce Medicare spending. A study 
released last year by Lewin-VHI showed that for every dollar Medicare 
spent on hospice, it saved $1.52 in Medicare part A and part B 
expenditures. Similarly, a 1989 study commissioned by the Health Care 
Financing Administration showed savings of $1.26 for every Medicare 
dollar spent on hospice. I would ask unanimous consent that a summary 
of these studies be inserted in the Record at the conclusion of my 
remarks.
  Since 1982, when the hospice benefit was added to the Medicare 
statute, more and more Americans have chosen to spend their final 
months of life in this humane and cost-effective setting. Yet in recent 
years it has become clear that certain technical changes are needed in 
the Medicare hospice benefit both to protect beneficiaries and to 
ensure that a full range of cost-effective hospice services continues 
to be available. The bill I am introducing today makes six necessary 
technical changes.
  First, the Medicare Hospice Benefits Amendments of 1996 restructures 
the hospice benefit periods. The basic eligibility criteria do not 
change. Under this bill, as in current law, a person is eligible for 
the Medicare hospice benefit only if two physicians have certified that 
he is terminally ill with a life expectancy of 6 months or less. 
Patients who elect to receive hospice benefits give up most other 
Medicare benefits unless and until they withdraw from the hospice 
program.
  While this bill does not change hospice eligibility criteria, it does 
change how the benefit periods are structured. Currently, the Medicare 
benefit consists of four benefit periods. At the end of each of the 
first three periods, the patient must be recertified as being 
terminally ill. The fourth benefit period is of unlimited duration. 
However, a patient who withdraws from hospice during the fourth hospice 
period forfeits his ability to elect hospice services in the future. 
Thus, a patient who goes into remission, and is thus no longer eligible 
for hospice because his life expectancy exceeds 6 months, is not be 
able to return to hospice when his condition worsens.
  This bill restructures the hospice benefit periods to eliminate the 
existing open-ended fourth benefit period and to provide that after the 
first two 90 day periods, patients are reevaluated every 60 days to 
ensure that they still qualify for hospice services. This restructuring 
ensures that those receiving Medicare benefits are able to receive 
hospice services at the time they need them and can be discharged from 
hospice care with no penalty if their prognosis changes.
  Second, the bill clarifies that ambulance services, diagnostic tests, 
radiation, and chemotherapy are covered under the hospice benefit when 
they are included in the patient s plan of care. No separate payment 
will be made for these services, but hospices will have to provide them 
when they are found to be necessary as a palliative measure. This 
change conforms the statute to current Medicare regulatory policy.
  Third, the bill also permits hospices to have independent contractor 
relationships with physicians. Under current law, hospices must 
directly employ their medical directors and other staff physicians. 
This creates a legal problem in some States which prohibit the 
corporate practice of medicine, and the requirement has made it 
increasingly difficult to recruit part-time hospice physicians.
  Fourth, the bill creates a mechanism to allow waiver of certain 
staffing requirements for rural hospices, which often have difficulty 
becoming Medicare-certified because of shortages of certain health 
professionals. Currently, about 80 percent of hospices are Medicare-
certified or pending certification.
  Fifth, the bill reinstates an expired provision regarding liability 
for certain denials. As made clear by an article published on July 18 
of last month in the prestigious New England Journal of Medicine, most 
patients are referred to hospice very late in the course of their 
terminal illnesses, but some live longer than 6 months. Predicting when 
an individual will die will never be an exact science, and we should 
not expect it to be. Therefore, the bill reinstates the expired 
statutory presumption that hospices with very low error rates on their 
Medicare claims did not know that denied benefits were not covered, and 
it expands the bases for waiver of liability to include cases where a 
prognosis of 6 months life expectancy is found to have been in error.
  Finally, this bill provides some administrative flexibility regarding 
certification of terminal illness. Currently, the statute requires that 
paperwork documenting physician certification of a patient s terminal 
illness be

[[Page S9583]]

completed within a certain number of days of the patient s admission to 
hospice. This bill will eliminate the strict statutory requirements and 
give the Health Care Financing Administration the discretion, as it 
currently has with home health certifications, to require hospice 
certifications to be on file before a Medicare claim is submitted.
  The Medicare Hospice Benefit Amendments of 1996 are noncontroversial 
and should not affect Medicare spending, but they will make important 
and necessary changes to the Medicare hospice benefit, to enable 
hospices to provide high quality, cost effective care to the terminally 
ill, and to protect beneficiaries who depend on these services. I urge 
my colleagues to support this bill.
  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. 2034

       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 ``Medicare Hospice Benefit 
     Amendments of 1996''.

     SEC. 2. HOSPICE CARE BENEFIT PERIODS.

       (a) Restructuring of Benefit Period.--Section 1812 of the 
     Social Security Act (42 U.S.C. 1395d) is amended in 
     subsections (a)(4) and (d)(1), by striking ``, a subsequent 
     period of 30 days, and a subsequent extension period'' and 
     inserting ``and an unlimited number of subsequent periods of 
     60 days each''.
       (b) Conforming Amendments.--(1) Section 1812(d)(2)(B) of 
     such Act (42 U.S.C. 1395d(d)(2)(B)) is amended by striking 
     ``90- or 30-day period or a subsequent extension period'' and 
     inserting ``90-day period or a subsequent 60-day period''.
       (2) Section 1814(a)(7)(A) of such Act (42 U.S.C. 
     1395f(a)(7)(A)) is amended--
       (A) in clause (i), by inserting ``and'' at the end;
       (B) in clause (ii)--
       (i) by striking ``30-day'' and inserting ``60-day''; and
       (ii) by striking ``and'' at the end and inserting a period; 
     and
       (C) by striking clause (iii).

     SEC. 3. AMBULANCE SERVICES, DIAGNOSTIC TESTS, CHEMOTHERAPY 
                   SERVICES, AND RADIATION THERAPY SERVICES 
                   INCLUDED IN HOSPICE CARE.

       Section 1861(dd)(1) of the Social Security Act (42 U.S.C. 
     1395x(dd)(1)) is amended--
       (1) in subparagraph (E), by inserting ``anticancer 
     chemotherapeutic agents and other'' before ``drugs'';
       (2) in subparagraph (G), by striking ``and'' at the end;
       (3) in subparagraph (H), by striking the period at the end 
     and inserting a comma; and
       (4) by inserting after subparagraph (H) the following:
       ``(I) ambulance services,
       ``(J) diagnostic tests, and
       ``(K) radiation therapy services.''.

     SEC. 4. CONTRACTING WITH INDEPENDENT PHYSICIANS OR PHYSICIAN 
                   GROUPS FOR HOSPICE CARE SERVICES PERMITTED.

       Section 1861(dd)(2) of the Social Security Act (42 U.S.C. 
     1395x(dd)(2)) is amended--
       (1) in subparagraph (A)(ii)(I), by striking ``(F),''; and
       (2) in subparagraph (B)(i), by inserting ``or under 
     contract with'' after ``employed by''.

     SEC. 5. WAIVER OF CERTAIN STAFFING REQUIREMENTS FOR HOSPICE 
                   CARE PROGRAMS IN NON-URBANIZED AREAS.

       Section 1861(dd)(5) of the Social Security Act (42 U.S.C. 
     1395x(dd)(5)) is amended--
       (1) in subparagraph (B), by inserting ``or (C)'' after 
     ``subparagraph (A)'' each place it appears; and
       (2) by adding at the end the following:
       ``(C) The Secretary may waive the requirements of 
     paragraphs (2)(A)(i) and (2)(A)(ii) for an agency or 
     organization with respect to the services described in 
     paragraph (1)(B) and, with respect to dietary counseling, 
     paragraph (1)(H), if such agency or organization--
       ``(i) is located in an area which is not an urbanized area 
     (as defined by the Bureau of Census), and
       ``(ii) demonstrates to the satisfaction of the Secretary 
     that the agency or organization has been unable, despite 
     diligent efforts, to recruit appropriate personnel.''.

     SEC. 6. LIMITATION ON LIABILITY OF BENEFICIARIES AND 
                   PROVIDERS FOR CERTAIN HOSPICE COVERAGE DENIALS.

       (a) In General.--Section 1879(g) of the Social Security Act 
     (42 U.S.C. 1395pp(g)) is amended--
       (1) by redesignating paragraphs (1) and (2) as 
     subparagraphs (A) and (B), respectively, and moving such 
     subparagraphs 2 ems to the right;
       (2) by striking ``is,'' and inserting ``is--'';
       (3) by making the remaining text of subsection (g), as 
     amended, that follows ``is--'' a new paragraph (1) and 
     indenting such paragraph 2 ems to the right;
       (4) by striking the period at the end and inserting ``; 
     and''; and
       (5) by adding at the end the following new paragraph:
       ``(2) with respect to the provision of hospice care to an 
     individual, a determination that the individual is not 
     terminally ill.''.
       (b) Waiver Period Extended.--Section 9305(f)(2) of the 
     Omnibus Budget Reconciliation Act of 1986 is amended by 
     striking ``and before December 31, 1995.''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on December 31, 1995.

     SEC. 7. EXTENDING THE PERIOD FOR PHYSICIAN CERTIFICATION OF 
                   AN INDIVIDUAL'S TERMINAL ILLNESS.

       Section 1814(a)(7)(A)(i)(II) of the Social Security Act (42 
     U.S.C. 1395f(a)(7)(A)(i)(II)) is amended by striking ``, not 
     later than 2 days after hospice care is initiated (or, if 
     each certify verbally not later than 2 days after hospice 
     care is initiated, not later than 8 days after such care is 
     initiated),'' and inserting ``at the beginning of the 
     period''.

     SEC. 8. EFFECTIVE DATE.

       Except as provided in section 6(c), the amendments made by 
     this Act shall apply to benefits provided on or after the 
     date of the enactment of this Act, regardless of whether or 
     not an individual has made an election under section 1812(d) 
     of the Social Security Act before such date.
                                                                    ____



       Summary of Studies Regarding Cost-Effectiveness of Hospice

       Lewin-VHI's 1995 report, An Analysis of the Cost Savings of 
     the Medicare Hospice Benefit, prepared for The National 
     Hospice Organization, updates a previous study prepared in 
     1989 by Abt Associates for the Health Care Financing 
     Administration entitled Medicare Hospice Benefit Program 
     Evaluation.
       The 1989 Abt study found that:
       (1) Medicare saved $1.26 for every $1.00 spent on hospice 
     care.
       (2) Much of these savings were realized during the last 
     month of life of the patient and were largely a result of the 
     substitution of home hospice care for in-hospital care.
       The 1995 Lewin-VHI study was based on data generated from a 
     group of Medicare recipients who died of cancer during the 
     period between July 1 and December 31, 1992. This group was 
     further divided into those who had one or more hospices claim 
     during the aforementioned period and those who had none. 
     (Additional analysis was done to ensure no selection bias.)
       The Lewin-VHI report concluded:
       (1) Medicare saved $1.52 for every $1.00 spent on hospice.
       (2) While savings were highest for the last month of life, 
     there were also net savings over the last year of life for 
     those who enrolled in hospice.
       (3) While the greatest savings were found in Part A 
     Medicare expenditures, savings were also found in Part B 
     expenditures.
  Mr. GRAHAM. Mr. President, I rise today to join in support of the 
``Medicare Hospice Benefit Amendments of 1996'' to be introduced by 
Senator Breaux.
  The number of terminally ill patients choosing hospice care over 
conventional Medicare has increased from 11,000 Medicare admission in 
1985 to more than 220,000 Medicare beneficiaries last year.
  During the current session of Congress, much has been made about the 
problems with the Medicare Trust Fund. Congress should act as soon as 
possible to reduce Medicare costs and protect the Medicare Trust Fund. 
However, radical cuts to the program are not the solution.
  Instead, we should emphasize prevention, fraud reduction, and 
successful programs such as hospice care--all proven efforts at 
reducing spending while maintaining current Medicare quality and 
beneficiary protections.
  The goal of hospice is to provide comprehensive health care at home 
to terminally ill patients in a manner that improves the quality of 
life for the patients and their families. This approach places a high 
value of personal choice, family support, and community involvement.
  Patients covered by Medicare and Medicaid waiver their eligibility 
for all other public program benefits when choosing hospice care. By 
doing so, hospice patients are cared for at home with their families 
and avoid costly hospitalizations. Hospice makes sense from a health 
care, quality of life, and economic perspective.
  The number of terminally ill patients choosing hospice care over 
conventional Medicare has increased from 11,000 Medicare admission in 
1985 to more than 220,000 Medicare beneficiaries last year.
  Clearly, hospice is an idea that is rapidly gaining acceptance and 
acclaim in modern times. Florida has been a pioneer in the modern 
hospice movement. In 1979, while I was the Governor in Florida, my 
State became the first to set standards for hospices and recognize 
hospice as an option for the terminally ill. The Florida law served as 
a model for national legislation. As a result, inpatient and at-home 
hospice care has been covered by Medicare since 1982.

[[Page S9584]]

  The goal of hospice is to make the last months of a person's life as 
comfortable and meaningful as possible. Hospice does not use artificial 
life-support systems or surgery when there is no reasonable hope of 
remission. Hospice offers dignity for the dying and avoids costly--
often traumatic--acute-care hospitalization.
  For example, according to Lewin-VHI in their 1994 study entitled 
Hospice Care: An Introduction and Review of the Evidence, Medicare 
beneficiaries in their last year of life constituted 5 percent of 
beneficiaries in 1988 but more than 27 percent of Medicare payments. 
Lewin-VHI adds that ``during the last month of life, hospice users 
cost, on average, $3,069, while those using conventional care cost 
$4,071.'' Overall, that study indicates the use of the hospice benefit 
saved Medicare $1.26 for every $1.00 spent.
  However, an updated 1995 Lewin-VHI study shows even better results 
through the use of hospice. The study, entitled An Analysis of the Cost 
Savings of the Medicare Hospice Benefit, found that Medicare saves 
$1.52 for every $1.00 spent on hospice.
  According to Lewin-VHI, ``First, hospices effectively substitute 
relatively inexpensive care at home for costly inpatient hospital days 
during the period in which expenditures are typically the greatest and 
in which most hospice users enroll in the benefit, in the last month of 
life. Second, the financial incentives of the current Medicare Hospice 
Benefit reinforce the organizational incentives of most hospice 
programs to provide quality care at a lower cost.''
  In another study entitled ``Survival of Medicare Patients After 
Enrollment in Hospice Programs'' in the New England Journal of Medicine 
on July 18, 1996, authors Nicholas Christakis and Jose Escarce 
establish that the benefits of hospice should be expanded. They write, 
``Enrolling patients [in hospice] earlier . . . might enhance the 
quality of end-of-life care and also prove cost effective.''
  Again, hospice has been a Medicare benefit since passage of the 1982 
law and its implementation in 1983. Hospice care has grown dramatically 
since the benefit's inception, but few changes have been made to the 
1982 law. As the bill's House sponsors--Congressmen Ben Cardin and Rob 
Portman--have said, ``As more and more patients choose the hospice 
benefit, it has become clear that certain provisions of the law need to 
be clarified in order to protect Medicare beneficiaries and to ensure 
that Medicare hospice patients can continue to receive excellent, cost-
effective hospice care.''

  We should do what we can to encourage hospice care in the Medicare 
program and through the health care system generally. This bill makes 
technical amendments to Medicare's hospice program. Specifically, the 
bill would:
  Restructure the benefit periods to require more frequent 
certifications after 180 days to facilitate appropriate discharge with 
no penalty to the patient; clarify that ambulances, diagnostic tests, 
radiation and chemotherapy are covered hospice services when included 
in the plan of care; amend the ``core services'' requirement to allow 
hospices to contract for physician services with independent contractor 
physicians or physician groups; allow waiver of certain staffing 
requirements of rural hospices; extend the expired favorable 
presumption of waiver of liability provisions and include waiver 
protection where prognosis of terminal illness is found to have been in 
error; and, allow the Health Care Financing Administration to set 
documentation requirements of physician certifications.
  Finally, I would like to commend Congressman Cardin from Maryland for 
his hard work on this legislation on the House side. The Congressman is 
a great thinker on the topic of how to improve Medicare and his 
legislation--H.R. 3714--once again serves that purpose.
                                 ______
                                 
      By Mr. BIDEN:
  S. 2035. A bill to invest in the future American work force and to 
ensure that all Americans have access to higher education by providing 
tax relief for investment in a college education and by encouraging 
savings for college costs, and for other purposes; to the Committee on 
Finance.


                           the get ahead act

  Mr. BIDEN. Mr. President, I have spoken in the Senate before about 
how the rising cost of a college education is putting a higher 
education--the American dream--out of reach for many middle-class 
American families.
  When I went to college, middle-class families could pay for the 
public college tuition and fees of their children for less than 5 
percent of their income. It stayed that way until 1980. Since then, 
however, college costs have skyrocketed and middle-class incomes have 
stagnated. The result is that today it takes almost 9 percent of the 
average family's income to send one--just one--child to a public 
college. And, if you go to a private college or university, tuition and 
fees will eat up 35 percent of your income.
  Who can afford that? Not many middle-class families that I know. Many 
young people today must choose between going heavily into debt or not 
going to college at all. And, as the debt burden gets heavier and 
heavier, more and more middle-class kids will not even have that 
choice. They simply will not be able to go to college.
  And, this is happening at a time when we as a Nation can least afford 
it.
  Educating our work force is one of the best investments we as a 
society can make, and it is one of the best measurements of future 
economic well-being. According to one study, a more educated population 
has been responsible for nearly one-third of America's economic growth 
since the Great Depression. As we prepare to enter the 21st century and 
as the world economy is increasingly internationally competitive, we 
must ensure that no American is denied a higher education solely 
because of the cost.
  In fact, this has been a goal of the Federal Government for over a 
century. From the establishment of the land-grant university system in 
the late 1800's to the GI bill at the end of World War II to the 
creation of the Pell Grant and Guaranteed Student Loan Programs in the 
1960's, the Federal Government has been committed to seeing a college 
education within reach of every American. It is time to renew that 
commitment.
  So, today, Mr. President, I am introducing comprehensive legislation 
to make college more affordable for American families, so that middle-
class parents can afford to send their kids to college and middle-class 
kids can afford to go.
  My bill, titled ``Growing the Economy for Tomorrow: Assuring Higher 
Education is Affordable and Dependable''--Get Ahead, for short--
combines numerous proposals to give tax cuts for the cost of college, 
to encourage families to save for a college education, and to award 
college scholarships to high school students in the top of their class 
academically.
  For the sake of time, Mr. President, I will not go through all of 
specific proposals now. Instead, I refer my colleagues to a summary of 
the legislation.
  Mr. President, a college education is the dream of every American 
family. When I travel around my State of Delaware, I meet with wealthy 
businessmen, poor welfare mothers, and hundreds of middle-class 
families. And, they all want the same thing for their kids: a chance to 
go to college.
  They do not need us in Washington to tell them it is becoming harder 
and harder to get there. They know that. They need us to make it easier 
for them. I urge my colleagues to cosponsor this important legislation 
to make sure that the American dream of a college education remains 
within reach of every American.
  Mr. President, I ask unanimous consent that additional material be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                       The GET AHEAD Act--Summary


              title i--tax incentives for higher education

           Subtitle A--Tax Relief for Higher Education Costs

     Section 101--Deduction for Higher Education Expenses
       An above-the-line tax deduction (available even to those 
     who do not itemize deductions) would be allowed for the costs 
     of college tuition and fees as well as interest on college 
     loans.
       In the case of tuition costs, beginning in tax year 1999, 
     the maximum annual deduction would be $10,000 per year; a 
     maximum deduction of $5,000 would be available in tax years 
     1996, 1997, and 1998. The full deduction

[[Page S9585]]

     would be available to single taxpayers with incomes under 
     $70,000 and married couples with incomes under $100,000; a 
     reduced (phased-out) deduction would be available to those 
     with incomes up to $90,000 (singles) and $120,000 (couples). 
     The income thresholds would be indexed annually for 
     inflation.
       Interest on student loans would be deductible beginning 
     with interest payments made in tax year 1996. Interest 
     payments could be deducted on top of the $10,000 deduction 
     for payment of college tuition and fees. There would be no 
     annual maximum and no income limits with regard to the 
     deductibility of interest on student loans.
       Language is included to coordinate this tax deduction with 
     other education provisions of the tax code--to ensure that 
     individuals do not receive a double benefit for the same 
     payments. Specifically, qualified higher education expenses 
     that could be tax deductible would be reduced by any payments 
     made from Series EE savings bonds (and excluded from taxable 
     income), any veterans educational assistance provided by the 
     federal government, and any other payments from tax-exempt 
     sources (e.g. employer-provided educational assistance). 
     Also, tax-free scholarships and tax-excluded funds from 
     Education Savings Accounts (see section 112) would first be 
     attributed to room and board costs; the remainder, if any, 
     would count against tuition and fees and would reduce the 
     amount that would be tax deductible. However, if tuition and 
     fees still exceeded $10,000 even after the reductions, the 
     full tax deduction would be available.
     Section 102--Exclusion for Scholarships and Fellowships
       College scholarships and fellowship grants would not be 
     considered income for the purposes of federal income taxes. 
     This returns the tax treatment of scholarships and 
     fellowships to their treatment prior to the 1986 Tax Reform 
     Act (which limited the exclusion of scholarships and 
     fellowships to that used for tuition and fees).
       Scholarships and fellowship grants would be fully 
     excludable for degree candidates. In the case of non-degree 
     candidates, individuals would be eligible for a lifetime 
     exclusion of $10,800--$300 per month for a maximum 36 months.
       Language is included to clarify that federal grants for 
     higher education that are conditioned on future service (such 
     as National Health Service Corps grants for medical students) 
     would still be eligible for tax exclusion.
       This section would be effective beginning with scholarships 
     and fellowship grants used in tax year 1996.
     Section 103--Permanent Exclusion for Educational Assistance
       The tax exclusion for employer-provided educational 
     assistance would be reinstated retroactively to January 1, 
     1995. And, the tax exclusion would be made a permanent part 
     of the tax code.

       Subtitle B--Encouraging Savings for Higher Education Costs

     Section 111--IRA Distributions Used Without Penalty for 
         Higher Education Expenses
       Funds could be withdrawn from Individual Retirement 
     Accounts (IRAs) before age 59\1/2\ without being subject to 
     the 10 percent penalty tax if the funds were used for higher 
     education tuition and fees. (However, withdrawn funds, if 
     deductible when contributed to the IRA, would be considered 
     gross income for the purposes of federal income taxes.)
       This section would be effective upon enactment.
     Section 112--Education Savings Accounts
       This section would create IRA-like accounts--known as 
     Education Savings Accounts (ESA's)--for the purpose of 
     encouraging savings for a college education.
       Each year, a family could invest up to $2000 per child 
     under the age of 19 in an ESA. For single taxpayers with 
     incomes under $70,000 (phased out up to $90,000) and married 
     couples with incomes under $100,000 (phased out up to 
     $120,000), the contributions would be tax deductible. (These 
     income thresholds would be indexed annually for inflation.) 
     For all taxpayers, the interest in an ESA would accumulate 
     tax free; the contributions would not be subject to the 
     federal gift tax; and, the balance in an ESA would not be 
     treated as an asset or income for the purposes of determining 
     eligibility for federal means-tested programs.
       ESA funds could be withdrawn to meet the higher education 
     expenses--tuition, fees, books, supplies, equipment, and room 
     and board--of the beneficiary. Funds withdrawn for other 
     purposes would be subject to a 10 percent penalty tax and 
     would be considered income for the purposes of federal income 
     taxes (to the extent that the funds were tax deductible when 
     contributed). The penalty tax would not apply in cases of 
     death or disability of the beneficiary of the ESA and in 
     cases of unemployment of the contributors.
       In addition, when the beneficiary of the account turns age 
     30 and is not enrolled in college at least half time, any 
     funds remaining in the ESA would be (1) transferred to 
     another ESA; (2) donated to an educational institution; or 
     (3) refunded to the contributors. In the first two cases, 
     there would be no penalty tax and the money would not be 
     considered taxable income. In the third case, the penalty tax 
     would not apply, but the funds would be counted as income to 
     the extent that the funds were tax deductible when 
     contributed.
       Finally, parents could roll over funds from one child's ESA 
     to another child's ESA without regard to any taxes, without 
     regard to the $2000 annual maximum contribution to an ESA, 
     and without regard to the age 30 requirement noted above. 
     Funds rolled over would also not be subject to the federal 
     gift tax.
       Language is also included to allow individuals to designate 
     contributions to an ESA as nondeductible even if such 
     contributions could be tax deductible. This gives families 
     the option to build up the principal in an ESA while at a 
     lower tax rate, rather than having to pay taxes on unspent 
     ESA funds when the contributors are older and likely in a 
     higher tax bracket.
       Tax deductible contributions to ESAs would be allowed 
     beginning in tax year 1996.
     Section 113--Increase in Income Limits for Savings Bond 
         Exclusion
       For taxpayers with incomes below certain thresholds, the 
     interest earned on Series EE U.S. Savings Bonds are not 
     considered taxable income if the withdrawn funds are used to 
     pay for higher education tuition and fees. This section 
     increases the income thresholds to allow more Americans to 
     use the Series EE Savings Bonds for education expenses.
       Effective with tax year 1996, the income thresholds would 
     be the same as the income thresholds for the higher education 
     tax deduction (see section 101): $70,000 for single taxpayers 
     (phased out up to $90,000), and $100,000 for couples (phased 
     out up to $120,000). As with the higher education tax 
     deduction, these income thresholds would be indexed annually 
     for inflation.
     Section 114--Tax Treatment of State Prepaid Tuition Plans
       Several states have established prepaid tuition plans, 
     where individuals can make advance payments for college 
     tuition. However, because of the uncertainty of federal tax 
     law, some states have put their plans on hold and other 
     states have not gone forward at all. This section clarifies 
     federal tax law in two respects.
       First, state-established trusts or corporations created 
     exclusively for managing tuition prepayment plans would be 
     exempt from federal taxes on investment earnings. Second, 
     the letter-ruling issued by the IRS to Michigan would be 
     codified: purchasers and beneficiaries of prepaid tuition 
     plans would be liable for federal income taxes on the 
     increased value of the investment only at the time the 
     funds were redeemed, not each year as the ``interest'' 
     accrued.
       To be eligible for the tax clarification, a state prepaid 
     tuition plan must guarantee at the time of purchase that a 
     certain percentage of costs would be covered at a 
     participating educational institution, regardless of the 
     performance of the investment fund. And, it must guarantee 
     that funds would be refunded in the event of the death or 
     disability of the beneficiary or in the event the beneficiary 
     failed to enroll in a participating institution.


            title ii--scholarships for academic achievement

       Beginning with the high school graduating class of 1997, 
     the top 5 percent of graduating seniors at each high school 
     in the United States would be eligible for a $1000 merit 
     scholarship. If an individual receiving such a scholarship 
     achieved a 3.0 (``B'') average during his or her first year 
     of college, a second $1000 scholarship would be awarded.
       However, the merit scholarships would be available only to 
     those students in families with income under $70,000 (single) 
     and $100,000 (couples). These income thresholds would be 
     increased annually for inflation.
       Funds are authorized (and subject to annual appropriations) 
     for five years. The first year authorization (fiscal year 
     1997) is $130 million. In each of the next four years (FY 
     1998-FY 2001), because the scholarships could be renewed for 
     a second year, the authorization is $260 million per year. 
     Total five-year authorization: $1.17 billion.


                     title iii--deficit neutrality

       To ensure that the ``GET AHEAD'' Act does not increase the 
     deficit, this title declares it the sense of the Senate that 
     the costs of the bill should be paid by closing corporate tax 
     loopholes.
                                 ______
                                 
      By Mr. DORGAN (for himself, Mr. Baucus, Mrs. Murray, Mr. 
        Wellstone, Mr. Conrad, Mr. Wyden, and Mr. Daschle):
  S. 2036. A bill to amend the Agricultural Market Transition Act to 
provide equitable treatment for barley producers so that 1996 contract 
payments to the producers are not reduced to a greater extent than the 
average percentage reduction in contract payments for other 
commodities, while maintaining the level of contract payments for other 
commodities, and for other purposes; to the Committee on Agriculture, 
Nutrition, and Forestry.


                       barley growers legislation

  Mr. DORGAN. Mr. President, last week, I was among a group of Senators 
who tried to correct an inequitable payment reduction in farm program 
contract payments faced by barley growers. After considerable time and 
effort we reluctantly came to an agreement on an amendment to address 
this problem.
  At the time, I said it was not the answer to the problem, but rather 
a small

[[Page S9586]]

step in the journey. Unfortunately that journey ended up being a very 
short one that quickly got sidetracked.
  Despite the fact that the Senate agreed to the amendment to provide 
some relief to barley growers, the conference report came back this 
week with no additional funds to deal with this problem. The Senate 
amendment was deleted.
  Instead the conferees referred the issue back to the authorizing 
committee and then provided an unfunded directive to the Secretary of 
Agriculture to deal with the problem. At the time we agreed to the 
Senate amendment, I was concerned that this would be the outcome. 
Another referral and no real action.
  Barley growers deserve more than that. The freedom to farm fixed 
contract payment system has been violated, and the Government is once 
again being viewed as not keeping its word. While the freedom to farm 
bill was not my choice for farm legislation, I believe the promises it 
made to producers constitutes a public commitment that should be kept.
  It appears that the only way that commitment can be met is if 
legislation is introduced to require that such action be taken. That is 
why I am introducing legislation today.
  My bill will give the authorizing committee, the Senate Agriculture 
Committee, a clear opportunity to move forward to resolve this issue. 
It will establish the goal that we had in mind when we sought to solve 
this problem by amending the appropriations bill.
  It would seem to me that the majority leadership of the authorizing 
committees would be the first ones in line to correct this problem. 
They were the ones who developed the freedom to farm proposal, and they 
were the ones who used their projected schedule of fixed payments to 
sell their farm policy approach to American farmers.
  A news release issued November 21, 1995, by House Agriculture 
Committee Chairman Pat Roberts clearly states that the expected market 
transition payments under the Freedom to Farm Program would be 46 cents 
per bushel for barley, 27 cents per bushel for corn, and 92 cents per 
bushel for wheat.
  This news release lists the source of these estimates as the 
Republican staff of the Senate Committee on Agriculture, Nutrition, and 
Forestry. These payment projections went unchanged throughout the farm 
bill debate right through the final farm bill conference committee.
  How or why these miscalculations occurred is a moot point. My purpose 
is not to blame anybody. My purpose is to point out that the freedom to 
farm bill sponsors developed these projections and used them to advance 
their farm program proposal. These estimates were the basis of the 
decisions of many farmers and farm organizations in deciding what they 
would support as the farm bill moved through Congress.
  Throughout the farm bill debate, it was clear that these estimated 
amounts might be a few cents off, but nobody expected any substantial 
difference between these estimates and the contract payments.


                miscalculation results in 30-percent cut

  Unfortunately, there was a $39 million miscalculation in the payments 
projected for barley producers. Rather than the original payment rate 
of 46 cents per bushel in 1996, barley producers found out later that 
their payments will be only 32 cents per bushel. That is a full 30 
percent less than the original congressional estimates.
  Our barley producers based their farm plans and cash flow for this 
crop year on the projections that were made last fall. They went to 
their bankers and creditors who made loans based on these projections.
  Frankly, I shouldn't be the one that is trying to correct this 
problem. This problem should have been corrected by those that 
developed the freedom to farm bill and its payment projections. 
However, since North Dakota is the largest barley producing State in 
the Nation, this is of considerable concern to our barley producers.
  My amendment would restore $35 of the $39 million to barley 
producers. This would be about a 10-percent cut from what was 
originally projected. A 10-percent cut is in line with the reductions 
that are expected in other payments for the other commodities.
  The purpose of this amendment is to provide equitable treatment to 
barley producers so that contract payments are not reduced to any 
greater degree than they are for other commodities. No other commodity 
has been asked to take as deep a reduction as barley.
  Wheat producers will be getting 87 cents, rather than 92 cents. That 
is a 5-percent reduction. Corn producers will be getting 24 cents, 
rather than 27 cents. That is an 11-percent reduction. Barley producers 
should not be expected to take a 30-percent cut in their payments.
  This is a matter of keeping faith with those family farmers that made 
their plans on the basis of a farm bill that was very late in getting 
passed. It is a matter of fairness to our Nation's barley producers.
  I am pleased that Senators Baucus, Murray, Wellstone, Conrad, Wyden, 
and Daschle have joined me in this effort and will be original 
cosponsors of this legislation.
  Mr. CONRAD. Mr. President, I rise as an original cosponsor of 
legislation to correct the provisions of the Federal Agriculture 
Improvement and Reform Act of 1996 which unfairly penalizes barley 
producers. In one of the most egregious examples of misinformation I've 
ever seen, actual payments to barley producers under the act are 
dramatically lower than the original promises made by proponents of the 
bill. The bill we are introducing today corrects that error and gives 
barley producers the equal treatment they deserve.
  On November 21, 1995, House Agriculture Committee Chairman Pat 
Roberts released a press statement announcing the estimated market 
transition payments under freedom to farm. The announcement clearly 
stated that barley payments for 1996 would be 46 cents per bushel. 
While the press release does state the figures were estimates, it is 
undeniable that the figures became the basis on which farm group after 
farm group made farm policy decisions. Producers were told they would 
receive this level of payment, or something very close to it, and that 
the payment would be guaranteed. I know this is true in North Dakota 
because in meeting after meeting I heard producers tell me it was their 
belief they would receive 46 cents in 1996 if freedom to farm became 
law.
  Later we find out this is not the case, that the payments to barley 
producers would not be 46 cents, they would be only 32 cents. I 
understand other commodities received some reductions--approximately 5-
10 percent--but none received the 30 percent reduction barley producers 
have little choice but to accept. Opponents of this bill will argue all 
producers were treated the same and that barley producers should have 
been aware the initial figures were subject to change. Well, barley 
producers did know there might be some change, maybe 1 or 2 cents, but 
did not know there might be a 30 percent change.
  It's time we set the record straight and admit that barley producers 
were not treated fairly by the 1996 farm bill. I hope my colleagues 
will join me in correcting this extremely unfair situation.
                                 ______
                                 
      By Mr. LAUTENBERG:
  S. 2037. A bill to provide for aviation security, and for other 
purposes; to the Committee on Commerce, Science, and Transportation.


                   The Aviation Security Act of 1996

  Mr. LAUTENBERG. Mr. President, I rise today to introduce the Aviation 
Security Act [ASA]. This legislation is designed to significantly 
enhance security measures at U.S. airports, to better protect those who 
fly.
  Mr. President, I join with all Americans in expressing my sorrow at 
the loss of 230 innocent lives in the crash of TWA flight 800. My 
sympathy and prayers are with the victims' families and friends as they 
struggle to cope with this tragedy.
  At this time, the sea has not yielded its secrets, and we do not have 
conclusive evidence of why the jet crashed. However, terrorism appears 
to be the likely cause of the disaster.
  Whether or not the cause of the crash was a bomb, this disaster has 
focused national attention on the fact that America's shores are not 
immune from terrorism. And this is a threat which I fear will only 
increase in scope and sophistication over the next few years.
  Terrorism is an act of war, not against any specific individual, but 
against our entire nation. Consequently, protecting ourselves from

[[Page S9587]]

this scourge is a matter of national security, and we must act 
accordingly. We must treat this threat as seriously as any declared 
war. And we need to adopt measures--and attitudes--to aggressively 
combat this twentieth century plague.
  Mr. President, living in a free society, there is only so much we can 
do to protect every public building, park and gathering place. However, 
terrorists usually target a nation where it's most vulnerable. And 
perhaps nowhere are we more vulnerable than in our air security system.
  Mr. President, after the past few agonizing days, it's all too 
apparent that we must significantly upgrade security measures at U.S. 
airports. Although it may be impossible to stop every terrorist who is 
determined to bomb an airline, security can be significantly enhanced 
to better protect those who fly. And it must be continually improved as 
threats and technology change.
  The 1.5 million people who daily board flights at American airports 
undergo security measures which were designed decades ago to stop 
highjackers with metal guns and knives. These measures are inadequate 
when dealing with terrorists with Semtex and other plastic explosives. 
Such explosives are so dangerous that less than 2 pounds can shred a 
jumbo jet into a pile of scrap metal.

  The problem of inadequate protection stems from many causes. In most 
other countries, government is responsible for air security. In the 
United States, the Government, the airlines and the airports share 
responsibility. The highly competitive airlines, many of which are 
experiencing financial difficulties, face an inevitable and difficult 
conflict of interest. Although the Federal Aviation Administration 
issues minimum security standards, individual airlines and airports are 
responsible for implementing them.
  There are also multiple loopholes in the present security system. On 
U.S. domestic flights, bags and passengers are not even required to 
travel together. And there are many other points of vulnerability, 
including cargo and mail.
  It is true that our safety procedures were upgraded after the 
Lockerbie disaster. As a member of the President's Commission on 
Aviation Security and Terrorism, I helped draft the Aviation Security 
Improvement Act of 1990. Among its 38 provisions were requirements that 
the FAA accelerate explosives detection research and heighten security 
checks on airport personnel.
  Additionally, on July 25, the President announced new air travel 
security measures. These improvements, which include increased searches 
of carry-on luggage and required pre-flight cargo and cabin 
inspections, will certainly enhance security. However, they do not go 
far enough.
  Over the past few weeks, I have been briefed by some of our nation's 
best experts in the field of aviation safety. They are concerned that 
terrorists are outstripping our current procedures, and are breaking 
through America's cordon of safety. We can do better; we must do 
better. It will require leadership and decisiveness.
  This Senator believes that we must institute a truly comprehensive 
security system. In order to achieve this, we must do at least three 
things. We must adequately invest in security technology in proportion 
to the increasing threat of terrorism. We must ensure that the airlines 
enforce necessary security measures at the gate. And we must make sure 
that our security personnel are adequately trained and perform well.
  To begin the debate on these matters, I am introducing the Aviation 
Security Act (ASA). This legislation effectively addresses the problems 
which have become apparent recently, by charging the Department of 
Transportation with implementing a comprehensive aviation security 
system.
  To enhance security before travelers reach the airport, and once they 
are at the gate, my bill mandates increased screening of passengers, 
luggage, and cargo. It also requires that the Department of 
Transportation review and upgrade the current procedures for examining 
cargo on passenger flight.

  To identify passengers and cargo that pose a heightened risk--in 
other words, to stop the bad guys before they board or get a package on 
board--this legislation requries the Department of Transportation to 
develop a methodology to profile passengers and cargo. It also requires 
that air carriers implement this methodology and institute contingency 
plans for dealing with individuals identified as potential threats. For 
those individuals and cargo that pose the greatest threat, airports and 
airlines would be required to develop and utilize additional measures, 
including bag-match, personal interview, and enhanced bag search.
  To complement the additional profiling and security measures, my 
legislation also mandates expedited installation of explosive detection 
devices at those airports which the Department of Transportation 
identifies as facing the greatest risk. These devices will include 
density evaluators, scanners, trace and vapor detectors.
  Mr. President, the importance of installing these detection systems, 
as soon as possible, cannot be overemphasized. The latest luggage 
scanners, which can detect the most elusive plastic explosives, are now 
not generally used in U.S. airports. The most advanced scanning 
machine, the CTX-5000, works like a CAT Scan, providing a three 
dimensional image. There are 14 in use in Europe and Israel, and two 
are being installed in Manila. In our country, they are currently being 
tested in only Atlanta, which has two, and San Francisco. Another 
device, the EGIS machine, uses air samples from passengers' luggage to 
check for vapors emitted by explosives. Various overseas airports 
utilize the machine, but it's being used on only a limited basis in the 
United States. This, and other technologies, which can detect liquid 
explosives and trace chemicals, need to be further developed and 
deployed.
  Just as important as any new machine or measure is hiring well 
trained security people. Most airlines, to save money, contract with 
security companies for low-wage workers with minimal education and 
little experience. Training is cursory and turnover is high. Yet, this 
person may be the last line of defense between a plane full of innocent 
people and a suicide bomber. By contrast, European security personnel 
are usually highly trained, educated, speak several languages and have 
taken courses in psychology.
  This legislation requires that airport personnel who have security 
duties or who have access to any secure area must meet stringent 
requirements for training, job performance and security checks.
  In conjunction with training, performance measures will be developed 
to assess how well security personnel are doing their jobs. Also, 
comprehensive investigations, including criminal history checks, will 
be required of all personnel in this category.
  The importance of the human factor in improving security is probably 
best evidenced by the case of Ramzi Ahmed Yousef. Yousef is currently 
on trial in New York for his alleged role in the 1994 bombing of the 
World Trade Center. Less well known are the details of a plot to join 
two other men in blowing up a dozen U.S. jumbo jets in 1995.
  In a 2-day reign of terror, Yousef and his compatriots planned to 
bomb 12 planes, with over 4,000 people on board. The motive was to 
provoke an end to United States support of Israel.
  The heart of each bomb was a timer built by rewiring a common Casio 
digital watch. The timer would then be connected to a liquid 
nitroglycerin, disguised as contact lens solution. Even the newest 
screening devices would have extreme difficulty detecting the 
substance. Only human vigilance may have been able to stop these 
murderers if they had reached the airport gate. Luckily, the plot was 
discovered by police in the Philippines before the night's sky was set 
ablaze.
  In addition to security, what became painfully obvious this week is 
that procedures to notify and counsel the families of airline disaster 
victims are totally inadequate. Compassion dictates that we need to 
adopt more efficient and humane procedures.
  This legislation establishes, perhaps within the National 
Transportation Safety Board, the Office of Family Advocate. In 
consultation with the Department of State, the Department of 
Transportation, experts in psychology and representatives of victims' 
families, this Office will develop standards for informing, counseling 
and supporting grieving families. Providing this assistance is not just 
common sense, it's common decency.

[[Page S9588]]

  Additionally, this legislation requires that information, such as 
full name, phone numbers and contact person, be collected when a 
passenger purchases a ticket. This information would be provided to the 
Office of Family Advocate within a specified time period after an air 
disaster.
  Mr. President, a comprehensive security system will be expensive. The 
FAA has estimated that it could cost up to $6 billion over the next 10 
years, to pay for security improvements. We need to decide how to pay 
the bill--and we need to remember that this legislation is not about 
spending dollars, it is about saving lives.
  ASA proposes that an aviation security fee, or small surcharge of no 
more than $2 per one way ticket or $4 per round trip ticket, be 
instituted to pay for needed improvements. I would note that recent 
polls suggest that Americans are willing to pay as much as an extra $50 
per ticket to upgrade security.
  An alternative financing mechanism would be to authorize the 
Department of Defense to transfer such funds as may be necessary to 
implement the provisions of the Act. In drawing on defense funds, we 
would recognize that terrorism is a threat to our national security.
  Mr. President, a truly comprehensive system should be put in place as 
soon as possible. Although not a panacea for every airport security 
problem, it can provide significant protection for travelers.
  Of course, to truly enhance security, there is another price we all 
must pay. We must be willing to submit to some delay, inconvenience and 
intrusion when traveling by air. In London, travelers are patted down. 
And in many Arab airports, passengers must negotiate fourteen 
checkpoints before boarding. Anyone who flies coach on El Al, the 
Israeli national airline, is required to report to the airport 3 hours 
ahead of a scheduled flight. The FAA is working on how to minimize 
disruption while enhancing security. But we must be willing to make 
some trade-offs, giving up easy and quick experiences on the ground, 
for added security in the air.
  Finally, it would be inappropriate for me to close without discussing 
the issue of terrorism. As a Nation, we need to better address the 
overall problem. We need to clamp down on domestic fundraising for 
Middle East Terrorist organizations. Press reports indicate that 
approximately $10 million is being sent annually by Americans to the 
terrorist group Hamas. We also need to encourage our allies in the 
Middle East to fight terrorist organizations in the region. And we must 
work with the international community to target the economies of 
countries that sponsor terrorism. We also cannot rule out the use of 
force, where necessary.
  If the crash of TWA flight 800 was the work of terrorists, then they 
may think that they have won the battle--but they certainly haven't won 
the war. We can fight back.
  But even if this tragedy was not the result of an evil act, but an 
unfortunate accident, we should not delay upgrading our security 
systems. We need to change the way this country approaches security. We 
need to be more proactive, anticipating and pre-empting changes in 
terrorist methods, rather than being reactive--always waiting for 
something to happen before we act.
  To those who would try to deny the seriousness of the threat, and the 
intensity of anti-American feelings in many parts of the world, I want 
to again recall Ramzi Yousef's legacy of hatred. When questioned by a 
Pakistani interrogator as to his real motive, Yousef remarked, ``This 
is * * * the best thing, I enjoy it.'' He went on to explain that the 
United States is the first country in the world making trouble for the 
Muslim people. Consequently, he was willing to send 4,000 innocent 
people to their deaths.

  Many of the scenes which have flickered across our T.V. screens over 
the past 2 weeks can never be forgotten. But there is one moment, in 
particular, which will always remain with me. A husband and father, who 
had lost his wife and two daughters in the disaster, hired a helicopter 
to fly over the crash site, which I had visited last weekend. Once 
there, he tossed two red roses on the water for his wife, and three 
white rosebuds for his little girls. And as I watched the news footage 
which showed the flowers slowly drifting in all directions, I thought 
of everything which the sea now held--the future lives of those taken 
too soon, and the past memories of those left behind.
  I can think of no better memorial to those who died, and to those who 
were left behind to carry on, than to work to ensure that such a 
tragedy does not happen again. For the living, and in memory of the 
deceased, we must act now.
  Mr. President, I ask unanimous consent that additional material be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2037

       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 ``Aviation Security Act of 
     1996''.

     SEC. 2. ENHANCED SECURITY PROGRAMS.

       (a) In General.--Chapter 449 of title 49, United States 
     Code, is amended by adding at the end of subchapter I the 
     following new sections:

     ``Sec. 44916. Enhancement of aviation security

       ``(a) In General.--The Secretary of Transportation 
     (hereafter in this section referred to as the `Secretary'), 
     in consultation with the Administrator of the Federal 
     Aviation Administration (hereafter in this section referred 
     to as the `Administrator') and other appropriate officials of 
     the Federal Aviation Administration, shall provide for the 
     enhancement of aviation security programs under the 
     jurisdiction of the Federal Aviation Administration in 
     accordance with this section.
       ``(b) Improvements in the Examination of Cargo and Checked 
     Baggage.--The Secretary, in consultation with the 
     Administrator, shall--
       ``(1) review applicable procedures and requirements 
     relating to the security issues concerning screening and 
     examination of cargo and checked baggage to be placed on 
     flights involving intrastate, interstate, or foreign air 
     transportation that are in effect at the time of the review; 
     and
       ``(2) on the basis of that review, develop and implement 
     procedures and requirements that are more stringent than 
     those referred to in paragraph (1) for the screening and 
     examination of cargo and checked baggage to be placed on 
     flights referred to in that subparagraph, including 
     procedures that ensure that only personnel with unescorted 
     access privileges have unescorted access at the airport to--
       ``(A) an aircraft;
       ``(B) cargo or checked baggage that is loaded onto an 
     aircraft;
       ``(C) a cargo hold on an aircraft before passengers are 
     loaded and after passengers debark;
       ``(D) an aircraft servicing area; or
       ``(E) a secured area of an airport.
       ``(c) Profiles for Risk Assessment and Risk Reduction 
     Measures.--
       ``(1) In general.--The Secretary, in consultation with the 
     Administrator and appropriate officials of other Federal 
     agencies, shall develop and implement, a methodology to 
     profile the types of passengers, cargo, and air 
     transportation that present, or are most susceptible to, a 
     significant degree of risk with respect to aviation security.
       ``(2) Risk reduction measures.--In addition to developing 
     the methodology for profiles under paragraph (1), the 
     Secretary, in consultation with the Administrator, shall 
     develop and implement measures to address sources that 
     contribute to a significant degree of risk with respect to 
     aviation security, including improved methods for matching 
     and searching luggage or other cargo.
       ``(d) Explosive Detection.--
       ``(1) In general.--The Secretary and the Administrator, in 
     accordance with this section, and section 44913, shall ensure 
     the deployment, by not later than the date specified in 
     subsection (j), of explosive detection equipment that 
     incorporates the best available technology for explosive 
     detection in airports--
       ``(A) selected by the Secretary on the basis of risk 
     assessments; and
       ``(B) covered under the plan under paragraph (2).
       ``(2) Plan.--The deployment of explosive detection 
     equipment under paragraph (1) shall be carried out in 
     accordance with a plan prepared by the Secretary, in 
     consultation with the Administrator and other appropriate 
     officials of the Federal Government, to expedite the 
     installation and deployment of that equipment.
       ``(3) Report.--
       ``(A) In general.--Not later than 1 year after the date of 
     enactment of this section, and annually thereafter, the 
     Secretary shall submit to the Speaker of the House of 
     Representatives and the President pro tempore of the Senate a 
     report on the deployment of explosive detection devices 
     pursuant to the plan developed under paragraph (2).
       ``(B) Treatment of classified information.--No officer or 
     employee of the Federal Government (including any Member of 
     Congress) may disclose to any person other than another 
     official of the Federal Government in accordance with 
     applicable Federal law,

[[Page S9589]]

     any information in the report under subparagraph (A) that is 
     classified.
       ``(e) Enhanced Screening of Personnel.--
       ``(1) In general.--The Secretary, in consultation with the 
     Administrator, shall establish a program for enhancing the 
     screening of personnel of air carriers or contractors of air 
     carriers (or subcontractors thereof) who--
       ``(A) in the course of their employment have--
       ``(i) unescorted access privileges to--

       ``(I) an aircraft;
       ``(II) cargo or checked baggage that is loaded onto an 
     aircraft;
       ``(III) a cargo hold on an aircraft; or
       ``(IV) an aircraft servicing area; or

       ``(ii) security responsibilities that affect the access and 
     passage of passengers or cargo in aircraft referred to in 
     subparagraph (A); and
       ``(B) any immediate supervisor of an individual referred to 
     in subparagraph (A).
       ``(2) Training.--
       ``(A) In general.--The Secretary, in consultation with the 
     Administrator, shall--
       ``(i) review regulations and standards relating to the 
     training of personnel referred to in paragraph (1) that are 
     in effect at the time of the review; and
       ``(ii) on the basis of that review, prescribe such 
     regulations and standards relating to minimum standards for 
     training and certification as the Secretary determines to be 
     appropriate.
       ``(B) Prohibition.--The fact that an individual received 
     training in accordance with this paragraph may not be used as 
     a defense in any action involving the negligence or 
     intentional wrongdoing of that individual in carrying out 
     airline security or in the conduct of intrastate, interstate, 
     or foreign air transportation.
       ``(f) Performance-Based Measures.--The Secretary, in 
     consultation with the Administrator, shall--
       ``(1) develop and implement, by the date specified in 
     subsection (j), performance-based measures for all security 
     functions covered under this section that are carried out by 
     personnel referred to in subsection (e)(1); and
       ``(2) require that air carriers and owners or operators of 
     airports that provide intrastate, interstate, or foreign air 
     transportation ensure that those measures are carried out.
       ``(g) Security Checks.--
       ``(1) In general.--The Secretary, in consultation with the 
     Administrator and other appropriate officers and employees of 
     the Federal Government, shall, require comprehensive 
     employment investigations to be conducted for any individual 
     that is employed, or commences employment, in a position 
     described in subsection (e)(1).
       ``(2) Criminal history check.--The employment 
     investigations referred to in paragraph (1) shall include 
     criminal history checks. Notwithstanding any other provision 
     of law, a criminal history check may cover a period longer 
     than the 10-year period immediately preceding--
       ``(A) the initial date of employment of an individual by an 
     employer; or
       ``(B) the date on which a criminal history check is 
     conducted for an applicant for employment.
       ``(h) Administrative Actions.--
       ``(1) In general.--The Secretary, in consultation with the 
     Administrator, shall, as appropriate, specify appropriate 
     administrative actions or violations of this section or the 
     regulations prescribed under this section.
       ``(2) Orders.--The administrative actions referred to in 
     paragraph (1) may include an order by the Secretary 
     requiring, in accordance with applicable requirements of this 
     subtitle and any other applicable law--
       ``(A) the closure of an airport gate or area that the 
     Secretary determines, on the basis of a risk assessment or 
     inspection conducted under this section, should be secured in 
     accordance with applicable requirements of this subtitle; or
       ``(B) the cancellation of a flight in intrastate, 
     interstate, or foreign air transportation.
       ``(3) Notification.--If the Secretary carries out an 
     administrative action under this subsection, the Secretary 
     shall provide public notice of that action, except in any 
     case in which the President determines that the disclosure of 
     that information would not be in the national security or 
     foreign policy interest of the United States.
       ``(i) Audits and Evaluations.--
       ``(1) In general.--The Secretary shall require each air 
     carrier and airport that provides for intrastate, interstate, 
     or foreign air transportation to conduct periodic audits and 
     evaluations of the security systems of that air carrier or 
     airport.
       ``(2) Reports.--Not later than 1 year after the date of 
     enactment of this section, and annually thereafter, each air 
     carrier and airport referred to in paragraph (1) shall submit 
     to the Secretary a report on the audits and evaluations 
     conducted by the air carrier or airport under this 
     subsection.
       ``(3) Investigations.--The Secretary, in consultation with 
     the Administrator, shall conduct periodic and unannounced 
     inspections of security systems of airports and air carriers 
     to determine whether the air carriers and airports are in 
     compliance with the performance-based measures developed 
     under subsection (f). To the extent allowable by law, the 
     Secretary may provide for anonymous tests of the security 
     systems referred to in the preceding sentence.
       ``(j) Regulations.--Not later than 180 days after the date 
     of enactment of this section, the Secretary, in consultation 
     with the Administrator and appropriate officers and employees 
     of other Federal agencies, shall prescribe and implement such 
     regulations as are necessary to carry out this section.
       ``(k) Modification of Existing Programs.--If the Secretary 
     or the Administrator determines that a modification of a 
     program in existence on the date specified in subsection (j) 
     could be accomplished without prescribing regulations to meet 
     the requirements of this section, the Secretary or the 
     Administrator may make that modification in lieu of 
     prescribing a regulation.

     ``Sec. 44917. Support for families of victims of 
       transportation disasters

       ``(a) In General.--
       ``(1) Establishment.--The President shall establish, within 
     an appropriate Federal agency, an office to be known as the 
     Office of Family Advocate.
       ``(2) Standards of conduct.--
       ``(A) In general.--The head of the Federal agency specified 
     in paragraph (1) (hereafter in this section referred to as 
     the ``agency head''), acting through the Office of Family 
     Advocate, shall develop standards of conduct for informing 
     and supporting families of victims of accidents in air 
     commerce and other transportation accidents involving any 
     other form of transportation that is subject to the 
     jurisdiction of the Department of Transportation.
       ``(B) Consultation.--In developing the standards under this 
     paragraph, the agency head shall consult with--
       ``(i) appropriate officers and employees of other Federal 
     agencies;
       ``(ii) representatives of families of victims of accidents 
     in air commerce and other transportation accidents referred 
     to in subparagraph (A);
       ``(iii) individuals who are experts in psychology and 
     trauma counseling; and
       ``(iv) representatives of air carriers.
       ``(3) Third party involvement.--
       ``(A) In general.--The agency head, acting through the 
     Office of Family Advocate, shall provide for counseling, 
     support, and protection for the families of victims of 
     transportation accidents referred to in paragraph (2)(A) by--
       ``(i) consulting with a nongovernmental organization that 
     the agency head determines to have appropriate experience and 
     expertise; and
       ``(ii) if appropriate, entering into an agreement with a 
     nongovernmental organization or the head of another 
     appropriate Federal agency (including the Director of the 
     Federal Emergency Management Agency) to provide those 
     services.
       ``(b) Passenger Information.--
       ``(1) In general.--The Secretary of Transportation 
     (hereafter in this section referred to as the `Secretary') 
     shall require each air carrier that provides intrastate, 
     interstate, or foreign air transportation to obtain, at the 
     time of purchase of passage, from each passenger that 
     purchases passage on a flight--
       ``(A) the full name, address, and daytime and evening 
     telephone numbers of the passenger; and
       ``(B) the full name and daytime and evening telephone 
     numbers of a contact person designated by the passenger.
       ``(2) Requirement for air carriers.--
       ``(A) In general.--The Secretary shall require each air 
     carrier that provides intrastate, interstate, or foreign air 
     transportation to provide the information obtained for a 
     flight under paragraph (1) only--
       ``(i) in the event of an accident in air commerce in which 
     a serious injury or crime (as determined by the Secretary) or 
     death occurs; and
       ``(ii) in accordance with section 552a of title 5, United 
     States Code.
       ``(B) Provision of information.--In the event of an 
     accident in air commerce described in subparagraph (A), if 
     the flight involves--
       ``(i) intrastate or interstate air transportation, the air 
     carrier shall provide the information required to be 
     submitted under subparagraph (A) not later than 3 hours after 
     the accident occurs; or
       ``(ii) foreign air transportation, the air carrier shall 
     provide such information not later than 4 hours after the 
     accident occurs.

     ``Sec. 44918 Exemption; fees

       ``(a) Exemption.--The regulations issued under sections 
     44916 and 44917 shall be exempt from any requirement for a 
     cost-benefit analysis under chapter 8 of title 5, United 
     States Code, or any other provision of Federal law.
       ``(b) Fees.--
       ``(1) In general.--Subject to paragraph (2), the Secretary 
     shall determine, and adjust on an annual basis, a fee that 
     shall be assessed against each individual who purchases 
     passage on a flight in intrastate, interstate, or foreign air 
     transportation that is based on the estimated cost of 
     carrying out sections 44916 and 44917.
       ``(2) Limitation on amount.--The amount of a fee assessed 
     under this subsection shall not exceed $2 per flight, per 
     passenger.
       ``(3) Aviation security account.--
       ``(A) In general.--There shall be established within the 
     Treasury of the United States, an Aviation Security Account. 
     The fees collected under this subsection shall be deposited 
     into that account.
       ``(B) Use of funds in account.--The Secretary of the 
     Treasury shall make the funds in the account available only 
     to--
       ``(i) the Secretary of Transportation for use by the 
     Secretary in accordance with section 44916; and

[[Page S9590]]

       ``(ii) the agency head specified by the President under 
     section 44917, for use by that agency head in accordance with 
     that section.''.
       (b) Employment Investigations and Restrictions.--Section 
     44936(b)(1)(B) of title 49, United States Code, is amended by 
     striking ``, in the 10-year period ending on the date of the 
     investigation,''.
       (c) Conforming Amendment.--The analysis for subchapter I of 
     chapter 449 of title 49, United States Code, is amended by 
     adding at the end the following new items:

     ``44916. Enhancement of aviation security.
     ``44917. Support for families of victims of transportation 
     disasters.
     ``44918. Exemption; fees.''.
                                                                    ____


                       Aviation Security Proposal


       (1) DOT to implement an enhanced aviation security system

       Cargo and checked baggage--The Secretary shall review 
     current procedures for examining cargo and checked baggage on 
     passenger flights and implement a program to reduce all 
     significant security risks. That program shall include, but 
     not be limited to, procedures that restrict access to 
     passenger, cargo, cargo hold and aircraft servicing areas.
       Profiling risk assessment--the Secretary shall develop, in 
     consultation with appropriate federal authorities, a 
     methodology to profile passengers, cargo and flights for both 
     pre-airport and airport arrival to identify those passengers 
     and cargo that present a possible risk to aviation security. 
     The Secretary will require that air carriers implement this 
     methodology and develop contingency actions described below 
     with respect to those persons and cargo identified by the 
     methodology. Those measures may include, but not be limited 
     to, bag-match and enhanced bag search.
       Explosive Detection Systems--the Secretary shall identify, 
     based on profiles and other information and measures 
     developed in consultation with appropriate federal agencies, 
     all flights that pose the greatest risk to security, and 
     ensure that enhanced, state-of-the-art, explosive detection 
     devices are installed in the appropriate airports to protect 
     against those risks. The Secretary shall, within six months 
     from the enactment of this Act, develop and implement a plan 
     to phase in expedited installation of the devices at priority 
     airports. The Secretary shall submit an annual report to the 
     Speaker of the House of Representatives and the President of 
     the Senate on the progress of the plan. The report may be 
     classified or unclassified at the Secretary's discretion.


         (2) Increased screening for certain airport personnel

       Classification of Airport Personnel--the provisions of this 
     section shall apply to those personnel employed by air 
     carriers or their contractors or subcontractors who, through 
     duties and work location, either (a) have unescorted access 
     to all or portions of aircraft that are engaged in the 
     transportation of passengers for hire, or (b) have security 
     responsibilities that affect the access and passage of 
     passengers and/or cargo into the proximity of passenger 
     carrying aircraft.
       Training--the Secretary shall review existing standards 
     and, where necessary, impose additional minimum standards for 
     training and certification of security personnel. The fact 
     that the employee passed the minimum standards shall not 
     relieve the air carrier of responsibility if he later is 
     responsible for, or contributes to, an incident or an 
     accident.
       Performance Based Measures--the Secretary shall develop 
     performance based measures for all personnel security 
     functions and implement actions to require the air carriers 
     or airports, as appropriate, to accomplish those measures.
       Security Checks--the Secretary shall require comprehensive 
     employment investigations on new hires and existing 
     employees, including but not limited to criminal history 
     checks. This provision also lifts the current restriction of 
     ten years on the employee's history.
       Penalties--the Secretary shall, within six months from 
     enactment, promulgate regulations that impose penalties for 
     violations that are commensurate with the seriousness of the 
     offense. Such penalties may include temporary suspension of 
     the operating certificate, immediate closure of a gate or 
     secure area, cancellation of flights, public notification of 
     violations or actual revocation of the operating certificate.


             (3) Mandated Operational Checks of the System

       Self-audits and evaluations--the Secretary shall require 
     air carriers and airports to conduct audits and evaluations 
     on the efficacy of the security systems, and issue annual 
     reports of their results to the Secretary.
       The Secretary shall conduct regular, unannounced and/or 
     anonymous tests of the airport and air carrier's security 
     systems to determine whether the systems are in compliance 
     with the performance based measures as determined by the 
     Secretary.


    (4) Support for Families of Victims of Transportation Disasters

       Family Advocate--there shall be established an Office of 
     Family Advocate in the appropriate federal agency to be 
     determined by the President. The Office shall develop 
     standards of conduct for informing and supporting families of 
     victims. The standards shall be developed in consultation 
     with any federal agency, representatives of families of 
     victims of airline or other transportation disasters, 
     psychological experts and air carriers.
       Third party involvement--the Office shall consult with a 
     third party organization that has the appropriate experience, 
     in offering counseling, support and protection for the 
     families of victims. the Office is authorized to task an 
     organization or other government agency, to carry out the 
     necessary tasks, if appropriate, including the Federal 
     Emergency Management Agency.
       Passenger information--the Secretary shall require air 
     carriers, both domestic and foreign flag carriers, to collect 
     the following information at the time of passenger's ticket 
     purchase: full name, address, telephone number (daytime and 
     nighttime) and contact person. The Secretary shall require 
     air carriers to provide, within three hours for domestic 
     flights and four hours for international flights, such 
     information to the Office of Family Advocate only in the 
     event of a transportation disaster where serious injury or 
     death occurred.


                              (5) Funding

       Fee per ticket--the Secretary shall determine a fee to be 
     assessed on each airline ticket, the amount of which is based 
     on the cost to implement the provisions of this Act, but not 
     to exceed $4 per ticket. The Secretary shall begin assessing 
     the fee within 30 days from the enactment of this Act.
       Aviation Security Account--there shall be established 
     within the Department, an Aviation Security Account. The fees 
     shall be collected and credited to relevant appropriations 
     within the FAA.
                                 ______
                                 
      By Mr. DASCHLE (for himself and Mr. Pressler);
  S. 2038. A bill to authorize the construction of the Fall River Water 
Users District Rural Water System and authorize the appropriation of 
Federal dollars to assist the Fall River Water Users District, a 
nonprofit corporation, in the planning and construction of the water 
supply system, and for other purposes; to the Committee on Energy and 
Natural Resources.


   THE FALL RIVER WATER USERS DISTRICT RURAL WATER SYSTEM ACT OF 1996

  S. 2039. A bill to authorize the construction of the Perkins County 
Rural Water System and authorize the appropriation of Federal dollars 
to assist the Perkins County Rural Water System, Inc., a nonprofit 
corporation, in the planning and construction of the water supply 
system, and for other purposes; to the Committee on Energy and Natural 
Resources.


           THE PERKINS COUNTY RURAL WATER SYSTEM ACT OF 1996

  Mr. DASCHLE. Mr. President, the need for water development throughout 
South Dakota is great. As we prepare to enter the 21st century, all 
South Dakotans should be able to consider a high quality water supply 
to be a basic human right, and we should do whatever we can to meet 
this goal.
  While considerable progress has been made in providing clean and safe 
drinking water to residents of my State, much work remains to be done. 
Fall River County and Perkins County are examples of areas that 
urgently need to develop new sources of potable water. That is why I am 
introducing bills today to authorize the construction of the Fall River 
Water Users District Rural Water System and the Perkins County Rural 
Water System.
  The communities that would be served by both systems are comprised of 
farmers and ranchers who for too long have had to endure substandard, 
and at times remote, sources of drinking water. The drinking water 
available in Fall River County, SD, like the water in much of the rest 
of the State, is contaminated with high levels of nitrates, sulfates, 
and dissolved solids. Wells have been known to run dry, due to the high 
frequency of droughts in the region. Many people currently must haul 
water, sometimes as much as 60 miles round-trip. Similar problems exist 
in Perkins County, where much of the drinking water fails to meet 
minimum public health standards, thereby posing a long-term health risk 
to the citizens of that region.
  Simply put, this situation is unacceptable and must be remedied.
  In Fall River County, the Fall River Water Users District was formed 
to plan and develop a rural water system capable of supplying the water 
to sustain this community. I and my congressional colleagues have 
worked hard over the past year with the district to identify a solution 
that was affordable and could provide adequate amounts of clean water 
to satisfy the needs of the community. It became apparent that the only 
feasible option was the authorization of a rural water system

[[Page S9591]]

that involved the financial and technical participation of the Federal, 
State, and local governments.
  My first bill would authorize the construction of a system to bring 
clean water to the residents of Fall River County. I am absolutely 
committed to continuing to work with the Fall River County Water Users 
District, the State and the Federal Government to bring a high quality 
water supply to Fall River County.
  Under the second bill I am introducing today, the Perkins County 
Rural Water System will obtain Missouri River water through the 
Southwest Pipeline, which is part of the Garrison Diversion Unit in 
North Dakota. This is an efficient and cost-effective approach that 
takes advantage of existing water management infrastructure. Clean, 
safe drinking water will be provided to about 2,500 people who reside 
in the towns of Lemmon and Bison, and the surrounding areas.
  It is my hope that my colleagues will join with me in supporting 
these two pieces of legislation, which will provide safe, clean 
drinking water to deserving South Dakota families.
  Mr. President, I ask unanimous consent that the text of the bills be 
printed in the Record.
  There being no objection, the bills were ordered to be printed in the 
Record, as follows:

                                S. 2038

       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 ``Fall River Water Users 
     District Rural Water System Act of 1996''.

     SEC. 2. FINDINGS AND PURPOSES.

       (a) Findings.--The Congress finds that--
       (1) there are insufficient water supplies of reasonable 
     quality available to the members of the Fall River Water 
     Users District Rural Water System located in Fall River 
     County, South Dakota, and the water supplies that are 
     available are of poor quality and do not meet the minimum 
     health and safety standards, thereby posing a threat to 
     public health and safety;
       (2) past cycles of severe drought in the southeastern area 
     of Fall River county have left local residents without a 
     satisfactory water supply and during 1990, many home owners 
     and ranchers were forced to haul water to sustain their water 
     needs;
       (3) most members of the Fall River Water Users District are 
     forced to either haul bottled water for human consumption or 
     use distillers due to the poor quality of water supplies 
     available;
       (4) the Fall River Water Users District Rural Water System 
     has been recognized by the State of South Dakota; and
       (5) the best available, reliable, and safe rural and 
     municipal water supply to serve the needs of the Fall River 
     Water Users District Rural Water System members consists of a 
     Madison Aquifer well, 3 separate water storage reservoirs, 3 
     pumping stations, and approximately 200 miles of pipeline.
       (b) Purposes.--The Congress declares that the purposes of 
     sections 1 through 13 are to--
       (1) ensure a safe and adequate municipal, rural, and 
     industrial water supply for the members of the Fall River 
     Water Users District Rural Water System in Fall River County, 
     South Dakota;
       (2) assist the citizens of the Fall River Water Users 
     District to develop safe and adequate municipal, rural, and 
     industrial water supplies; and
       (3) promote the implementation of water conservation 
     programs by the Fall River Water Users District Rural Water 
     System.

     SEC. 3. DEFINITIONS.

       As used in this Act (unless the context clearly requires 
     otherwise):
       (1) Engineering report.--The term ``engineering report'' 
     means the study entitled ``Supplemental Preliminary 
     Engineering Report for Fall River Water Users District'' in 
     August 1995.
       (2) Project construction budget.--The term ``project 
     construction budget'' means the description of the total 
     amount of funds that are needed for the construction of the 
     water supply system, as contained in the feasibility study.
       (3) Pumping and incidental operational requirements.--The 
     term ``pumping and incidental operational requirements'' 
     means all power requirements that are incidental to the 
     operation of intake facilities, pumping stations, water 
     treatment facilities, cooling facilities, reservoirs, and 
     pipelines up to the point of delivery of water by the Fall 
     River Water Users District Rural Water System to each entity 
     that distributes water at retail to individual users.
       (4) Secretary.--The term ``Secretary'' means the Secretary 
     of the Interior.
       (5) Water supply system.--The term ``water supply system'' 
     means the Fall River Water Users District Rural Water System 
     that is established and operated substantially in accordance 
     with the feasibility study.

     SEC. 4. FEDERAL ASSISTANCE FOR THE WATER SUPPLY SYSTEM.

       (a) In General.--The Secretary is authorized to make grants 
     to the Fall River Water Users District Rural Water System, a 
     nonprofit corporation, for the planning and construction of 
     the water supply system.
       (b) Service Area.--The water supply system shall provide 
     for safe and adequate municipal, rural, and industrial water 
     supplies, mitigation of wetlands areas; and water 
     conservation within the boundaries of the Fall River Water 
     Users District, described as follows: bounded on the north by 
     the Angostura Reservoir, the Cheyenne River, and the Fall 
     River/Custer County line, bounded on the east by the Fall 
     River/Shannon County line, bounded on the south by the South 
     Dakota/Nebraska State line, and bounded on the west by the 
     previously established Igloo-Provo Water Project District.
       (c) Amount of Grants.--Grants made available under 
     subsection (a) to the Fall River Water Users District Rural 
     Water System shall not exceed the amount authorized under 
     section 10.
       (d) Limitation on Availability of Construction Funds.--The 
     Secretary shall not obligate funds for the construction of 
     the water supply system until--
       (1) the requirements of the National Environmental Policy 
     Act of 1969 (42 U.S.C. 4321 et seq.) have been met;
       (2) a final engineering report has been prepared and 
     submitted to the Congress for a period of not less than 90 
     days before the commencement of construction of the system; 
     and
       (3) a water conservation program has been developed and 
     implemented.

     SEC. 5. WATER CONSERVATION.

       (a) Purpose.--The water conservation program required under 
     this section shall be designed to ensure that users of water 
     from the water supply system will use the best practicable 
     technology and management techniques to conserve water use.
       (b) Description.--The water conservation programs shall 
     include--
       (1) low consumption performance standards for all newly 
     installed plumbing fixtures;
       (2) leak detection and repair programs;
       (3) rate structures that do not include declining block 
     rate schedules for municipal households and special water 
     users (as defined in the feasibility study);
       (4) public education programs; and
       (5) coordinated operation between the Fall River Water 
     Users District Rural Water System and any preexisting water 
     supply facilities within its service area.
       (c) Review and Revision.--The programs described in 
     subsection (b) shall contain provisions for periodic review 
     and revision, in cooperation with the Secretary.

     SEC. 6. MITIGATION OF FISH AND WILDLIFE LOSSES.

       Mitigation of fish and wildlife losses incurred as a result 
     of the construction and operation of the Fall River Water 
     Users District Rural Water System shall be on an acre-for-
     acre basis, based on ecological equivalency, concurrent with 
     project construction, as provided in the feasibility study.

     SEC. 7. USE OF PICK-SLOAN POWER.

       (a) In General.--From power designated for future 
     irrigation and drainage pumping for the Pick-Sloan Missouri 
     River Basin Program, the Western Area Power Administration 
     shall make available the capacity and energy required to meet 
     the pumping and incidental operational requirements of the 
     water supply system during the period beginning May 1, and 
     ending October 31, of each year.
       (b) Conditions.--The capacity and energy described in 
     subsection (a) shall be made available on the following 
     conditions:
       (1) The water supply system shall be operated on a not-for-
     profit basis.
       (2) The water supply system shall contract to purchase its 
     entire electric service requirements, including the capacity 
     and energy made available under subsection (a), from a 
     qualified preference power supplier that itself purchases 
     power from the Western Area Power Administration.
       (3) The rate schedule applicable to the capacity and energy 
     made available under subsection (a) shall be the firm power 
     rate schedule of the Pick-Sloan Eastern Division of the 
     Western Area Power Administration in effect when the power is 
     delivered by the Administration.
       (4) It shall be agreed by contract among--
       (A) the Western Area Power Administration;
       (B) the power supplier with which the water supply system 
     contracts under paragraph (2);
       (C) the power supplier of the entity described in 
     subparagraph (B); and
       (D) the Fall River Water Users District,

      that in the case of the capacity and energy made available 
     under subsection (a), the benefit of the rate schedule 
     described in paragraph (3) shall be passed through to the 
     water supply system, except that the power supplier of the 
     water supply system shall not be precluded from including, in 
     the charges of the supplier to the water system for the 
     electric service, the other usual and customary charges of 
     the supplier.

     SEC. 8. NO LIMITATION ON WATER PROJECTS IN STATE.

       This Act shall not limit the authorization for water 
     projects in South Dakota and under law in effect on or after 
     the date of enactment of this Act.

     SEC. 9. WATER RIGHTS.

       Nothing in this Act--
       (1) invalidates or preempts State water law or an 
     interstate compact governing water;

[[Page S9592]]

       (2) alters the rights of any State to any appropriated 
     share of the waters of any body of surface or ground water, 
     whether determined by past or future interstate compacts or 
     by past or future legislative or final judicial allocations;
       (3) preempts or modifies any Federal or State law, or 
     interstate compact, dealing with water quality or disposal; 
     or
       (4) confers on any non-Federal entity the ability to 
     exercise any Federal right to the waters of any stream or to 
     any ground water resource.

     SEC. 10. FEDERAL COST SHARE.

       The Secretary is authorized to provide funds equal to 80 
     percent of--
       (1) the amount allocated in the total project construction 
     budget for the planning and construction of the water supply 
     system under section 4; and
       (2) such sums as are necessary to defray increases in 
     development costs reflected in appropriate engineering cost 
     indices after August 1, 1995.

     SEC. 11. NON-FEDERAL COST SHARE.

       The non-Federal share of the costs allocated to the water 
     supply system shall be 20 percent of--
       (1) the amount allocated in the total project construction 
     budget for the planning and construction of the water supply 
     system under section 4; and
       (2) such sums as are necessary to defray increases in 
     development costs reflected in appropriate engineering cost 
     indices after August 1, 1995.

     SEC. 12. BUREAU OF RECLAMATION AUTHORIZATION.

       (a) Authorization.--The Secretary is authorized to allow 
     the Bureau of Reclamation to provide construction oversight 
     to the water supply system for those areas of the water 
     supply system that are described in section 4(b).
       (b) Project Oversight Administration.--The amount of funds 
     used by the Bureau of Reclamation for planning and 
     construction of the water supply system may not exceed an 
     amount equal to 3 percent of the amount provided in the total 
     project construction budget for the portion of the projects 
     to be constructed in Fall River County, South Dakota.

     SEC. 13. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated $3,600,000 for the 
     planning and construction of the water system under section 
     4, plus such sums as are necessary to defray increases in 
     development costs reflected in appropriate engineering cost 
     indices after August 1, 1995.
                                                                    ____


                                S. 2039

       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 ``Perkins County Rural Water 
     System Act of 1996''.

     SEC. 2. FINDINGS AND PURPOSES.

       (a) Findings.--The Congress finds that--
       (1) there are insufficient water supplies of reasonable 
     quality available to the members of the Perkins County Rural 
     Water System located in Perkins County, South Dakota, and the 
     water supplies that are available do not meet the minimum 
     health and safety standards, thereby posing a threat to 
     public health and safety;
       (2) in 1977 the North Dakota State Legislature authorized 
     and directed the State Water Commission to conduct the 
     Southwest Area Water Supply Study, which included water 
     service to a portion of Perkins County, South Dakota;
       (3) the Garrison Diversion Unit Reformulation Act of 1986 
     authorized the Southwest Pipeline project as an eligible 
     project for Federal cost share participation;
       (4) the Perkins County Rural Water System has continued to 
     be recognized by the State of North Dakota, the Southwest 
     Water Authority, the North Dakota Water Commission, the 
     Department of the Interior, and the Congress of the United 
     States as a component of the Southwest Pipeline Project; and
       (5) the best available, reliable, and safe rural and 
     municipal water supply to serve the needs of the Perkins 
     County Rural Water System, Inc., members is the Missouri 
     River as delivered by the Southwest Pipeline Project in North 
     Dakota.
       (b) Purposes.--The Congress declares that the purposes of 
     sections 1 through 13 are to--
       (1) ensure a safe and adequate municipal, rural, and 
     industrial water supply for the members of the Perkins County 
     Rural Water Supply System, Inc., in Perkins County, South 
     Dakota;
       (2) assist the citizens of the Perkins County Rural Water 
     Supply System, Inc., to develop safe and adequate municipal, 
     rural, and industrial water supplies; and
       (3) promote the implementation of water conservation 
     programs by the Perkins County Rural Water System, Inc.

     SEC. 3. DEFINITIONS.

       As used in this Act (unless the context clearly requires 
     otherwise):
       (1) Feasibility study.--The term ``feasibility study'' 
     means the study entitled ``Feasibility Study for Rural Water 
     System for Perkins County Rural Water System, Inc.'', as 
     amended in March 1995.
       (2) Project construction budget.--The term ``project 
     construction budget'' means the description of the total 
     amount of funds that are needed for the construction of the 
     water supply system, as contained in the feasibility study.
       (3) Pumping and incidental operational requirements.--The 
     term ``pumping and incidental operational requirements'' 
     means all power requirements that are incidental to the 
     operation of intake facilities, pumping stations, water 
     treatment facilities, reservoirs, and pipelines up to the 
     point of delivery of water by the Perkins County Rural Water 
     System to each entity that distributes water at retail to 
     individual users.
       (4) Secretary.--The term ``Secretary'' means the Secretary 
     of the Interior.
       (5) Water supply system.--The term ``water supply system'' 
     means the Perkins County Rural Water System, Inc., that is 
     established and operated substantially in accordance with the 
     feasibility study.

     SEC. 4. FEDERAL ASSISTANCE FOR THE WATER SUPPLY SYSTEM.

       (a) In General.--The Secretary is authorized to make grants 
     to the Perkins County Rural Water System, Inc., a nonprofit 
     corporation, for the planning and construction of the water 
     supply system.
       (b) Service Area.--The water supply system shall provide 
     for safe and adequate municipal, rural, and industrial water 
     supplies, mitigation of wetlands areas, and water 
     conservation in Perkins County, South Dakota.
       (c) Amount of Grants.--Grants made available under 
     subsection (a) to the Perkins County Water System, Inc., 
     shall not exceed the amount authorized under section 10.
       (d) Limitation on Availability of Construction Funds.--The 
     Secretary shall not obligate funds for the construction of 
     the water supply system until--
       (1) the requirements of the National Environmental Policy 
     Act of 1969 (42 U.S.C. 4321 et seq.) have been met;
       (2) a final engineering report has been prepared and 
     submitted to the Congress for a period of not less than 90 
     days before the commencement of construction of the system; 
     and
       (3) a water conservation program has been developed and 
     implemented.

     SEC. 5. WATER CONSERVATION.

       (a) Purpose.--The water conservation program required under 
     this section shall be designed to ensure that users of water 
     from the water supply system will use the best practicable 
     technology and management techniques to conserve water use.
       (b) Description.--The water conservation programs shall 
     include--
       (1) low consumption performance standards for all newly 
     installed plumbing fixtures;
       (2) leak detection and repair programs;
       (3) rate structures that do not include declining block 
     rate schedules for municipal households and special water 
     users (as defined in the feasibility study);
       (4) public education programs;
       (5) coordinated operation between the Perkins County Rural 
     Water System and any preexisting water supply facilities 
     within its service area; and
       (6) coordinated operation between the Southwest Pipeline 
     Project of North Dakota and the Perkins County Rural Water 
     System, Inc., of South Dakota.
       (c) Review and Revision.--The programs described in 
     subsection (b) shall contain provisions for periodic review 
     and revision, in cooperation with the Secretary.

     SEC. 6. MITIGATION OF FISH AND WILDLIFE LOSSES.

       Mitigation of fish and wildlife losses incurred as a result 
     of the construction and operation of the Perkins County Rural 
     Water Supply System shall be on an acre-for-acre basis, based 
     on ecological equivalency, concurrent with project 
     construction, as provided in the feasibility study.

     SEC. 7. USE OF PICK-SLOAN POWER.

       (a) In General.--From power designated for future 
     irrigation and drainage pumping for the Pick-Sloan Missouri 
     River Basin Program, the Western Area Power Administration 
     shall make available the capacity and energy required to meet 
     the pumping and incidental operational requirements of the 
     water supply system during the period beginning May 1, and 
     ending October 31, of each year.
       (b) Conditions.--The capacity and energy described in 
     subsection (a) shall be made available on the following 
     conditions:
       (1) The water supply system shall be operated on a not-for-
     profit basis.
       (2) The water supply system shall contract to purchase its 
     entire electric service requirements, including the capacity 
     and energy made available under subsection (a), from a 
     qualified preference power supplier that itself purchases 
     power from the Western Area Power Administration.
       (3) The rate schedule applicable to the capacity and energy 
     made available under subsection (a) shall be the firm power 
     rate schedule of the Pick-Sloan Eastern Division of the 
     Western Area Power Administration in effect when the power is 
     delivered by the Administration.
       (4) It shall be agreed by contract among--
       (A) the Western Area Power Administration;
       (B) the power supplier with which the water supply system 
     contracts under paragraph (2);
       (C) the power supplier of the entity described in 
     subparagraph (B); and
       (D) the Perkins County Rural Water System, Inc.,

     that in the case of the capacity and energy made available 
     under subsection (a), the benefit of the rate schedule 
     described in paragraph (3) shall be passed through to the 
     water supply system, except that the power supplier of the 
     water supply system shall not be precluded from including, in 
     the charges

[[Page S9593]]

     of the supplier to the water system for the electric service, 
     the other usual and customary charges of the supplier.

     SEC. 8. NO LIMITATION ON WATER PROJECTS IN STATES.

       This Act shall not limit the authorization for water 
     projects in South Dakota and North Dakota under law in effect 
     on or after the date of enactment of this Act.

     SEC. 9. WATER RIGHTS.

       Nothing in this Act--
       (1) invalidates or preempts State water law or an 
     interstate compact governing water;
       (2) alters the rights of any State to any appropriated 
     share of the waters of any body of surface or ground water, 
     whether determined by past or future interstate compacts or 
     by past or future legislative or final judicial allocations;
       (3) preempts or modifies any Federal or State law, or 
     interstate compact, dealing with water quality or disposal; 
     or
       (4) confers on any non-Federal entity the ability to 
     exercise any Federal right to the waters of any stream or to 
     any ground water resource.

     SEC. 10. FEDERAL COST SHARE.

       The Secretary is authorized to provide funds equal to 75 
     percent of--
       (1) the amount allocated in the total project construction 
     budget for the planning and construction of the water supply 
     system under section 4; and
       (2) such sums as are necessary to defray increases in 
     development costs reflected in appropriate engineering cost 
     indices after May 1, 1994.

     SEC. 11. NON-FEDERAL COST SHARE.

       The non-Federal share of the costs allocated to the water 
     supply system shall be 25 percent of--
       (1) the amount allocated in the total project construction 
     budget for the planning and construction of the water supply 
     system under section 4; and
       (2) such sums as are necessary to defray increases in 
     development costs reflected in appropriate engineering cost 
     indices after May 1, 1994.

     SEC. 12. BUREAU OF RECLAMATION AUTHORIZATION.

       (a) Authorization.--The Secretary is authorized to allow 
     the Bureau of Reclamation to provide construction oversight 
     to the water supply system for those areas of the water 
     supply system that are described in section 4(b).
       (b) Project Oversight Administration.--The amount of funds 
     used by the Bureau of Reclamation for planning and 
     construction of the water supply system may not exceed an 
     amount equal to 3 percent of the amount provided in the total 
     project construction budget for the portion of the project to 
     be constructed in Perkins County, South Dakota.

     SEC. 13. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated $15,000,000 for the 
     planning and construction of the water system under section 
     4, plus such sums as are necessary to defray increases in 
     development costs reflected in appropriate engineering cost 
     indices after May 1, 1994.
                                 ______
                                 
      By Mr. HATCH (for himself and Mrs. Hutchison):
  S. 2040. A bill to amend the Controlled Substances Act to provide a 
penalty for the use of a controlled substance with the intent to rape, 
and for other purposes; to the Committee on the Judiciary.


              the drug-induced rape prevention act of 1996

  Mr. HATCH. Mr. President, I rise today to introduce S. 2040, a bill 
to prevent the use of controlled substances to facilitate rape. This 
bill is to strike back at those who would use controlled substances to 
engage in the most reprehensible of crimes. Joining me in cosponsorship 
of this legislation is Senator Hutchison.
  Mr. President, earlier in the year as a member of the congressional 
task force on national drug policy, I joined in issuing a report, 
``Setting the Course: A National Drug Strategy.'' This report noted 
that every survey of teenage drug use in the past two years indicates 
not only increasing use of dangerous drugs among teens, but a 
disturbing change in the attitudes teens have about the dangers of drug 
use.
  Two very important surveys have confirmed that teenage drug abuse is 
on the rise.
  The first study is the national high school report, Monitoring the 
Future, which surveys over 50,000 students in some 400 public and 
private secondary schools. The second study is the annual survey by the 
Parents' Resource Institute for Drug Education, which surveys nearly 
200,000 ninth to twelfth graders.
  While these studies focused on the use of marijuana, the use of 
hallucinogens, stimulants, and other drugs are also on the rise. 
According to reports by the Center on Addiction and Substance Abuse, 
adolescents who use marijuana are 85 times more likely to move to other 
dangerous drugs, such as cocaine.
  As a recent report that we issued from the Judiciary Committee, 
Losing Ground Against Drugs noted:

       The implication for public policy is clear. If such 
     increases are allowed to continue for just two more years, 
     America will be at risk of returning to the epidemic drug use 
     of the 1970's.

  While the overwhelming abuse of drugs by teenagers focuses on illicit 
drugs, the illegal diversion and misuse of medicines is also a growing 
problem in our country.
  During the past few years, there has been increasing abuse of a drug 
called rohypnol. Rohypnol is not approved for marketing in the United 
States but it is a legitimate therapeutic agent that is approved for 
use in several countries to treat sleep disorders.
  According to a report from the Haight Ashbury Free Clinic, several 
abuse patterns of rohypnol have evolved in the United States.
  Rohypnol is being abused by heroin addicts as an enhancing agent for 
low-quality heroin, as well as in combination with cocaine. In some 
areas it is referred to as a ``club drug''--where it is used by so 
called ``recreational'' users who intermittently abuse a variety of 
substances.
  However, the most disturbing use of rohypnol is its use to facilitate 
the rape of women. Reports continue to be made that rohypnol has been 
illicitly put into the drinks of unsuspecting victims before they are 
sexually assaulted.
  I believe that the Federal Government must show that it will not 
tolerate the use of this drug--or any drug--to facilitate rape. I 
believe it is necessary and appropriate to establish a new provision 
that establishes tough penalties for the use of any controlled 
substance to facilitate rape.
  Rohypnol abuse was initially reported in Florida and Texas, but its 
use has now become more widespread.
  In an effort to stem the illegal flow of rohypnol into the United 
States, the U.S. Customs Service developed and implemented a ban on the 
importation of rohypnol into the United States.
  Unfortunately, the problem continues to grow.
  Rohypnol is a member of the widely-used class of prescription 
medications known as benzodiazapines. This class of drugs is used to 
treat sleep disorders, anxiety disorders and to control seizures, among 
other purposes. When used for legitimate medical purposes, this class 
of drugs is vital to the physical and mental health of thousands of 
Americans.
  The Controlled Substances Act establishes five schedules of 
controlled substances, based primarily upon a drug's relative potential 
for abuse. Drugs listed in schedules I and II are those with the 
highest potential for abuse, while drugs listed in schedule V are those 
with the lowest potential for abuse.
  Rohypnol is currently listed in Schedule IV of the Controlled 
Substances Act. In addition to rohypnol, more than twenty other 
benzodiazepine substances are listed as a Schedule IV substance.
  Rohypnol is not marketed or manufactured in the United States. While 
not legally available for legitimate medical uses in the United States, 
rohypnol is widely used for legitimate medical purposes in many 
countries throughout the world.
  In response to reports that the incidence of abuse of rohypnol was 
increasing, the Drug Enforcement Administration instituted the formal 
rescheduling process for this substance by submitting a formal request 
on April 11, 1996 to the Food and Drug Administration to conduct an 
evaluation of the scientific and medical evaluation of this substance. 
That evaluation is ongoing.
  In a letter from Health and Human Services Secretary Donna E. Shalala 
to me on July 24, 1996, Secretary Shalala informed me that the goal of 
the rescheduling process was to make rohypnol subject to increased 
penalties for illicit use and trafficking.
  Since this particular drug has become a leading agent of abuse and 
the focus of this debate, I agree with Secretary Shalala that it is 
appropriate to increase the penalties for illegal trafficking in 
rohypnol. This bill does that.
  However, I am concerned about the precedent that rescheduling would 
have on this very useful class of medicines. I fee a more appropriate--
and rapid--method to respond to this crisis is to implement the 
increased penalties

[[Page S9594]]

for illegal trafficking in rohypnol without having Congress circumvent 
the well-established process for rescheduling a substance.
  As I mentioned previously, the rescheduling process requires a 
careful scientific and medical evaluation of the substance. This 
evaluation is completed by the FDA in consultation with HHS' National 
Institute on Drug Abuse. Congress does not have the resources or 
expertise to complete such an evaluation, and by considering 
rescheduling may establish an unintentional precedent with regard to 
scheduling of controlled substances which we may regret later on.
  I believe that the Drug-Induced Rape Prevention Act of 1996 provides 
for a rapid, measured response to the problem that the abuse of 
rohypnol has presented, without establishing an unintended role for 
Congress with regard to the scheduling of controlled substances. I urge 
that this legislation be considered when we reconvene next month.
  Mr. President, I ask unanimous consent that the text of the bill and 
a section-by-section analysis be place in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 2040

       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 ``Drug-Induced Rape Prevention 
     Act of 1996''.

     SEC. 2. PENALTIES FOR DISTRIBUTION OF A CONTROLLED SUBSTANCE 
                   WITH INTENT TO RAPE.

       Section 401(b) of the Controlled Substances Act is amended 
     by adding at the end the following:
       ``(7)(A) Whoever, with intent to rape an individual, 
     violates subsection (a) by distributing a controlled 
     substance to that individual without that individual's 
     knowledge, shall be imprisoned not more than 20 years and 
     fined as provided under title 18, United States Code.
       ``(B) As used in this paragraph--
       ``(i) the term `intent to rape' means the intent to 
     facilitate conducted defined in section 2241(b) or 2242(2) of 
     title 18, United States Code; and
       ``(ii) the term `without that individual's knowledge' means 
     that the individual is unaware that a substance with the 
     ability to alter that individual's ability to appraise 
     conduct or to decline participation in or communicate 
     unwillingness to participate in conduct is administered to 
     the individual.''.

     SEC. 3. ADDITIONAL PENALTIES RELATING TO FLUNITRAZEPAM.

       (a) General Penalties.--Section 401 of the Controlled 
     Substances Act (21 U.S.C. 841) is amended--
       (1) in subsection (b)(1)(C), by inserting ``or 1 gram of 
     flunitrazepam'' after ``I or II''; and
       (2) in subsection (b)(1)(D), by inserting ``or 30 
     milligrams of flunitrazepam,'' after ``schedule III,''.
       (b) Import and Export Penalties.--
       (1) Section 1009(a) of the Controlled Substances Import and 
     Export Act (21 U.S.C. 959(a)) is amended by inserting ``or 
     flunitrazepam'' after ``I or II''.
       (2) Section 1010(b)(3) of the Controlled Substances Import 
     and Export Act (21 U.S.C. 960(b)) is amended by inserting 
     ``or flunitrazepam'' after ``I or II,''.
       (3) Section 1010(b)(4) of the Controlled Substances Import 
     and Export Act is amended by inserting ``(except a violation 
     involving flunitrazepam)'' after ``III, IV, or V,''.
       (c) Sentencing Guidelines.--The United States Sentencing 
     Commission shall amend the Sentencing Guidelines so that one 
     dosage unit of flunitrazepam shall be equivalent to one gram 
     of marihuana for determining the offense level under the Drug 
     Quantity Table.
                                                                    ____

       Section 1. Short Title: Establishes the title of the bill 
     as the ``Drug-Induced Rape Prevention Act of 1996.''
       Section 2. Penalties for Distribution of a Controlled 
     Substance with Intent to Rape: Creates a specific violation 
     under the Controlled Substances Act (CSA) for unlawful 
     distribution, with the intent to rape, of a controlled 
     substance to a person without that person's knowledge. The 
     penalty will be up to 20 years without probation, and fines 
     will be imposed of up to two million dollars for an 
     individual. The definition of ``intent to rape'' is provided 
     in section 2241(b) or 2242(2) of Title 18, U.S.C. and is 
     referenced in this bill.
       Section 3. Additional Penalties Relating to Flunitrazepam:
       (a) General Penalties.--Provides enhanced penalties for 
     manufacturing, distributing, dispensing, or possessing with 
     the intent to manufacture, dispense or distribute large 
     quantities of the drug flunitrazepam (marketed under the name 
     ``Rohypnol''). One gram or more of flunitrazepam will carry a 
     penalty of not more than 20 years in prison, and 30 
     milligrams a penalty of not more than five years in prison.
       (b) Import and Export Penalties.--Extends the so-called 
     ``long-arm'' provisions of 21 U.S.C. 959(a) to the unlawful 
     manufacture and distribution of flunitrazepam outside the 
     United States with the intent to import it unlawfully into 
     this country.
       (c) Sentencing Guidelines.--Directs the U.S. Sentencing 
     Commission to amend the Sentencing Guidelines so that 
     flunitrazepam will be subject to the same base offense level 
     as schedule I or II depressants.
                                 ______
                                 
      By Mr. D'AMATO (for himself, Mr. Moynihan, and Mr. Faircloth):
  S. 2041. A bill to amend the Marine Protection, Research, and 
Sanctuaries Act of 1972 with respect to the dumping of dredged material 
in Long Island Sound, and for other purposes; to the Committee on 
Environment and Public Works.


         THE LONG ISLAND SOUND PRESERVATION AND PROTECTION ACT

  Mr. D'AMATO. Mr. President, I rise today to introduce legislation 
along with Senator Moynihan and Senator Faircloth that will help 
guarantee that one of our Nation's most important estuaries is no 
longer used as a dumping ground for polluted dredged material. Long 
Island Sound is a spectacular body of water located between Long 
Island, NY and the State of Connecticut. Unfortunately, dumping of 
dredged material of questionable environmental impact has occurred in 
the sound for a number of years. It is high time that Congress put an 
end to this practice of willful pollution of the Sound.
  The legislation that we are introducing today will prevent any 
individual or any Government agency from randomly dumping sediments 
into the ecologically sensitive sound. Specifically, the legislation 
prevents all sediments that contain any constituents prohibited as 
other than trace contaminants, as defined by Federal regulations, from 
being dumped into either Long Island Sound or Block Island Sound. 
Exceptions to the act can be made only in circumstances where the 
Administrator of the Environmental Protection Agency shows that the 
material will not cause undesirable effects to the environment or 
marine life.
  Last fall, the U.S. Navy dumped over 1 million cubic yards of dredged 
material from the Thames River into the New London dump site located in 
the sound. Independent tests of this sediment indicated that 
contaminants were present in that dredged material that now lies at the 
bottom of the sound's New London dump site-contaminants such as dioxin, 
cadmium, pesticides, polyaromatic hydrocarbons, PCB's, and mercury. 
Right now, there is a question as to the long-term impact this material 
will have on the aquatic life and the environment in this area. Such 
concerns should not have to occur. It has taken years to come as far as 
we have in cleaning up Long Island Sound--we should not jeopardize 
those gains by routinely allowing the dumping of polluted sediments in 
these waters.
  Over $1.2 billion in Federal, State, and local funds have been spent 
in the State of New York in the last quarter century combating 
pollution in the sound. However, over the last 25 years, we have 
continued to look the other way when it comes to dumping in the sound. 
Such actions are counterproductive in our efforts to restore the Sound 
for recreational activities such as swimming and boating as well as the 
economic benefits of sport fishing and the shellfish industry all of 
which bring more than $5.5 billion to the region each year. We can and 
must change our current direction. With the passage of this 
legislation, I am confident that we will do so, and the Long Island 
Sound will move forward on the road to recovery. I urge my colleagues 
to join us in cosponsoring this bill, and I encourage its swift passage 
in the Senate.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2041

       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 ``Long Island Sound 
     Preservation and Protection Act of 1996''.

     SEC. 2. DUMPING OF DREDGED MATERIALS IN LONG ISLAND SOUND.

       Section 106(f) of the Marine Protection, Research, and 
     Sanctuaries Act of 1972 (33 U.S.C. 1416(f)) is amended to 
     read as follows:

[[Page S9595]]

       ``(f) Dumping of Dredged Material in Long Island Sound.--
       ``(1) In general.--No dredged material from any Federal or 
     non-Federal project that contains any of the constituents 
     prohibited as other than trace contaminants (as defined by 
     the Federal ocean dumping criteria stated in section 227.6 of 
     title 40, Code of Federal Regulations) may be dumped in Long 
     Island Sound or Block Island Sound except in a case in which 
     it is demonstrated to the Administrator, and the 
     Administrator certifies by publication in the Federal 
     Register, that the dumping of the dredged material containing 
     the constituents will not cause significant undesirable 
     effects, including the threat associated with bioaccumulation 
     of such constituents in marine organisms.
       (2) Federal projects exceeding 25,000 yards.--In addition 
     to other provisions of law and notwithstanding the specific 
     exclusion relating to dredged material of the first sentence 
     in section 102(a), any dumping of dredged material in Long 
     Island Sound from a Federal project (or pursuant to Federal 
     authorization) by a non-Federal applicant in a quantity 
     exceeding 25,000 cubic yards shall comply with the criteria 
     established under the second sentence of section 102(a) 
     relating to the effects of dumping.
       ``(3) Relation to other law.--Subsection (d) shall not 
     apply to this subsection.''.
                                 ______
                                 
      By Mr. MACK (for himself, Mr. Bond, Mr. D'Amato, and Mr. 
        Bennett):
  S. 2042. A bill to reform the multifamily rental assisted housing 
programs of the Federal Government, maintain the affordability and 
availability of low-income housing, and for other purposes; to the 
Committee on Banking, Housing, and Urban Affairs.


 the multifamily assisted housing reform and affordability act of 1996

  Mr. MACK. Mr. President, I am pleased to introduce, on behalf of 
Senator D'Amato, Bond, and Bennett, the Multifamily Assisted Housing 
Reform and Affordability Act of 1996. This bill is a serious effort to 
reform the Nation's assisted and insured multifamily housing portfolio 
in a responsible manner that balances both fiscal and public policy 
goals. This legislation will save scarce Federal subsidy dollars while 
maintaining the affordability and availability of decent and safe 
rental housing.
  About 20 years ago, the Federal Government encouraged private 
developers to construct affordable rental housing by providing mortgage 
insurance through the Federal Housing Administration [FHA] and rental 
assistance through the Department of Housing and Urban Development's 
[HUD] project-based Section 8 programs. In addition, tax incentives for 
the development of low-income housing were provided through the tax 
code until 1986.
  The combination of these financial incentives resulted in the 
creation of thousands of decent, safe, and affordable housing 
properties but, at a great cost to the American taxpayer. Flaws in the 
Section 8 rental assistance program allowed owners to receive more 
Federal dollars in rental subsidy than was necessary to maintain 
properties as decent and affordable rental housing. A recent HUD study 
found that almost two-thirds of assisted properties have contract rents 
greater than comparable market rents. Like the severely distressed 
public housing stock, some of these Section 8 projects have become 
targets and havens for crime and drug activities. Thus, in some cases, 
taxpayers are paying costly subsidies for inferior housing. We believe 
that a policy that pays excessive rental subsidies for housing is not 
fair to the American taxpayer, and it cannot be sustained in the 
current budget environment.
  It is critical that this legislation be enacted this year because in 
the next several years, a majority of the Section 8 contracts on the 
8,500 FHA-insured properties will expire. If contracts continue to be 
renewed at existing levels, the cost of renewing these contracts will 
grow from $1.2 billion in fiscal year 1997 to almost $4 billion in 
fiscal year 2000 and $8 billion 10 years from now. However, if these 
project-based assistance contracts are not renewed most of the FHA-
insured mortgages--with an unpaid principal balance of $18 billion--
will default and result in claims on the FHA insurance funds. This 
could lead to more severe actions such as foreclosure, which will 
adversely affect residents and communities.
  Like public housing, federally assisted and insured housing provides 
critical housing to almost 1.6 million American families. There are 
other similarities to public housing. For one, the average annual 
income of residents that reside in project-based housing is less than 
$7,000. A significant percentage of residents are elderly or persons 
with disabilities. Many of these developments are located in rural 
areas where no other rental housing exists. some of these properties 
serve as ``anchors'' of neighborhoods where the economic stability of 
the neighborhoods is dependent upon the viability of these properties.
  Unfortunately for residents and communities, HUD does not have the 
ability to administer and oversee its portfolio of multifamily housing 
properties. The General Accounting Office and the HUD Office of 
Inspector General [IG] have found that even though HUD has various 
enforcement tools to ensure that properties are properly maintained, 
poor management information systems and ineffective oversight of 
properties have impeded HUD's ability to identify problems and pursue 
enforcement actions in a timely fashion. HUD is further hampered by the 
lack of adequate staffing and inadequately trained staff. For example, 
the IG found that the average workload for a HUD loan servicer ranged 
from 28 projects per servicer to 105 projects per servicer. In 
comparison, State housing finance agencies averaged 12 to 16 projects 
per servicer.
  The Multifamily Assisted Housing Reform and Affordability Act 
addresses these issues through a new comprehensive structure that 
provides a wide variety of tools to address the spiraling costs of 
Section 8 assistance without harming residents or communities. The bill 
will reduce the long-term ongoing costs of Federal subsidies by 
restructuring the underlying debt insured by FHA. This restructuring 
process will reduce the subsidy needs and costs of the properties and 
minimizes adverse tax consequences to good owners.
  In recognition of HUD's inability to manage and service its housing 
inventory, this legislation would transfer the functions and 
responsibilities to capable State and local housing agencies who would 
act as participating administrative entities in managing this program. 
Incentives would be provided to these entities to ensure that the 
American taxpayer is paying the least amount of money to provide 
decent, safe, and affordable housing. Any amount of incentives provided 
to State and local entities would only be used for low-income housing 
purposes.
  Horror stories of owners that have clearly violated housing quality 
standards would no longer be tolerated. Our bill screens out bad owners 
and managers and nonviable projects from the inventory and provides 
tougher and more effective enforcement tools that will minimize fraud 
and abuse of FHA insurance and assisted housing programs.

  Lastly, our bill provides tools to recapitalize the assisted stock 
that suffer from deferred maintenance and empowers residents by 
providing for meaningful community and resident input into the process. 
Residents would also be empowered through opportunities to purchase 
properties.
  Mr. President, I would like to reemphasize that it is critical that 
we address this issue this year. Delays will only harm the assisted 
housing stock, its residents and communities, and the financial 
stability of the FHA insurance funds. Further, HUD only has limited 
statutory authority to renew these contracts. In most cases, it cannot 
and does not have the capability to deal with this housing portfolio 
under current law.
  This legislation will protect the Federal Government's investment in 
assisted housing and ensure that participating administrative entities 
are held accountable for their activities. It is also our goal that 
this process will ensure the long-term viability of these projects with 
minimal Federal involvement. It is a real effort to reduce the costs of 
the Federal Government while recognizing the needs of low-income 
families and communities throughout the Nation.
  Mr. President, I ask unanimous consent that a summary and the text of 
the bill be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 2042

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

[[Page S9596]]

       

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the 
     ``Multifamily Assisted Housing Reform and Affordability Act 
     of 1996''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents.

     TITLE I--FHA-INSURED MULTIFAMILY HOUSING MORTGAGE AND HOUSING 
                        ASSISTANCE RESTRUCTURING

Sec. 101. Findings and purposes.
Sec. 102. Definitions.
Sec. 103. Authority of participating administrative entities.
Sec. 104. Mortgage restructuring and rental assistance sufficiency 
              plan.
Sec. 105. Section 8 renewals and long-term affordability commitment by 
              owner of project.
Sec. 106. Prohibition on restructuring.
Sec. 107. Restructuring tools.
Sec. 108. Shared savings incentive.
Sec. 109. Management standards.
Sec. 110. Monitoring of compliance.
Sec. 111. Review.
Sec. 112. GAO audit and review.
Sec. 113. Regulations.
Sec. 114. Technical and conforming amendments.
Sec. 115. Termination of authority.

                    TITLE II--ENFORCEMENT PROVISIONS

Sec. 201. Implementation.

         Subtitle A--FHA Single Family and Multifamily Housing

Sec. 211. Authorization to immediately suspend mortgagees.
Sec. 212. Extension of equity skimming to other single family and 
              multifamily housing programs.
Sec. 213. Civil money penalties against mortgagees, lenders, and other 
              participants in FHA programs.

                      Subtitle B--FHA Multifamily

Sec. 220. Civil money penalties against general partners, officers, 
              directors, and certain managing agents of multifamily 
              projects.
Sec. 221. Civil money penalties for noncompliance with section 8 HAP 
              contracts.
Sec. 222. Extension of double damages remedy.
Sec. 223. Obstruction of Federal audits.
     TITLE I--FHA-INSURED MULTIFAMILY HOUSING MORTGAGE AND HOUSING 
                        ASSISTANCE RESTRUCTURING

     SEC. 101. FINDINGS AND PURPOSES.

       (a) Findings.--The Congress finds that--
       (1) there exists throughout the Nation a need for decent, 
     safe, and affordable housing;
       (2) as of the date of enactment of this Act, it is 
     estimated that--
       (A) the insured multifamily housing portfolio of the 
     Federal Housing Administration consists of 14,000 rental 
     properties, with an aggregate unpaid principal mortgage 
     balance of $38,000,000,000; and
       (B) approximately 10,000 of these properties contain 
     housing units that are assisted with project-based rental 
     assistance under section 8 of the United States Housing Act 
     of 1937;
       (3) FHA-insured multifamily rental properties are a major 
     Federal investment, providing affordable rental housing to an 
     estimated 2,000,000 low- and very low-income families;
       (4) approximately 1,600,000 of these families live in 
     dwelling units that are assisted with project-based rental 
     assistance under section 8 of the United States Housing Act 
     of 1937;
       (5) a substantial number of housing units receiving 
     project-based assistance have rents that are higher than the 
     rents of comparable, unassisted rental units in the same 
     housing rental market;
       (6) many of the contracts for project-based assistance will 
     expire during the several years following the date of 
     enactment of this Act;
       (7) it is estimated that--
       (A) if no changes in the terms and conditions of the 
     contracts for project-based assistance are made before fiscal 
     year 2000, the cost of renewing all expiring rental 
     assistance contracts under section 8 of the United States 
     Housing Act of 1937 for both project-based and tenant-based 
     rental assistance will increase from approximately 
     $4,000,000,000 in fiscal year 1997 to over $17,000,000,000 by 
     fiscal year 2000 and some $23,000,000,000 in fiscal year 
     2006;
       (B) of those renewal amounts, the cost of renewing project-
     based assistance will increase from $1,200,000,000 in fiscal 
     year 1997 to almost $8,000,000,000 by fiscal year 2006; and
       (C) without changes in the manner in which project-based 
     rental assistance is provided, renewals of expiring contracts 
     for project-based rental assistance will require an 
     increasingly larger portion of the discretionary budget 
     authority of the Department of Housing and Urban Development 
     in each subsequent fiscal year for the foreseeable future;
       (8) absent new budget authority for the renewal of expiring 
     rental contracts for project-based assistance, many of the 
     FHA-insured multifamily housing projects that are assisted 
     with project-based assistance will likely default on their 
     FHA-insured mortgage payments, resulting in substantial 
     claims to the FHA General Insurance Fund and Special Risk 
     Insurance Funds;
       (9) more than 15 percent of federally assisted multifamily 
     housing projects are physically or financially distressed, 
     including a number which suffer from mismanagement;
       (10) due to Federal budget constraints, the downsizing of 
     the Department of Housing and Urban Development, and 
     diminished administrative capacity, the Department lacks the 
     ability to ensure the continued economic and physical well-
     being of the stock of federally insured and assisted 
     multifamily housing projects; and
       (11) the economic, physical, and management problems facing 
     the stock of federally insured and assisted multifamily 
     housing projects will be best served by reforms that--
       (A) reduce the cost of Federal rental assistance, including 
     project-based assistance, to these projects by reducing the 
     debt service and operating costs of these projects while 
     retaining the low-income affordability and availability of 
     this housing;
       (B) address physical and economic distress of this housing 
     and the failure of some project managers and owners of 
     projects to comply with management and ownership rules and 
     requirements; and
       (C) transfer and share many of the loan and contract 
     administration functions and responsibilities of the 
     Secretary with capable State, local, and other entities.
       (b) Purposes.--The purposes of this title are--
       (1) to preserve low-income rental housing affordability and 
     availability while reducing the long-term costs of project-
     based assistance;
       (2) to reform the design and operation of Federal rental 
     housing assistance programs, administered by the Secretary, 
     to promote greater multifamily housing project operating and 
     cost efficiencies;
       (3) to encourage owners of eligible multifamily housing 
     projects to restructure their FHA-insured mortgages and 
     project-based assistance contracts in a manner which is 
     consistent with this title before the year in which the 
     contract expires;
       (4) to streamline and improve federally insured and 
     assisted multifamily housing project oversight and 
     administration;
       (5) to resolve the problems affecting financially and 
     physically troubled federally insured and assisted 
     multifamily housing projects through cooperation with 
     residents, owners, State and local governments, and other 
     interested entities and individuals; and
       (6) to grant additional enforcement tools to use against 
     those who violate agreements and program requirements, in 
     order to ensure that the public interest is safeguarded and 
     that Federal multifamily housing programs serve their 
     intended purposes.

     SEC. 102. DEFINITIONS.

       For purposes of this title, the following definitions shall 
     apply:
       (1) Comparable properties.--The term ``comparable 
     properties'' means properties that are--
       (A) similar to the eligible multifamily housing project in 
     neighborhood (including risk of crime), location, access, 
     street appeal, age, property size, apartment mix, physical 
     configuration, property amenities, inapartment rental 
     amenities, and utilities;
       (B) unregulated by contractual encumbrances or local rent-
     control laws; and
       (C) occupied predominantly by renters who receive no rent 
     supplements or rental assistance.
       (2) Eligible multifamily housing project.--The term 
     ``eligible multifamily housing project'' means a property 
     consisting of more than 4 dwelling units--
       (A) with rents which, on an average per unit or per room 
     basis, exceed the fair market rent of the same market area, 
     as determined by the Secretary;
       (B) that is covered in whole or in part by a contract for 
     project-based assistance under--
       (i) the new construction and substantial rehabilitation 
     program under section 8(b)(2) of the United States Housing 
     Act of 1937 (as in effect before October 1, 1983);
       (ii) the property disposition program under section 8(b) of 
     the United States Housing Act of 1937;
       (iii) the moderate rehabilitation program under section 
     8(e)(2) of the United States Housing Act of 1937;
       (iv) the project-based certificate program under section 8 
     of the United States Housing Act of 1937;
       (v) section 23 of the United States Housing Act of 1937 (as 
     in effect before January 1, 1975);
       (vi) the rent supplement program under section 101 of the 
     Housing and Urban Development Act of 1965; or
       (vii) section 8 of the United States Housing Act of 1937, 
     following conversion from assistance under section 101 of the 
     Housing and Urban Development Act of 1965; and
       (C) financed by a mortgage insured under the National 
     Housing Act.
       (3) Expiring contract.--The term ``expiring contract'' 
     means a project-based assistance contract attached to an 
     eligible multifamily housing project which, under the terms 
     of the contract, will expire.
       (4) Expiration date.--The term ``expiration date'' means 
     the date on which an expiring contract expires.
       (5) Fair market rent.--The term ``fair market rent'' means 
     the fair market rental established under section 8(c) of the 
     United States Housing Act of 1937.
       (6) Knowing or knowingly.--The term ``knowing'' or 
     ``knowingly'' means having actual knowledge of or acting with 
     deliberate ignorance or reckless disregard.
       (7) Low-income families.--The term ``low-income families'' 
     has the same meaning as provided under section 3(b)(2) of the 
     United States Housing Act of 1937.

[[Page S9597]]

       (8) Multifamily housing management agreement.--The term 
     ``multifamily housing management agreement'' means the 
     agreement entered into between the Secretary and a 
     participating administrative entity, as provided under 
     section 103 of the title.
       (9) Participating administrative entity.--The term 
     ``participating administrative entity'' means a public 
     agency, including a State housing finance agency or local 
     housing agency, which meets the requirements under section 
     103(b).
       (10) Project-based assistance.--The term ``project-based 
     assistance'' means rental assistance under section 8 of the 
     United States Housing Act of 1937 that is attached to a 
     multifamily housing project.
       (11) Renewal.--The term ``renewal'' means the replacement 
     of an expiring Federal rental contract with a new contract 
     under section 8 of the United States Housing Act of 1937, 
     consistent with the requirements of this title.
       (12) Secretary.--The term ``Secretary'' means the Secretary 
     of Housing and Urban Development.
       (13) State.--The term ``State'' has the same meaning as in 
     section 104 of the Cranston-Gonzalez National Affordable 
     Housing Act.
       (14) Tenant-based assistance.--The term ``tenant-based 
     assistance'' has the same meaning as in section 8(f) of the 
     United States Housing Act of 1937.
       (15) Unit of general local government.--The term ``unit of 
     general local government'' has the same meaning as in section 
     104 of the Cranston-Gonzalez National Affordable Housing Act.
       (16) Very low-income family.--The term ``very low-income 
     family'' has the same meaning as in section 3(b) of the 
     United States Housing Act of 1937.

     SEC. 103. AUTHORITY OF PARTICIPATING ADMINISTRATIVE ENTITIES.

       (a) Participating Administrative Entities.--
       (1) In general.--The Secretary shall enter into multifamily 
     housing management agreements with participating 
     administrative entities for the implementation of mortgage 
     restructuring and rental assistance sufficiency plans to 
     restructure FHA-insured multifamily housing mortgages, in 
     order to--
       (A) reduce the costs of current and expiring contracts for 
     assistance under section 8 of the United States Housing Act 
     of 1937;
       (B) address financially and physically troubled projects; 
     and
       (C) correct management and ownership deficiencies.
       (2) Multifamily housing management agreements.--Each 
     multifamily housing management agreement entered into under 
     this subsection shall--
       (A) be a cooperative agreement to establish the obligations 
     and requirements between the Secretary and the participating 
     administrative entity;
       (B) identify the eligible multifamily housing projects or 
     groups of projects for which the participating administrative 
     entity is responsible for assisting in developing and 
     implementing approved mortgage workout and rental assistance 
     sufficiency plans under section 104;
       (C) require the participating administrative entity to 
     review and certify to the accuracy and completeness of a 
     comprehensive needs assessment submitted by the owner of an 
     eligible multifamily housing project, in accordance with the 
     information and data requirements of section 403 of the 
     Housing and Community Development Act of 1992, including such 
     other data, information, and requirements as the Secretary 
     may require to be included as part of the comprehensive needs 
     assessment;
       (D) identify the responsibilities of both the participating 
     administrative entity and the Secretary in implementing a 
     mortgage restructuring and rental assistance sufficiency 
     plan, including any actions proposed to be taken under 
     section 106 or 107;
       (E) require each mortgage restructuring and rental 
     assistance sufficiency plan prepared in accordance with the 
     requirements of section 104 for each eligible multifamily 
     housing project;
       (F) indemnify the participating administrative entity 
     against lawsuits and penalties for actions taken pursuant to 
     the agreement, excluding actions involving gross negligence 
     or willful misconduct; and
       (G) include compensation for all reasonable expenses 
     incurred by the participating administrative entity necessary 
     to perform its duties under this Act, including such 
     incentives as may be authorized under section 108.
       (b) Selection of Participating Administrative Entity.--
       (1) Selection criteria.--The Secretary shall select a 
     participating administrative entity based on the following 
     criteria--
       (A) is located in the State or local jurisdiction in which 
     the eligible multifamily housing project or projects are 
     located;
       (B) has demonstrated expertise in the development or 
     management of low-income affordable rental housing;
       (C) has a history of stable, financially sound, and 
     responsible administrative performance;
       (D) has demonstrated financial strength in terms of asset 
     quality, capital adequacy, and liquidity; and
       (E) is otherwise qualified, as determined by the Secretary, 
     to carry out the requirements of this title.
       (2) Selection of mortgage risk-sharing entities.--Any State 
     housing finance agency or local housing agency which is 
     designated as a qualified participating entity under section 
     542 of the Housing and Community Development Act of 1992 
     shall automatically qualify as a participating administrative 
     entity under this section.
       (3) Alternative administrators.--With respect to any 
     eligible multifamily housing project that is located in a 
     State or local jurisdiction in which the Secretary determines 
     that a participating administrative entity is not located, is 
     unavailable, or does not qualify, the Secretary shall 
     either--
       (A) carry out the requirements of this title with respect 
     to that eligible multifamily housing project; or
       (B) contract with other qualified entities that meet the 
     requirements of subsection (b), with the exception of 
     subsection (b)(1)(A), the authority to carry out all or a 
     portion of the requirements of this title with respect to 
     that eligible multifamily housing project.
       (4) Preference for state housing finance agencies as 
     participating administrative entities.--For each State in 
     which eligible multifamily housing projects are located, the 
     Secretary shall give preference to the housing finance agency 
     of that State or, if a State housing finance agency is 
     unqualified or has declined to participate, a local housing 
     agency to act as the participating administrative entity for 
     that State or for the jurisdiction in which the agency 
     located.
       (5) State portfolio requirements.--
       (A) In general.--If the housing finance agency of a State 
     is selected as the participating administrative entity, that 
     agency shall be responsible for all eligible multifamily 
     housing projects in that State, except that a local housing 
     agency selected as a participating administrative entity 
     shall be responsible for all eligible multifamily housing 
     projects in the jurisdiction of the agency.
       (B) Delegation.--A participating administrative entity may 
     delegate or transfer responsibilities and functions under 
     this title to one or more interested and qualified public 
     entities.
       (C) Waiver.--A State housing finance agency or local 
     housing agency may request a waiver from the Secretary from 
     the requirements of this paragraph for good cause.

     SEC. 104. MORTGAGE RESTRUCTURING AND RENTAL ASSISTANCE 
                   SUFFICIENCY PLAN.

       (a) In General.--
       (1) Development of procedures and requirements.--The 
     Secretary shall develop procedures and requirements for the 
     submission of a mortgage restructuring and rental assistance 
     sufficiency plan for each eligible multifamily housing 
     project with an expiring contract.
       (2) Terms and conditions.--Each mortgage restructuring and 
     rental assistance sufficiency plan submitted under this 
     subsection shall be developed at the initiative of an owner 
     of an eligible multifamily housing project with a 
     participating administrative entity, under such terms and 
     conditions as the Secretary shall require.
       (3) Consolidation.--Mortgage restructuring and rental 
     assistance sufficiency plans submitted under this subsection 
     may be consolidated as part of an overall strategy for more 
     than one property.
       (b) Notice Requirements.--
       (1) Establishment.--
       (A) In general.--The Secretary shall establish notice 
     procedures and hearing requirements for tenants and owners 
     concerning the dates for the expiration of project-based 
     assistance contracts for any eligible multifamily housing 
     project.
       (B) 12-month notice.--Under the hearing requirements 
     established under this paragraph, the owner shall provide 12 
     months notice in writing before the expiration of the initial 
     project-based assistance contract to tenants of any eligible 
     multifamily housing project.
       (2) Extension of contract term.--Subject to agreement by a 
     project owner, the Secretary may extend the term of any 
     expiring contract or provide a section 8 contract with rent 
     levels set in accordance with subsection (f)(2) for a period 
     sufficient to facilitate the implementation of a mortgage 
     restructuring and rental assistance sufficiency plan, as 
     determined by the Secretary.
       (c) Tenant Rent Protection.--If the owner of a project with 
     an expiring Federal rental assistance contract does not agree 
     to extend the contract, the Secretary shall make tenant-based 
     assistance available to tenants residing in units assisted 
     under the expiring contract at the time of expiration.
       (d) Mortgage Restructuring and Rental Assistance 
     Sufficiency Plan.--Each mortgage restructuring and rental 
     assistance sufficiency plan shall--
       (1) except as otherwise provided, restructure the project-
     based assistance rents for the eligible multifamily housing 
     property in a manner consistent with subsection (e);
       (2) require the owner or purchaser of an eligible 
     multifamily mortgage housing project with an expiring 
     contract to submit to the participating administrative entity 
     a comprehensive housing needs assessment, in accordance with 
     the information and data requirements of section 403 of the 
     Housing and Community Development Act of 1992, including such 
     other data, information, and requirements as the Secretary 
     may require to be included as part of the comprehensive needs 
     assessment;
       (3) require the owner or purchaser of the project to 
     provide or contract for competent management of the project;

[[Page S9598]]

       (4) require the owner or purchaser of the project to take 
     such actions as may be necessary to rehabilitate, maintain 
     adequate reserves, and to maintain the project in decent and 
     safe condition, based on housing quality standards 
     established by--
       (A) the Secretary; or
       (B) local housing codes or codes adopted by public housing 
     agencies that--
       (i) meet or exceed housing quality standards established by 
     the Secretary; and
       (ii) do not severely restrict housing choice;
       (5) require the owner or purchaser of the project to 
     maintain affordability and use restrictions for 20 years, as 
     the participating administrative entity determines to be 
     appropriate, which restrictions shall be consistent with the 
     long-term physical and financial viability character of the 
     project as affordable housing;
       (6) meet subsidy layering requirements under guidelines 
     established by the Secretary; and
       (7) require the owner or purchaser of the project to meet 
     such other requirements as the Secretary determines to be 
     appropriate.
       (e) Tenant and Community Participation and Capacity 
     Building.--
       (1) Procedures.--
       (A) In general.--The Secretary shall establish procedures 
     to provide an opportunity for tenants of the project and 
     other affected parties, including local government and the 
     community in which the project is located, to participate 
     effectively in the restructuring process established by this 
     title.
       (B) Criteria.--These procedures shall include--
       (i) the rights to timely and adequate written notice of the 
     proposed decisions of the owner or the Secretary or 
     participating administrative entity;
       (ii) timely access to all relevant information (except for 
     information determined to be proprietary under standards 
     established by the Secretary);
       (iii) an adequate period to analyze this information and 
     provide comments to the Secretary or participating 
     administrative entity (which comments shall be taken into 
     consideration by the Administrator); and
       (iv) if requested, a meeting with a representative of the 
     Administrator and other affected parties.
       (2) Procedures required.--The procedures established under 
     paragraph (1) shall permit tenant, local government, and 
     community participation in at least the following decisions 
     or plans specified in this title:
       (A) The Multifamily Housing Management Agreement.
       (B) Any proposed expiration of the section 8 contract.
       (C) The project's eligibility for restructuring pursuant to 
     section 106 and the mortgage restructuring and rental 
     assistance sufficiency plan pursuant to section 104.
       (D) Physical inspections.
       (E) Capital needs and management assessments, whether 
     before or after restructuring.
       (F) Any proposed transfer of the project.
       (3) Funding.--
       (A) In general.--The Secretary may provide not more than 
     $10,000,000 annually in funding to tenant groups, nonprofit 
     organizations, and public entities for building the capacity 
     of tenant organizations, for technical assistance in 
     furthering any of the purposes of this title (including 
     transfer of developments to new owners) and for tenant 
     services, from those amounts made available under 
     appropriations Acts for implementing this title.
       (B) Allocation.--The Secretary may allocate any funds made 
     available under subparagraph (A) through existing technical 
     assistance programs and procedures developed pursuant to any 
     other Federal law, including the Low-Income Housing 
     Preservation and Resident Homeownership Act of 1990 and the 
     Multifamily Property Disposition Reform Act of 1994.
       (C) Prohibition.--None of the funds made available under 
     subparagraph (A) may be used directly or indirectly to pay 
     for any personal service, advertisement, telegram, telephone, 
     letter, printed or written matter, or other device, intended 
     or designed to influence in any manner a Member of Congress, 
     to favor or oppose, by vote or otherwise, any legislation or 
     appropriation by the Congress, whether before or after the 
     introduction of any bill or resolution proposing such 
     legislation or appropriation.
       (f) Rent Levels.--
       (1) In general.--Except as provided in paragraph (2), each 
     mortgage restructuring and rental assistance sufficiency plan 
     pursuant to the terms, conditions, and requirements of this 
     title shall establish for units assisted with project-based 
     assistance in eligible multifamily housing projects adjusted 
     rent levels that--
       (A) are equivalent to rents derived from comparable 
     properties, if--
       (i) the participating administrative entity makes the rent 
     determination not later than 60 days after the owner submits 
     a mortgage restructuring and rental assistance sufficiency 
     plan; and
       (ii) the market rent determination is based on not less 
     than 2 comparable properties; or
       (B) if those rents cannot be determined, are equal to 90 
     percent of the fair market rents for the relevant market 
     area.
       (2) Exceptions.--
       (A) In general.--A contract under this section may include 
     rent levels that exceed the rent level described in paragraph 
     (1) at rent levels that do not exceed 120 percent of the 
     local fair market rent if the participating administrative 
     entity--
       (i) determines, that the housing needs of the tenants and 
     the community cannot be adequately addressed through 
     implementation of the rent limitation required to be 
     established through a mortgage restructuring and rental 
     assistance sufficiency plan under paragraph (1); and
       (ii) follows the procedures under paragraph (3).
       (B) Exception rents.--In any fiscal year, a participating 
     administrative entity may approve exception rents on not more 
     than 20 percent of all units in the geographic jurisdiction 
     of the entity with expiring contracts in that fiscal year, 
     except that the Secretary may waive this ceiling upon a 
     finding of special need in the geographic area served by the 
     participating administrative entity.
       (3) Rent levels for exception projects.--For purposes of 
     this section, a project eligible for an exception rent shall 
     receive a rent calculation on the actual and projected costs 
     of operating the project, at a level that provides income 
     sufficient to support a budget-based rent that consists of--
       (A) the debt service of the project;
       (B) the operating expenses of the project, as determined by 
     the participating administrative entity, including--
       (i) contributions to adequate reserves;
       (ii) the costs of maintenance and necessary rehabilitation; 
     and
       (iii) other eligible costs permitted under section 8 of the 
     United States Housing Act of 1937;
       (C) an adequate allowance for potential operating losses 
     due to vacancies and failure to collect rents, as determined 
     by the participating administrative entity;
       (D) an allowance for a reasonable rate of return to the 
     owner or purchaser of the project, as determined by the 
     participating administrative entity, which shall not exceed 7 
     percent of the return on equity; and
       (E) other expenses determined by the participating 
     administrative entity to be necessary for the operation of 
     the project.
       (g) Exemptions From Restructuring.--Subject to section 106, 
     the Secretary shall renew project-based assistance contracts 
     at existing rents if--
       (1) the project was financed through obligations such that 
     the implementation of a mortgage restructuring and rental 
     assistance plan under this section is inconsistent with 
     applicable law or agreements governing such financing;
       (2) in the determination of the Secretary or the 
     participating administrative entity, the refinancing would 
     not result in significant savings to the Secretary; or
       (3) the project has an expiring contract under section 8 of 
     the United States Housing Act of 1937 but does not qualify as 
     an eligible multifamily project pursuant to section 102(6) of 
     this title.

     SEC. 105. SECTION 8 RENEWALS AND LONG-TERM AFFORDABILITY 
                   COMMITMENT BY OWNER OF PROJECT.

       (a) Section 8 Renewals of Restructured Projects.--Subject 
     to the availability of amounts provided in advance in 
     appropriations Acts, the Secretary shall enter into contracts 
     with participating administrative entities pursuant to which 
     the participating administrative entity shall offer to renew 
     or extend an expiring section 8 contract on an eligible 
     multifamily project, and the owner of the project shall 
     accept the offer, provided the initial renewal is in 
     accordance with the terms and conditions specified in the 
     mortgage restructuring and rental sufficiency plan.
       (b) Required Commitment.--After the initial renewal of a 
     section 8 contract pursuant to this section, the owner shall 
     accept each offer made pursuant to subsection (a) to renew 
     the contract, for a period of 20 years from the date of the 
     initial renewal, if the offer to renew is on terms and 
     conditions specified in the mortgage restoration and rental 
     sufficiency plan.

     SEC. 106. PROHIBITION ON RESTRUCTURING.

       (a) Prohibition on Restructuring.--The Secretary shall not 
     consider any mortgage restructuring and rental assistance 
     sufficiency plan or request for contract renewal if the 
     participating administrative entity determines that--
       (1) the owner or purchaser of the project has engaged in 
     material adverse financial or managerial actions or omissions 
     with regard to this project (or with regard to other similar 
     projects if the Secretary determines that those actions or 
     omissions constitute a pattern of mismanagement that would 
     warrant suspension or debarment by the Secretary), 
     including--
       (A) knowingly and materially violating any Federal, State, 
     or local law or regulation with regard to this project or any 
     other federally assisted project;
       (B) knowingly and materially breaching a contract for 
     assistance under section 8 of the United States Housing Act 
     of 1937;
       (C) knowingly and materially violating any applicable 
     regulatory or other agreement with the Secretary or a 
     participating administrative entity;
       (D) repeatedly failing to make mortgage payments at times 
     when project income was sufficient to maintain and operate 
     the property;
       (E) materially failing to maintain the property according 
     to housing quality standards after receipt of notice and a 
     reasonable opportunity to cure; or
       (F) committing any actions or omissions that would warrant 
     suspension or debarment by the Secretary;
       (2) the owner or purchaser of the property materially 
     failed to follow the procedures

[[Page S9599]]

     and requirements of this title, after receipt of notice and 
     an opportunity to cure; or
       (3) the poor condition of the project cannot be remedied in 
     a cost effective manner, as determined by the participating 
     administrative entity.
       (b) Opportunity To Dispute Findings.--
       (1) In general.--During the 30-day period beginning on the 
     date on which the owner or purchaser of an eligible 
     multifamily housing project receives notice of a rejection 
     under subsection (a) or of a mortgage restructuring and 
     rental assistance sufficiency plan under section 104, the 
     Secretary or participating administrative entity shall 
     provide that owner or purchaser with an opportunity to 
     dispute the basis for the rejection and an opportunity to 
     cure.
       (2) Affirmation, modification, or reversal.--
       (A) In general.--After providing an opportunity to dispute 
     under paragraph (1), the Secretary or the participating 
     administrative entity may affirm, modify, or reverse any 
     rejection under subsection (a) or rejection of a mortgage 
     restructuring and rental assistance sufficiency plan under 
     section 104.
       (B) Reasons for decision.--The Secretary or the 
     participating administrative entity, as applicable, shall 
     identify the reasons for any final decision under this 
     paragraph.
       (C) Review process.--The Secretary shall establish an 
     administrative review process to appeal any final decision 
     under this paragraph.
       (c) Final Determination.--Any final determination under 
     this section shall not be subject to judicial review.
       (d) Displaced Tenants.--Subject to the availability of 
     amounts provided in advance in appropriations Acts, for any 
     low-income tenant that is residing in a project or receiving 
     assistance under section 8 of the United States Housing Act 
     of 1937 at the time of rejection under this section, that 
     tenant shall be provided with tenant-based assistance and 
     reasonable moving expenses, as determined by the Secretary.
       (e) Transfer of Property.--For properties disqualified from 
     the consideration of a mortgage restructuring and rental 
     assistance sufficiency plan under this section because of 
     actions by an owner or purchaser in accordance with paragraph 
     (1) or (2) of subsection (a), the Secretary shall establish 
     procedures to facilitate the voluntary sale or transfer of a 
     property as part of a mortgage restructuring and rental 
     assistance sufficiency plan, with a preference for tenant 
     organizations and tenant-endorsed community-based nonprofit 
     and public agency purchasers meeting such reasonable 
     qualifications as may be established by the Secretary.

     SEC. 107. RESTRUCTURING TOOLS.

       (a) Restructuring Tools.--For purposes of this title, and 
     to the extent these actions are consistent with this section, 
     an approved mortgage restructuring and assistance sufficiency 
     plan may include one or more of the following:
       (1) Full or partial payment of claim.--Making a full 
     payment of claim or partial payment of claim under section 
     541(b) of the National Housing Act.
       (2) Refinancing of debt.--Refinancing of all or part of the 
     debt on a project, if the refinancing would result in 
     significant subsidy savings under section 8 of the United 
     States Housing Act of 1937.
       (3) Mortgage insurance.--Providing FHA multifamily mortgage 
     insurance, reinsurance or other credit enhancement 
     alternatives, including multifamily risk-sharing mortgage 
     programs, as provided under section 542 of the Housing and 
     Community Development Act of 1992. Any limitations on the 
     number of units available for mortgage insurance under 
     section 542 shall not apply to eligible multifamily housing 
     projects. Any credit subsidy costs of providing mortgage 
     insurance shall be paid from the General Insurance Fund and 
     the Special Risk Insurance Fund.
       (4) Credit enhancement.--Any additional State or local 
     mortgage credit enhancements and risk-sharing arrangements 
     may be established with State or local housing finance 
     agencies, the Federal Housing Finance Board, the Federal 
     National Mortgage Association, and the Federal Home Loan 
     Mortgage Corporation, to a modified first mortgage.
       (5) Compensation of third parties.--Entering into 
     agreements, incurring costs, or making payments, as may be 
     reasonably necessary, to compensate the participation of 
     participating administrative entities and other parties in 
     undertaking actions authorized by this title. Upon request, 
     participating administrative entities shall be considered to 
     be contract administrators under section 8 of the United 
     States Housing Act of 1937 for purposes of any contracts 
     entered into as part of an approved mortgage restructuring 
     and rental assistance sufficiency plan.
       (6) Residual receipts.--Applying any acquired residual 
     receipts to maintain the long-term affordability and physical 
     condition of the property. The participating administrative 
     entity may expedite the acquisition of residual receipts by 
     entering into agreements with owners of housing covered by an 
     expiring contract to provide an owner with a share of the 
     receipts, not to exceed 10 percent.
       (7) Rehabilitation needs.--Assisting in addressing the 
     necessary rehabilitation needs of the project, except that 
     assistance under this paragraph shall not exceed the 
     equivalent of $5,000 per unit for those units covered with 
     project-based assistance. Rehabilitation may be paid from the 
     provision of grants from residual receipts or, as provided in 
     appropriations Acts, from budget authority provided for 
     increases in the budget authority for assistance contracts 
     under section 8 of the United States Housing Act of 1937, or 
     through the debt restructuring transaction. Each owner that 
     receives rehabilitation assistance shall contribute not less 
     than 25 percent of the amount of rehabilitation assistance 
     received.
       (8) Mortgage restructuring.--Restructuring mortgages to 
     provide a structured first mortgage to cover rents at levels 
     that are established in section 104(f) and a second mortgage 
     equal to the difference between the restructured first 
     mortgage and the mortgage balance of the eligible multifamily 
     housing project at the time of restructuring. The second 
     mortgage shall bear interest at a rate not to exceed the 
     applicable Federal rate for a term not to exceed 40 years. If 
     the first mortgage remains outstanding, payments of interest 
     and principal on the second mortgage shall be made from all 
     excess project income only after the payment of all 
     reasonable and necessary operating expenses (including 
     deposits in a reserve for replacement), debt service on the 
     first mortgage, and such other expenditures as may be 
     approved by the Secretary. Except as required by the 
     preceding sentence, during the period in which the first 
     mortgage remains outstanding, no payments of interest or 
     principal shall be required on the second mortgage. The 
     second mortgage shall be assumable by any subsequent 
     purchaser of any multifamily housing project, pursuant to 
     guidelines established by the Secretary. The principal and 
     accrued interest due under the second mortgage shall be fully 
     payable upon disposition of the property, unless the mortgage 
     is assumed under the preceding sentence. The owner shall 
     begin repayment of the second mortgage upon full payment of 
     the first mortgage in equal monthly installments in an amount 
     equal to the monthly principal and interest payments formerly 
     paid under the first mortgage. The principal and interest of 
     a second mortgage shall be immediately due and payable upon a 
     finding by the Secretary that an owner has failed to 
     materially comply with this title or any requirements of the 
     United States Housing Act of 1937 as those requirements apply 
     to the applicable project. Any credit subsidy costs of 
     providing a second mortgage shall be paid from the General 
     Insurance Fund and the Special Risk Insurance Fund.
       (b) Role of FNMA and FHLMC.--Section 1335 of the Federal 
     Housing Enterprises Financial Safety and Soundness Act of 
     1992 (12 U.S.C. 4565) is amended--
       (1) in paragraph (3), by striking ``and'' at the end;
       (2) paragraph (4), by striking the period at the end and 
     inserting ``; and'';
       (3) by striking ``To meet'' and inserting the following:
       ``(a) In General.--To meet''; and
       (4) by adding at the end the following:
       ``(5) assist in maintaining the affordability of assisted 
     units in eligible multifamily housing projects with expiring 
     contracts, as defined under the Multifamily Assisted Housing 
     Reform and Affordability Act of 1996.
       ``(b) Affordable Housing Goals.--Actions taken under 
     subsection (a)(5) shall constitute part of the contribution 
     of each entity in meeting their affordable housing goals 
     under sections 1332, 1333, and 1334 for any fiscal year, as 
     determined by the Secretary.''.
       (c) Prohibition on Equity Sharing by the Secretary.--The 
     Secretary is prohibited from participating in any equity 
     agreement or profit-sharing agreement in conjunction with any 
     eligible multifamily housing project.

     SEC. 108. SHARED SAVINGS INCENTIVE.

       (a) In General.--At the time a participating administrative 
     entity is designated, the Secretary shall negotiate an 
     incentive agreement with the participating administrative 
     entity, which agreement may provide such entity with a share 
     of savings from any restructured mortgage and reduced 
     subsidies resulting from actions under section 107. The 
     Secretary shall negotiate with participating administrative 
     entities a savings incentive formula that provides for 
     periodic payments over a 5-year period, which is allocated as 
     incentives to participating administrative entities and to 
     project owners.
       (b) Use of savings.--Notwithstanding any other provision of 
     law, the incentive agreement under subsection (a) shall 
     require any savings provided to a participating 
     administrative entity under that agreement to be used only 
     for providing decent, safe, and affordable housing for very 
     low-income families and persons with a priority for eligible 
     multifamily housing projects; and

     SEC. 109. MANAGEMENT STANDARDS.

       Each participating administrative entity shall establish 
     and implement management standards, including requirements 
     governing conflicts of interest between owners, managers, 
     contractors with an identity of interest, pursuant to 
     guidelines established by the Secretary and consistent with 
     industry standards.

     SEC. 110. MONITORING OF COMPLIANCE.

       (a) Compliance Agreements.--Pursuant to regulations issued 
     by the Secretary after public notice and comment, each 
     participating administrative entity, through binding 
     contractual agreements with owners and

[[Page S9600]]

     otherwise, shall ensure long-term compliance with the 
     provisions of this title. Each agreements shall, at a 
     minimum, provide for--
       (1) enforcement of the provisions of this title; and
       (2) remedies for the breach of those provisions.
       (b) Periodic Monitoring.--
       (1) In general.--Not less than annually, each participating 
     administrative entity shall review the status of all 
     multifamily housing projects for which a mortgage 
     restructuring and rental assistance sufficiency plan has been 
     implemented.
       (2) Inspections.--Each review under this subsection shall 
     include onsite inspection to determine compliance with 
     housing codes and other requirements as provided in this 
     title and the multifamily housing management agreements.
       (c) Audit by the Secretary.--The Comptroller General of the 
     United States, the Secretary, and the Inspector General of 
     the Department of Housing and Urban Development may conduct 
     an audit at any time of any multifamily housing project for 
     which a mortgage restructuring and rental assistance 
     sufficiency plan has been implemented.

     SEC. 111. REVIEW.

       (a) Annual Review.--In order to ensure compliance with this 
     title, the Secretary shall conduct an annual review and 
     report to the Congress on actions taken under this title and 
     the status of eligible multifamily housing projects.
       (b) Subsidy Layering Review.--The participating 
     administrative entity shall certify, pursuant to guidelines 
     issued by the Secretary, that the requirements of section 
     102(d) of the Department of Housing and Urban Development 
     Reform Act of 1989 are satisfied so that the combination of 
     assistance provided in connection with a property for which a 
     mortgage is to be restructured shall not be any greater than 
     is necessary to provide affordable housing.

     SEC. 112. GAO AUDIT AND REVIEW.

       (a) Initial Audit.--Not later than 18 months after the 
     effective date of interim or final regulations promulgated 
     under this title, the Comptroller General of the United 
     States shall conduct an audit to evaluate a representative 
     sample of all eligible multifamily housing projects and the 
     implementation of all mortgage restructuring and rental 
     assistance sufficiency plans.
       (b) Report.--
       (1) In general.--Not later than 18 months after the audit 
     conducted under subsection (a), the Comptroller General of 
     the United States shall submit to the Congress a report on 
     the status of all eligible multifamily housing projects and 
     the implementation of all mortgage restructuring and rental 
     assistance sufficiency plans.
       (2) Contents.--The report submitted under paragraph (1) 
     shall include--
       (A) a description of the initial audit conducted under 
     subsection (a); and
       (B) recommendations for any legislative action to increase 
     the financial savings to the Federal Government of the 
     restructuring of eligible multifamily housing projects 
     balanced with the continued availability of the maximum 
     number of affordable low-income housing units.

     SEC. 113. REGULATIONS.

       (a) Rulemaking and Implementation.--The Secretary shall 
     issue interim regulations necessary to implement this title 
     not later than the expiration of the 6-month period beginning 
     on the date of enactment of this Act. Not later than 1 year 
     after the date of enactment of this Act, in accordance with 
     the negotiated rulemaking procedures set forth in subchapter 
     III of chapter 5 of title 5, United States Code, the 
     Secretary shall implement final regulations implementing this 
     title.
       (b) Repeal of FHA Multifamily Housing Demonstration 
     Authority.--
       (1) In general.--Beginning upon the expiration of the 6-
     month period beginning on the date of enactment of this Act, 
     the Secretary may not exercise any authority or take any 
     action under section 210 of the Balanced Budget Down Payment 
     Act, II.
       (2) Unused budget authority.--Any unused budget authority 
     under section 210(f) of the Balanced Budget Down Payment Act, 
     II, shall be available for taking actions under the 
     requirements established through regulations issued under 
     subsection (a).

     SEC. 114. TECHNICAL AND CONFORMING AMENDMENTS.

       (a) Calculation of Limit on Project-Based Assistance.--
     Section 8(d) of the United States Housing Act of 1937 (42 
     U.S.C. 1437f(d)) is amended by adding at the end the 
     following new paragraph:
       ``(5) Calculation of limit.--Any contract entered into 
     under section 104 of the Multifamily Assisted Housing Reform 
     and Affordability Act of 1996 shall be excluded in computing 
     the limit on project-based assistance under this 
     subsection.''.
       (b) Partial Payment of Claims on Multifamily Housing 
     Projects.--Section 541 of the National Housing Act (12 U.S.C. 
     1735f-19) is amended--
       (1) in subsection (a), in the subsection heading, by 
     striking ``Authority'' and inserting ``Defaulted Mortgages'';
       (2) by redesignating subsection (b) as subsection (c); and
       (3) by inserting after subsection (a) the following new 
     subsection:
       ``(b) Existing Mortgages.--Notwithstanding any other 
     provision of law, the Secretary, in connection with a 
     mortgage restructuring under section 104 of the Multifamily 
     Assisted Housing Reform and Affordability Act of 1996, may 
     make a one time, nondefault partial payment of the claim 
     under the mortgage insurance contract, which shall include a 
     determination by the Secretary or the participating 
     administrative entity, in accordance with the Multifamily 
     Assisted Housing Reform and Affordability Act of 1996, of the 
     market value of the project and a restructuring of the 
     mortgage, under such terms and conditions as the Secretary 
     may establish.''.

     SEC. 115. TERMINATION OF AUTHORITY.

       (a) In General.--Except as provided in subsection (b), this 
     title is repealed effective October 1, 2001.
       (b) Exception.--The repeal under this section does not 
     apply with respect to projects and programs for which binding 
     commitments have been entered into before October 1, 2001.
                    TITLE II--ENFORCEMENT PROVISIONS

     SEC. 201. IMPLEMENTATION.

       (a) Issuance of Necessary Regulations.--Notwithstanding 
     section 7(o) of the Department of Housing and Urban 
     Development Act or part 10 of title 24, Code of Federal 
     Regulations (as in existence on the date of enactment of this 
     Act), the Secretary shall issue such regulations as the 
     Secretary determines to be necessary to implement this title 
     and the amendments made by this title in accordance with 
     section 552 or 553 of title 5, United States Code, as 
     determined by the Secretary.
       (b) Use of Existing Regulations.--In implementing any 
     provision of this title, the Secretary may, in the discretion 
     of the Secretary, provide for the use of existing regulations 
     to the extent appropriate, without rulemaking.
         Subtitle A--FHA Single Family and Multifamily Housing

     SEC. 211. AUTHORIZATION TO IMMEDIATELY SUSPEND MORTGAGEES.

       Section 202(c)(3)(C) of the National Housing Act (12 U.S.C. 
     1708(c)(3)(C)) is amended by inserting after the first 
     sentence the following new sentence: ``Notwithstanding 
     paragraph (4)(A), a suspension shall be effective upon 
     issuance by the Board if the Board determines that there 
     exists adequate evidence that immediate action is required to 
     protect the financial interests of the Department or the 
     public.''.

     SEC. 212. EXTENSION OF EQUITY SKIMMING TO OTHER SINGLE FAMILY 
                   AND MULTIFAMILY HOUSING PROGRAMS.

       Section 254 of the National Housing Act (12 U.S.C. 1715z-
     19) is amended to read as follows:

     ``SEC. 254. EQUITY SKIMMING PENALTY.

       ``(a) In General.--Whoever, as an owner, agent, or manager, 
     or who is otherwise in custody, control, or possession of a 
     multifamily project or a 1- to 4-family residence that is 
     security for a mortgage note that is described in subsection 
     (b), willfully uses or authorizes the use of any part of the 
     rents, assets, proceeds, income, or other funds derived from 
     property covered by that mortgage note for any purpose other 
     than to meet reasonable and necessary expenses that include 
     expenses approved by the Secretary if such approval is 
     required, in a period during which the mortgage note is in 
     default or the project is in a nonsurplus cash position, as 
     defined by the regulatory agreement covering the property, or 
     the mortgagor has failed to comply with the provisions of 
     such other form of regulatory control imposed by the 
     Secretary, shall be fined not more than $500,000, imprisoned 
     not more than 5 years, or both.
       ``(b) Mortgage Notes Described.--For purposes of subsection 
     (a), a mortgage note is described in this subsection if it--
       ``(1) is insured, acquired, or held by the Secretary 
     pursuant to this Act;
       ``(2) is made pursuant to section 202 of the Housing Act of 
     1959 (including property still subject to section 202 program 
     requirements that existed before the date of enactment of the 
     Cranston-Gonzalez National Affordable Housing Act); or
       ``(3) is insured or held pursuant to section 542 of the 
     Housing and Community Development Act of 1992, but is not 
     reinsured under section 542 of the Housing and Community 
     Development Act of 1992.''.

     SEC. 213. CIVIL MONEY PENALTIES AGAINST MORTGAGEES, LENDERS, 
                   AND OTHER PARTICIPANTS IN FHA PROGRAMS.

       (a) Change to Section Title.--Section 536 of the National 
     Housing Act (12 U.S.C. 1735f-14) is amended by striking the 
     section heading and the section designation and inserting the 
     following:

     ``SEC. 536. CIVIL MONEY PENALTIES AGAINST MORTGAGEES, 
                   LENDERS, AND OTHER PARTICIPANTS IN FHA 
                   PROGRAMS.''.

       (b) Expansion of Persons Eligible for Penalty.--Section 
     536(a) of the National Housing Act (12 U.S.C. 1735f-14(a)) is 
     amended--
       (1) in paragraph (1), by striking the first sentence and 
     inserting the following: ``If a mortgagee approved under the 
     Act, a lender holding a contract of insurance under title I 
     of this Act, or a principal, officer, or employee of such 
     mortgagee or lender, or other person or entity participating 
     in either an insured mortgage or title I loan transaction 
     under this Act or providing assistance to the borrower in 
     connection with any such loan, including sellers of the real 
     estate involved,

[[Page S9601]]

     borrowers, closing agents, title companies, real estate 
     agents, mortgage brokers, appraisers, loan correspondents and 
     dealers, knowingly and materially violates any applicable 
     provision of subsection (b), the Secretary may impose a civil 
     money penalty on the mortgagee or lender, or such other 
     person or entity, in accordance with this section. The 
     penalty under this paragraph shall be in addition to any 
     other available civil remedy or any available criminal 
     penalty, and may be imposed whether or not the Secretary 
     imposes other administrative sanctions.''; and
       (2) in paragraph (2)--
       (A) in the first sentence, by inserting ``or such other 
     person or entity'' after ``lender''; and
       (B) in the second sentence, by striking ``provision'' and 
     inserting ``the provisions''.
       (c) Additional Violations for Mortgagees, Lenders, and 
     Other Participants in FHA Programs.--Section 536(b) of the 
     National Housing Act (12 U.S.C. 1735f-14(b)) is amended--
       (1) by redesignating paragraph (2) as paragraph (3);
       (2) by inserting after paragraph (1) the following new 
     paragraph:
       ``(2) The Secretary may impose a civil money penalty under 
     subsection (a) for any knowing and material violation by a 
     principal, officer, or employee of a mortgagee or lender, or 
     other participants in either an insured mortgage or title I 
     loan transaction under this Act or provision of assistance to 
     the borrower in connection with any such loan, including 
     sellers of the real estate involved, borrowers, closing 
     agents, title companies, real estate agents, mortgage 
     brokers, appraisers, loan correspondents, and dealers for--
       ``(A) submission to the Secretary of information that was 
     false, in connection with any mortgage insured under this 
     Act, or any loan that is covered by a contract of insurance 
     under title I of this Act;
       ``(B) falsely certifying to the Secretary or submitting to 
     the Secretary a false certification by another person or 
     entity; or
       ``(C) failure by a loan correspondent or dealer to submit 
     to the Secretary information which is required by regulations 
     or directives in connection with any loan that is covered by 
     a contract of insurance under title I of this Act.''; and
       (3) in paragraph (3), as redesignated, by striking ``or 
     paragraph (1)(F)'' and inserting ``or (F), or paragraph 
     (2)(A), (B), or (C)''.
       (d) Conforming and Technical Amendments.--Section 536 of 
     the National Housing Act (12 U.S.C. 1735f-14) is amended--
       (1) in subsection (c)(1)(B), by inserting after ``lender'' 
     the following: ``or such other person or entity'';
       (2) in subsection (d)(1)--
       (A) by inserting ``or such other person or entity'' after 
     ``lender''; and
       (B) by striking ``part 25'' and inserting ``parts 24 and 
     25''; and
       (3) in subsection (e), by inserting ``or such other person 
     or entity'' after ``lender'' each place that term appears.
                      Subtitle B--FHA Multifamily

     SEC. 220. CIVIL MONEY PENALTIES AGAINST GENERAL PARTNERS, 
                   OFFICERS, DIRECTORS, AND CERTAIN MANAGING 
                   AGENTS OF MULTIFAMILY PROJECTS.

       (a) Civil Money Penalties Against Multifamily Mortgagors.--
     Section 537 of the National Housing Act (12 U.S.C. 1735f-15) 
     is amended--
       (1) in subsection (b)(1), by striking ``on that mortgagor'' 
     and inserting the following: ``on that mortgagor, on a 
     general partner of a partnership mortgagor, or on any officer 
     or director of a corporate mortgagor'';
       (2) in subsection (c)--
       (A) by striking the subsection heading and inserting the 
     following:
       ``(c) Other Violations.--''; and
       (B) in paragraph (1)--
       (i) by striking ``Violations.--The Secretary may'' and all 
     that follows through the colon and inserting the following:
       ``(A) Liable parties.--The Secretary may also impose a 
     civil money penalty under this section on--
       ``(i) any mortgagor of a property that includes five or 
     more living units and that has a mortgage insured, coinsured, 
     or held pursuant to this Act;
       ``(ii) any general partner of a partnership mortgagor of 
     such property;
       ``(iii) any officer or director of a corporate mortgagor;
       ``(iv) any agent employed to manage the property that has 
     an identity of interest with the mortgagor, with the general 
     partner of a partnership mortgagor, or with any officer or 
     director of a corporate mortgagor of such property; or
       ``(v) any member of a limited liability company that is the 
     mortgagor of such property or is the general partner of a 
     limited partnership mortgagor or is a partner of a general 
     partnership mortgagor.
       ``(B) Violations.--A penalty may be imposed under this 
     section upon any liable party under subparagraph (A) that 
     knowingly and materially takes any of the following 
     actions:'';
       (ii) in subparagraph (B), as designated by clause (i), by 
     redesignating the subparagraph designations (A) through (L) 
     as clauses (i) through (xii), respectively;
       (iii) by adding after clause (xii), as redesignated by 
     clause (ii), the following new clauses:
       ``(xiii) Failure to maintain the premises, accommodations, 
     any living unit in the project, and the grounds and equipment 
     appurtenant thereto in good repair and condition in 
     accordance with regulations and requirements of the 
     Secretary, except that nothing in this clause shall have the 
     effect of altering the provisions of an existing regulatory 
     agreement or federally insured mortgage on the property.
       ``(xiv) Failure, by a mortgagor, a general partner of a 
     partnership mortgagor, or an officer or director of a 
     corporate mortgagor, to provide management for the project 
     that is acceptable to the Secretary pursuant to regulations 
     and requirements of the Secretary.''; and
       (iv) in the last sentence, by deleting ``of such 
     agreement'' and inserting ``of this subsection'';
       (3) in subsection (d)--
       (A) in paragraph (1)(B), by inserting after ``mortgagor'' 
     the following: ``, general partner of a partnership 
     mortgagor, officer or director of a corporate mortgagor, or 
     identity of interest agent employed to manage the property''; 
     and
       (B) by adding at the end the following new paragraph:
       ``(5) Payment of penalty.--No payment of a civil money 
     penalty levied under this section shall be payable out of 
     project income.'';
       (4) in subsection (e)(1), by deleting ``a mortgagor'' and 
     inserting ``an entity or person'';
       (5) in subsection (f), by inserting after ``mortgagor'' 
     each place such term appears the following: ``, general 
     partner of a partnership mortgagor, officer or director of a 
     corporate mortgagor, or identity of interest agent employed 
     to manage the property'';
       (6) by striking the heading of subsection (f) and inserting 
     the following: ``Civil Money Penalties Against Multifamily 
     Mortgagors, General Partners of Partnership Mortgagors, 
     Officers and Directors of Corporate Mortgagors, and Certain 
     Managing Agents''; and
       (7) by adding at the end the following new subsection:
       ``(k) Identity of Interest Managing Agent.--For purposes of 
     this section, the terms `agent employed to manage the 
     property that has an identity of interest' and `identity of 
     interest agent' mean an entity--
       ``(1) that has management responsibility for a project;
       ``(2) in which the ownership entity, including its general 
     partner or partners (if applicable) and its officers or 
     directors (if applicable), has an ownership interest; and
       ``(3) over which the ownership entity exerts effective 
     control.''.
       (b) Implementation.--
       (1) Public comment.--The Secretary shall implement the 
     amendments made by this section by regulation issued after 
     notice and opportunity for public comment. The notice shall 
     seek comments primarily as to the definitions of the terms 
     `ownership interest in' and `effective control', as those 
     terms are used in the definition of the terms `agent employed 
     to manage the property that has an identity of interest' and 
     `identity of interest agent'.
       (2) Timing.--A proposed rule implementing the amendments 
     made by this section shall be published not later than one 
     year after the date of enactment of this Act.
       (c) Applicability of Amendments.--The amendments made by 
     subsection (a) shall apply only with respect to--
       (1) violations that occur on or after the effective date of 
     the final regulations implementing the amendments made by 
     this section; and
       (2) in the case of a continuing violation (as determined by 
     the Secretary of Housing and Urban Development), any portion 
     of a violation that occurs on or after that date.

     SEC. 221. CIVIL MONEY PENALTIES FOR NONCOMPLIANCE WITH 
                   SECTION 8 HAP CONTRACTS.

       (a) Basic Authority.--Title I of the United States Housing 
     Act of 1937 is amended by adding at the end the following new 
     section:

     ``SEC. 27. CIVIL MONEY PENALTIES AGAINST SECTION 8 OWNERS.

       ``(a) In General.--
       ``(1) Effect on other remedies.--The penalties set forth in 
     this section shall be in addition to any other available 
     civil remedy or any available criminal penalty, and may be 
     imposed regardless of whether the Secretary imposes other 
     administrative sanctions.
       ``(2) Failure of secretary.--The Secretary may not impose 
     penalties under this section for a violation, if a material 
     cause of the violation is the failure of the Secretary, an 
     agent of the Secretary, or a public housing agency to comply 
     with an existing agreement.
       ``(b) Violations of Housing Assistance Payment Contracts 
     for Which Penalty May Be Imposed.--
       ``(1) Liable parties.--The Secretary may impose a civil 
     money penalty under this section on--
       ``(A) any owner of a property receiving project-based 
     assistance under section 8;
       ``(B) any general partner of a partnership owner of that 
     property; and
       ``(C) any agent employed to manage the property that has an 
     identity of interest with the owner or the general partner of 
     a partnership owner of the property.
       ``(2) Violations.--A penalty may be imposed under this 
     section for a knowing and material breach of a housing 
     assistance payments contract, including the following--
       ``(A) failure to provide decent, safe, and sanitary housing 
     pursuant to section 8; or
       ``(B) knowing or willful submission of false, fictitious, 
     or fraudulent statements or requests for housing assistance 
     payments to

[[Page S9602]]

     the Secretary or to any department or agency of the United 
     States.
       ``(3) Amount of penalty.--The amount of a penalty imposed 
     for a violation under this subsection, as determined by the 
     Secretary, may not exceed $25,000 per violation.
       ``(c) Agency Procedures.--
       ``(1) Establishment.--The Secretary shall issue regulations 
     establishing standards and procedures governing the 
     imposition of civil money penalties under subsection (b). 
     These standards and procedures--
       ``(A) shall provide for the Secretary or other department 
     official to make the determination to impose the penalty;
       ``(B) shall provide for the imposition of a penalty only 
     after the liable party has received notice and the 
     opportunity for a hearing on the record; and
       ``(C) may provide for review by the Secretary of any 
     determination or order, or interlocutory ruling, arising from 
     a hearing and judicial review, as provided under subsection 
     (d).
       ``(2) Final orders.--
       ``(A) In general.--If a hearing is not requested before the 
     expiration of the 15-day period beginning on the date on 
     which the notice of opportunity for hearing is received, the 
     imposition of a penalty under subsection (b) shall constitute 
     a final and unappealable determination.
       ``(B) Effect of review.--If the Secretary reviews the 
     determination or order, the Secretary may affirm, modify, or 
     reverse that determination or order.
       ``(C) Failure to review.--If the Secretary does not review 
     that determination or order before the expiration of the 90-
     day period beginning on the date on which the determination 
     or order is issued, the determination or order shall be 
     final.
       ``(3) Factors in determining amount of penalty.--In 
     determining the amount of a penalty under subsection (b), the 
     Secretary shall take into consideration--
       ``(A) the gravity of the offense;
       ``(B) any history of prior offenses by the violator 
     (including offenses occurring before the enactment of this 
     section);
       ``(C) the ability of the violator to pay the penalty;
       ``(D) any injury to tenants;
       ``(E) any injury to the public;
       ``(F) any benefits received by the violator as a result of 
     the violation;
       ``(G) deterrence of future violations; and
       ``(H) such other factors as the Secretary may establish by 
     regulation.
       ``(4) Payment of penalty.--No payment of a civil money 
     penalty levied under this section shall be payable out of 
     project income.
       ``(d) Judicial Review of Agency Determination.--Judicial 
     review of determinations made under this section shall be 
     carried out in accordance with section 537(e) of the National 
     Housing Act.
       ``(e) Remedies for Noncompliance.--
       ``(1) Judicial intervention.--
       ``(A) In general.--If a person or entity fails to comply 
     with the determination or order of the Secretary imposing a 
     civil money penalty under subsection (b), after the 
     determination or order is no longer subject to review as 
     provided by subsections (c) and (d), the Secretary may 
     request the Attorney General of the United States to bring an 
     action in an appropriate United States district court to 
     obtain a monetary judgment against that person or entity and 
     such other relief as may be available.
       ``(B) Fees and expenses.--Any monetary judgment awarded in 
     an action brought under this paragraph may, in the discretion 
     of the court, include the attorney's fees and other expenses 
     incurred by the United States in connection with the action.
       ``(2) Nonreviewability of determination or order.--In an 
     action under this subsection, the validity and 
     appropriateness of the determination or order of the 
     Secretary imposing the penalty shall not be subject to 
     review.
       ``(f) Settlement by Secretary.--The Secretary may 
     compromise, modify, or remit any civil money penalty which 
     may be, or has been, imposed under this section.
       ``(g) Deposit of Penalties.--
       ``(1) In general.--Notwithstanding any other provision of 
     law, if the mortgage covering the property receiving 
     assistance under section 8 is insured or formerly insured by 
     the Secretary, the Secretary shall apply all civil money 
     penalties collected under this section to the appropriate 
     insurance fund or funds established under this Act, as 
     determined by the Secretary.
       ``(2) Exception.--Notwithstanding any other provision of 
     law, if the mortgage covering the property receiving 
     assistance under section 8 is neither insured nor formerly 
     insured by the Secretary, the Secretary shall make all civil 
     money penalties collected under this section available for 
     use by the appropriate office within the Department for 
     administrative costs related to enforcement of the 
     requirements of the various programs administered by the 
     Secretary.
       ``(h) Definitions.--For the purposes of this section--
       ``(1) the term `agent employed to manage the property that 
     has an identity of interest' means an entity--
       ``(A) that has management responsibility for a project;
       ``(B) in which the ownership entity, including its general 
     partner or partners (if applicable), has an ownership 
     interest; and
       ``(C) over which such ownership entity exerts effective 
     control; and
       ``(2) the term `knowing' means having actual knowledge of 
     or acting with deliberate ignorance of or reckless disregard 
     for the prohibitions under this section.''.
       (b) Applicability.--The amendments made by subsection (a) 
     shall apply only with respect to--
       (1) violations that occur on or after the effective date of 
     final regulations implementing the amendments made by this 
     section; and
       (2) in the case of a continuing violation (as determined by 
     the Secretary of Housing and Urban Development), any portion 
     of a violation that occurs on or after such date.
       (c) Implementation.--
       (1) Regulations.--
       (A) In general.--The Secretary shall implement the 
     amendments made by this section by regulation issued after 
     notice and opportunity for public comment.
       (B) Comments sought.--The notice under subparagraph (A) 
     shall seek comments as to the definitions of the terms 
     ``ownership interest in'' and ``effective control'', as such 
     terms are used in the definition of the term ``agent employed 
     to manage such property that has an identity of interest''.
       (2) Timing.--A proposed rule implementing the amendments 
     made by this section shall be published not later than one 
     year after the date of enactment of this Act.

     SEC. 222. EXTENSION OF DOUBLE DAMAGES REMEDY.

       Section 421 of the Housing and Community Development Act of 
     1987 (12 U.S.C. 1715z-4a) is amended--
       (1) in subsection (a)(1)--
       (A) in the first sentence, by striking ``Act; or (B)'' and 
     inserting the following: ``Act; (B) a regulatory agreement 
     that applies to a multifamily project whose mortgage is 
     insured or held by the Secretary under section 202 of the 
     Housing Act of 1959 (including property subject to section 
     202 of such Act as it existed before enactment of the 
     Cranston-Gonzalez National Affordable Housing Act of 1990); 
     (C) a regulatory agreement or such other form of regulatory 
     control as may be imposed by the Secretary that applies to 
     mortgages insured or held by the Secretary under section 542 
     of the Housing and Community Development Act of 1992, but not 
     reinsured under section 542 of the Housing and Community 
     Development Act of 1992; or (D)''; and
       (B) in the second sentence, by inserting after 
     ``agreement'' the following: ``, or such other form of 
     regulatory control as may be imposed by the Secretary,'';
       (2) in subsection (a)(2), by inserting after ``Act,'' the 
     following: ``under section 202 of the Housing Act of 1959 
     (including section 202 of such Act as it existed before 
     enactment of the Cranston-Gonzalez National Affordable 
     Housing Act of 1990) and under section 542 of the Housing and 
     Community Development Act of 1992,'';
       (3) in subsection (b), by inserting after ``agreement'' the 
     following: ``, or such other form of regulatory control as 
     may be imposed by the Secretary,'';
       (4) in subsection (c)--
       (A) in the first sentence, by inserting after ``agreement'' 
     the following: ``, or such other form of regulatory control 
     as may be imposed by the Secretary,''; and
       (B) in the second sentence, by inserting before the period 
     the following: ``or under the Housing Act of 1959, as 
     appropriate''; and
       (5) in subsection (d), by inserting after ``agreement'' the 
     following: ``, or such other form of regulatory control as 
     may be imposed by the Secretary,''.

     SEC. 223. OBSTRUCTION OF FEDERAL AUDITS.

       Section 1516(a) of title 18, United States Code, is amended 
     by inserting after ``under a contract or subcontract,'' the 
     following: ``or relating to any property that is security for 
     a mortgage note that is insured, guaranteed, acquired, or 
     held by the Secretary of Housing and Urban Development 
     pursuant to any Act administered by the Secretary,''.
                                                                    ____


 Summary of the Multifamily Assisted Housing Reform and Affordability 
                              Act of 1996

       Restructures the oversubsidized portfolio and reduces 
     Section 8 subsidy costs while maintaining the affordable 
     housing stock. Projects with subsidy contract rents above the 
     fair market rent would be restructured in a manner that would 
     reduce the rents by restructuring the underlying debt. Rents 
     would be ``marked'' to comparable market rents where 
     comparable properties exist or at 90 percent of fair market 
     rents (FMR) if comparable properties do not exist.
       In some cases (such as properties that provide special 
     services to elderly and disabled households or because of the 
     local market rent conditions), even if debt is restructured, 
     setting rents at comparable market rent levels of 90 percent 
     of FMR may be inadequate to cover the costs of operation. In 
     these cases, a budget-based process would be used to set 
     rents at the minimum level necessary to support proper 
     operations and maintenance costs.
       Screens out troubled multifamily properties and 
     noncompliant owners. Nonviable housing projects and bad 
     owners would be screened out from the renewal and debt 
     restructuring process. Community and resident involvement 
     would be used in resolving these problems. Potential outcomes 
     could include demolition or change of ownership to other 
     entities including nonprofits. Alternative housing would be 
     provided to affected residents in cases of demolition. 
     Stronger FHA and Section 8 enforcement authorities would also 
     be provided to address troubled

[[Page S9603]]

     properties and bad owners. In addition, stronger enforcement 
     remedies would be an integral part of all restructuring 
     transactions, to ensure that restructured properties would 
     continue to provide high quality affordable housing.
       Recapitalizes the assisted stock that suffer from deferred 
     maintenance. In some cases, recapitalization is needed to 
     address deferred maintenance for properties under portfolio 
     restructuring. Rehabilitation grants or deeper debt 
     writedowns would be used.
       Utilizes capable public entities to restructure portfolio 
     and recognizes HUD's limited capacity. Portfolio 
     restructuring is being undertaken to reform and improve the 
     programs from a financial and operating perspective, but not 
     to abandon the long-term commitment to resident protection 
     and ongoing affordability. As a result, balancing the fiscal 
     goals of reducing costs with the public policy goals of 
     maintaining affordable housing requires an intermediary 
     accountable to the public interest. With HUD's acknowledged 
     lack of capacity to address these issues, public 
     intermediaries that have demonstrated expertise in affordable 
     housing and responsible management would be selected. State 
     housing finance agencies would be given a priority in acting 
     as Participating Administrative Entities (PAE). Incentives 
     would be negotiated with the PAEs to protect the financial 
     interests of the Federal Government.
       Addresses the tax issues facing debt restructuring. Under 
     current tax law, debt restructuring could result in the 
     triggering of a large income tax liability on the owners/
     investors without generating sufficient cash with which the 
     owners/investors could pay the tax. As a result, a tax 
     solution is needed to avoid resistance and delays from owners 
     and investors. Debt restructuring results in an event that 
     reduces the outstanding mortgage that is owed by the owners 
     and investors. This reduction in the mortgage amount will 
     result in a tax liability--referred to as ``cancellation 
     of indebtedness'' or COD. COD is generally treated as 
     ordinary taxable income under the Internal Revenue Code.
       The bill addresses this problem by bifurcating the existing 
     mortgage into two obligations. The first piece would be 
     determined on the amount the mortgage could be supported by 
     the rental income stream. Payment on the second piece would 
     be deferred until the first mortgage is paid off. According 
     to Treasury officials, this practice would not result in an 
     immediate tax liability to owners and investors.
       Provides for resident and community input into the 
     restructuring process. To ensure that portfolio restructuring 
     does not adversely affect the residents or local communities 
     in which the properties are located, communities, residents, 
     and local government officials would be provided an 
     opportunity to comment on the process.
       Strengthens HUD and FHA enforcement authority. This bill 
     contains important provisions that will minimize the 
     incidence of fraud and abuse of federally assisted programs. 
     Such key provisions include (1) expanding HUD's ability to 
     impose sanctions on lenders, (2) expanding equity skimming 
     prohibitions, and (3) broadening the use of civil money 
     penalties.

  Mr. BOND. Mr. President, I stand in strong support of the Multifamily 
Assisted Housing Reform and Affordability Act of 1996. This bill goes a 
long way toward developing a constructive and comprehensive section 8 
mark-to-market contract renewal program for reducing the costs of 
expiring project-based section 8 contracts, limiting the financial 
exposure of the FHA multifamily housing insurance fund for FHA-insured 
section 8 projects, and preserving, to the maximum extent possible, the 
section 8 project-based housing stock for very-low- and low-income 
families.
  I congratulate Senators D'Amato, Mack, and Bennett for their 
contribution and commitment to this comprehensive legislation, as well 
as their commitment to finding a bipartisan approach to the many 
difficult issues associated with the renewal of over subsidized section 
8 project-based contracts. This legislation is a meaningful step in 
developing a reasonable policy toward the concerns raised by these 
expiring section 8 project-based contracts.
  Over the last 25 years, a number of HUD programs were established for 
the construction of affordable, low-income housing by providing FHA 
mortgage insurance while financing the cost of the housing through 
section 8 project-based housing assistance. Currently, there are some 
8,500 projects with almost 1 million units that are both FHA-insured 
and whose debt service is almost totally dependent on rental assistance 
payments made under section 8 project-based contracts. Most of these 
projects serve very-low-income families, with approximately 37 percent 
of the stock serving elderly families.
  The crisis facing this housing stock is that the section 8 project-
based housing assistance was initially budgeted and appropriated 
through 15- and 20-year section 8 project-based contracts that are now 
expiring and for which contract renewal is prohibitively expensive. For 
example, at least 75 percent of this housing stock have rents that 
exceed the fair market rent of the local area.
  Since current law prohibits HUD from renewing these section 8 
contracts at rents above 100 percent of the fair market rent, with some 
exceptions not to exceed 120 percent, in many cases, the failure to 
renew expiring section 8 project-based contracts at existing rents will 
leave owners without the financial ability to pay the mortgage debt on 
these projects. This means that owners likely will default on their 
FHA-insured mortgage liabilities, resulting in FHA mortgage insurance 
claims and foreclosures. HUD would then own and be responsible for 
managing these low-income multifamily housing projects. This bill is 
intended to avoid this potential crisis through a fiscally responsible 
and housing sensitive strategy.

  In addition, the cost of the section 8 contracts on these projects 
reemphasizes the difficult budget and appropriation issues facing the 
Congress. In particular, according to HUD estimates, the cost of all 
section 8 contract renewals, both tenant-based and project-based, will 
require appropriations of about $4.3 billion in fiscal year 1997, $10 
billion in fiscal year 1998, and over $16 billion in fiscal year 2000. 
In addition, the cost of renewing the section 8 project-based contracts 
will grow from $1.2 billion in fiscal year 1997 to almost $4 billion in 
fiscal year 2000, and to some $8 billion in 10 years.
  Since the HUD appropriations account cannot sustain these exploding 
costs, this legislation is intended to be a comprehensive response 
which will reduce the financial cost and exposure to the Federal 
Government and preserve this valuable housing resource. The Senate bill 
would generally preserve this low-income housing by using various tools 
to restructure these multifamily housing mortgages to the market value 
of the housing with resulting reductions in section 8 costs.
  I also am troubled by some of the other section 8 mark-to-market 
proposals being promoted, including the position taken by HUD which, in 
general, opposes preserving this housing as FHA-insured or as assisted 
through section 8 project-based assistance, including the elderly 
assisted housing, in favor of vouchers. This position is very 
questionable, and I emphasize that it is widely opposed by the housing 
industry and tenant groups and advocates.
  I highlight the underlying principles of the bill which would 
authorize the establishing of participating administrative entities 
[PAE's] which would generally be a public agency, with a first 
preference that a PAE be a State housing finance agency or, second, a 
local housing agency. These entities would be contracted by HUD to 
develop work-out plans in conjunction with owners of FHA-insured 
projects with expiring, oversubsidized section 8 contracts. Each PAE 
would develop mortgage restructuring and rental assistance sufficiency 
plans as workout instruments to reduce the section 8 subsidy needs of 
projects through mortgage restructuring.
  The basic tool provided in the draft bill, and the likely key to any 
successful strategy to preserve this housing, is to authorize the 
restructuring of the mortgage debt on these oversubsidized section 8 
multifamily housing projects. In particular, the bill would allow the 
restructuring of these high cost mortgages with a new first mortgage 
reflecting, generally, the market value of a project, and a soft second 
mortgage held by HUD, with interest at the applicable Federal rate, 
covering the remainder of the original mortgage debt and payable upon 
disposition or upon full payment of the first mortgage. This provision 
will reduce the cost of section 8 assistance and minimize any loss to 
the FHA multifamily insurance fund. In addition, this approach ensures 
that there is no taxable event by virtue of the mortgage restructuring.

  I also think it would be beneficial to look at some kind of exit tax 
relief to encourage owners, especially limited partners, to divest 
their interest in these properties, to encourage new investment in and 
revitalization of these properties. Nevertheless, I am convinced that 
the tax committees are unlikely to take up this issue during this

[[Page S9604]]

Congress and that any discussion on tax relief will have to wait for 
another time.
  Finally, I emphasize that it is time to act now. I am currently 
sponsoring a section 8 mark-to-market demonstration to be included in 
the VA-HUD fiscal year 1997 appropriations bill which is similar to the 
Multifamily Assisted Housing Reform and Affordability Act and which 
represents an interim approach to the section 8 mark-to-market contract 
renewal issue. This appropriation language indicates my strong belief 
that we can no longer afford, as a matter of housing policy and fiscal 
responsibility, to renew expiring section 8 project-based contracts at 
the existing, over-market rents. Nevertheless, I strongly prefer that 
section 8 reform legislation be acted on by the authorizing committees 
before the end of the fiscal year, with the full benefit of hearings 
and discussion on these very difficult policy issues.
  I look forward to working with my colleagues on the legislation and 
hope that the Housing Subcommittee and Banking Committee can act in an 
expeditious manner on this measure. I emphasize the need to work 
together and I look forward to moving this legislation through Congress 
and onto the desk of the President.
  Mr. D'AMATO. Mr. President, I rise today to cosponsor the Multifamily 
Assisted Housing Reform and Affordability Act of 1996. I wish to thank 
my colleagues, Senators Connie Mack and Kit Bond, for their outstanding 
efforts in crafting and advancing this vitally important piece of 
legislation to restructure the Department of Housing and Urban 
Development's [HUD] Federal Housing Administration [FHA] insured and 
section 8 assisted multifamily housing portfolio. Also,I would like to 
thank Senator Bennett for his diligence in confronting the complex 
issues surrounding our federal multifamily housing programs.
  Mr. President, this legislation represents a significant step forward 
in addressing the complicated and vexing problem of the rising costs of 
HUD's section 8 assisted housing program. Over the course of the next 
several years, the costs of renewing expiring section 8 contracts at 
their current rent levels will skyrocket from $4.3 billion in fiscal 
year 1997 to $20 billion in fiscal year 2002--a figure which represents 
the entire existing HUD budget. This is the result of the expiration of 
long-term housing assistance contracts which were entered into 15 to 20 
years ago. In addition, many of these contracts support projects with 
rents that are far higher than local market rents. While these rising 
costs are clearly significant and represent a formidable challenge, the 
expiration of these long-term contracts also presents us with an 
opportunity to address the oversubsidized and often inflated costs of 
the section 8 program.
  During the course of the past year, the Banking Committee has held 
hearings and has conducted an ongoing dialogue with residents, lenders, 
servicers, public officials and leading professionals within the 
housing community to find a consensus solution to the problems 
associated with the section 8 program. This legislation represents the 
culmination of that important effort.
  Mr. President, I would like to emphasize the guiding principles of 
this legislation: To contain the growth of the expanding costs of the 
section 8 program; to protect existing tenants; to maintain the 
existing stock of decent, safe and affordable housing for future needs; 
to remove bad owners and managers; to protect the FHA insurance fund 
and minimize the liability of the Federal taxpayer; and to provide for 
local control and flexibility while reducing HUD's administrative 
burden.
  This legislation seeks to: Reduce inflated contract rents to market-
rate and budget-based rent levels; screen out bad owners, replace 
corrupt managers and encourage transfers to resident-supported 
nonprofit corporations; and provide must needed capital and facilitate 
private financing to address backlogged maintenance needs. 
This comprehensive approach will allow us to reduce the costs of the 
section 8 program while protecting the FHA insurance fund and 
minimizing the liability of the federal taxpayer. The outstanding debt 
on the oversubsidized portfolio would be restructured to reflect market 
rent levels. This debt restructuring would include the continuation of 
project-based subsidies as well as FHA multifamily insurance. This bill 
also addresses the significant tax dilemma which would be caused by 
debt restructuring. In order to avoid adverse tax consequences, a 
bifurcation of the mortgage into two separate obligations is proposed.

  The legislation recognizes the lack of capacity at HUD and seeks to 
maximize local control and flexibility in carrying out debt 
restructuring in order to reduce inflated rents. A preference would be 
provided to State and local housing finance agencies to oversee 
mortgage workouts. These public entities are ideally suited for this 
role and are already accountable to the public interest in their own 
jurisdictions. Also, residents of affected properties would be provided 
with input in a communitywide consultation process, and will be 
provided adequate notice, access to information, and an adequate time 
period for analysis and comment.
  In conclusion, let me reiterate my appreciation for my colleagues who 
made tremendous contributions to the effort to stem this impending 
crisis. As chairman of the Subcommittee on Housing Opportunity and 
Community Development, Senator Mack has charted a reasonable and 
rational course for us to follow. He has utilized a fair and bipartisan 
approach in the development of this legislation, and should be 
commended for his efforts. Also, Senator Bond, chairman of the 
Subcommittee on VA-HUD Appropriations and my fellow colleague on the 
Banking Committee, has been very instrumental in moving the process 
forward. Throughout, he has insisted on our continued federal 
commitment to providing affordable housing and the protection of the 
interests of existing low and moderate income tenants.
  I thank all members of the Banking Committee for their tireless 
efforts on behalf of affordable housing and look forward to pursuing 
our bipartisan commitment to resolving the HUD section 8 crisis as 
expeditiously as possible.
                                 ______
                                 
      By Mr. KERRY:
  S. 2043. A bill to require the implementation of a corrective action 
plan in States in which child poverty has increased; to the Committee 
on Finance.


                       CHILD POVERTY LEGISLATION

  Mr. KERRY. Mr. President, the welfare bill we passed this week would 
allow States to experiment with various welfare policies. Many States 
may implement innovative welfare policies to move parents from welfare 
to work. But if we are sending Federal money to States, if we are going 
to take this risk and allow States to experiment, we must be sure that 
child poverty does not increase.
  There is nothing more important than constantly reminding ourselves 
that our focus is--or ought to be--this Nation's children. That was the 
focus when under Franklin Roosevelt's leadership title IV-A of the 
Social Security Act was originally enacted. The objective here is to 
help impoverished children.
  This bill I am introducing today says that if child poverty increases 
in a State after the date of enactment of the welfare bill, then that 
State would be required to submit a corrective action plan. Although a 
weaker version of my bill passed and was included in the welfare bill, 
I am introducing this as a separate bill in the hope that ultimately we 
will be able to pass the strongest possible version.
  What would this bill do? This bill says that if the most recent State 
child poverty rate exceeds the level for the previous year by 5 percent 
or more then the State would have to submit to the HHS Secretary within 
90 days a corrective action plan describing the actions the state shall 
take to reduce child poverty rates.
  Mr. President, I want to be clear that this bill in no way intrudes 
on a State's ability to design its own welfare program. State 
flexibility would not be decreased in any way. This bill simply says 
that if a state's welfare system increases child poverty, that state 
must take corrective action.
  Mr. President, I believe all of us regardless of party can agree on 
two things at least: We can all agree that the child poverty rate in 
this country is too high. The fact is that 15.3 million U.S. children 
live in poverty. This

[[Page S9605]]

means that more than 1 in 5 children--21.8 percent--live in poverty. In 
Massachusetts, there are more than 176,000 children who live in 
poverty. And despite the stereotypes, Mr. President, the majority of 
America's poor children are white (9.3 million) and live in rural or 
suburban areas (8.4 million) rather than central cities (6.9 million).
  The other thing on which we can all agree, because it is a fact 
rather than an opinion, is that the child poverty rate in this country 
is dramatically higher than the rate in other major industrialized 
countries. According to an excellent, comprehensive recent report by an 
international research group called the Luxembourg Income Study, the 
child poverty rate in the United Kingdom is less than half our rate 
(9.9 percent), the rate in France is less than one-third of our rate 
(6.5 percent), and the rate in Denmark (3.3 percent) is about one-sixth 
our rate.
  Mr. President, we know that poverty is bad for children. This should 
be obvious. Nobel prizewinning economist Robert Solow and the 
Children's Defense Fund recently conducted the first-ever long-term 
impact of child poverty. They found that their lowest estimate was that 
the future cost to society of a single year of poverty for the 15 
million poor children is $36 billion in lost output per worker. When 
they included lost work hours, lower skills, and other labor market 
disadvantages related to poverty, they found that the future cost to 
society was $177 billion.
  With this bill, I want to make sure that, at the very least, if a 
State's welfare plan increases child poverty--instead of increasing the 
number of parents moving from welfare to work and self-sufficiency--
that State will take immediate steps to refocus its program.
  Mr. President, I urge all my colleagues to support this bill to 
ensure that welfare reform results in more parents working, not more 
child poverty.
                                 ______
                                 
      By Mr. SANTORUM:
  S. 2044. A bill to provide for modification of the State agreement 
under title II of the Social Security Act with the State of 
Pennsylvania with respect to certain students; to the Committee on 
Finance.


               legislation helping pennsylvania students

  Mr. SANTORUM. Mr. President, I wanted to take a few minutes of Senate 
business today to introduce legislation of importance to the 
Pennsylvania state system of higher education and to the students 
enrolled and working at our state-related universities.
  The bill is a companion measure to legislation in the House of 
Representatives. The House proposal was introduced by my friend and 
distinguished colleague from Pennsylvania, Representative Bill Clinger.
  Mr. President, this legislation will affect students and graduate 
assistants employed by Pennsylvania's public universities and will 
allow them to keep more of their pay from campus employment. Currently, 
student employees of Pennsylvania's State system of higher education 
are covered under FICA and pay taxes unlike working students at schools 
in most other states. Only a change in the law would enable 
Pennsylvania's colleges and universities to exempt their student 
employees from FICA coverage.
  This legislation would make Pennsylvania schools more attractive and 
competitive with the other states who have opted out of Social Security 
coverage. Graduate students are often called upon to perform paid 
assistant teaching duties. The current system and application of FICA 
coverage does not make Pennsylvania institutions as competitive with 
other out of state graduate programs.
  If a student or graduate student compares their employment earning 
possibilities with other states, Pennsylvania students are at a 
distinct disadvantage. At a time in young adults' lives when resources 
are usually limited, it makes practical sense to free up more funds for 
student employees who are working hard toward their educational goals.
  Today, colleges and universities are being called upon to downsize 
and make better use of dollars. This legislation is an easy way to 
support individuals who are attaining goals while attending 
Pennsylvania state-related universities.
                                 ______
                                 
      By Mr. HATFIELD:
  S. 2045. A bill to provide regulatory relief for small business 
concerns, and for other purposes; to the Committee on Small Business.


           the national small business regulatory relief act

  Mr. HATFIELD. Mr. President, one of the most common small business 
complaints my constituents bring to my attention is the issue of 
burdensome government regulations. As we all recognize, small 
businesses rarely have the expertise or resources necessary to keep up 
to date with changing Federal requirements. Consequently, many small 
businesses are not in compliance with Federal regulations and face 
potential fines. Fines or costly compliance procedures can be 
devastating to small businesses which characteristically operate at a 
very narrow profit margin.
  All across this Nation conscientious small business owners are 
frustrated with Federal regulations simply because they cannot get 
concise and specific answers to their compliance questions. How can we 
realistically expect to increase environmental protection, work place 
safety or tax compliance, if these respective agency's regulations are 
so complex that professionals in these fields cannot determine the 
meanings and applications of these rules? While our regulatory reform 
efforts have done much to change the rulemaking process and the sheer 
volume of regulations, very little has been done to translate rules 
written by bureaucrats into easy to understand language that the owner 
of any small firm can implement.
  Mr. President, according to a 1995 study by the Small Business 
Administration's Office of Advocacy, 94 percent of small businesses 
were unsure of what they needed to do to comply with Federal 
regulations. The same study revealed that it is difficult, if not 
impossible, for small businesses to obtain concise answers to 
compliance questions from a Federal agency. It is no wonder that so 
many business owners, who have honestly believed they were in 
compliance, have either lost or had their businesses crippled because 
they were uninformed or misunderstood Federal regulations which applied 
to them.
  Congress has considered several proposals which would scale back 
intrusive Federal regulations. However, we must realize that Federal 
regulations will continue in some capacity. Consequently, it is vital 
to establish a mechanism which assists small businesses in complying 
with these regulations.
  The Small Business Development Centers have established themselves as 
a valuable resource for small businesses. They have an existing network 
of over 950 centers nationwide which have been providing education and 
technical assistance to small business owners for years.
  The Oregon Small Business Development Center Network has 
distinguished itself as a national model of how SBDC's can play an 
integral role in ensuring the success of small businesses. In April 
1995 I conducted a field hearing in Portland, OR on a proposal to 
expand the responsibilities of the SBDC's to include regulatory 
compliance assistance. At that hearing, I heard from several Oregon 
small business owners who testified about their experience with the 
Oregon Small Business Development Center Network and the positive 
benefits these centers have had on small businesses in the State of 
Oregon.
  The proposal to accomplish a shift in Federal regulatory policy from 
enforcement to education was at a conceptual stage at the time of the 
Oregon field hearing. However, this idea was extremely intriguing and 
the small business owners who discussed this issue were impressive in 
conveying their vision for the future of this proposal. Since that 
time, I have worked with the National Association of Small Business 
Development Center and the Director of the Oregon SBDC Network to 
develop this concept into the legislation I am introducing today.
  The National Small Business Regulatory Relief Act provides 
comprehensive regulatory assistance to small firms by enlisting the 
nationwide network of over 950 Small Business Development Centers 
(SBDC's). Over 550,000 small businesses each year seek SBDC

[[Page S9606]]

help in drafting business plans and expansion strategies, developing 
financing and marketing tactics, improving management and personnel 
skills, and addressing many other business needs. The locally 
controlled and managed SBDC network's long-standing confidentiality 
policy and its proven track record of success make it an ideal, cost-
effective and user-friendly delivery system for meaningful compliance 
assistance. Even though SBDC's are funded by all 50 States and the 
Federal Government they do not have enough resources to provide the 
regulatory help small businesses so desperately need.
  Mr. President this legislation provides the resources necessary to 
expand SBDC assistance, creating a one-stop shop business resource that 
can explain how a company's marketing, finance, personnel, 
international trade, procurement and technology strategies comport with 
the regulatory requirements of EPA, OSHA, and IRS. The result will be a 
holistic delivery system of business assistance that will not only 
increase compliance with today's regulations, but will help small 
businesses bring about a cleaner environment, safer work place and 
better tax compliance. Most importantly, by utilizing the vast SBDC 
network, the cost of making comprehensive regulatory assistance 
available to all of America's small businesses is minimized for a 
program of this magnitude.
  This legislation authorizes appropriations to the Occupational Safety 
and Health Administration, the Environmental Protection Agency and the 
Internal Revenue Service to accomplish the goals I described earlier. 
However, I would like to point out that similar legislation has been 
introduced in the House of Representatives which directs each of these 
three Federal agencies to set-aside a percentage of their overall 
budget for SBDC compliance assistance activities. While I sympathize 
with the intentions of the House sponsors of this measure to use 
existing funds for this program, as Chairman and a longtime member of 
the Senate Appropriations Committee I feel the appropriations process 
is the proper way to distribute Federal discretionary dollars. I 
believe that the goals of this proposal can be accomplished using 
existing Federal dollars.
  Mr. President, America's small businesses are frustrated by the 
current Federal regulatory situation and have been pleading for help. 
The National Small Business Regulatory Relief Act is a creative 
approach towards balancing economic growth with regulatory compliance. 
I urge my colleagues to join me in this important effort to assist our 
Nation's small businesses in complying with Federal regulations.
  I ask unanimous consent that a letter from the Oregon Small Business 
Development Center Network in support of this legislation be included 
in the Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                             Oregon Small Business


                                   Development Center Network,

                                      Eugene, OR, January 8, 1996.
     Hon. Mark O. Hatfield,
     Hart Senate Office Building,
     Washington, DC.
       Dear Senator Hatfield: Thank you for taking time from your 
     busy schedule to meet with me and John Eskildsen regarding 
     the Oregon Small Business Development Center Network and the 
     National Small Business Extension Network proposal. We 
     appreciate your strong support and advocacy for the OSBDCN 
     and the NSBEN proposal.
       I believe that the NSBEN proposal represents a tremendous 
     opportunity to reduce the federal regulatory burden on small 
     business while simultaneously reducing the federal budget. 
     This legislation, if enacted, will enable small business 
     owners in Oregon and throughout the United States to meet 
     federal regulatory standards without fear of reprisal.
       Thank you again for your leadership and support for small 
     business.
           Sincerely,

                                                 Sandy Cutler,

                             State Director, Oregon Small Business
                                       Development Center Network.
                                 ______
                                 
      By Mr. ROCKEFELLER:
  S. 2046. A bill to amend section 29 of the Internal Revenue Code of 
1986 to allow a credit for qualified fuels produced from wells drilled 
during 1997, and for other purposes; to the Committee on Finance.


            the marginal well drilling incentive act of 1996

  Mr. ROCKEFELLER. Mr. President, today I offer a bill that is very 
important to my State of West Virginia, and can benefit the entire 
Nation. This very small bill will have a very big impact on the ability 
of small oil and gas producers in my State and across the Nation to 
compete. The bill creates a new tax incentive, modeled on the old 
section 29 tax credit, to help small marginal well drillers.
  I offer this with a measure of frustration, based on the fact that 
while Congress managed to incorporate a great number of narrowly 
targeted amendments into the small business tax bill passed today, the 
final bill did not include this provision that I propose today. I am 
pleased that the tax package includes an extension of the part of 
section 29 dealing with facilities that manufacture gas from biomass 
and coal. That is helpful to a variety of States, including West 
Virginia. But for less than one tenth the cost of that provision, we 
could and should have done something to help drillers get gas from 
devonian shale and other nonconventional sources.
  The original section 29 credit for drilling expired in 1992 after 
some of the larger gas companies in this country put emphasis on 
getting relief from the alternative minimum tax instead of renewing 
section 29. They got that, but it didn't help a lot of the smaller 
drillers, which happen to include most of the gas producers in West 
Virginia.
  Mr. President, I'd like the record to show that since the credit 
expired, drilling for margin gas wells in West Virginia has dropped off 
by more than 30 percent. In 1992, the last year of the credit, 760 
wells were drilled in West Virginia. By 1995, that number had fallen to 
530 wells. In that same timeframe, the number of rigs actively drilling 
wells in the Appalachian basin declined from 73 to 45--a 48-percent 
decline. That translates directly into jobs, as the average rig employs 
about 25 people. When you add to that all the jobs associated with a 
well (from transportation to bookkeeping), you have a job loss of more 
than 1,500 in the Appalachian Basin, which stretches from New York to 
Kentucky, and from Ohio to Virginia.
  Mr. President, this is about more than jobs. I have spoken in the 
past of the great problem our Nation has with oil dependency. Following 
the oil shocks of the 1970's, Congress made a concerted effort to help 
ease our dependency on foreign energy sources. That effort showed much 
success in the 1980's when imports fell by more than 40 percent from 
1970's highs. However, the 1990's have seen import totals steadily 
rise, to today when more than 50 percent of our oil is imported. In 
fact, Mr. President, the biggest 1-year rise in imports since 1986 came 
in the year following the expiration of section 29, in 1993.
  The Senate knows well the problem raised by energy dependency. The 
Gulf war was fought largely to protect our foreign oil sources in the 
Middle East, and 19 brave American soldiers died in June for that very 
same cause. Our energy dependency, in addition to years of cheap oil 
and an exceptionally harsh winter, also led to the outrage earlier this 
spring when gas prices at the pump rose steeply.
  For all these reasons, Mr. President, it is important that we foster 
the development of new sources of domestic energy. Gas in my State, and 
many others, is hard to get at. It is locked in rock formations that 
yield their fuel much more slowly, and at lower profits, than wells in 
the oil patch out West.
  This bill is specifically designed to offer a very modest incentive 
to those producers, when the price of natural gas gets so low that they 
can't make a profit from their wells. Unlike the original section 29, 
the credit will be available only for the first 10 million cubic feet 
of gas produced each year by each well. Additionally, the credit will 
only be available to wells that produce less than 100 million cubic 
feet of gas per year.
  Mr. President, I have intentionally limited the scope of this bill so 
that it is only available to smaller wells, and only there, for a 
limited amount of gas. The idea behind this bill is not to have a big 
giveaway for big oil and gas producers. But instead, it is designed to 
give a little bit of insurance to risk-taking drillers who make their 
living tilling nonconventional sources for fuel.

[[Page S9607]]

  This is a modest bill, but one that can make a big difference in 
certain places that have the potential for more prosperity, more job 
growth, and more economic growth like West Virginia. Reviving and 
revising section 29 will put an incentive in place to seize more of 
this potential while reducing the entire country's dependence in 
foreign oil. I urge the Senate to find a way to make this bill a 
reality--the sooner, the better.
                                 ______
                                 
      By Mr. HATCH (for himself, Mr. Conrad, Mr. Pressler, Mr. Pryor, 
        Mr. Nickles, and Mr. Baucus):
  S. 2047. A bill to amend the Internal Revenue Code of 1986 to modify 
the application of the pension nondiscrimination rules to governmental 
plans; to the Committee on Finance.

                          ____________________