[Congressional Record Volume 143, Number 4 (Tuesday, January 21, 1997)]
[Senate]
[Pages S234-S376]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
THE PARTIAL-BIRTH BAN ACT OF 1997
Mr. SANTORUM. Mr. President, the agenda for the 105th Congress
reflects a continuance of the very significant debate that occurred in
the 104th Congress on the issue of partial birth abortion.
Four months ago, we debated and considered a presidential veto
override on a bill to ban the partial birth abortion procedure. On a
final vote, we came very close to banning this very gruesome procedure,
and the number of colleagues who supported the override set the stage
for consideration again this year.
A wide spectrum of individuals have coalesced around the effort to
ban partial birth abortions. These varied individuals and groups have
raised their voices in support of a ban both because of the brutality
of partial birth abortions and because they recognize that this debate
is not about Roe vs. Wade, the 1973 Supreme Court decision legalizing
abortion. It is not about when a fetus becomes a baby. And it is
certainly not about women's health. It is about infanticide, it is
about killing a child as he or she is being born, an issue that neither
Roe vs. Wade nor the subsequent Doe vs. Bolton decision addressed.
During the Senate debate last year, various traditionally pro-choice
legislators voted in support of legislation to ban this particular
procedure. Among them was a colleague who stated on the floor of the
Senate, ``In my legal judgement, the issue is not over a woman's right
to choose within the constitutional context of Roe versus Wade. * * *
The line of the law is drawn, in my legal judgement, when the child is
partially out of the womb of the mother. It is no longer abortion; it
is infanticide.'' He was joined in these sentiments by other like
minded Senators.
This perspective is significant in that it suggests the scope of the
tragedy that this procedure represents. And for those who may still be
unclear what a partial birth abortion procedure is, it is this: a fully
formed baby--in most cases a viable fetus of 23-26 weeks--is pulled
from its mother until all but the head is delivered. Then, scissors are
plunged into the base of the skull, a tube is inserted and the child's
brains are suctioned out so that the head of the now-dead infant
collapses and is delivered.
Partial birth abortion is tragic for the infant who loses his or her
life in this brutal procedure. It is also a personal tragedy for the
families who choose the procedure, as it is for those who perform it--
even if they aren't aware of it. But partial birth abortion is also a
profound social tragedy. It rips through the moral cohesion of our
public life. It cuts into our most deeply held beliefs about the
importance of protecting and cherishing vulnerable human life. It
fractures our sense that the laws of our country should reflect long-
held, commonly accepted moral norms.
Yet this kind of tragedy--even as it calls forth and exposes our
outrage--can be an unexpected catalyst for consensus, for new
coalitions and configurations in our public life. The partial birth
abortion debate moves us beyond the traditional lines of confrontation
to hollow out a place in the public square where disparate individuals
and groups can come together and draw a line that they know should not
be crossed.
The stark tragedy of partial birth abortion can be the beginning of a
significant public discussion where we define--or re-define--our first
principles. Why is such a discussion important? Precisely because it
throws into relief the fundamental truths around which a moral
consensus is formed in this country. And, as John Courtney Murray
reminds us in ``We Hold These Truths, Catholic Reflections on the
American Proposition'', a public consensus which finds its expression
in the law should be ``an ensemble of substantive truths, a structure
of basic knowledge, an order of elementary affirmations* * *''.
If we do not have fundamental agreement about first principles, we
simply cannot engage one another in civil debate. All we have is the
confusion of different factions locked in their own moral universe. If
we could agree publicly on just this one point--that partial birth
abortion is not something our laws should sanction, and if we could
then reveal the consensus--a consensus that I know exists--against
killing an almost-born infant, we would have significantly advanced the
discussion about what moral status and dignity we give to life in all
its stages. Public agreement, codified by law, on this one prohibition
gives us a common point of departure. It give us a common language
even, because we agree, albeit in a narrow sense, on the meaning of
fundamental terms such as life and death. And it is with this common
point of departure and discourse--however narrow--that we gain a degree
of coherence and unity in our public life and dialogue.
I truly believe that out of the horror and tragedy of partial birth
abortions, we can find points of agreement across ideological,
political and religious lines which enable us to work toward a life-
sustaining culture. So, as hundreds of thousands of faithful and
steadfast citizens come together to participate in this year's March
for Life, let us remember that such a culture, the culture for which we
hope and pray daily, might very well be achieved one argument at a
time.
Mr. President, I am proud to have the opportunity to sponsor this
legislation and to continue the very significant achievements of my
colleague, Senator Bob Smith. I look forward to continuing that effort
in cooperation with Representative Charles Canady, and I thank my
colleagues for making this initiative a priority in our legislative
agenda.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 6
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 ``Partial-Birth Abortion Ban
Act of 1997''.
SEC. 2. PROHIBITION ON PARTIAL-BIRTH ABORTIONS.
(a) In General.--Title 18, United States Code, is amended
by inserting after chapter 73 the following:
``CHAPTER 74--PARTIAL BIRTH ABORTIONS
``Sec.
``1531. Partial-birth abortions prohibited.
``Sec. 1531. Partial-birth abortions prohibited
``(a) Whoever, in or affecting interstate or foreign
commerce, knowingly performs a partial-birth abortion and
thereby kills a human fetus or infant shall be fined under
this title or imprisoned not more than two years, or both.
``(b) Subsection (a) does not apply to a partial-birth
abortion that is necessary to save the life of a mother
because her life is endangered by a physical disorder,
physical injury, or physical illness, including a life-
endangering physical condition caused by or arising from the
pregnancy itself, if no other medical procedure would suffice
for that purpose.
``(c) As used in this section--
``(1) the term `partial-birth abortion' means an abortion
in which the person performing the abortion partially
vaginally delivers a living fetus before killing the infant
and completing the delivery; and
``(2) the terms `fetus' and `infant' are interchangeable.
``(d)(1) Unless the pregnancy resulted from the plaintiff's
criminal conduct or the plaintiff consented to the abortion,
the father, and if the mother has not attained the age of 18
years at the time of the abortion, the maternal grandparents
of the fetus or infant, may in a civil action obtain
appropriate relief.
``(2) Such relief shall include--
``(A) money damages for all injuries, psychological and
physical, occasioned by the violation of this section; and
``(B) statutory damages equal to three times the cost of
the partial-birth abortion;
even if the mother consented to the performance of an
abortion.
``(e) A woman upon whom a partial-birth abortion is
performed may not be prosecuted under this section for a
conspiracy to violate this section, or an offense under
section 2, 3, or 4 of this title based on a violation of this
section.''.
(b) Clerical Amendment.--The table of chapters for part I
of title 18, United States Code, is amended by inserting
after the item relating to chapter 73 the following new item:
``75. Partial-birth abortions...............................1531''.....
Mr. ABRAHAM. Mr. President, I rise today to cosponsor S. 6. In doing
so I add my voice to the chorus calling for
[[Page S235]]
an end to partial birth abortion. The bill we are considering is
designed to outlaw medical procedures ``in which the person performing
the abortion partially delivers a living fetus before killing the fetus
and completing the delivery.'' It is a narrowly drafted bill which
specifically and effectively targets a rare but grisly and unnecessary
practice.
I understand, Mr. President, that the American people are divided on
many issues within the abortion debate. I am firmly pro-life. But in my
view one need not resort to broad, ideological arguments in this case.
Partial birth abortions occur only in the third trimester of pregnancy.
They are never required to save the life, health, or child-bearing
ability of the mother. They are unnecessary and regrettable.
We in this chamber failed to override the President's veto of this
legislation during the last Congress. But I remain convinced that all
of us can agree that this Nation can do without this particular, rare,
and grisly procedure. I urge my colleagues to support this legislation.
______
By Mr. LOTT (for himself, Mr. Thurmond, Mr. Smith, Mr. Warner,
Mr. Kyl, Mr. Cochran, Mr. Abraham, Mr. Allard, Mr. Ashcroft,
Mr. Coverdell, Mr. Craig, Mr. DeWine, Mr. Domenici, Mr. Enzi,
Mr. Faircloth, Mr. Grams, Mr. Hagel, Mr. Hatch, Mr. Helms, Mrs.
Hutchison, Mr. Hutchinson, Mr. Inhofe, Mr. Murkowski, Mr.
Nickles, Mr. Sessions, and Mr. Kempthorne):
S. 7. A bill to establish a U.S. policy for the deployment of a
national missile defense system, and for other purposes; to the
Committee on Armed Services.
the national missile defense act of 1997
Mr. LOTT. 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. 7
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 Missile Defense Act
of 1997''.
SEC. 2. NATIONAL MISSILE DEFENSE POLICY.
(a) National Missile Defense.--It is the policy of the
United States to deploy by the end of 2003 a National Missile
Defense system that--
(1) is capable of defending the territory of the United
States against limited ballistic missile attack (whether
accidental, unauthorized, or deliberate); and
(2) could be augmented over time to provide a layered
defense against larger and more sophisticated ballistic
missile threats if they emerge.
(b) Cooperative Transition.--It is the policy of the United
States to seek a cooperative transition to a regime that does
not feature an offense-only form of deterrence as the basis
for strategic stability.
SEC. 3. NATIONAL MISSILE DEFENSE SYSTEM ARCHITECTURE.
(a) Requirement for Development of System.--To implement
the policy established in section 3(a), the Secretary of
Defense shall develop for deployment a National Missile
Defense (NMD) system which shall achieve an initial
operational capability (IOC) by the end of 2003.
(b) Elements of the NMD System.--The system to be developed
for deployment shall include the following elements:
(1) Interceptors.--An interceptor system that optimizes
defensive coverage of the continental United States, Alaska,
and Hawaii against limited ballistic missile attack (whether
accidental, unauthorized, or deliberate).
(2) Ground-based radars.--Fixed ground-based radars.
(3) Space-based sensors.--Space-based sensors, including
the Space and Missile Tracking System.
(4) BM/C3.--Battle management, command, control, and
communications (BM/C3).
SEC. 4. IMPLEMENTATION OF NATIONAL MISSILE DEFENSE SYSTEM.
The Secretary of Defense shall--
(1) upon the enactment of this Act, promptly initiate
required preparatory and planning actions that are necessary
so as to be capable of meeting the initial operational
capability (IOC) date specified in section 3(a);
(2) not later than the end of fiscal year 1999, conduct an
integrated systems test which uses elements (including BM/
C3 elements) that are representative of, and traceable
to, the national missile defense system architecture
specified in section 3(b);
(3) prescribe and use streamlined acquisition policies and
procedures to reduce the cost and increase the efficiency of
developing the system specified in section 3(a); and
(4) develop a national missile defense follow-on program
that--
(A) leverages off of the national missile defense system
specified in section 3(a); and
(B) could augment that system, if necessary, to provide for
a layered defense.
SEC. 5. REPORT ON PLAN FOR NATIONAL MISSILE DEFENSE SYSTEM
DEVELOPMENT AND DEPLOYMENT.
Not later than 120 days after the date of the enactment of
this Act, the Secretary of Defense shall submit to Congress a
report on the Secretary's plan for development and deployment
of a national missile defense system pursuant to this Act.
The report shall include the following matters:
(1) The Secretary's plan for carrying out this Act,
including--
(A) a detailed description of the system architecture
selected for development under section 3(b); and
(B) a discussion of the justification for the selection of
that particular architecture.
(2) The Secretary's estimate of the amount of
appropriations required for research, development, test,
evaluation, and for procurement, for each of fiscal years
1998 through 2003 in order to achieve the initial operational
capability date specified in section 3(a).
(3) A determination of the point at which any activity that
is required to be carried out under this Act would conflict
with the terms of the ABM Treaty, together with a description
of any such activity, the legal basis for the Secretary's
determination, and an estimate of the time at which such
point would be reached in order to meet the initial
operational capability date specified in section 3(a).
SEC. 6. POLICY REGARDING THE ABM TREATY.
(a) ABM Treaty Negotiations.--In light of the findings in
section 232 of the National Defense Authorization Act for
Fiscal Year 1996 (Public Law 102-106; 110 Stat. 228, 10
U.S.C. 2431 note) and the policy established in section 2,
Congress urges the President to pursue, if necessary, high-
level discussions with the Russian Federation to achieve an
agreement to amend the ABM Treaty to allow deployment of the
national missile defense system being developed for
deployment under section 3.
(b) Requirement for Senate Advice and Consent.--If an
agreement described in subsection (a) is achieved in
discussions described in that subsection, the President shall
present that agreement to the Senate for its advice and
consent. No funds appropriated or otherwise available for any
fiscal year may be obligated or expended to implement such an
amendment to the ABM Treaty unless the amendment is made in
the same manner as the manner by which a treaty is made.
(c) Action Upon Failure To Achieve Negotiated Changes
Within One Year.--If an agreement described in subsection (a)
is not achieved in discussions described in that subsection
within one year after the date of the enactment of this Act,
the President and Congress, in consultation with each other,
shall consider exercising the option of withdrawing the
United States from the ABM Treaty in accordance with the
provisions of Article XV of that treaty.
SEC. 7. DEFINITIONS.
In this Act:
(1) ABM treaty.--The term ``ABM Treaty'' means the Treaty
Between the United States of America and the Union of Soviet
Socialist Republics on the Limitation of Anti-Ballistic
Missile Systems, and signed at Moscow on May 26, 1972, and
includes the Protocols to that Treaty, signed at Moscow on
July 3, 1974.
(2) Limited ballistic missile attack.--The term ``limited
ballistic missile attack'' refers to a limited ballistic
missile attack as that term is used in the National Ballistic
Defense Capstone Requirements Document, dated August 24,
1996, that was issued by the United States Space Command and
validated by the Joint Requirements Oversight Council of the
Department of Defense.
Mr. HELMS. Mr. President, the Defend America Act of 1997 is a vital
piece of legislation--one which provides a clear and concise blueprint
for protecting the American people from the growing threat of attack
from ballistic missiles carrying nuclear, chemical, or biological
warheads.
It is critical that the United States begin immediately the 8-year
task of building and deploying a national missile defense. I am
grateful to the distinguished majority leader, Mr. Lott, for
introducing this bill and I am honored to join him as a cosponsor.
Just over a year ago the Clinton administration vetoed the 1996
Defense Authorization Act. In his veto message, the President
explicitly objected to the missile defense provisions of the act. At
that time, along with others, I found it beyond belief that the
administration could arrive at the decision to block the deployment of
a national missile defense. I remember wondering, given the fact that
North Korea is known to be developing a missile capable of striking
United States cities, how such a decision could be made.
The chairman of the National Intelligence Council, Richard Cooper,
testified before the House National Security
[[Page S236]]
Committee on February 28, 1996, that ``. . . North Korea is developing
a missile, which we call the Taepo Dong 2, that could have a range
sufficient to reach Alaska. The missile way also be capable of reaching
some U.S. territories in the Pacific and the far western portion of the
2,000-km-long Hawaiian Island chain.''
What Mr. Cooper did not add was the fact that nations can and have
increased the ranges of their ballistic missiles by reducing payloads.
Mr. President, a September 29, 1995, article in the Washington Times
reported that the Defense Intelligence Agency has estimated that the
Taepo Dong 2 could, in fact, have a range of 4,650 miles and, with a
smaller warhead, could reach 6,200 miles--approximately 10,000 km.
Similarly, a September 11, 1995, article in a South Korean newspaper
stated that Russia believes that once the Taepo Dong 2's inertial
navigation system, warhead weight, and fuel injection devices are
improved, the missile could reach over 9,600 kilometers. At those
ranges, the Taepo Dong 2 could drop a nuclear or biological warhead on
U.S. cities as far east as Denver or Minneapolis.
Mr. President, I ask unanimous consent that these two articles be
printed in the Record.
Second, I cannot fathom why the Clinton administration objected to
the deployment of a national missile defense in light of Red China's
bellicose words and deeds. China fields of dozens of submarine-launched
ballistic missiles, hundreds of warheads on heavy bombers, roughly 24
medium- and long-range ballistic missiles, and has several crash
modernization initiatives in progress. Moreover, China intends to
deploy, by the end of the century, four new types of ballistic
missiles. Furthermore, the United States has very clear indications
that Red China is at this moment pursuing MIRV-technology.
Mr. President, this is the same country, mind you, that flexed its
military might by conducting live missile-firing exercises in the
Strait of Taiwan in an obviously intentional effort to bully and cower
a valued and longstanding ally of the United States. This is the same
country that issued thinly-veiled threats this spring suggesting that
nuclear weapons would be used against the United States if the United
States intervened on behalf of Taiwan. Assistant Secretary of State
Winston Lord acknowledged that Chinese officials had declared that the
United States ``wouldn't dare defend Taiwan because they--China--would
rain nuclear bombs on Los Angeles.''
Now, if this was not nuclear blackmail, it will do while the Clinton
administration folds its hands until the first nuclear missile hits the
West Coast of the United States. China's ability to hold the United
States hostage to such threats is made possible by the fact that a band
of latter-day Luddites here in Washington have consistently refused
even to consider building the very strategic missile defenses necessary
to protect the American people from such an attack.
Mr. President, it is time for the defenders of the ABM Treaty to give
up their pious devotion to an antiquated arms control theology, and to
come to grips with the realities of the post-cold-war world. Dr. Henry
Kissinger--the architect of the ABM Treaty--put it best when he
recently wrote: ``The end of the cold war has made * * * a strategy [of
mutually assured destruction (MAD)] largely irrelevant. Barely
plausible when there was only one strategic opponent, the theory makes
no sense in a multipolar world of proliferating nuclear powers.''
Dr. Kissinger went on to note specifically that MAD would not work
against blackmail with nuclear weapons. Yet that is exactly what we
faced when China blatantly threatened Los Angeles.
The truth of the matter is that no amount of policy reformulation by
the Clinton administration can change the fact that the United States
is vulnerable to nuclear-tipped missiles fielded by China, or any one
else. Rectifying this dangerous deficiency requires leadership and
action. It is an all the more pressing issue because the current course
charted by the administration fails to recognize the inherent danger in
China's pursuit of an advanced nuclear arsenal.
Mr. President, any further delay in the development of the United
States of a flexible, cost-effective national missile defense is
unconscionable. I am honored to be a cospsonor of the Defend America
Act and urge Senators to support this legislation to ensure that the
American people are protected from attack by ballistic missiles.
There being no objection, the material was ordered to be printed in
the Record, as follows:
[From the Washington Times, Sept. 29, 1995]
North Korean Missile Could Reach United States, Intelligence Warns
(By Bill Gertz)
The Western United States could be within range of North
Korea's longest-range missile armed with nuclear, chemical or
biological warheads by the year 2000, according to U.S. and
foreign intelligence assessments.
Sen. Jon Kyl, Arizona Republican, said new information
indicates North Korea's Taepo Dong-2 missile, still under
development, is an intercontinental ballistic missile (ICBM)
capable of hitting U.S. cities and demonstrates the need for
rapidly building a national missile defense.
A South Korean intelligence official, quoting a Russian
assessment said the Taepo Dong-2 will be deployed by 2000
with a maximum range of 6,200 miles once warhead
modifications and technical improvements are made, the
newspaper Seoul Shinmun reported Sept. 11.
Mr. Kyl, a member of the Senate Intelligence Committee,
said he investigated the report and found it ``not
inconsistent with some information that I have.''
``The bottom line is that if the information is even close
to the truth, it presents for the first time a very serious
and relatively quick challenge to U.S. sovereignty,'' he
said.
The Defense Intelligence Agency (DIA) estimates the Taepo
Dong-2 will have a range of about 4,650 miles and confirmed
that with a smaller warhead it could reach 6,200 miles, a
Pentagon source said.
Information on the North Korean ICBM comes as a House and
Senate conference committee is working on provisions of the
fiscal 1996 defense authorization about whether the Pentagon
should move ahead quickly with deployment of a national
missile defense that could defend against such North Korean
missiles.
``Given the time it takes to develop and deploy an
effective national missile-defense system, overlayed on that
intelligence information, it is clear we have to begin now if
we are to avoid a `missile-defense gap,' '' Mr. Kyl said.
``In this case it would be real,'' he said, referring to
the issue of the United States lagging behind the Soviet
Union in strategic missiles. The missile-gap debate surfaced
during the 1960 presidential election campaign and was later
proved to have been unfounded.
Mr. Kyl said the intelligence report also counters claims
by administration officials that national missile defenses
are not needed because there is no immediate threat to the
United States.
A DIA statement said the press information about the Taepo
Dong-2 was ``factual. . . . Clearly the successful deployment
of these longer-range missiles would present a new dimension
to the challenges to United States and regional interests.''
One DIA computer simulation of the Taepo Dong-2 put the
range of the missile at between 2,666 miles and 3,720 miles.
But according to South Korean intelligence, Russian missile
experts believe the range of the Taepo Dong-2 could be
extended to at least 6,000 miles after technical problems are
solved, the Seoul newspaper reported.
The Russians told South Korea the greater range could be
achieved if the guidance mechanism is improved, the warhead
weight is decreased and fuel-injection technology is
advanced.
The Pentagon's Ballistic Missile Defense Organization drew
up charts showing the targets a long-range Taepo Dong-2 could
hit. They include all major U.S. cities on the West Coast, in
Arizona, Colorado, Kansas and just short of Chicago. It also
could reach all the major European capitals.
A U.S. intelligence official said current North Korean
missile technology is ``Scud technology'' with rudimentary
guidance and control mechanisms.
``It will take a lot longer than the year 2000 to get to
that point,'' he said of long-range missile capability.
``Although there is no question they would like to achieve
that.''
But other intelligence officials said China is secretly
helping the North Korean long-range missile project and a
group of up to 200 North Korean missile engineers has
undergone training in China.
As for the range of the Taepo Dong, the CIA report says
only that its two versions will have ranges shorter and
greater than 1,860 miles, respectively.
The accuracy of the missile is so poor that U.S. analysis
see it as only useful for firing weapons of mass
destruction--nuclear, chemical or biological warheads. The
Pentagon says North Korea has covertly developed enough
nuclear fuel for four or five nuclear devices. The CIA says
it has aggressive chemical and biological warfare programs.
____
South Korea
u.s. reportedly within new north missile range
[Report by Pak Chae-pom]
[FBIS Translated Text] The new Taepodong missile No. 2 that
North Korea is
[[Page S237]]
developing is believed to have a maximum range of 10,000 km--
which means that the U.S. mainland would be within its
range--and will be ready for actual deployment around 2000.
According to an ROK intelligence official on 10 September,
the assessment is based on a Russian-source intelligence on
North Korea's ground-to-ground missiles.
The data Russia handed over to the ROK reveal that North
Korea is continuing the research and development of Taepodong
No. 1 and No. 2 at a missile test site in Sanum-tong and that
it recently conducted a missile engine test.
A computer simulated test by the U.S. Defense Intelligence
Agency estimated that the Taepodong No. 2 has a 4,300 to
6,000-km range, but the Russian authorities projected that
when some technical problems are solved, the range could be
expanded to over 9,600 km.
The Russian source analyzed that the safety of the inertial
navigation system, adjustment of the warhead weight, and fuel
injection device are the technologies North Korea needs to
improve.
North Korea's Taepodong No. 2 is reportedly a two-stage
missile with a 16-meter Taepodong No. 1 attached on a 16.2-
meter thruster and a 1,000-kg warhead on the thruster.
An intelligence official said: ``Irrespective of the recent
economic setback, North Korea is speeding up the development
of Taepodong No. 2 and other long-range weapons to block the
support from the neighboring countries in case of an
emergency on the Korean peninsula.''
______
By Mr. BOB SMITH (for himself, Mr. Chafee, and Mr. Lott):
S. 8. A bill to reauthorize and amend the Comprehensive Environmental
Response, Liability, and Compensation Act of 1980, and for other
purposes; to the Committee on Environment and Public Works.
superfund cleanup acceleration act of 1997
Mr. CHAFEE. Mr. President, Senator Smith from New Hampshire and I
have been working on this not only this year, but in past years also. I
think after 7 years, it is time to fix this program. Tens of billions
of dollars have been spent with very modest results, as far as cleanups
go. This bill, which Senator Smith and I have submitted, addresses the
so-called brownfields problem, for example.
What are brownfields? They are contaminated sites, usually within our
cities, which can be cleaned up relatively quickly and inexpensively
and can be returned to productive industrial commercial use, thereby
generating jobs and revenue.
In this legislation, we deal with who will have to pay. Obviously,
this is where the intense legal arguments have occurred, where you need
to hire a hall because there are so many lawyers involved.
We eliminate the unfairness of joint and several liability at most
sites, and we replace it with proportional allocations where each
polluter pays its fair share.
We eliminate from liability anyone who legally sent waste to a
municipal landfill.
We eliminate small businesses and persons whose share was less than 1
percent and persons who sent less than 200 pounds or 110 gallons.
In deciding how clean the cleanup ought to be, we take into
consideration, what is the future use of the site going to be? Is it
going to be for a children's playground, or is it going to be for a
parking lot that is paved? Obviously, it makes a difference as to how
clean the site should be cleaned up.
Mr. President, this bill is not written in concrete. Senator Abraham,
for example, is deeply concerned that we do not include here within our
legislation tax incentives for brownfields cleanup in empowerment zones
and in enterprise communities. Senator Abraham, who is deeply concerned
about our inner cities and the jobs that will flow from it if these
sites within the inner cities are cleaned up, believes there should be
some tax incentives provided. We have not done that because of a cost
problem, but we have assured Senator Abraham we will work with him to
try to come up with the result that he seeks. I want to commend Senator
Abraham for the work that he has done on this and the intense concern
he has shown throughout the process of formulating this legislation.
Mr. President, now I would like to turn it over to Senator Smith who
has labored so hard in this vineyard, not only this year but last year.
I do not think anybody in this Senate knows more about this legislation
or has worked harder on it than Senator Smith from New Hampshire.
Mr. BOB SMITH addressed the Chair.
The PRESIDING OFFICER. The Senator from New Hampshire is recognized.
Mr. BOB SMITH. Thank you, Mr. President. I thank my distinguished
colleague and chairman of the Environment and Public Works Committee
for his kind remarks. He, too, has been deeply involved in this issue.
We have spent a lot of hours on this.
I am just very excited about the fact that this is in the top 10
legislative initiatives that the majority leader and the Republican
Party have, and I welcome the opportunity to make a few remarks here.
It is a tribute to Senator Lott and to Senator Chafee that they have
made this a priority. It is the right thing to do, Mr. President,
because I share with the American people the belief that our children
ought to be able to drink clean water and breathe clean air and live in
safe homes so they do not have to worry about environmental pollution,
most specifically not having to live next to the stigma of a so-called
Superfund site that never gets cleaned up.
We have some very good environmental laws on the books in this
country--the Clean Air Act, the Safe Drinking Water Act, and others--
but there are a few that do not fit that category, that have failed.
Superfund is one of those laws. It is up to this committee and to the
Senate, I think, to take the leadership here and to try to make those
corrections.
To achieve meaningful reform--and I mean reform--we have to cut
transaction costs. That is goal No. 1. The second goal is to reduce the
time necessary to complete cleanup at these sites. The third goal is to
inject some common sense into our cleanup program to reach sensible
levels that protect our children and our environment.
The bill we introduce today will accomplish each and every one of
those goals. It improves the serious problem of brownfields, which our
colleague, Senator Chafee, has already mentioned. Senator Abraham of
Michigan is very much involved in this issue. We commend his leadership
and look forward to working with him on the brownfields portion of this
bill.
But we provide $60 million in new funding each year for States and
localities for grants and loan programs to spur the cleanup and the
redevelopment of these sites.
I welcome the initiative on the part of our colleagues on the other
side of our aisle on brownfields. It enhances the role of States by
allowing them to take responsibility for conducting Superfund cleanups
and increases citizen participation. It reinjects common sense back
into the cleanup process by taking the future use of the site into
consideration when cleanup remedies are elected.
It promotes the use of innovative technology to ensure that the
citizenry can have the benefit of the most up-to-date scientific
approaches to cleanup and eliminates potential liability for tens of
thousands of average citizens, small businesses, schools, churches, the
Boy Scouts, Girl Scouts, and others who have been caught up in this
Superfund liability net. It caps the liability of municipalities and
other entities that owned or operated municipal sites and did so
legally.
Finally, it reduces litigation by creating a fair-share allocation
process at multiparty sites where the trust fund will pick up the cost
of the defunct or insolvent parties in wastes that cannot be attributed
to a viable party.
Thus, Mr. President, what this bill does, in a nutshell, is it stops
paying lawyers and starts paying for cleanup. I think that is a
tremendous improvement over current law. So the discussions over the
past 2 years, which Senator Chafee has mentioned, which I have been
involved in with the administration, Administrator Browner, and my
colleagues on the other side of the aisle, have been productive. We
have learned a lot. We are ready to roll up our sleeves again and get
it done. We were very close to an agreement last time. We look forward
to working with our colleagues and with the President of the United
States to get it done in a bipartisan way.
As the Chairman of the Senate Subcommittee on Superfund, Waste
Control and Risk Assessment, I am here today, along with Senator
Chafee, the Chairman of the Environment Committee, to introduce some
commonsense
[[Page S238]]
legislation to put the Superfund law back on track toward achieving its
original goal of protecting our Nation's children from environmental
pollutants in the quickest practical manner possible.
I would like to thank the Republican Leader, Senator Lott and all of
the members of the Republican Conference who have co-sponsored our
legislation--The Superfund Cleanup Acceleration Act--for recognizing
the importance of improving the Superfund program. By making this one
of the ``top 10'' Senate priorities for the 105th Congress, I believe
we have demonstrated our strong commitment toward protecting our
environment, improving environmental laws, and preserving the health of
our Nation's children.
Before I describe our legislation, I would like to take a few minutes
to talk about Superfund and how we find ourselves here today.
The history of Superfund is long and somewhat checkered. The program
was created in 1980 to clean up abandoned hazardous waste sites, and at
that time, it was anticipated that this program would clean up around
400 sites nationwide. Begun with the best of intentions, the program
has not performed the way it should. So far Superfund has cost our
Nation more than $40 billion dollars, yet, only 125 out of a total of
around 1,300 sites have been removed from the Superfund list over the
last 16 years. Superfund has become the classic example of a Federal
program awash in redtape, litigation and gold plated spending.
The problems in Superfund are many. First, the Superfund liability
scheme allows the Environmental Protection Agency to hold any
potentially responsible party liable for the entire cleanup cost at a
site--irrespective of the type of contamination, when the material was
disposed of, or whether the activity was legal. This is simply unfair
and, not surprisingly, results in enormous litigation costs with 30 to
70 percent of every dollar spent on lawyers.
Because of the fear of Superfund liability, many of our Nation's
inner cities contain abandoned or underutilized properties--dubbed
Brownfields--which lay fallow because private developers and
municipalities don't want to be dragged into Superfund's litigation
quagmire. In order to spur economic redevelopment, we must place a
priority on fixing this problem.
Superfund sets out unrealistic cleanup goals which frequently ignore
common sense in considering the future use of the site. All too often,
sites that are destined to become industrial parks or parking lots are
required to be cleaned to standards compatible with school playgrounds.
We need to reinject common sense back into this program so that we
protect real people from real risks, not hypothetical people from
hypothetical risks. We must also recognize that the States, which are
much better able to understand the concerns and needs of residents who
live near these sites, should have the lead in determining how these
sites are going to be cleaned up, and when.
Because I am also the Chairman of the Armed Services Subcommittee on
Strategic Forces, which funds the Department of Energy cleanup program,
I am keenly aware that the real costs of Superfund are not limited
solely to the private sector. Not only are there more than 155 Federal
facilities on the Superfund list, but these sites represent the most
complex and costly cleanup challenges in the program. The inability to
create commonsense cleanup plans results in billions of dollars of
additional liability to Federal agencies--costs that ultimately come
from the taxes we all pay. In a period of budget deficits and declining
resources, we need to do a better job of making cleanup decisions.
While Superfund was created with the hope of quickly dealing with the
serious problem of toxic waste sites endangering our citizens, it is
evident that Superfund has proceeded at a snail's pace and that most
sites are still not cleaned up. I commend Carol Browner, the
Administrator of the EPA, for recognizing this fact, and for
instituting a series of administrative reforms in the last year--
reforms that reflect changes that I, and other Republicans have
advocated for many years.
Although I applaud the administration for making these changes, I
believe it is too soon to declare victory in the effort to make
Superfund work better. While improvements have been made in some areas,
it is far too early to determine their true or lasting effect. I
certainly do not agree with some in the Administration that feel that
the administrative reforms have corrected all the problems of
Superfund. The fact remains that even with the administrative reforms,
too much money is spent on litigation, sites aren't being cleaned up
fast enough, and children are being needlessly exposed to toxic
contaminants.
Rather than reform Superfund on a piecemeal basis, as some may
suggest, it is clear that comprehensive legislation is necessary to
correct Superfund's deeper problems. The bill we have introduced will
address those problems in a top-to-bottom fashion so that we can clean
up all of these waste sites as quickly as possible.
To achieve meaningful Superfund reform, it is necessary to meet three
goals. The first is to cut the transaction costs of the program. That
means cutting out the lawyers and ensuring that every dollar meant for
cleanup goes to cleanup. The second goal is to reduce the time
necessary to complete cleanup at these sites. Currently, it takes more
than 12 years to clean up a site. We can do better than that. The last
goal is to inject common sense into our cleanup program to reach
sensible levels that protect our children and protect the environment.
The bill we are introducing today will accomplish each of these
goals.
Our legislation improves the serious problem of brownfields by
providing $60 million in new funding each year to States and localities
for grant and loan programs to spur the cleanup and redevelopment of
these sites;
It enhances the roll of States by allowing them to take primary
responsibility for conducting Superfund cleanups.
It increases citizen participation by setting up Citizen Response
Organizations to improve coordination between citizens, government and
responsible parties.
It reinjects common sense back into the cleanup process by taking the
future use of the site into consideration when cleanup remedies are
selected.
It promotes the use of innovative technologies to insure that the
citizenry can have the benefit of the most-up-to-date scientific
approaches to cleanup.
It eliminates potential liability from tens of thousands of average
citizens, small businesses, schools, churches, and others who are
currently caught in the Superfund liability net.
It caps the liability of municipalities and other entities that owned
or operated municipal waste sites.
And finally, it reduces litigation by creating a fair-share
allocation process at multi-party sites where the Trust fund will pick
up the cost of defunct or insolvent parties, or wastes that cannot be
attributed to a viable party.
Among the significant issues we have focused on is the issue of
brownfields. As many of my colleagues may know, there are a variety of
bills that have been introduced by Senator Abraham, Senator Lieberman,
Senator Lautenberg and others which attempt to take a crack at this
issue.
Many of the brownfield bills that have been introduced rely on tax
credits or tax deductions to promote the cleanup of these sites. While
the issue of tax credits does not fall within the jurisdiction of the
Environment Committee, as this bill progresses toward passage, it is my
intention to work with my colleagues to find common ground and provide
additional support for these areas.
Liability has always been one of the most contentious issues in the
Superfund reform debate. My position has been clear from the beginning.
I believe that retroactive liability is fundamentally unfair and if I
had my way, I would repeal it. Some of my colleagues see things
differently. It is important to understand that the bill we are
introducing represents many hours of intense discussions and all the
parties involved will recognize some of their positions. The bill does
not go as far as I would like. Equally, it asks that the other side to
take a step forward as well. We each must take this step to improve a
system which is not helping our citizens the way it should.
Over the last 2 years, my staff and that of Senator Chafee have been
engaged in bi-partisian discussions with
[[Page S239]]
Democrats and the Clinton administration. These discussions were long
and sometimes pointed, but the participants in these negotiations
understood that the Superfund program has flaws which need to be
corrected.
While there is general agreement that cleanups should occur faster,
and that there are too many lawyers in the system, there are many ideas
about how to correct these problems. The discussions over the past 2
years have been productive and on many issues we are close to
agreement. We look forward to working with our colleagues and the with
the President to craft a bipartisan solution to the problems of
Superfund.
The bill we introduce today incorporates many good ideas from our
bipartisan negotiations. It represents a significant step away from
where we started last Congress, and I believe it deserves, and will
receive, bipartisan support.
Much has been said about the Republican and Democratic positions on
the environment. I urge my colleagues to move beyond the rhetoric and
the posturing of the last election and examine the real situation. The
bill we are introducing today will speed cleanups, take lawyers out of
the system, inject common sense back into the process, and protect
children much faster from toxic exposure than under current law. This
should not merely be a top-10 priority on the Republican agenda, but it
should be a top ten item on our shared agenda. I urge all of my
colleagues to join with us to reform this program this year.
I thank you, Mr. President. I thank my colleague.
Mr. CHAFEE addressed the Chair.
The PRESIDING OFFICER. The Senator from Rhode Island.
Mr. CHAFEE. Mr. President, I want to stress the comments that Senator
Smith made about a bipartisan approach.
As I mentioned before, this is legislation that we worked on. We
believe it is very, very good legislation. We are not saying it is the
end all and be all. Obviously, in our committee we will have hearings
on it. All the members of the committee will have a chance to have
their views expressed.
We look forward to contributions from the members of the Democratic
Party who are part of our Environment Committee. It is our hope that
when we come forward with a bill to present on this floor finally for
consideration by the body, that it will come out unanimously from our
committee, will have the support of the administration, and will
fulfill the desires of all of us that this legislation become law.
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. 8
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Superfund
Cleanup Acceleration Act of 1997.''
(b) Table of Contents.--The table of contents of this Act
is as follows:
Sec. 1. Short title; table of contents.
TITLE I--BROWNFIELDS REVITALIZATION
Sec. 101. Brownfields.
Sec. 102. Assistance for qualifying State voluntary response programs.
Sec. 103. Enforcement in cases of a release subject to a State plan.
Sec. 104. Contiguous properties.
Sec. 105. Prospective purchasers and windfall liens.
Sec. 106. Safe harbor innocent landholders.
TITLE II--STATE ROLE
Sec. 201. Delegation to the States of authorities with respect to
national priorities list facilities.
TITLE III--COMMUNITY PARTICIPATION
Sec. 301. Community response organizations; technical assistance
grants; improvement of public participation in the
superfund decisionmaking process.
TITLE IV--SELECTION OF REMEDIAL ACTIONS
Sec. 401. Definitions.
Sec. 402. Selection and implementation of remedial actions.
Sec. 403. Remedy selection methodology.
Sec. 404. Remedy selection procedures.
Sec. 405. Completion of physical construction and delisting.
Sec. 406. Transition rules for facilities currently involved in remedy
selection.
Sec. 407. National Priorities List.
TITLE V--LIABILITY
Sec. 501. Liability exceptions and limitations.
Sec. 502. Contribution from the Fund.
Sec. 503. Allocation of liability for certain facilities.
Sec. 504. Liability of response action contractors.
Sec. 505. Release of evidence.
Sec. 506. Contribution protection.
Sec. 507. Treatment of religious, charitable, scientific, and
educational organizations as owners or operators.
Sec. 508. Common carriers.
Sec. 509. Limitation on liability of railroad owners.
Sec. 510. Liability of recyclers.
TITLE VI--FEDERAL FACILITIES
Sec. 601. Transfer of authorities.
Sec. 602. Limitation on criminal liability of Federal officers,
employees, and agents.
Sec. 603. Innovative technologies for remedial action at Federal
facilities.
TITLE VII--NATURAL RESOURCE DAMAGES
Sec. 701. Restoration of natural resources.
Sec. 702. Assessment of injury to and restoration of natural resources.
Sec. 703. Consistency between response actions and resource restoration
standards.
Sec. 704. Contribution.
TITLE VIII--MISCELLANEOUS
Sec. 801. Result-oriented cleanups.
Sec. 802. National Priorities List.
Sec. 803. Obligations from the fund for response actions.
TITLE IX--FUNDING
Subtitle A--General Provisions
Sec. 901. Authorization of appropriations from the Fund.
Sec. 902. Orphan share funding.
Sec. 903. Department of Health and Human Services.
Sec. 904. Limitations on research, development, and demonstration
programs.
Sec. 905. Authorization of appropriations from general revenues.
Sec. 906. Additional limitations.
Sec. 907. Reimbursement of potentially responsible parties.
TITLE I--BROWNFIELDS REVITALIZATION
SEC. 101. BROWNFIELDS.
(a) In General.--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:
``SEC. 127. BROWNFIELDS.
``(a) Definitions.--In this section:
``(1) Administrative cost.--The term `administrative cost'
does not include the cost of--
``(A) investigation and identification of the extent of
contamination;
``(B) design and performance of a response action; or
``(C) monitoring of natural resources.
``(2) Brownfield facility.--The term `brownfield facility'
means--
``(A) a parcel of land that contains an abandoned, idled,
or underused commercial or industrial facility, the expansion
or redevelopment of which is complicated by the presence or
potential presence of a hazardous substance; but
``(B) does not include--
``(i) a facility that is the subject of a removal or
planned removal under title I;
``(ii) a facility that is listed or has been proposed for
listing on the National Priorities List or that has been
delisted under section 134(d)(5);
``(iii) a 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 at which an
application for a grant concerning the facility is submitted
under this section;
``(iv) a land disposal unit with respect to which--
``(I) a closure notification under subtitle C of the Solid
Waste Disposal Act (42 U.S.C. 6921 et seq.) has been
submitted; and
``(II) closure requirements have been specified in a
closure plan or permit;
``(v) a facility with respect to which an administrative
order on consent or judicial consent decree requiring cleanup
has been entered into by the United States under this Act,
the Solid Waste Disposal Act (42 U.S.C. 6901 et seq.), the
Federal Water Pollution Control Act (33 U.S.C. 1251 et seq.),
the Toxic Substances Control Act (15 U.S.C. 2601 et seq.), or
the Safe Drinking Water Act (42 U.S.C. 300f et seq.);
``(vi) a facility that is owned or operated by a
department, agency, or instrumentality of the United States;
or
``(vii) a portion of a facility, for which portion,
assistance for response activity has been obtained under
subtitle I of the Solid Waste Disposal Act (42 U.S.C. 6991 et
seq.) from the Leaking Underground Storage Tank Trust Fund
established under section 9508 of the Internal Revenue Code
of 1986.
``(3) Eligible entity.--The term `eligible entity' means--
``(A) a general purpose unit of local government;
``(B) a land clearance authority or other quasi-
governmental entity that operates under the supervision and
control of or as an agent of a general purpose unit of local
government;
``(C) a regional council or group of general purpose units
of local government;
[[Page S240]]
``(D) a redevelopment agency that is chartered or otherwise
sanctioned by a State; and
``(E) an Indian tribe.
``(b) Brownfield Characterization Grant Program.--
``(1) Establishment of program.--The Administrator shall
establish a program to provide grants for the site
characterization and assessment of brownfield facilities.
``(2) Assistance for site characterization and
assessment.--
``(A) In general.--On approval of an application made by an
eligible entity, the Administrator may make grants out of the
Fund to the eligible entity to be used for the site
characterization and assessment of 1 or more brownfield
facilities or to capitalize a revolving loan fund.
``(B) Appropriate inquiry.--A site characterization and
assessment carried out with the use of a grant under
subparagraph (A) shall be performed in accordance with
section 101(35)(B).
``(3) Maximum grant amount.--A grant under subparagraph (A)
shall not exceed, with respect to any individual brownfield
facility covered by the grant, $100,000 for any fiscal year
or $200,000 in total.
``(c) Brownfield Remediation Grant Program.--
``(1) Establishment of program.--The Administrator shall
establish a program to provide grants to be used for
capitalization of revolving loan funds for response actions
(excluding site characterization and assessment) at
brownfield facilities.
``(2) Assistance for site characterization and
assessment.--
``(A) In general.--On approval of an application made by a
State or an eligible entity, the Administrator may make
grants out of the Fund to the State or eligible entity to
capitalize a revolving loan fund to be used for response
actions (excluding site characterization and assessment) at 1
or more brownfield facilities.
``(B) Appropriate inquiry.--A site characterization and
assessment carried out with the use of a grant under
subparagraph (A) shall be performed in accordance with
section 101(35)(B).
``(3) Maximum grant amount.--A grant under subparagraph (A)
shall not exceed, with respect to any individual brownfield
facility covered by the grant, $150,000 for any fiscal year
or $300,000 in total.
``(d) General Provisions.--
``(1) Sunset.--No amount shall be available from the Fund
for purposes of this section after the fifth fiscal year
after the date of enactment of this section.
``(2) Prohibition.--No part of a grant under this section
may be used for payment of penalties, fines, or
administrative costs.
``(3) Audits.--The Inspector General of the Environmental
Protection Agency shall audit an appropriate number of grants
made under subsections (b)(2) and (c)(2) to ensure that funds
are used for the purposes described in this section.
``(4) Agreements.--Each grant made under this section shall
be subject to an agreement that--
``(A) requires the eligible entity to comply with all
applicable State laws (including regulations);
``(B) requires that the eligible entity shall use the grant
exclusively for purposes specified in subsection (b)(2) or
(c)(2);
``(C) in the case of an application by a State under
subsection (c)(2), payment by the State of a matching share
of at least 50 percent of the costs of the response action
for which the grant is made, from other sources of State
funding; and
``(D) contains such other terms and conditions as the
Administrator determines to be necessary to carry out the
purposes of this section.
``(5) Leveraging.--An eligible entity that receives a grant
under paragraph (1) may use the funds for part of a project
at a brownfield facility for which funding is received from
other sources, but the grant shall be used only for the
purposes described in subsection (b)(2) or (c)(2).
``(e) Grant Applications.--
``(1) In general.--Any eligible entity may submit an
application to the Administrator, through a regional office
of the Environmental Protection Agency and in such form as
the Administrator may require, for a grant under this section
for 1 or more brownfield facilities.
``(2) Application requirements.--An application for a grant
under this section shall include--
``(A) an identification of each brownfield facility for
which the grant is sought and a description of the
redevelopment plan for the area or areas in which the
brownfield facilities are located, including a description of
the nature and extent of any known or suspected environmental
contamination within the area;
``(B) an analysis that demonstrates the potential of the
grant to stimulate economic development on completion of the
planned response action, including a projection of the number
of jobs expected to be created at each facility after
remediation and redevelopment and, to the extent feasible, a
description of the type and skill level of the jobs and a
projection of the increases in revenues accruing to Federal,
State, and local governments from the jobs; and
``(C) information relevant to the ranking criteria stated
in paragraph (4).
``(3) Approval.--
``(A) Initial grant.--On or about March 30 and September 30
of the first fiscal year following the date of enactment of
this section, the Administrator shall make grants under this
section to eligible entities that submit applications before
those dates that the Administrator determines have the
highest rankings under ranking criteria established under
paragraph (4).
``(B) Subsequent grants.--Beginning with the second fiscal
year following the date of enactment of this section, the
Administrator shall make an annual evaluation of each
application received during the prior fiscal year and make
grants under this section to eligible entities that submit
applications during the prior year that the Administrator
determines have the highest rankings under the ranking
criteria established under paragraph (4).
``(4) Ranking criteria.--The Administrator shall establish
a system for ranking grant applications that includes the
following criteria:
``(A) The extent to which a grant will stimulate the
availability of other funds for environmental remediation and
subsequent redevelopment of the area in which the brownfield
facilities are located.
``(B) The potential of the development plan for the area in
which the brownfield facilities are located to stimulate
economic development of the area on completion of the
cleanup, such as the following:
``(i) The relative increase in the estimated fair market
value of the area as a result of any necessary response
action.
``(ii) The potential of a grant to create new or expand
existing business and employment opportunities (particularly
full-time employment opportunities) on completion of any
necessary response action.
``(iii) The estimated additional tax revenues expected to
be generated by economic redevelopment in the area in which a
brownfield facility is located.
``(iv) The estimated extent to which a grant would
facilitate the identification of or facilitate a reduction of
health and environmental risks.
``(v) The financial involvement of the State and local
government in any response action planned for a brownfield
facility and the extent to which the response action and the
proposed redevelopment is consistent with any applicable
State or local community economic development plan.
``(vi) The extent to which the site characterization and
assessment or response action and subsequent development of a
brownfield facility involves the active participation and
support of the local community.
``(vii) Such other factors as the Administrator considers
appropriate to carry out the purposes of this section.''.
(b) Funding.--Section 111 of the Comprehensive
Environmental Response, Compensation, and Liability Act of
1980 (42 U.S.C. 9611) is amended by adding at the end the
following:
``(q) Brownfield Characterization Grant Program.--For each
of fiscal years 1998 through 2002, not more than $15,000,000
of the amounts available in the Fund may be used to carry out
section 127(b).
``(r) Brownfield Remediation Grant Program.--For each of
fiscal years 1998 through 2002, not more than $25,000,000 of
the amounts available in the Fund may be used to carry out
section 127(c).''.
SEC. 102. ASSISTANCE FOR QUALIFYING STATE VOLUNTARY RESPONSE
PROGRAMS.
(a) Definition.--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:
``(39) Qualifying state voluntary response program.--The
term `qualifying State voluntary response program' means a
State program that includes the elements described in section
128(b).''.
(b) Qualifying State Voluntary Response Programs.--Title I
of the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980 (42 U.S.C. 9601 et seq.) (as
amended by section 101(a)) is amended by adding at the end
the following:
``SEC. 128. QUALIFYING STATE VOLUNTARY RESPONSE PROGRAMS.
``(a) Assistance to States.--The Administrator shall
provide technical and other assistance to States to establish
and expand qualifying State voluntary response programs that
include the elements listed in subsection (b).
``(b) Elements.--The elements of a qualifying State
voluntary response program are the following:
``(1) Opportunities for technical assistance for voluntary
response actions.
``(2) Adequate opportunities for public participation,
including prior notice and opportunity for comment in
appropriate circumstances, in selecting response actions.
``(3) Streamlined procedures to ensure expeditious
voluntary response actions.
``(4) Oversight and enforcement authorities or other
mechanisms that are adequate to ensure that--
``(A) voluntary response actions will protect human health
and the environment and be conducted in accordance with
applicable Federal and State law; and
``(B) if the person conducting the voluntary response
action fails to complete the necessary response activities,
including operation and maintenance or long-term monitoring
activities, the necessary response activities are completed.
``(5) Mechanisms for approval of a voluntary response
action plan.
[[Page S241]]
``(6) A requirement for certification or similar
documentation from the State to the person conducting the
voluntary response action indicating that the response is
complete.
``(c) Compliance With Act.--A person that conducts a
voluntary response action under this section at a facility
that is listed or proposed for listing on the National
Priorities List shall implement applicable provisions of this
Act or of similar provisions of State law in a manner
comporting with State policy, so long as the remedial action
that is selected protects human health and the environment to
the same extent as would a remedial action selected by the
Administrator under section 121(a).''.
(c) Funding.--Section 111 of the Comprehensive
Environmental Response, Compensation, and Liability Act of
1980 (42 U.S.C. 9611) (as amended by section 101(b)) is
amended by adding at the end the following:
``(s) Qualifying State Voluntary Response Program.--For
each of fiscal years 1998 through 2002, not more than
$25,000,000 of the amounts available in the Fund may be used
for assistance to States to establish and administer
qualifying State voluntary response programs, during the
first 5 full fiscal years following the date of enactment of
this subparagraph, distributed among each of the States that
notifies the Administrator of the State's intent to establish
a qualifying State voluntary response program and each of the
States with a qualifying State voluntary response program.
For each fiscal year there shall be available to each
eligible entity a grant in the amount of at least
$250,000.''.
SEC. 103. ENFORCEMENT IN CASES OF A RELEASE SUBJECT TO A
STATE PLAN.
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:
``SEC. 129. ENFORCEMENT IN CASES OF A RELEASE SUBJECT TO A
STATE PLAN.
``(a) In General.--In the case of a facility at which there
is a release or threatened release of a hazardous substance
subject to a State remedial action plan or with respect to
which the State has provided certification or similar
documentation that response action has been completed under a
State remedial action plan, neither the President nor any
other person may use any authority under this Act to take an
administrative or judicial enforcement action or to bring a
private civil action against any person regarding any matter
that is within the scope of the plan.
``(b) Releases Not Subject to State Plans.--For any
facility at which there is a release or threatened release of
hazardous substances that is not subject to a State remedial
action plan, the President shall provide notice to the State
within 48 hours after issuing an order under section 106(a)
addressing a release or threatened release. Such an order
shall cease to have force or effect on the date that is 90
days after issuance unless the State concurs in the
continuation of the order.
``(c) Cost or Damage Recovery Actions.--Subsection (a) does
not apply to an action brought by a State or Indian tribe for
the recovery of costs or damages under section 107.''.
SEC. 104. CONTIGUOUS PROPERTIES.
(a) In General.--Section 107 of the Comprehensive
Environmental Response, Compensation, and Liability Act of
1980 (42 U.S.C. 9607(a)) is amended by adding at the end the
following:
``(o) Contiguous Properties.--
``(1) Not considered to be an owner or operator.--A person
that owns or operates real property that is contiguous to or
otherwise similarly situated with respect to real property on
which there has been a release or threatened release of a
hazardous substance and that is or may be contaminated by the
release shall not be considered to be an owner or operator of
a vessel or facility under subsection (a) (1) or (2) solely
by reason of the contamination if--
``(A) the person did not cause, contribute, or consent to
the release or threatened release; and
``(B) the person is not liable, and is not affiliated with
any other person that is liable, for any 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.
``(2) Cooperation, assistance, and access.--Notwithstanding
paragraph (1), a person described in paragraph (1) shall
provide full cooperation, assistance, and facility access to
the 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.
``(3) Assurances.--The Administrator may--
``(A) issue an assurance that no enforcement action under
this Act will be initiated against a person described in
paragraph (1); and
``(B) grant a person described in paragraph (1) protection
against a cost recovery or contribution action under section
113(f).''.
(b) Conforming Amendment.--Section 107(a) of the
Comprehensive Environmental Response, Compensation, and
Liability Act of 1980 (42 U.S.C. 9607) is amended by striking
``of this section'' and inserting ``and the exemptions and
limitations stated in this section''.
SEC. 105. PROSPECTIVE PURCHASERS AND WINDFALL LIENS.
(a) Definition.--Section 101 of the Comprehensive
Environmental Response, Compensation, and Liability Act of
1980 (42 U.S.C. 9601) (as amended by section 102(a)) is
amended by adding at the end the following:
``(40) Bona fide prospective purchaser.--The term `bona
fide prospective purchaser' means a person that acquires
ownership of a facility after the date of enactment of this
paragraph, or a tenant of such a person, that establishes
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 the
person acquired the facility.
``(B) Inquiries.--
``(i) In general.--The person made all appropriate
inquiries into the previous ownership and uses of the
facility and the facility's real property in accordance with
generally accepted good commercial and customary standards
and practices.
``(ii) Standards and practices.--The standards and
practices referred to in paragraph (35)(B)(ii) or those
issued or adopted by the Administrator under that paragraph
shall be considered to satisfy the requirements of this
subparagraph.
``(iii) Residential use.--In the case of property for
residential or other similar use purchased by a
nongovernmental or noncommercial entity, a facility
inspection and title search that reveal no basis for further
investigation shall be considered to 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 each hazardous substance found at the facility by
taking reasonable steps to stop any continuing release,
prevent any threatened future release and prevent or limit
human or natural resource exposure to any previously released
hazardous substance.
``(E) Cooperation, assistance, and access.--The person
provides full cooperation, assistance, and facility access to
the 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, and is not
affiliated with any other person that is liable, for any
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.''.
(b) Amendment.--Section 107 of the Comprehensive
Environmental Response, Compensation, and Liability Act of
1980 (42 U.S.C. 9607) (as amended by section 104) is amended
by adding at the end the following:
``(p) Prospective Purchaser and Windfall Lien.--
``(1) Limitation on liability.--Notwithstanding subsection
(a), a bona fide prospective purchaser whose potential
liability for a release or threatened release is based solely
on the purchaser's being considered to be an owner or
operator of a facility shall not be liable as long as the
bona fide prospective purchaser does not impede the
performance of a response action or natural resource
restoration.
``(2) Lien.--If there are unrecovered response costs at a
facility for which an owner of the facility is not liable by
reason of section 101(20)(G)(iii) and each of the conditions
described in paragraph (3) is met, the United States shall
have a lien on the facility, or may obtain from appropriate
responsible party a lien on any other property or other
assurances of payment satisfactory to the Administrator, for
such unrecovered costs.
``(3) 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.--The 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 initiated.
``(C) Sale.--A sale or other disposition of all or a
portion of the facility has occurred.
``(4) Amount.--A lien under paragraph (2)--
``(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 at which costs are first
incurred by the United States with respect to a response
action at the facility;
``(C) shall be subject to the requirements of subsection
(l)(3); and
``(D) shall continue until the earlier of satisfaction of
the lien or recovery of all response costs incurred at the
facility.''.
SEC. 106. SAFE HARBOR INNOCENT LANDHOLDERS.
(a) Amendment.--Section 101(35) of the Comprehensive
Environmental Response, Compensation, and Liability Act of
1980 (42 U.S.C. 9601(35)) is amended by striking subparagraph
(B) and inserting the following:
``(B) Knowledge of inquiry requirement.--
[[Page S242]]
``(i) All appropriate inquiries.--To establish that the
defendant had no reason to know of the matter described in
subparagraph (A)(i), the defendant must show that, at or
prior to the date on which the defendant acquired the
facility, the defendant undertook all appropriate inquiries
into the previous ownership and uses of the facility in
accordance with generally accepted good commercial and
customary standards and practices.
``(ii) Standards and practices.--The Administrator shall by
regulation establish as standards and practices for the
purpose of clause (i)--
``(I) the American Society for Testing and Materials (ASTM)
Standard E1527-94, entitled `Standard Practice for
Environmental Site Assessments: Phase I Environmental Site
Assessment Process'; or
``(II) alternative standards and practices under clause
(iii).
``(iii) Alternative standards and practices.--
``(I) In general.--The Administrator may by regulation
issue alternative standards and practices or designate
standards developed by other organizations than the American
Society for Testing and Materials after conducting a study of
commercial and industrial practices concerning the transfer
of real property in the United States.
``(II) Considerations.--In issuing or designating
alternative standards and practices under subclause (I), the
Administrator shall consider including each of the following:
``(aa) The results of an inquiry by an environmental
professional.
``(bb) Interviews with past and present owners, operators,
and occupants of the facility and the facility's real
property for the purpose of gathering information regarding
the potential for contamination at the facility and the
facility's real property.
``(cc) Reviews 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 the property was first
developed.
``(dd) Searches for recorded environmental cleanup liens,
filed under Federal, State, or local law, against the
facility or the facility's real property.
``(ee) Reviews 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 the facility's real
property.
``(ff) Visual inspections of the facility and facility's
real property and of adjoining properties.
``(gg) Specialized knowledge or experience on the part of
the defendant.
``(hh) The relationship of the purchase price to the value
of the property if the property was uncontaminated.
``(ii) Commonly known or reasonably ascertainable
information about the property.
``(jj) The degree of obviousness of the presence or likely
presence of contamination at the property, and the ability to
detect such contamination by appropriate investigation.
``(iv) 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 facility
inspection and title search that reveal no basis for further
investigation shall be considered to satisfy the requirements
of this subparagraph.''.
(b) Standards and Practices.--
(1) Establishment by regulation.--The Administrator of the
Environmental Protection Agency shall issue the regulation
required by section 101(35)(B)(ii) of the Comprehensive
Environmental Response, Compensation, and Liability Act of
1980 (as added by subsection (a) not later than 1 year after
the date of enactment of this Act.
(2) Interim standards and practices.--Until the
Administrator issues the regulation described in paragraph
(1), in making a determination under section 101(35)(B)(i) of
the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980 (as added by subsection (a)), there
shall be taken into account--
(A) any specialized knowledge or experience on the part of
the defendant;
(B) the relationship of the purchase price to the value of
the property if the property was uncontaminated;
(C) commonly known or reasonably ascertainable information
about the property;
(D) the degree of obviousness of the presence or likely
presence of contamination at the property; and
(E) the ability to detect the contamination by appropriate
investigation.
TITLE II--STATE ROLE
SEC. 201. DELEGATION TO THE STATES OF AUTHORITIES WITH
RESPECT TO NATIONAL PRIORITIES LIST FACILITIES.
(a) In General.--Title I of the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980 (42 U.S.C.
9601 et seq.) (as amended by section 103) is amended by
adding at the end the following:
``SEC. 130. DELEGATION TO THE STATES OF AUTHORITIES WITH
RESPECT TO NATIONAL PRIORITIES LIST FACILITIES.
``(a) Definitions.--In this section:
``(1) Comprehensive delegation state.--The term
`comprehensive delegation State', with respect to a facility,
means a State to which the Administrator has delegated
authority to perform all of the categories of delegable
authority.
``(2) Delegable authority.--The term `delegable authority'
means authority to perform (or ensure performance of) all of
the authorities included in any 1 or more of the categories
of authority:
``(A) Category a.--All authorities necessary to perform
technical investigations, evaluations, and risk analyses,
including--
``(i) a preliminary assessment or facility evaluation under
section 104;
``(ii) facility characterization under section 104;
``(iii) a remedial investigation under section 104;
``(iv) a facility-specific risk evaluation under section
131;
``(v) enforcement authority related to the authorities
described in clauses (i) through (iv); and
``(vi) any other authority identified by the Administrator
under subsection (b).
``(B) Category b.--All authorities necessary to perform
alternatives development and remedy selection, including--
``(i) a feasibility study under section 104; and
``(ii)(I) remedial action selection under section 121
(including issuance of a record of decision); or
``(II) remedial action planning under section 133(b)(5);
``(iii) enforcement authority related to the authorities
described in clauses (i) and (ii); and
``(iv) any other authority identified by the Administrator
under subsection (b).
``(C) Category c.--All authorities necessary to perform
remedial design, including--
``(i) remedial design under section 121;
``(ii) enforcement authority related to the authority
described in clause (i); and
``(iii) any other authority identified by the Administrator
under subsection (b).
``(D) Category d.--All authorities necessary to perform
remedial action and operation and maintenance, including--
``(i) a removal under section 104;
``(ii) a remedial action under section 104 or section 10
(a) or (b);
``(iii) operation and maintenance under section 104(c);
``(iv) enforcement authority related to the authorities
described in clauses (i) through (iii); and
``(v) any other authority identified by the Administrator
under subsection (b).
``(E) Category e.--All authorities necessary to perform
information collection and allocation of liability,
including--
``(i) information collection activity under section 104(e);
``(ii) allocation of liability under section 136;
``(iii) a search for potentially responsible parties under
section 104 or 107;
``(iv) settlement under section 122;
``(v) enforcement authority related to the authorities
described in clauses (i) through (iv); and
``(vi) any other authority identified by the Administrator
under subsection (b).
``(3) Delegated state.--The term `delegated State' means a
State to which delegable authority has been delegated under
subsection (c), except as may be provided in a delegation
agreement in the case of a limited delegation of authority
under subsection (c)(5).
``(4) Delegated authority.--The term `delegated authority'
means a delegable authority that has been delegated to a
delegated State under this section.
``(5) Delegated facility.--The term `delegated facility'
means a non-federal listed facility with respect to which a
delegable authority has been delegated to a State under this
section.
``(6) Enforcement authority.--The term ``enforcement
authority'' means all authorities necessary to recover
response costs, require potentially responsible parties to
perform response actions, and otherwise compel implementation
of a response action, including--
``(A) issuance of an order under section 106(a);
``(B) a response action cost recovery under section 107;
``(C) imposition of a civil penalty or award under section
109 (a)(1)(D) or (b)(4);
``(D) settlement under section 122; and
``(E) any other authority identified by the Administrator
under subsection (b).
``(7) Noncomprehensive delegation state.--The term
`noncomprehensive delegation State', with respect to a
facility, means a State to which the Administrator has
delegated authority to perform fewer than all of the
categories of delegable authority.
``(8) Nondelegable authority.--The term `nondelegable
authority' means authority to--
``(A) make grants to community response organizations under
section 117; and
``(B) conduct research and development activities under any
provision of this Act.
``(9) Non-federal listed facility.--The term `non-federal
listed facility' means a facility that--
``(A) is not owned or operated by a department, agency, or
instrumentality of the United States in any branch of the
Government; and
``(B) is listed on the National Priorities List.
``(b) Identification of Delegable Authorities.--
``(1) In general.--The President shall by regulation
identify all of the authorities of
[[Page S243]]
the Administrator that shall be included in a delegation of
any category of delegable authority described in subsection
(a)(2).
``(2) Limitation.--The Administrator shall not identify a
nondelegable authority for inclusion in a delegation of any
category of delegable authority.
``(c) Delegation of Authority.--
``(1) In general.--Pursuant to an approved State
application, the Administrator shall delegate authority to
perform 1 or more delegable authorities with respect to 1 or
more non-Federal listed facilities in the State.
``(2) Application.--An application under paragraph (1)
shall--
``(A) identify each non-Federal listed facility for which
delegation is requested;
``(B) identify each delegable authority that is requested
to be delegated for each non-Federal listed facility for
which delegation is requested; and
``(C) certify that the State, supported by such
documentation as the State, in consultation with the
Administrator, considers to be appropriate--
``(i) has statutory and regulatory authority (including
appropriate enforcement authority) to perform the requested
delegable authorities in a manner that is protective of human
health and the environment;
``(ii) has resources in place to adequately administer and
enforce the authorities;
``(iii) has procedures to ensure public notice and, as
appropriate, opportunity for comment on remedial action
plans, consistent with sections 117 and 133; and
``(iv) agrees to exercise its enforcement authorities to
require that persons that are potentially liable under
section 107(a), to the extent practicable, perform and pay
for the response actions set forth in each category described
in subsection (a)(2).
``(3) Approval of application.--
``(A) In general.--Not later than 60 days after receiving
an application under paragraph (2) by a State that is
authorized to administer and enforce the corrective action
requirements of a hazardous waste program under section 3006
of the Solid Waste Disposal Act (42 U.S.C. 6926), and not
later than 120 days after receiving an application from a
State that is not authorized to administer and enforce the
corrective action requirements of a hazardous waste program
under section 3006 of the Solid Waste Disposal Act (42 U.S.C.
6926), unless the State agrees to a greater length of time
for the Administrator to make a determination, the
Administrator shall--
``(i) issue a notice of approval of the application
(including approval or disapproval regarding any or all of
the facilities with respect to which a delegation of
authority is requested or with respect to any or all of the
authorities that are requested to be delegated); or
``(ii) if the Administrator determines that the State does
not have adequate legal authority, financial and personnel
resources, organization, or expertise to administer and
enforce any of the requested delegable authority, issue a
notice of disapproval, including an explanation of the basis
for the determination.
``(B) Failure to act.--If the Administrator does not issue
a notice of approval or notice of disapproval of all or any
portion of an application within the applicable time period
under subparagraph (A), the application shall be deemed to
have been granted.
``(C) Resubmission of application.--
``(i) In general.--If the Administrator disapproves an
application under paragraph (1), the State may resubmit the
application at any time after receiving the notice of
disapproval.
``(ii) Failure to act.--If the Administrator does not issue
a notice of approval or notice of disapproval of a
resubmitted application within the applicable time period
under subparagraph (A), the resubmitted application shall be
deemed to have been granted.
``(D) No additional terms or conditions.--The Administrator
shall not impose any term or condition on the approval of an
application that meets the requirements stated in paragraph
(2) (except that any technical deficiencies in the
application be corrected).
``(E) Judicial review.--The State (but no other person)
shall be entitled to judicial review under section 113(b) of
a disapproval of a resubmitted application.
``(4) Delegation agreement.--On approval of a delegation of
authority under this section, the Administrator and the
delegated State shall enter into a delegation agreement that
identifies each category of delegable authority that is
delegated with respect to each delegated facility.
``(5) Limited delegation.--
``(A) In general.--In the case of a State that does not
meet the requirements of paragraph (2)(C) the Administrator
may delegate to the State limited authority to perform,
ensure the performance of, or supervise or otherwise
participate in the performance of 1 or more delegable
authorities, as appropriate in view of the extent to which
the State has the required legal authority, financial and
personnel resources, organization, and expertise.
``(B) Special provisions.--In the case of a limited
delegation of authority to a State under subparagraph (A),
the Administrator shall specify the extent to which the State
shall be considered to be a delegated State for the purposes
of this Act.
``(d) Performance of Delegated Authorities.--
``(1) In general.--A delegated State shall have sole
authority (except as provided in paragraph (6)(B), subsection
(e)(4), and subsection (g)) to perform a delegated authority
with respect to a delegated facility.
``(2) Agreements for performance of delegated
authorities.--
``(A) In general.--Except as provided in subparagraph (B),
a delegated State may enter into an agreement with a
political subdivision of the State, an interstate body
comprised of that State and another delegated State or
States, or a combination of such subdivisions or interstate
bodies, providing for the performance of any category of
delegated authority with respect to a delegated facility in
the State if the parties to the agreement agree in the
agreement to undertake response actions that are consistent
with this Act.
``(B) No agreement with potentially responsible party.--A
delegated State shall not enter into an agreement under
subparagraph (A) with a political subdivision or interstate
body that is, or includes as a component an entity that is, a
potentially responsible party with respect to a delegated
facility covered by the agreement.
``(C) Continuing responsibility.--A delegated State that
enters into an agreement under subparagraph (A)--
``(i) shall exercise supervision over and approve the
activities of the parties to the agreement; and
``(ii) shall remain responsible for ensuring performance of
the delegated authority.
``(3) Compliance with act.--
``(A) Noncomprehensive delegation states.--A
noncomprehensive delegation State shall implement each
applicable provision of this Act (including regulations and
guidance issued by the Administrator) so as to perform each
delegated authority with respect to a delegated facility in
the same manner as would the Administrator with respect to a
facility that is not a delegated facility.
``(B) Comprehensive delegation states.--
``(i) In general.--A comprehensive delegation State shall
implement applicable provisions of this Act or of similar
provisions of State law in a manner comporting with State
policy, so long as the remedial action that is selected
protects human health and the environment to the same extent
as would a remedial action selected by the Administrator
under section 121.
``(ii) Costlier remedial action.--
``(I) In general.--A delegated State may select a remedial
action for a delegated facility that has a greater response
cost (including operation and maintenance costs) than the
response cost for a remedial action that would be selected by
the Administrator under section 121, if the State pays for
the difference in cost.
``(II) No cost recovery.--If a delegated State selects a
more costly remedial action under subclause (I), the State
shall not be entitled to seek cost recovery under this Act or
any other Federal or State law from any other person for the
difference in cost.
``(4) Judicial review.--An order that is issued under
section 106 by a delegated State with respect to a delegated
facility shall be reviewable only in United States district
court under section 113.
``(5) Delisting of national priorities list facilities.--
``(A) Delisting.--After notice and an opportunity for
public comment, a delegated State may remove from the
National Priorities List all or part of a delegated
facility--
``(i) if the State makes a finding that no further action
is needed to be taken at the facility (or part of the
facility) under any applicable law to protect human health
and the environment consistent with section 121(a) (1) and
(2);
``(ii) with the concurrence of the potentially responsible
parties, if the State has an enforceable agreement to perform
all required remedial action and operation and maintenance
for the facility or if the cleanup will proceed at the
facility under section 3004 (u) or (v) of the Solid Waste
Disposal Act (42 U.S.C. 6924 (u), (v)); or
``(iii) if the State is a comprehensive delegation State
with respect to the facility.
``(B) Effect of delisting.--A delisting under subparagraph
(A) (ii) or (iii) shall not affect--
``(i) the authority or responsibility of the State to
complete remedial action and operation and maintenance;
``(ii) the eligibility of the State for funding under this
Act;
``(iii) notwithstanding the limitation on section
104(c)(1), the authority of the Administrator to make
expenditures from the Fund relating to the facility; or
``(iv) the enforceability of any consent order or decree
relating to the facility.
``(C) No relisting.--
``(i) In general.--Except as provided in clause (ii), the
Administrator shall not relist on the National Priorities
List a facility or part of a facility that has been removed
from the National Priorities List under subparagraph (A).
``(ii) Cleanup not completed.--The Administrator may relist
a facility or part of a facility that has been removed from
the National Priorities List under subparagraph (A) if
cleanup is not completed in accordance with the enforceable
agreement under subparagraph (A)(ii).
``(6) Cost recovery.--
``(A) Recovery by a delegated state.--Of the amount of any
response costs recovered from a responsible party by a
delegated State for a delegated facility under section 107--
``(i) 25 percent of the amount of any Federal response cost
recovered with respect to
[[Page S244]]
a facility, plus an amount equal to the amount of response
costs incurred by the State with respect to the facility, may
be retained by the State; and
``(ii) the remainder shall be deposited in the Hazardous
Substances Superfund established under subchapter A of
chapter 98 of the Internal Revenue Code of 1986.
``(B) Recovery by the administrator.--
``(i) In general.--The Administrator may take action under
section 107 to recover response costs from a responsible
party for a delegated facility if--
``(I) the delegated State notifies the Administrator in
writing that the delegated State does not intend to pursue
action for recovery of response costs under section 107
against the responsible party; or
``(II) the delegated State fails to take action to recover
response costs within a reasonable time in light of
applicable statutes of limitation.
``(ii) Notice.--If the Administrator proposes to commence
an action for recovery of response costs under section 107,
the Administrator shall give the State written notice and
allow the State at least 90 days after receipt of the notice
to commence the action.
``(iii) No further action.--If the Administrator takes
action against a potentially responsible party under section
107 relating to a release from a delegated facility, the
delegated State may not take any other action for recovery of
response costs relating to that release under this Act or any
other Federal or State law.
``(e) Federal Responsibilities and Authorities.--
``(1) Review use of funds.--
``(A) In general.--The Administrator shall review the
certification submitted by the Governor under subsection
(f)(8) not later than 120 days after the date of its
submission.
``(B) Finding of use of funds inconsistent with this act.--
If the Administrator finds that funds were used in a manner
that is inconsistent with this Act, the Administrator shall
notify the Governor in writing not later than 120 days after
receiving the Governor's certification.
``(C) Explanation.--not later than 30 days after receiving
a notice under subparagraph (B), the Governor shall--
``(i) explain why the Administrator's finding is in error;
or
``(ii) explain to the Administrator's satisfaction how any
misapplication or misuse of funds will be corrected.
``(D) Failure to explain.--If the Governor fails to make an
explanation under subparagraph (C) to the Administrator's
satisfaction, the Administrator may request reimbursement of
such amount of funds as the Administrator finds was
misapplied or misused.
``(E) Repayment of funds.--If the Administrator fails to
obtain reimbursement from the State within a reasonable
period of time, the Administrator may, after 30 days' notice
to the State, bring a civil action in United States district
court to recover from the delegated State any funds that were
advanced for a purpose or were used for a purpose or in a
manner that is inconsistent with this Act.
``(2) Withdrawal of delegation of authority.--
``(A) Delegated states.--If at any time the Administrator
finds that contrary to a certification made under subsection
(c)(2), a delegated State--
``(i) lacks the required financial and personnel resources,
organization, or expertise to administer and enforce the
requested delegated authorities;
``(ii) does not have adequate legal authority to request
and accept delegation; or
``(iii) is failing to materially carry out the State's
delegated authorities,
the Administrator may withdraw a delegation of authority with
respect to a delegated facility after providing notice and
opportunity to correct deficiencies under subparagraph (D).
``(B) States with limited delegations of authority.--If the
Administrator finds that a State to which a limited
delegation of authority was made under subsection (c)(5) has
materially breached the delegation agreement, the
Administrator may withdraw the delegation after providing
notice and opportunity to correct deficiencies under
subparagraph (D).
``(C) Notice and opportunity to correct.--If the
Administrator proposes to withdraw a delegation of authority
for any or all delegated facilities, the Administrator shall
give the State written notice and allow the State at least 90
days after the date of receipt of the notice to correct the
deficiencies cited in the notice.
``(D) Failure to correct.--If the Administrator finds that
the deficiencies have not been corrected within the time
specified in a notice under subparagraph (C), the
Administrator may withdraw delegation of authority after
providing public notice and opportunity for comment.
``(E) Judicial review.--A decision of the Administrator to
withdraw a delegation of authority shall be subject to
judicial review under section 113(b).
``(3) Rule of construction.--Nothing in this section shall
be construed to affect the authority of the Administrator
under this Act to--
``(A) take a response action at a facility listed on the
National Priorities List in a State to which a delegation of
authority has not been made under this section or at a
facility not included in a delegation of authority; or
``(B) perform a delegable authority with respect to a
facility that is not included among the authorities delegated
to a State with respect to the facility.
``(4) Retained authority.--
``(A) Notice.--Before performing an emergency removal
action under section 104 at a delegated facility, the
Administrator shall notify the delegated States of the
Administrator's intention to perform the removal.
``(B) State action.--If, after receiving a notice under
subparagraph (A), the delegated State notifies the
Administrator within 48 hours that the State intends to take
action to perform an emergency removal at the delegated
facility, the Administrator shall not perform the emergency
removal action unless the Administrator determines that the
delegated State has failed to act within a reasonable period
of time to perform the emergency removal.
``(C) Immediate and significant danger.--If the
Administrator finds that an emergency at a delegated facility
poses an immediate and significant danger to human health or
the environment, the Administrator shall not be required to
provide notice under subparagraph (A).
``(5) Prohibited actions.--Except as provided in
subsections (d)(6)(B), (e)(4), and (g) or except with the
concurrence of the delegated State, the President, the
Administrator, and the Attorney General shall not take any
action under section 104, 106, 107, 109, 121, or 122 in
performance of a delegable authority that has been delegated
to a State with respect to a delegated facility.
``(f) Funding.--
``(1) In general.--The Administrator shall provide grants
to or enter into contracts or cooperative agreements with
delegated States to carry out this section.
``(2) No claim against fund.--Notwithstanding any other
law, funds to be granted under this subsection shall not
constitute a claim against the Fund or the United States.
``(3) Insufficient funds available.--If funds are
unavailable in any fiscal year to satisfy all commitments
made under this section by the Administrator, the
Administrator shall have sole authority and discretion to
establish priorities and to delay payments until funds are
available.
``(4) Determination of costs on a facility-specific
basis.--The Administrator shall--
``(A) determine--
``(i) the delegable authorities the costs of performing
which it is practicable to determine on a facility-specific
basis; and
``(ii) the delegable authorities the costs of performing
which it is not practicable to determine on a facility-
specific basis; and
``(B) publish a list describing the delegable authorities
in each category.
``(5) Facility-specific grants.--The costs described in
paragraph (4)(A)(ii) shall be funded as such costs arise with
respect to each delegated facility.
``(6) Nonfacility-specific grants.--
``(A) In general.--The costs described in paragraph
(4)(A)(ii) shall be funded through nonfacility-specific
grants under this paragraph.
``(B) Formula.--The Administrator shall establish a formula
under which funds available for nonfacility-specific grants
shall be allocated among the delegated States, taking into
consideration--
``(i) the cost of administering the delegated authority;
``(ii) the number of sites for which the State has been
delegated authority;
``(iii) the types of activities for which the State has
been delegated authority;
``(iv) the number of facilities within the State that are
listed on the National Priorities List or are delegated
facilities under section 130(d)(5);
``(v) the number of other high priority facilities within
the State;
``(vi) the need for the development of the State program;
``(vii) the need for additional personnel;
``(viii) the amount of resources available through State
programs for the cleanup of contaminated sites; and
``(ix) the benefit to human health and the environment of
providing the funding.
``(7) Permitted use of grant funds.--A delegated State may
use grant funds, in accordance with this Act and the National
Contingency Plan, to take any action or perform any duty
necessary to implement the authority delegated to the State
under this section.
``(8) Cost share.--
``(A) Assurance.--A delegated State to which a grant is
made under this subsection shall provide an assurance that
the State will pay any amount required under section
104(c)(3).
``(B) Prohibited use of grant funds.--A delegated State to
which a grant is made under this subsection may not use grant
funds to pay any amount required under section 104(c)(3).
``(9) Certification of use of funds.--
``(A) In general.--Not later than 1 year after the date on
which a delegated State receives funds under this subsection,
and annually thereafter, the Governor of the State shall
submit to the Administrator--
``(i) a certification that the State has used the funds in
accordance with the requirements of this Act and the National
Contingency Plan; and
``(ii) information describing the manner in which the State
used the funds.
[[Page S245]]
``(B) Regulations.--Not later than 1 year after the date of
enactment of this section, the Administrator shall issue a
regulation describing with particularity the information that
a State shall be required to provide under subparagraph
(A)(ii).
``(g) Cooperative Agreements.--Nothing in this section
shall affect the authority of the Administrator under section
104(d)(1) to enter into a cooperative agreement with a State,
a political subdivision of a State, or an Indian tribe to
carry out actions under section 104.''.
(b) State Cost Share.--Section 104(c) of the Comprehensive
Environmental Response, Compensation, and Liability Act of
1980 (42 U.S.C. 9604(c)) is amended--
(1) by striking ``(c)(1) Unless'' and inserting the
following:
``(c) Miscellaneous Limitations and Requirements.--
``(1) Continuance of obligations from fund.--Unless'';
(2) by striking ``(2) The President'' and inserting the
following:
``(2) Consultation.--The President''; and
(3) by striking paragraph (3) and inserting the following:
``(3) State cost share.--
``(A) In general.--The Administrator shall not provide any
remedial action under this section unless the State in which
the release occurs first enters into a contract or
cooperative agreement with the Administrator providing
assurances deemed adequate by the Administrator that the
State will pay, in cash or through in-kind contributions, a
specified percentage of the costs of the remedial action and
operation and maintenance costs.
``(B) Activities with respect to which state cost share is
required.--No State cost share shall be required except for
remedial actions under section 104.
``(C) Specified percentage.--
``(i) In general.--The specified percentage of costs that a
State shall be required to share shall be the lower of 10
percent or the percentage determined under clause (ii).
``(ii) Maximum in accordance with law prior to 1996
amendments.--
``(I) On petition by a State, the Director of the Office of
Management and Budget (referred to in this clause as the
`Director'), after providing public notice and opportunity
for comment, shall establish a cost share percentage, which
shall be uniform for all facilities in the State, at the
percentage rate at which the total amount of anticipated
payments by the State under the cost share for all facilities
in the State for which a cost share is required most closely
approximates the total amount of estimated cost share
payments by the State for facilities that would have been
required under cost share requirements that were applicable
prior to the date of enactment of this subparagraph, adjusted
to reflect the extent to which the State's ability to recover
costs under this Act were reduced by reason of enactment of
amendments to this Act by the Superfund Cleanup Acceleration
Act of 1997.
``(II) The Director may adjust a State's cost share under
this clause not more frequently than every 3 years.
``(D) Indian tribes.--In the case of remedial action to be
taken on land or water held by an Indian Tribe, held by the
United States in trust for Indians, held by a member of an
Indian Tribe (if the land or water is subject to a trust
restriction on alienation), or otherwise within the borders
of an Indian reservation, the requirements of this paragraph
shall not apply.''.
(c) Uses of Fund.--Section 111(a) of the Comprehensive
Environmental Response, Compensation, and Liability Act of
1980 (42 U.S.C. 9611(a)) is amended by inserting after
paragraph (6) the following:
``(7) Grants to delegated states.--Making a grant to a
delegated State under section 130(f).''.
(d) Relationship to Other Laws.--
(1) In general.--Section 114(b) of the Comprehensive
Environmental Response, Compensation, and Liability Act of
1980 (42 U.S.C. 9614(b)) is amended by striking ``removal''
each place it appears and inserting ``response''.
(2) Conforming amendment.--Section 101(37)(B) of the
Comprehensive Environmental Response, Compensation, and
Liability Act of 1980 (42 U.S.C. 9601(37)(B)) is amended by
striking ``section 114(c)'' and inserting ``section 114(b)''.
TITLE III--COMMUNITY PARTICIPATION
SEC. 301. COMMUNITY RESPONSE ORGANIZATIONS; TECHNICAL
ASSISTANCE GRANTS; IMPROVEMENT OF PUBLIC
PARTICIPATION IN THE SUPERFUND DECISIONMAKING
PROCESS.
(a) Amendment.--Section 117 of the Comprehensive
Environmental Response, Compensation, and Liability Act of
1980 (42 U.S.C. 9617) is amended by striking subsection (e)
and inserting the following:
``(e) Community Response Organizations.--
``(1) Establishment.--The Administrator shall create a
community response organization for a facility that is listed
or proposed for listing on the National Priorities List--
``(A) if the Administrator determines that a representative
public forum will be helpful in promoting direct, regular,
and meaningful consultation among persons interested in
remedial action at the facility; or
``(B) at the request of--
``(i) 50 individuals residing in, or at least 20 percent of
the population of, the area in which the facility is located;
``(ii) a representative group of the potentially
responsible parties; or
``(iii) any local governmental entity with jurisdiction
over the facility.
``(2) Responsibilities.--A community response organization
shall--
``(A) solicit the views of the local community on various
issues affecting the development and implementation of
remedial actions at the facility;
``(B) serve as a conduit of information to and from the
community to appropriate Federal, State, and local agencies
and potentially responsible parties;
``(C) serve as a representative of the local community
during the remedial action planning and implementation
process; and
``(D) provide reasonable notice of and opportunities to
participate in the meetings and other activities of the
community response organization.
``(3) Access to documents.--The Administrator shall provide
a community response organization access to documents in
possession of the Federal Government regarding response
actions at the facility that do not relate to liability and
are not protected from disclosure as confidential business
information.
``(4) Community response organization input.--
``(A) Consultation.--The Administrator (or if the remedial
action plan is being prepared or implemented by a party other
than the Administrator, the other party) shall--
``(i) consult with the community response organization in
developing and implementing the remedial action plan; and
``(ii) keep the community response organization informed of
progress in the development and implementation of the
remedial action plan.
``(B) Timely submission of comments.--The community
response organization shall provide its comments,
information, and recommendations in a timely manner to the
Administrator (and other party).
``(C) Consensus.--The community response organization shall
attempt to achieve consensus among its members before
providing comments and recommendations to the Administrator
(and other party), but if consensus cannot be reached, the
community response organization shall report or allow
presentation of divergent views.
``(5) Technical assistance grants.--
``(A) Preferred recipient.--If a community response
organization exists for a facility, the community response
organization shall be the preferred recipient of a technical
assistance grant under subsection (f).
``(B) Prior award.--If a technical assistance grant
concerning a facility has been awarded prior to establishment
of a community response organization--
``(i) the recipient of the grant shall coordinate its
activities and share information and technical expertise with
the community response organization; and
``(ii) 1 person representing the grant recipient shall
serve on the community response organization.
``(6) Membership.--
``(A) Number.--The Administrator shall select not less than
15 nor more than 20 persons to serve on a community response
organization.
``(B) Notice.--Before selecting members of the community
response organization, the Administrator shall provide a
notice of intent to establish a community response
organization to persons who reside in the local community.
``(C) Represented groups.--The Administrator shall, to the
extent practicable, appoint members to the community response
organization from each of the following groups of persons:
``(i) Persons who reside or own residential property near
the facility;
``(ii) Persons who, although they may not reside or own
property near the facility, may be adversely affected by a
release from the facility.
``(iii) Persons who are members of the local public health
or medical community and are practicing in the community.
``(iv) Representatives of Indian tribes or Indian
communities that reside or own property near the facility or
that may be adversely affected by a release from the
facility.
``(v) Local representatives of citizen, environmental, or
public interest groups with members residing in the
community.
``(vi) Representatives of local governments, such as city
or county governments, or both, and any other governmental
unit that regulates land use or land use planning in the
vicinity of the facility.
``(vii) Members of the local business community.
``(D) Proportion.--Local residents shall comprise not less
than 60 percent of the membership of a community response
organization.
``(E) Pay.--Members of a community response organization
shall serve without pay.
``(7) Participation by government representatives.--
Representatives of the Administrator, the Administrator of
the Agency for Toxic Substances and Disease Registry, other
Federal agencies, and the State, as appropriate, shall
participate in community response organization meetings to
provide information and technical expertise, but shall not be
members of the community response organization.
``(8) Administrative support.--The Administrator, to the
extent practicable, shall provide administrative services and
meeting
[[Page S246]]
facilities for community response organizations.
``(9) FACA.--The Federal Advisory Committee Act (5 U.S.C.
App.) shall not apply to a community response organization.
``(f) Technical Assistance Grants.--
``(1) Definitions.--In this subsection:
``(A) Affected citizen group.--The term `affected citizen
group' means a group of 2 or more individuals who may be
affected by the release or threatened release of a hazardous
substance, pollutant, or contaminant at any facility on the
State Registry or the National Priorities List.
``(B) Technical assistance grant.--The term `technical
assistance grant' means a grant made under paragraph (2).
``(2) Authority.--
``(A) In general.--In accordance with a regulation issued
by the Administrator, the Administrator may make grants
available to affected citizen groups.
``(B) Availability of application process.--To ensure that
the application process for a technical assistance grant is
available to all affected citizen groups, the Administrator
shall periodically review the process and, based on the
review, implement appropriate changes to improve
availability.
``(3) Special rules.--
``(A) No matching contribution.--No matching contribution
shall be required for a technical assistance grant.
``(B) Availability in advance.--The Administrator shall
make all or a portion (but not less than $5,000 or 10 percent
of the grant amount, whichever is greater) of the grant
amount available to a grant recipient in advance of the total
expenditures to be covered by the grant.
``(4) Limit per facility.--
``(A) 1 grant per facility.--Not more than 1 technical
assistance grant may be made with respect to a single
facility, but the grant may be renewed to facilitate public
participation at all stages of response action.
``(B) Duration.--The Administrator shall set a limit by
regulation on the number of years for which a technical
assistance grant may be made available based on the duration,
type, and extent of response action at a facility.
``(5) Availability for facilities not yet listed.--Subject
to paragraph (6), 1 or more technical assistance grants shall
be made available to affected citizen groups in communities
containing facilities on the State Registry as of the date on
which the grant is awarded.
``(6) Funding limit.--
``(A) Percentage of total appropriations.--Not more than 2
percent of the funds made available to carry out this Act for
a fiscal year may be used to make technical assistance
grants.
``(B) Allocation between listed and unlisted facilities.--
Not more than the portion of funds equal to \1/8\ of the
total amount of funds used to make technical assistance
grants for a fiscal year may be used for technical assistance
grants with respect to facilities not listed on the National
Priorities List.
``(7) Funding amount.--
``(A) In general.--Except as provided in subparagraph (B),
the amount of a technical assistance grant may not exceed
$50,000 for a single grant recipient.
``(B) Increase.--The Administrator may increase the amount
of a technical assistance grant, or renew a previous
technical assistance grant, up to a total grant amount not
exceeding $100,000, to reflect the complexity of the response
action, the nature and extent of contamination at the
facility, the level of facility activity, projected total
needs as requested by the grant recipient, the size and
diversity of the affected population, and the ability of the
grant recipient to identify and raise funds from other non-
Federal sources.
``(8) Use of technical assistance grants.--
``(A) Permitted use.--A technical assistance grant may be
used to obtain technical assistance in interpreting
information with regard to--
``(i) the nature of the hazardous substances located at a
facility;
``(ii) the work plan;
``(iii) the facility evaluation;
``(iv) a proposed remedial action plan, a remedial action
plan, and a final remedial design for a facility;
``(v) response actions carried out at the facility; and
``(vi) operation and maintenance activities at the
facility.
``(B) Prohibited use.--A technical assistance grant may not
be used for the purpose of collecting field sampling data.
``(9) Grant guidelines.--
``(A) In general.--Not later than 90 days after the date of
enactment of this paragraph, the Administrator shall develop
and publish guidelines concerning the management of technical
assistance grants by grant recipients.
``(B) Hiring of experts.--A recipient of a technical
assistance grant that hires technical experts and other
experts shall act in accordance with the guidelines under
subparagraph (A).
``(g) Improvement of Public Participation in the Superfund
Decisionmaking Process.--
``(1) In general.--
``(A) Meetings and notice.--In order to provide an
opportunity for meaningful public participation in every
significant phase of response activities under this Act, the
Administrator shall provide the opportunity for, and publish
notice of, public meetings before or during performance of--
``(i) a facility evaluation, as appropriate;
``(ii) announcement of a proposed remedial action plan; and
``(iii) completion of a final remedial design.
``(B) Information.--A public meeting under subparagraph (A)
shall be designed to obtain information from the community,
and disseminate information to the community, with respect to
a facility concerning the Administrator's facility activities
and pending decisions.
``(2) Participants and subject.--The Administrator shall
provide reasonable notice of an opportunity for public
participation in meetings in which--
``(A) the participants include Federal officials (or State
officials, if the State is conducting response actions under
a delegated or authorized program or through facility
referral) with authority to make significant decisions
affecting a response action, and other persons (unless all of
such other persons are coregulators that are not potentially
responsible parties or are government contractors); and
``(B) the subject of the meeting involves discussions
directly affecting--
``(i) a legally enforceable work plan document, or any
significant amendment to the document, for a removal,
facility evaluation, proposed remedial action plan, final
remedial design, or remedial action for a facility on the
National Priorities List; or
``(ii) the final record of information on which the
Administrator will base a hazard ranking system score for a
facility.
``(3) Limitation.--Nothing in this subsection shall be
construed--
``(A) to provide for public participation in or otherwise
affect any negotiation, meeting, or other discussion that
concerns only the potential liability or settlement of
potential liability of any person, whether prior to or
following the commencement of litigation or administrative
enforcement action;
``(B) to provide for public participation in or otherwise
affect any negotiation, meeting, or other discussion that is
attended only by representatives of the United States (or of
a department, agency, or instrumentality of the United
States) with attorneys representing the United States (or of
a department, agency, or instrumentality of the United
States); or
``(C) to waive, compromise, or affect any privilege that
may be applicable to a communication related to an activity
described in subparagraph (A) or (B).
``(4) Evaluation.--
``(A) In general.--To the extent practicable, before and
during the facility evaluation, the Administrator shall
solicit and evaluate concerns, interests, and information
from the community.
``(B) Procedure.--An evaluation under subparagraph (A)
shall include, as appropriate--
``(i) face-to-face community surveys to identify the
location of private drinking water wells, historic and
current or potential use of water, and other environmental
resources in the community;
``(ii) a public meeting;
``(iii) written responses to significant concerns; and
``(iv) other appropriate participatory activities.
``(5) Views and preferences.--
``(A) Solicitation.--During the facility evaluation, the
Administrator (or other person performing the facility
evaluation) shall solicit the views and preferences of the
community on the remediation and disposition of hazardous
substances or pollutants or contaminants at the facility.
``(B) Consideration.--The views and preferences of the
community shall be described in the facility evaluation and
considered in the screening of remedial alternatives for the
facility.
``(6) Alternatives.--Members of the community may propose
remedial action alternatives, and the Administrator shall
consider such alternatives in the same manner as the
Administrator considers alternatives proposed by potentially
responsible parties.
``(7) Information.--
``(A) The community.--The Administrator, with all
significant phases of the response action at the facility.
``(B) Technical staff.--The Administrator shall ensure that
information gathered from the community during community
outreach efforts reaches appropriate technical staff i
``(B) Technical staff.--The Administrator shall ensure that
information gathered from the community during community
outreach efforts reaches appropriate technical staff in a
timely and effective manner.
``(C) Responses.--The Administrator shall ensure that
reasonable written or other appropriate responses will be
made to such information.
``(8) Nonprivileged information.--Throughout all phases of
response action at a facility, the Administrator shall make
all nonprivileged information relating to a facility
available to the public for inspection and copying without
the need to file a formal request, subject to reasonable
service charges as appropriate.
``(9) Presentation.--
``(A) Documents.--
``(i) In general.--The Administrator, in carrying out
responsibilities under this Act, shall ensure that the
presentation of information on risk is complete and
informative.
``(ii) Risk.--To the extent feasible, documents prepared by
the Administrator and made available to the public that
purport to
[[Page S247]]
describe the degree of risk to human health shall be
consistent with the risk communication principles outlined in
section 131(c).
``(B) Comparisons.--The Administrator, in carrying out
responsibilities under this Act, shall provide comparisons of
the level of risk from hazardous substances found at the
facility to comparable levels of risk from those hazardous
substances ordinarily encountered by the general public
through other sources of exposure.
``(10) Requirements.--
``(A) Lengthy removal actions.--Notwithstanding any other
provision of this subsection, in the case of a removal action
taken in accordance with section 104 that is expected to
require more than 180 days to complete, and in any case in
which implementation of a removal action is expected to
obviate or that in fact obviates the need to conduct a long-
term remedial action--
``(i) the Administrator shall, to the maximum extent
practicable, allow for public participation consistent with
paragraph (1); and
``(ii) the removal action shall achieve the goals of
protecting human health and the environment in accordance
with section 121(a)(1).
``(B) Other removal actions.--In the case of all other
removal actions, the Administrator may provide the community
with notice of the anticipated removal action and a public
comment period, as appropriate.''.
(b) Issuance of Guidelines.--The Administrator of the
Environmental Protection Agency shall issue guidelines under
section 117(e)(9) of the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as added
by subsection (a), not later than 90 days after the date of
enactment of this Act.
TITLE IV--SELECTION OF REMEDIAL ACTIONS
SEC. 401. DEFINITIONS.
Section 101 of the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (42 U.S.C. 9601) (as
amended by section 105(a)) is amended by adding at the end
the following:
``(41) Actual or planned or reasonably anticipated future
use of the land and water resources.--The term `actual or
planned or reasonably anticipated future use of the land and
water resources' means--
``(A) the actual use of the land, surface water, and ground
water at a facility on the date of submittal of the proposed
remedial action plan; and
``(B)(i) with respect to land--
``(I) the use of land that is authorized by the zoning or
land use decisions formally adopted, at or prior to the time
of the initiation of the facility evaluation, by the local
land use planning authority for a facility and the land
immediately adjacent to the facility; and
``(II) any other reasonably anticipated use that the local
land use authority, in consultation with the community
response organization (if any), determines to have a
substantial probability of occurring based on recent (as of
the time of the determination) development patterns in the
area in which the facility is located and on population
projections for the area; and
``(ii) with respect to water resources, the future use of
the surface water and ground water that is potentially
affected by releases from a facility that is reasonably
anticipated, by the governmental unit that regulates surface
or ground water use or surface or ground water use planning
in the vicinity of the facility, on the date of submission of
the proposed remedial action plan.
``(42) Sustainability.--The term `sustainability'', for the
purpose of section 121(a)(1)(B)(ii), means the ability of an
ecosystem to continue to function within the normal range of
its variability absent the effects of a release of a
hazardous substance.''.
SEC. 402. SELECTION AND IMPLEMENTATION OF REMEDIAL ACTIONS.
Section 121 of the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (42 U.S.C. 9621) is
amended--
(1) by striking the section heading and subsections (a) and
(b) and inserting the following:
``SEC. 121. SELECTION AND IMPLEMENTATION OF REMEDIAL ACTIONS.
``(a) General Rules.--
``(1) Selection of cost-effective remedial action that
protects human health and the environment.--
``(A) In general.--The Administrator shall select a cost-
effective remedial action that achieves the goals of
protecting human health and the environment as stated in
subparagraph (B), and complies with other applicable Federal
and State laws in accordance with subparagraph (C) on the
basis of a facility-specific risk evaluation in accordance
with section 131 and in accordance with the criteria stated
in subparagraph (D) and the requirements of paragraph (2).
``(B) Goals of protecting human health and the
environment.--
``(i) Protection of human health.--A remedial action shall
be considered to protect human health if, considering the
expected exposures associated with the actual or planned or
reasonably anticipated future use of the land and water
resources and on the basis of a facility-specific risk
evaluation in accordance with section 131, the remedial
action achieves a residual risk--
``(I) from exposure to nonthreshold carcinogenic hazardous
substances, pollutants, or contaminants such that cumulative
lifetime additional cancer from exposure to hazardous
substances from releases at the facility range from 10-4
to 10-6 for the affected population; and
``(II) from exposure to threshold carcinogenic and
noncarcinogenic hazardous substances, pollutants, or
contaminants at the facility, that does not exceed a hazard
index of 1.
``(ii) Protection of the environment.--A remedial action
shall be considered to be protective of the environment if
the remedial action--
``(I) protects ecosystems from significant threats to their
sustainability arising from exposure to releases of hazardous
substances at a site; and
``(II) does not cause a greater threat to the
sustainability of ecosystems than a release of a hazardous
substance.
``(iii) Protection of ground water.--A remedial action
shall prevent or eliminate any actual human ingestion of
drinking water containing any hazardous substance from the
release at levels--
``(I) in excess of the maximum contaminant level
established under the Safe Drinking Water Act (42 U.S.C. 300f
et seq.); or
``(II) if no such maximum contaminant level has been
established for the hazardous substance, at levels that meet
the goals for protection of human health under clause (i).
``(C) Compliance with federal and state laws.--
``(i) Substantive requirements.--
``(I) In general.--Subject to clause (iii) and
subparagraphs (A) and (D) and paragraph (2), a remedial
action shall--
``(aa) comply with the substantive requirements of all
promulgated standards, requirements, criteria, and
limitations under each Federal law and each State law
relating to the environment or to the siting of facilities
(including a State law that imposes a more stringent
standard, requirement, criterion, or limitation than Federal
law) that is applicable to the conduct or operation of the
remedial action or to determination of the level of cleanup
for remedial actions; and
``(bb) comply with or attain any other promulgated
standard, requirement, criterion, or limitation under any
State law relating to the environment or siting of
facilities, as determined by the State, after the date of
enactment of the Superfund Cleanup Acceleration Act of 1997,
through a rulemaking procedure that includes public notice,
comment, and written response comment, and opportunity for
judicial review, but only if the State demonstrates that the
standard, requirement, criterion, or limitation is of general
applicability and is consistently applied to remedial actions
under State law.
``(II) Identification of facilities.--Compliance with a
State standard, requirement, criterion, or limitation
described in subclause (I) shall be required at a facility
only if the standard, requirement, criterion, or limitation
has been identified by the State to the Administrator in a
timely manner as being applicable to the facility.
``(III) Published lists.--Each State shall publish a
comprehensive list of the standards, requirements, criteria,
and limitations that the State may apply to remedial actions
under this Act, and shall revise the list periodically, as
requested by the Administrator.
``(IV) Contaminated media.--Compliance with this clause
shall not be required with respect to return, replacement, or
disposal of contaminated media or residuals of contaminated
media into the same media in or very near then-existing areas
of contamination onsite at a facility.
``(ii) Procedural requirements.--Procedural requirements of
Federal and State standards, requirements, criteria, and
limitations (including permitting requirements) shall not
apply to response actions conducted onsite at a facility.
``(iii) Waiver provisions.--
``(I) Determination by the president.--The Administrator
shall evaluate and determine if it is not appropriate for a
remedial action to attain a Federal or State standard,
requirement, criterion, or limitation as required by clause
(i).
``(II) Selection of remedial action that does not comply.--
The Administrator may select a remedial action at a facility
that meets the requirements of subparagraph (B) but does not
comply with or attain a Federal or State standard,
requirement, criterion, or limitation described in clause (i)
if the Administrator makes any of the following findings:
``(aa) Improper identification.--The standard, requirement,
criterion, or limitation, which was improperly identified as
an applicable requirement under clause (i)(I)(aa), fails to
comply with the rulemaking requirements of clause (i)(I)(bb).
``(bb) Part of remedial action.--The selected remedial
action is only part of a total remedial action that will
comply with or attain the applicable requirements of clause
(i) when the total remedial action is completed.
``(cc) Greater risk.--Compliance with or attainment of the
standard, requirement, criterion, or limitation at the
facility will result in greater risk to human health or the
environment than alternative options.
``(dd) Technically impracticability.--Compliance with or
attainment of the standard, requirement, criterion, or
limitation is technically impracticable.
``(ee) Equivalent to standard of performance.--The selected
remedial action will attain a standard of performance that is
equivalent to that required under a standard,
[[Page S248]]
requirement, criterion, or limitation described in clause (i)
through use of another approach.
``(ff) Inconsistent application.--With respect to a State
standard, requirement, criterion, limitation, or level, the
State has not consistently applied (or demonstrated the
intention to apply consistently) the standard, requirement,
criterion, or limitation or level in similar circumstances to
other remedial actions in the State.
``(gg) Balance.--In the case of a remedial action to be
undertaken under section 104 or 136 using amounts from the
Fund, a selection of a remedial action that complies with or
attains a standard, requirement, criterion, or limitation
described in clause (i) will not provide a balance between
the need for protection of public health and welfare and the
environment at the facility, and the need to make amounts
from the Fund available to respond to other facilities that
may present a threat to public health or welfare or the
environment, taking into consideration the relative immediacy
of the threats presented by the various facilities.
``(III) Publication.--The Administrator shall publish any
findings made under subclause (II), including an explanation
and appropriate documentation.
``(D) Remedy selection criteria.--In selecting a remedial
action from among alternatives that achieve the goals stated
in subparagraph (B) pursuant to a facility-specific risk
evaluation in accordance with section 131, the Administrator
shall balance the following factors, ensuring that no single
factor predominates over the others:
``(i) The effectiveness of the remedy in protecting human
health and the environment.
``(ii) The reliability of the remedial action in achieving
the protectiveness standards over the long term.
``(iii) Any short-term risk to the affected community,
those engaged in the remedial action effort, and to the
environment posed by the implementation of the remedial
action.
``(iv) The acceptability of the remedial action to the
affected community.
``(v) The implementability and technical feasibility of the
remedial action from an engineering perspective.
``(vi) The reasonableness of the cost.
``(2) Technical impracticability.--
``(A) Minimization of risk.--If the Administrator, after
reviewing the remedy selection criteria stated in paragraph
(1)(D), finds that achieving the goals stated in paragraph
(1)(B) is technically impracticable, the Administrator shall
evaluate remedial measures that mitigate the risks to human
health and the environment and select a technically
practicable remedial action that will most closely achieve
the goals stated in paragraph (1) through cost-effective
means.
``(B) Basis for finding.--A finding of technical
impracticability may be made on the basis of a determination,
supported by appropriate documentation, that, at the time at
which the finding is made--
``(i) there is no known reliable means of achieving at a
reasonable cost the goals stated in paragraph (1)(B); and
``(ii) it has not been shown that such a means is likely to
be developed within a reasonable period of time.
``(3) Presumptive remedial actions.--A remedial action that
implements a presumptive remedial action issued under section
132 shall be considered to achieve the goals stated in
paragraph (1)(B) and balance adequately the factors stated in
paragraph (1)(D).
``(4) Ground water.--
``(A) In general.--The Administrator or the preparer of the
remedial action plan shall select a cost effective remedial
action for ground water that achieves the goals of protecting
human health and the environment as stated in paragraph
(1)(B) and with the requirements of this paragraph, and
complies with other applicable Federal and State laws in
accordance with subparagraph (C) on the basis of a facility-
specific risk evaluation in accordance with section 131 and
in accordance with the criteria stated in subparagraph (D)
and the requirements of paragraph (2). If appropriate, a
remedial action for ground water shall be phased, allowing
collection of sufficient data to evaluate the effect of any
other remedial action taken at the site and to determine the
appropriate scope of the remedial action.
``(B) Considerations for ground water remedial action.--A
decision regarding a remedial action for ground water shall
take into consideration--
``(i) the actual or planned or reasonably anticipated
future use of ground water and the timing of that use; and
``(ii) any attenuation or biodegradation that would occur
if no remedial action were taken.
``(C) Uncontaminated ground water.--A remedial action shall
protect uncontaminated ground water that is suitable for use
as drinking water by humans or livestock if the water is
uncontaminated and suitable for such use at the time of
submission of the proposed remedial action plan. A remedial
action to protect uncontaminated ground water may utilize
natural attenuation (which may include dilution or
dispersion, but in conjunction with biodegradation or other
levels of attenuation necessary to facilitate the remediation
of contaminated ground water) so long as the remedial action
does not interfere with the actual or planned or reasonably
anticipated future use of the uncontaminated ground water.
``(D) Contaminated ground water.--
``(i) In general.--In the case of contaminated ground water
for which the actual or planned or reasonably anticipated
future use of the resource is as drinking water for humans or
livestock, if the Administrator determines that restoration
of some portion of the contaminated ground water to a
condition suitable for the use is technically practicable,
the Administrator shall seek to restore the ground water to a
condition suitable for the use.
``(ii) Determination of restoration practicability.--In
making a determination regarding the technical practicability
of ground water restoration--
``(I) there shall be no presumption of the technical
practicability; and
``(II) the determination of technical practicability shall,
to the extent practicable, be made on the basis of
projections, modeling, or other analysis on a site-specific
basis without a requirement for the construction or
installation and operation of a remedial action.
``(iii) Determination of need for and methods of
restoration.--In making a determination and selecting a
remedial action regarding restoration of contaminated ground
water the Administrator shall take into account--
``(I) the ability to substantially accelerate the
availability of ground water for use as drinking water beyond
the rate achievable by natural attenuation; and
``(II) the nature and timing of the actual or planned or
reasonably anticipated use of such ground water.
``(iv) Restoration technically impracticable.--
``(I) In general.--A remedial action for contaminated
ground water having an actual or planned or reasonably
anticipated future use as a drinking water source for humans
or livestock for which attainment of the levels described in
paragraph (1)(B)(iii) is technically impracticable shall be
selected in accordance with paragraph (1)(D)(2).
``(II) No ingestion.--Selected remedies may rely on point-
of-use treatment or other measures to ensure that there will
be no ingestion of drinking water at levels exceeding the
requirement of paragraph (1)(B)(iii) (I) or (II).
``(III) Inclusion as part of operation and maintenance.--
The operation and maintenance of any treatment device
installed at the point of use shall be included as part of
the operation and maintenance of the remedy.
``(E) Ground water not suitable for use as drinking
water.--Notwithstanding any other evaluation or determination
of the potential suitability of ground water for drinking
water use, ground water that is not suitable for use as
drinking water by humans or livestock because of naturally
occurring conditions, or is so contaminated by the effects of
broad-scale human activity unrelated to a specific facility
or release that restoration of drinking water quality is
technically impracticable or is physically incapable of
yielding a quantity of 150 gallons per day of water to a well
or spring, shall be considered to be not suitable for use as
drinking water.
``(F) Other ground water.--Remedial action for contaminated
ground water (other than ground water having an actual or
planned or reasonably anticipated future use as a drinking
water source for humans or livestock) shall attain levels
appropriate for the then-current or reasonably anticipated
future use of the ground water, or levels appropriate
considering the then-current use of any ground water or
surface water to which the contaminated ground water
discharges.
``(5) Other considerations applicable to remedial
actions.--A remedial action that uses institutional and
engineering controls shall be considered to be on an equal
basis with all other remedial action alternatives.'';
(2) by redesignating subsection (c) as subsection (b);
(3) by striking subsection (d); and
(4) by redesignating subsections (e) and (f) as subsections
(c) and (d), respectively.
SEC. 403. REMEDY SELECTION METHODOLOGY.
Title I of the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (42 U.S.C. 9601 et
seq.) (as amended by section 201(a)) is amended by adding at
the end the following:
``SEC. 131. FACILITY-SPECIFIC RISK EVALUATIONS.
``(a) Uses.--
``(1) In general.--A facility-specific risk evaluation
shall be used to--
``(A) identify the significant components of potential risk
posed by a facility;
``(B) screen out potential contaminants, areas, or exposure
pathways from further study at a facility;
``(C) compare the relative protectiveness of alternative
potential remedies proposed for a facility; and
``(D) demonstrate that the remedial action selected for a
facility is capable of protecting human health and the
environment considering the actual or planned or reasonably
anticipated future use of the land and water resources.
``(2) Compliance with principles.--A facility-specific risk
evaluation shall comply with the principles stated in this
section to ensure that--
``(A) actual or planned or reasonably anticipated future
use of the land and water resources is given appropriate
consideration; and
``(B) all of the components of the evaluation are, to the
maximum extent practicable,
[[Page S249]]
scientifically objective and inclusive of all relevant data.
``(b) Risk Evaluation Principles.--A facility-specific risk
evaluation shall--
``(1) be based on actual information or scientific
estimates of exposure considering the actual or planned or
reasonably anticipated future use of the land and water
resources to the extent that substituting such estimates for
those made using standard assumptions alters the basis for
decisions to be made;
``(2) be comprised of components each of which is, to the
maximum extent practicable, scientifically objective, and
inclusive of all relevant data;
``(3) use chemical and facility-specific data and analysis
(such as bioavailability, exposure, and fate and transport
evaluations) in preference to default assumptions when--
``(A) such data and analysis are likely to vary by
facility; and
``(B) facility-specific risks are to be communicated to the
public or the use of such data and analysis alters the basis
for decisions to be made; and
``(4) use a range and distribution of realistic and
scientifically supportable assumptions when chemical and
facility-specific data are not available, if the use of such
assumptions would communicate more accurately the
consequences of the various decision options.
``(c) Risk Communication Principles.--The document
reporting the results of a facility-specific risk evaluation
shall--
``(1) contain an explanation that clearly communicates the
risks at the facility;
``(2) identify and explain all assumptions used in the
evaluation, any alternative assumptions that, if made, could
materially affect the outcome of the evaluation, the policy
or value judgments used in choosing the assumptions, and
whether empirical data conflict with or validate the
assumptions;
``(3) present--
``(A) a range and distribution of exposure and risk
estimates, including, if numerical estimates are provided,
central estimates of exposure and risk using--
``(i) the most scientifically supportable assumptions or a
weighted combination of multiple assumptions based on
different scenarios; or
``(ii) any other methodology designed to characterize the
most scientifically supportable estimate of risk given the
information that is available at the time of the facility-
specific risk evaluation; and
``(B) a statement of the nature and magnitude of the
scientific and other uncertainties associated with those
estimates;
``(4) state the size of the population potentially at risk
from releases from the facility and the likelihood that
potential exposures will occur based on the actual or planned
or reasonably anticipated future use of the land and water
resources; and
``(5) compare the risks from the facility to other risks
commonly experienced by members of the local community in
their daily lives and similar risks regulated by the Federal
Government.
``(d) Regulations.--Not later than 18 months after the date
of enactment of this section, the Administrator shall issue a
final regulation implementing this section that promotes a
realistic characterization of risk that neither minimizes nor
exaggerates the risks and potential risks posed by a facility
or a proposed remedial action.
``SEC. 132. PRESUMPTIVE REMEDIAL ACTIONS.
``(a) In General.--Not later than 1 year after the date of
enactment of this section, the Administrator shall issue a
final regulation establishing presumptive remedial actions
for commonly encountered types of facilities with reasonably
well understood contamination problems and exposure
potential.
``(b) Practicability and Cost-Effectiveness.--Such
presumptive remedies must have been demonstrated to be
technically practicable and cost-effective methods of
achieving the goals of protecting human health and the
environment stated in section 121(a)(1)(B).
``(c) Variations.--The Administrator may issue various
presumptive remedial actions based on various uses of land
and water resources, various environmental media, and various
types of hazardous substances, pollutants, or contaminants.
``(d) Engineering Controls.--Presumptive remedial actions
are not limited to treatment remedies, but may be based on,
or include, institutional and standard engineering
controls.''.
SEC. 404. REMEDY SELECTION PROCEDURES.
Title I of the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (42 U.S.C. 9601 et
seq.) (as amended by section 403) is amended by adding at the
end the following:
``SEC. 133. REMEDIAL ACTION PLANNING AND IMPLEMENTATION.
``(a) In General.--
``(1) Basic rules.--
``(A) Procedures.--A remedial action with respect to a
facility that is listed or proposed for listing on the
National Priorities List shall be developed and selected in
accordance with the procedures set forth in this section.
``(B) No other procedures or requirements.--The procedures
stated in this section are in lieu of any procedures or
requirements under any other law to conduct remedial
investigations, feasibility studies, record of decisions,
remedial designs, or remedial actions.
``(C) Limited review.--In a case in which the potentially
responsible parties prepare a remedial action plan, only the
work plan, facility evaluation, proposed remedial action
plan, and final remedial design shall be subject to review,
comment, and approval by the Administrator.
``(D) Designation of potentially responsible parties to
prepare work plan, facility evaluation, proposed remedial
action, and remedial design and to implement the remedial
action plan.--In the case of a facility for which the
Administrator is not required to prepare a work plan,
facility evaluation, proposed remedial action, and remedial
design and implement the remedial action plan--
``(i) if a potentially responsible party or group of
potentially responsible parties--
``(I) expresses an intention to prepare a work plan,
facility evaluation, proposed remedial action plan, and
remedial design and to implement the remedial action plan
(not including any such expression of intention that the
Administrator finds is not made in good faith); and
``(II) demonstrates that the potentially responsible party
or group of potentially responsible parties has the financial
resources and the expertise to perform those functions,
the Administrator shall designate the potentially responsible
party or group of potentially responsible parties to perform
those functions; and
``(ii) if more than 1 potentially responsible party or
group of potentially responsible parties--
``(I) expresses an intention to prepare a work plan,
facility evaluation, proposed remedial action plan, and
remedial design and to implement the remedial action plan
(not including any such expression of intention that the
Administrator finds is not made in good faith); and
``(II) demonstrates that the potentially responsible
parties or group of potentially responsible parties has the
financial resources and the expertise to perform those
functions,
the Administrator, based on an assessment of the various
parties' comparative financial resources, technical
expertise, and histories of cooperation with respect to
facilities that are listed on the National Priorities List,
shall designate 1 potentially responsible party or group of
potentially responsible parties to perform those functions.
``(E) Approval required at each step of procedure.--No
action shall be taken with respect to a facility evaluation,
proposed remedial action plan, remedial action plan, or
remedial design, respectively, until a work plan, facility
evaluation, proposed remedial action plan, and remedial
action plan, respectively, have been approved by the
Administrator.
``(F) National contingency plan.--The Administrator shall
conform the National Contingency Plan regulations to reflect
the procedures stated in this section.
``(2) Use of presumptive remedial actions.--
``(A) Proposal to use.--In a case in which a presumptive
remedial action applies, the Administrator (if the
Administrator is conducting the remedial action) or the
preparer of the remedial action plan may, after conducting a
facility evaluation, propose a presumptive remedial action
for the facility, if the Administrator or preparer shows with
appropriate documentation that the facility fits the generic
classification for which a presumptive remedial action has
been issued and performs an engineering evaluation to
demonstrate that the presumptive remedial action can be
applied at the facility.
``(B) Limitation.--The Administrator may not require a
potentially responsible party to implement a presumptive
remedial action.
``(b) Remedial Action Planning Process.--
``(1) In general.--The Administrator or a potentially
responsible party shall prepare and implement a remedial
action plan for a facility.
``(2) Contents.--A remedial action plan shall consist of--
``(A) the results of a facility evaluation, including any
screening analysis performed at the facility;
``(B) a discussion of the potentially viable remedies that
are considered to be reasonable under section 121(a), the
respective capital costs, operation and maintenance costs,
and estimated present worth costs of the remedies, and how
the remedies balance the factors stated in section
121(a)(1)(D);
``(C) a description of the remedial action to be taken;
``(D) a description of the facility-specific risk-based
evaluation under section 131 and a demonstration that the
selected remedial action will satisfy sections 121(a) and
132; and
``(E) a realistic schedule for conducting the remedial
action, taking into consideration facility-specific factors.
``(3) Work plan.--
``(A) In general.--Prior to preparation of a remedial
action plan, the preparer shall develop a work plan,
including a community information and participation plan,
which generally describes how the remedial action plan will
be developed.
``(B) Submission.--A work plan shall be submitted to the
Administrator, the State, the community response
organization, the local library, and any other public
facility designated by the Administrator.
``(C) Publication.--The Administrator or other person that
prepares a work plan shall publish in a newspaper of general
circulation in the area where the facility is located, and
post in conspicuous places in the local community, a notice
announcing that the work plan is available for review at the
local library and that comments concerning the work plan can
be submitted to the preparer
[[Page S250]]
of the work plan, the Administrator, the State, or the local
community response organization.
``(D) Forwarding of comments.--If comments are submitted to
the Administrator, the State, or the community response
organization, the Administrator, State, or community response
organization shall forward the comments to the preparer of
the work plan.
``(E) Notice of disapproval.--If the Administrator does not
approve a work plan, the Administrator shall--
``(i) identify to the preparer of the work plan, with
specificity, any deficiencies in the submission; and
``(ii) require that the preparer submit a revised work plan
within a reasonable period of time, which shall not exceed 90
days except in unusual circumstances, as determined by the
Administrator.
``(4) Facility evaluation.--
``(A) In general.--The Administrator (or the preparer of
the facility evaluation) shall conduct a facility evaluation
at each facility to characterize the risk posed by the
facility by gathering enough information necessary to--
``(i) assess potential remedial alternatives, including
ascertaining, to the degree appropriate, the volume and
nature of the contaminants, their location, potential
exposure pathways and receptors;
``(ii) discern the actual or planned or reasonably
anticipated future use of the land and water resources; and
``(iii) screen out any uncontaminated areas, contaminants,
and potential pathways from further consideration.
``(B) Submission.--A draft facility evaluation shall be
submitted to the Administrator for approval.
``(C) Publication.--Not later than 30 days after
submission, or in a case in which the Administrator is
preparing the remedial action plan, after the completion of
the draft facility evaluation, the Administrator shall
publish in a newspaper of general circulation in the area
where the facility is located, and post in conspicuous places
in the local community, a notice announcing that the draft
facility evaluation is available for review and that comments
concerning the evaluation can be submitted to the
Administrator, the State, and the community response
organization.
``(D) Availability of comments.--If comments are submitted
to the Administrator, the State, or the community response
organization, the Administrator, State, or community response
organization shall make the comments available to the
preparer of the facility evaluation.
``(E) Notice of approval.--If the Administrator approves a
facility evaluation, the Administrator shall--
``(i) notify the community response organization; and
``(ii) publish in a newspaper of general circulation in the
area where the facility is located, and post in conspicuous
places in the local community, a notice of approval.
``(F) Notice of disapproval.--If the Administrator does not
approve a facility evaluation, the Administrator shall--
``(i) identify to the preparer of the facility evaluation,
with specificity, any deficiencies in the submission; and
``(ii) require that the preparer submit a revised facility
evaluation within a reasonable period of time, which shall
not exceed 90 days except in unusual circumstances, as
determined by the Administrator.
``(5) Proposed remedial action plan.--
``(A) Submission.--In a case in which a potentially
responsible party prepares a remedial action plan, the
preparer shall submit the remedial action plan to the
Administrator for approval and provide a copy to the local
library.
``(B) Publication.--After receipt of the proposed remedial
action plan, or in a case in which the Administrator is
preparing the remedial action plan, after the completion of
the remedial action plan, the Administrator shall cause to be
published in a newspaper of general circulation in the area
where the facility is located and posted in other conspicuous
places in the local community a notice announcing that the
proposed remedial action plan is available for review at the
local library and that comments concerning the remedial
action plan can be submitted to the Administrator, the State,
and the community response organization.
``(C) Availability of comments.--If comments are submitted
to a State or the community response organization, the State
or community response organization shall make the comments
available to the preparer of the proposed remedial action
plan.
``(D) Hearing.--The Administrator shall hold a public
hearing at which the proposed remedial action plan shall be
presented and public comment received.
``(E) Remedy review boards.--
``(i) Establishment.--Not later than 60 days after the date
of enactment of this section, the Administrator shall
establish and appoint the members of 1 or more remedy review
boards (referred to in this subparagraph as a ``remedy review
board''), each consisting of independent technical experts
within Federal and State agencies with responsibility for
remediating contaminated facilities.
``(ii) Submission of remedial action plans for review.--
Subject to clause (iii), a proposed remedial action plan
prepared by a potentially responsible party or the
Administrator may be submitted to a remedy review board at
the request of the person responsible for preparing or
implementing the remedial action plan.
``(iii) No review.--The Administrator may preclude
submission of a proposed remedial action plan to a remedy
review board if the Administrator determines that review by a
remedy review board would result in an unreasonably long
delay that would threaten human health or the environment.
``(iv) Recommendations.--Not later than 180 days after
receipt of a request for review (unless the Administrator,
for good cause, grants additional time), a remedy review
board shall provide recommendations to the Administrator
regarding whether the proposed remedial action plan is--
``(I) consistent with the requirements and standards of
section 121(a);
``(II) technically feasible or infeasible from an
engineering perspective; and
``(III) reasonable or unreasonable in cost.
``(v) Review by the administrator.--
``(I) Consideration of comments.--In reviewing a proposed
remedial action plan, a remedy review board shall consider
any comments submitted under subparagraphs (B) and (D) and
shall provide an opportunity for a meeting, if requested,
with the person responsible for preparing or implementing the
remedial action plan.
``(II) Standard of review.--In determining whether to
approve or disapprove a proposed remedial action plan, the
Administrator shall give substantial weight to the
recommendations of the remedy review board.
``(F) Approval.--
``(i) In general.--The Administrator shall approve a
proposed remedial action plan if the plan--
``(I) contains the information described in section 131(b);
and
``(II) satisfies section 121(a).
``(ii) Default.--If the Administrator fails to issue a
notice of disapproval of a proposed remedial action plan in
accordance with subparagraph (G) within 180 days after the
proposed plan is submitted, the plan shall be considered to
be approved and its implementation fully authorized.
``(G) Notice of approval.--If the Administrator approves a
proposed remedial action plan, the Administrator shall--
``(i) notify the community response organization; and
``(ii) publish in a newspaper of general circulation in the
area where the facility is located, and post in conspicuous
places in the local community, a notice of approval.
``(H) Notice of disapproval.--If the Administrator does not
approve a proposed remedial action plan, the Administrator
shall--
``(i) inform the preparer of the proposed remedial action
plan, with specificity, of any deficiencies in the
submission; and
``(ii) request that the preparer submit a revised proposed
remedial action plan within a reasonable time, which shall
not exceed 90 days except in unusual circumstances, as
determined by the Administrator.
``(I) Judicial review.--A recommendation under subparagraph
(E)(iv) and the Administrator's review of such a
recommendation shall be subject to the limitations on
judicial review under section 113(h).
``(6) Implementation of remedial action plan.--A remedial
action plan that has been approved or is considered to be
approved under paragraph (5) shall be implemented in
accordance with the schedule set forth in the remedial action
plan.
``(7) Remedial design.--
``(A) Submission.--A remedial design shall be submitted to
the Administrator, or in a case in which the Administrator is
preparing the remedial action plan, shall be completed by the
Administrator.
``(B) Publication.--After receipt by the Administrator of
(or completion by the Administrator of) the remedial design,
the Administrator shall--
``(i) notify the community response organization; and
``(ii) cause a notice of submission or completion of the
remedial design to be published in a newspaper of general
circulation and posted in conspicuous places in the area
where the facility is located.
``(C) Comment.--The Administrator shall provide an
opportunity to the public to submit written comments on the
remedial design.
``(D) Approval.--Not later than 90 days after the
submission to the Administrator of (or completion by the
Administrator of) the remedial design, the Administrator
shall approve or disapprove the remedial design.
``(E) Notice of approval.--If the Administrator approves a
remedial design, the Administrator shall--
``(i) notify the community response organization; and
``(ii) publish in a newspaper of general circulation in the
area where the facility is located, and post in conspicuous
places in the local community, a notice of approval.
``(F) Notice of disapproval.--If the Administrator
disapproves the remedial design, the Administrator shall--
``(i) identify with specificity any deficiencies in the
submission; and
``(ii) allow the preparer submitting a remedial design a
reasonable time (which shall not exceed 90 days except in
unusual circumstances, as determined by the Administrator) in
which to submit a revised remedial design.
``(c) Enforcement of Remedial Action Plan.--
``(1) Notice of significant deviation.--If the
Administrator determines that the implementation of the
remedial action plan has
[[Page S251]]
deviated significantly from the plan, the Administrator shall
provide the implementing party a notice that requires the
implementing party, within a reasonable period of time
specified by the Administrator, to--
``(A) comply with the terms of the remedial action plan; or
``(B) submit a notice for modifying the plan.
``(2) Failure to comply.--
``(A) Class one administrative penalty.--In issuing a
notice under paragraph (1), the Administrator may impose a
class one administrative penalty consistent with section
109(a).
``(B) Additional enforcement measures.--If the implementing
party fails to either comply with the plan or submit a
proposed modification, the Administrator may pursue all
additional appropriate enforcement measures pursuant to this
Act.
``(d) Modifications to Remedial Action.--
``(1) Definition.--In this subsection, the term `major
modification' means a modification that--
``(A) fundamentally alters the interpretation of site
conditions at the facility;
``(B) fundamentally alters the interpretation of sources of
risk at the facility;
``(C) fundamentally alters the scope of protection to be
achieved by the selected remedial action;
``(D) fundamentally alters the performance of the selected
remedial action; or
``(E) delays the completion of the remedy by more than 180
days.
``(2) Major modifications.--
``(A) In general.--If the Administrator or other
implementing party proposes a major modification to the plan,
the Administrator or other implementing party shall
demonstrate that--
``(i) the major modification constitutes the most cost-
effective remedial alternative that is technologically
feasible and is not unreasonably costly; and
``(ii) that the revised remedy will continue to satisfy
section 121(a).
``(B) Notice and comment.--The Administrator shall provide
the implementing party, the community response organization,
and the local community notice of the proposed major
modification and at least 30 days' opportunity to comment on
any such proposed modification.
``(C) Prompt action.--At the end of the comment period, the
Administrator shall promptly approve or disapprove the
proposed modification and order implementation of the
modification in accordance with any reasonable and relevant
requirements that the Administrator may specify.
``(3) Minor modifications.--Nothing in this section
modifies the discretionary authority of the Administrator to
make a minor modification of a record of decision or remedial
action plan to conform to the best science and engineering,
the requirements of this Act, or changing conditions at a
facility.''.
SEC. 405. COMPLETION OF PHYSICAL CONSTRUCTION AND DELISTING.
Title I of the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (42 U.S.C. 9601 et
seq.) (as amended by section 404) is amended by adding at the
end the following:
``SEC. 134. COMPLETION OF PHYSICAL CONSTRUCTION AND
DELISTING.
``(a) In General.--
``(1) Proposed notice of completion and proposed
delisting.--Not later than 180 days after the completion by
the Administrator of physical construction necessary to
implement a response action at a facility, or not later than
180 days after receipt of a notice of such completion from
the implementing party, the Administrator shall publish a
notice of completion and proposed delisting of the facility
from the National Priorities List in the Federal Register and
in a newspaper of general circulation in the area where the
facility is located.
``(2) Physical construction.--For the purposes of paragraph
(1), physical construction necessary to implement a response
action at a facility shall be considered to be complete
when--
``(A) construction of all systems, structures, devices, and
other components necessary to implement a response action for
the entire facility has been completed in accordance with the
remedial design plan; or
``(B) no construction, or no further construction, is
expected to be undertaken.
``(3) Comments.--The public shall be provided 30 days in
which to submit comments on the notice of completion and
proposed delisting.
``(4) Final notice.--Not later than 60 days after the end
of the comment period, the Administrator shall--
``(A) issue a final notice of completion and delisting or a
notice of withdrawal of the proposed notice until the
implementation of the remedial action is determined to be
complete; and
``(B) publish the notice in the Federal Register and in a
newspaper of general circulation in the area where the
facility is located.
``(5) Failure to act.--If the Administrator fails to
publish a notice of withdrawal within the 60-day period
described in paragraph (4)--
``(A) the remedial action plan shall be deemed to have been
completed; and
``(B) the facility shall be delisted by operation of law.
``(6) Effect of delisting.--The delisting of a facility
shall have no effect on--
``(A) liability allocation requirements or cost-recovery
provisions otherwise provided in this Act;
``(B) any liability of a potentially responsible party or
the obligation of any person to provide continued operation
and maintenance;
``(C) the authority of the Administrator to make
expenditures from the Fund relating to the facility; or
``(D) the enforceability of any consent order or decree
relating to the facility.
``(7) Failure to make timely disapproval.--The issuance of
a final notice of completion and delisting or of a notice of
withdrawal within the time required by subsection (a)(3)
constitutes a nondiscretionary duty within the meaning of
section 310(a)(2).
``(b) Certification.--A final notice of completion and
delisting shall include a certification by the Administrator
that the facility has met all of the requirements of the
remedial action plan (except requirements for continued
operation and maintenance).
``(c) Future Use of a Facility.--
``(1) Facility available for unrestricted use.--If, after
completion of physical construction, a facility is available
for unrestricted use and there is no need for continued
operation and maintenance, the potentially responsible
parties shall have no further liability under any Federal,
State, or local law (including any regulation) for
remediation at the facility, unless the Administrator
determines, based on new and reliable factual information
about the facility, that the facility does not satisfy
section 121(a).
``(2) Facility not available for any use.--If, after
completion of physical construction, a facility is not
available for any use or there are continued operation and
maintenance requirements that preclude use of the facility,
the Administrator shall--
``(A) review the status of the facility every 5 years; and
``(B) require additional remedial action at the facility if
the Administrator determines, after notice and opportunity
for hearing, that the facility does not satisfy section
121(a).
``(3) Facilities available for restricted use.--The
Administrator may determine that a facility or portion of a
facility is available for restricted use while a response
action is under way or after physical construction has been
completed. The Administrator shall make a determination that
uncontaminated portions of the facility are available for
unrestricted use when such use would not interfere with
ongoing operations and maintenance activities or endanger
human health or the environment.
``(d) Operation and Maintenance.--The need to perform
continued operation and maintenance at a facility shall not
delay delisting of the facility or issuance of the
certification if performance of operation and maintenance is
subject to a legally enforceable agreement, order, or decree.
``(e) Change of Use of Facility.--
``(1) Petition.--Any person may petition the Administrator
to change the use of a facility described in subsection (c)
(2) or (3) from that which was the basis of the remedial
action plan.
``(2) Grant.--The Administrator may grant a petition under
paragraph (1) if the petitioner agrees to implement any
additional remedial actions that the Administrator determines
are necessary to continue to satisfy section 121(a),
considering the different use of the facility.
``(3) Responsibility for risk.--When a petition has been
granted under paragraph (2), the person requesting the change
in use of the facility shall be responsible for all risk
associated with altering the facility and all costs of
implementing any necessary additional remedial actions.''.
SEC. 406. TRANSITION RULES FOR FACILITIES CURRENTLY INVOLVED
IN REMEDY SELECTION.
Title I of the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (42 U.S.C. 9601 et
seq.) (as amended by section 405) is amended by adding at the
end the following:
``SEC. 135. TRANSITION RULES FOR FACILITIES INVOLVED IN
REMEDY SELECTION ON DATE OF ENACTMENT.
``(a) No Record of Decision.--
``(1) Option.--In the case of a facility or operable unit
that, as of the date of enactment of this section, is the
subject of a remedial investigation and feasibility study
(whether completed or incomplete), the potentially
responsible parties or the Administrator may elect to follow
the remedial action plan process stated in section 133 rather
than the remedial investigation and feasibility study and
record of decision process under regulations in effect on the
date of enactment of this section that would otherwise apply
if the requesting party notifies the Administrator and other
potentially responsible parties of the election not later
than 90 days after the date of enactment of this section.
``(2) Submission of facility evaluation.--In a case in
which the potentially responsible parties have or the
Administrator has made an election under subsection (a), the
potentially responsible parties shall submit the proposed
facility evaluation within 180 days after the date on which
notice of the election is given.
``(b) Remedy Review Boards.--
``(1) Authority.--A remedy review board established under
section 133(b)(5)(E) (referred to in this subsection as a
`remedy review board') shall have authority to consider a
petition under paragraph (3) or (4) of this subsection.
``(2) General procedure.--
[[Page S252]]
``(A) Completion of review.--The review of a petition
submitted to a remedy review board under this subsection
shall be completed not later than 180 days after the receipt
of the petition unless the Administrator, for good cause,
grants additional time.
``(B) Costs of review.--All reasonable costs incurred by a
remedy review board, the Administrator, or a State in
conducting a review or evaluating a petition for possible
objection shall be borne by the petitioner.
``(C) Decisions.--At the completion of the 180-day review
period, a remedy review board shall issue a written decision
including responses to all comments submitted during the
review process with regard to a petition.
``(D) Opportunity for comment and meetings.--In reviewing a
petition under this subsection, a remedy review board shall
provide an opportunity for all interested parties, including
representatives of the State and local community in which the
facility is located, to comment on the petition and, if
requested, to meet with the remedy review board under this
subsection.
``(E) Review by the administrator.--
``(i) In general.--The Administrator shall have final
review of any decision of a remedy review board under this
subsection.
``(ii) Standard of review.--In conducting a review of a
decision of a remedy review board under this subsection, the
Administrator shall accord substantial weight to the remedy
review board's decision.
``(iii) Rejection of decision.--Any determination to reject
a remedy review board's decision under this subsection must
be approved by the Administrator or the Assistant
Administrator for Solid Waste and Emergency Response.
``(F) Judicial review.--A decision of a remedy review board
under subparagraph (C) and the Administrator's review of such
a decision shall be subject to the limitations on judicial
review under section 113(h).
``(G) Calculations of cost savings.--
``(i) In general.--A determination with respect to relative
cost savings and whether construction has begun shall be
based on operable units or distinct elements or phases of
remediation and not on the entire record of decision.
``(ii) Items not to be considered.--In determining the
amount of cost savings--
``(I) there shall not be taken into account any
administrative, demobilization, remobilization, or additional
investigation costs of the review or modification of the
remedy associated with the alternative remedy; and
``(II) only the estimated cost savings of expenditures
avoided by undertaking the alternative remedy shall be
considered as cost savings.
``(3) Construction not begun.--
``(A) Petition.--In the case of a facility or operable unit
with respect to which a record of decision has been signed
but construction has not yet begun prior to the date of
enactment of this section and which meet the criteria of
subparagraph (B), the implementor of the record of decision
may file a petition with a remedy review board not later than
90 days after the date of enactment of this section to
determine whether an alternate remedy under section 133
should apply to the facility or operable unit.
``(B) Criteria for approval.--Subject to subparagraph (C),
a remedy review board shall approve a petition described in
subparagraph (A) if--
``(i) the alternative remedial action proposed in the
petition satisfies section 121(a);
``(ii)(I) in the case of a record of decision with an
estimated implementation cost of between $5,000,000 and
$10,000,000, the alternative remedial action achieves cost
savings of at least 25 percent of the total costs of the
record of decision; or
``(II) in the case of an record of decision valued at a
total cost greater than $10,000,000, the alternative remedial
action achieves cost savings of $2,500,000 or more;
``(iii) in the case of a record of decision involving
ground water extraction and treatment remedies for substances
other than dense, nonaqueous phase liquids, the alternative
remedial action achieves cost savings of $2,000,000 or more;
or
``(iv) in the case of a record of decision intended
primarily for the remediation of dense, nonaqueous phase
liquids, the alternative remedial action achieves cost
savings of $1,000,000 or more.
``(C) Contents of petition.--For the purposes of facility-
specific risk assessment under section 131, a petition
described in subparagraph (A) shall rely on risk assessment
data that were available prior to issuance of the record of
decision but shall consider the actual or planned or
reasonably anticipated future use of the land and water
resources.
``(D) Incorrect data.--Notwithstanding subparagraph (B) and
(C), a remedy review board may approve a petition if the
petitioner demonstrates that technical data generated
subsequent to the issuance of the record of decision
indicates that the decision was based on faulty or incorrect
information.
``(4) Additional construction.--
``(A) Petition.--In the case of a facility or operable unit
with respect to which a record of decision has been signed
and construction has begun prior to the date of enactment of
this section and which meets the criteria of subparagraph
(B), but for which additional construction or long-term
operation and maintenance activities are anticipated, the
implementor of the record of decision may file a petition
with a remedy review board within 90 days after the date of
enactment of this section to determine whether an alternative
remedial action should apply to the facility or operable
unit.
``(B) Criteria for approval.--Subject to subparagraph (C),
a remedy review board shall approve a petition described in
subparagraph (A) if--
``(i) the alternative remedial action proposed in the
petition satisfies section 121(a); and
``(ii)(I) in the case of a record of decision valued at a
total cost between $5,000,000 and $10,000,000, the
alternative remedial action achieves cost savings of at least
50 percent of the total costs of the record of decision;
``(II) in the case of a record of decision valued at a
total cost greater than $10,000,000, the alternative remedial
action achieves cost savings of $5,000,000 or more; or
``(III) in the case of a record of decision involving
monitoring, operations, and maintenance obligations where
construction is completed, the alternative remedial action
achieves cost savings of $1,000,000 or more.
(C) Incorrect data.--Notwithstanding subparagraph (B), a
remedy review board may approve a petition if the petitioner
demonstrates that technical data generated subsequent to the
issuance of the record of decision indicates that the
decision was based on faulty or incorrect information, and
the alternative remedial action achieves cost savings of at
least $2,000,000.
``(D) Mandatory review.--A remedy review board shall not be
required to entertain more than 1 petition under subparagraph
(B)(ii)(III) or (C) with respect to a remedial action plan.
``(5) Delay.--In determining whether an alternative
remedial action will substantially delay the implementation
of a remedial action of a facility, no consideration shall be
given to the time necessary to review a petition under
paragraph (3) or (4) by a remedy review board or the
Administrator.
``(6) Objection by the governor.----
``(A) Notification.--Not later than 7 days after receipt of
a petition under this subsection, a remedy review board shall
notify the Governor of the State in which the facility is
located and provide the Governor a copy of the petition.
``(B) Objection.--The Governor may object to the petition
or the modification of the remedy, if not later than 90 days
after receiving a notification under subparagraph (A) the
Governor demonstrates to the remedy review board that the
selection of the proposed alternative remedy would cause an
unreasonably long delay that would be likely to result in
significant adverse human health impacts, environmental
risks, disruption of planned future use, or economic
hardship.
``(C) Denial.--On receipt of an objection and demonstration
under subparagraph (C), the remedy review board shall--
``(i) deny the petition; or
``(ii) consider any other action that the Governor may
recommend.
``(7) Savings clause.--Notwithstanding any other provision
of this subsection, in the case of a remedial action plan for
which a final record of decision under section 121 has been
published, if remedial action was not completed pursuant to
the remedial action plan before the date of enactment of this
section, the Administrator or a State exercising authority
under section 130(d) may modify the remedial action plan in
order to conform the plan to the requirements of this Act, as
in effect on the date of enactment of this section.''.
SEC. 407. NATIONAL PRIORITIES LIST.
(a) Amendments.--Section 105 of the Comprehensive
Environmental Response, Compensation, and Liability Act of
1980 (42 U.S.C. 9605) is amended--
(1) in subsection (a)(8) by adding at the end the
following:
``(C) provision that in listing a facility on the National
Priorities List, the Administrator shall not include any
parcel of real property at which no release has actually
occurred, but to which a released hazardous substance,
pollutant, or contaminant has migrated in ground water that
has moved through subsurface strata from another parcel of
real estate at which the release actually occurred, unless--
``(i) the ground water is in use as a public drinking water
supply or was in such use at the time of the release; and
``(ii) the owner or operator of the facility is liable, or
is affiliated with any other person that is liable, for any
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.''; and
(2) by adding at the end the following:
``(h) Listing of Particular Parcels.--
``(1) Definition.--In subsection (a)(8)(C) and paragraph
(2) of this subsection, the term `parcel of real property'
means a parcel, lot, or tract of land that has a separate
legal description from that of any other parcel, lot, or
tract of land the legal description and ownership of which
has been recorded in accordance with the law of the State in
which it is located.
``(2) Statutory construction.--Nothing in subsection
(a)(8)(C) shall be construed to limit the Administrator's
authority under section 104 to obtain access to and undertake
response actions at any parcel of real property to which a
released hazardous substance, pollutant, or contaminant has
migrated in the ground water.''.
[[Page S253]]
(b) Revision of National Priorities List.--The President
shall revise the National Priorities List to conform with the
amendments made by subsection (a) not later that 180 days of
the date of enactment of this Act.
TITLE V--LIABILITY
SEC. 501. LIABILITY EXCEPTIONS AND LIMITATIONS.
(a) Definitions.--Section 101 of the Comprehensive
Environmental Response, Liability, and Compensation Act of
1980 (42 U.S.C. 9601) (as amended by section 401) is amended
by adding at the end of the following:
``(43) Codisposal landfills.--The `term codisposal
landfill' means a landfill that--
``(A) was listed on the National Priorities List as of
January 1, 1997;
``(B) received for disposal municipal solid waste or sewage
sludge; and
``(C) may also have received, before the effective date of
requirements under subtitle C of the Solid Waste Disposal Act
(42 U.S.C. 6921 et seq.), any hazardous waste, if a
substantial portion of the total volume of waste disposed of
at the landfill consisted of municipal solid waste or sewage
sludge that was transported to the landfill from outside the
facility.
``(44) Municipal solid waste.--The term `municipal solid
waste'--
``(A) means waste material generated by--
``(i) a household (such as a single- or multi-family
residence) or a public lodging (such as a hotel or motel); or
``(ii) a commercial, institutional, or industrial source,
to the extent that--
``(I) the waste material is essentially the same as waste
normally generated by a household or public lodging; or
``(II) the waste material is collected and disposed of with
other municipal solid waste or sewage sludge as part of
normal municipal solid waste collection services, and,
regardless of when generated, would be conditionally exempt
small quantity generator waste under the regulation issued
under section 3001(d) of the Solid Waste Disposal Act (42
U.S.C. 6921(d)); and
``(B) includes food and yard waste, paper, clothing,
appliances, consumer product packaging, disposable diapers,
office supplies, cosmetics, glass and metal food containers,
elementary or secondary school science laboratory waste, and
household hazardous waste; but
``(C) does not include combustion ash generated by resource
recovery facilities or municipal incinerators or waste from
manufacturing or processing (including pollution control)
operations that is not essentially the same as waste normally
generated by a household or public lodging.
``(45) Municipality.--The term `municipality' means--
``(A) means a political subdivision of a State (including a
city, county, village, town, township, borough, parish,
school district, sanitation district, water district, or
other public entity performing local governmental functions);
and
``(B) includes a natural person acting in the capacity of
an official, employee, or agent of any entity described in
subparagraph (A) in the performance of a governmental
function.
``(46) Sewage sludge.--The term `sewage sludge' means
solid, semisolid, or liquid residue removed during the
treatment of municipal waste water, domestic sewage, or other
waste water at or by publicly owned treatment works.''.
(b) Exceptions and Limitations.--Section 107 of the
Comprehensive Environmental Response, Compensation, and
Liability Act of 1980 (42 U.S.C. 9607) (as amended by section
306(b)) is amended by adding at the end the following:
``(q) Liability Exemption for Municipal Solid Waste and
Sewage Sludge.--No person (other than the United States or a
department, agency, or instrumentality of the United States)
shall be liable to the United States or to any other person
(including liability for contribution) under this section for
any response costs at a facility listed on the National
Priorities List to the extent that--
``(1) the person is liable solely under subparagraph (C) or
(D) of subsection (a)(1); and
``(2) the arrangement for disposal, treatment, or transport
for disposal or treatment, or the acceptance for transport
for disposal or treatment, involved only municipal solid
waste or sewage sludge.
``(r) De Minimis Contributor Exemption.--
``(1) In general.--In the case of a vessel or facility that
is not owned by the United States and is listed on the
National Priorities List, no person described in subparagraph
(C) or (D) of subsection (a)(1) (other than the United States
or any department, agency, or instrumentality of the United
States) shall be liable to the United States or to any other
person (including liability for contribution) for any
response costs under this section incurred after the date of
enactment of this subsection, if no activity specifically
attributable to the person resulted in--
``(A) the disposal or treatment of more than 1 percent of
the volume of material containing a hazardous substance at
the vessel or facility before January 1, 1997; or
``(B) the disposal or treatment of not more than 200 pounds
or 110 gallons of material containing hazardous substances at
the vessel or facility before January 1, 1997, or such
greater amount as the Administrator may determine by
regulation.
``(2) Exception.--Paragraph (1) shall not apply in a case
in which the Administrator determines that material described
in paragraph (1)(A) or (B) has contributed or may contribute
significantly to the amount of response costs at the
facility.
``(s) Small Business Exemption.--No person (other than the
United States or a department, agency, or instrumentality of
the United States) shall be liable to the United States or to
any person (including liability for contribution) under this
section for any response costs at a facility listed on the
National Priorities List incurred after the date of enactment
of this subsection if the person is a business that, during
the taxable year preceding the date of transmittal of
notification that the business is a potentially responsible
party, had on average fewer than 30 employees or for that
taxable year reported $3,000,000 or less in annual gross
revenues.
``(t) Codisposal Landfill Exemption and Limitations.--
``(1) Exemption.--No person shall be liable to the United
States or to any person (including liability for
contribution) under this section for any response costs at a
facility listed on the National Priorities List incurred
after the date of enactment of this subsection to the extent
that--
``(A) the person is liable under subparagraph (C) or (D) of
subsection (a)(1); and
``(B) the arrangement for disposal, treatment, or transport
for disposal or treatment or the acceptance for disposal or
treatment occurred with respect to a codisposal landfill.
``(2) Limitations.--
``(A) Definitions.--In this paragraph:
``(i) Large municipality.--The term `large municipality'
means a municipality with a population of 100,000 or more
according to the 1990 census.
``(ii) Small municipality.--The term `small municipality'
means a municipality with a population of less than 100,000
according to the 1990 census.
``(B) Aggregate liability of small municipalities.--With
respect to a codisposal landfill listed on the National
Priorities List that is owned or operated only by small
municipalities and that is not subject to the criteria for
solid waste landfills published under subtitle D of the Solid
Waste Disposal Act (42 U.S.C. 6941 et seq.) at part 258 of
title 40, Code of Federal Regulations (or a successor
regulation), the aggregate liability of all small
municipalities for response costs incurred on or after the
date of enactment of this subsection shall be the lesser of--
``(i) 10 percent of the total amount of response costs at
the facility; or
``(ii) the costs of compliance with the requirements of
subtitle D of the Solid Waste Disposal Act (42 U.S.C. 6941 et
seq.) for the facility (as if the facility had continued to
accept municipal solid waste through January 1, 1997);.
``(C) Aggregate liability of large municipalities.--With
respect to a codisposal landfill listed on the National
Priorities List that is owned or operated only by large
municipalities and that is not subject to the criteria for
solid waste landfills published under subtitle D of the Solid
Waste Disposal Act (42 U.S.C. 6941 et seq.) at part 258 of
title 40, Code of Federal Regulations (or a successor
regulation), the aggregate liability of all large
municipalities for response costs incurred on or after the
date of enactment of this subsection shall be the lesser of--
``(i) 20 percent of the proportion of the total amount of
response costs at the facility; or
``(ii) the costs of compliance with the requirements of
subtitle D of the Solid Waste Disposal Act (42 U.S.C. 6941 et
seq.) for the facility (as if the facility had continued to
accept municipal solid waste through January 1, 1997).
``(D) Aggregate persons other than municipalities.--With
respect to a codisposal landfill listed on the National
Priorities List that is owned or operated in whole or in part
by persons other than municipalities and that is not subject
to the criteria for solid waste landfills published under
subtitle D of the Solid Waste Disposal Act (42 U.S.C. 6941 et
seq.) at part 258 of title 40, Code of Federal Regulations
(or a successor regulation), the aggregate liability of all
persons other than municipalities shall be the lesser of--
``(i) 30 percent of the proportion of the total amount of
response costs at the facility; or
``(ii) the costs of compliance with the requirements of
subtitle D of the Solid Waste Disposal Act (42 U.S.C. 6941 et
seq.) for the facility (as if the facility had continued to
accept municipal solid waste through January 1, 1997).
``(E) Aggregate Liability for Municipalities and Non-
Municipalities.--With respect to a codisposal landfill listed
on the National Priorities List that is owned and operated by
a combination of small and large municipalities or persons
other than municipalities and that is subject to the criteria
for solid waste landfills published under subtitle D of the
Solid Waste Disposal Act (42 U.S.C. 6941 et seq.) at part 258
of title 40, Code of Federal Regulations (or a successor
regulation)--
``(i) the allocator shall determine the proportion of the
use of the landfill that was made by small and large
municipalities and persons other than municipalities during
the time the facility was in operation; and
``(ii) shall allocate among the parties an appropriate
percentage of total liability not exceeding the aggregate
liability percentages stated in (B)(ii), (C)(ii), (D)(ii),
respectively.
[[Page S254]]
``(F) Liability at subtitle d facilities.--With respect to
a codisposal landfill listed on the National Priorities List
that is owned and operated by a small municipality, large
municipality, or person other than municipalities, or a
combination of thereof, and that is subject to the criteria
for solid waste landfills published under subtitle D of the
Solid Waste Disposal Act (42 U.S.C. 6941 et seq.) at part 258
of title 40, Code of Federal Regulations (or a successor
regulation), the aggregate liability of such municipalities
and persons shall be no greater than the costs of compliance
with the requirements of subtitle D of the Solid Waste
Disposal Act (42 U.S.C. 6941 et seq.) for the facility.
``(3) Applicability.--This subsection shall not apply to--
``(A) a person that acted in violation of subtitle C of the
Solid Waste Disposal Act (42 U.S.C. Sec. 6921 et seq.);
``(B) a person that owned or operated a codisposal landfill
in violation of the applicable requirements for municipal
solid waste landfill units under subtitle D of the Solid
Waste Disposal Act (42 U.S.C. Sec. 6941 et seq.) after
October 9, 1991;
``(C) a facility that was not operated pursuant to and in
substantial compliance with any other applicable permit,
license, or other approval or authorization relating to
municipal solid waste or sewage sludge disposal issued by an
appropriate State, Indian tribe, or local government
authority;
``(D) a person described in section 136(t); or
``(E) a person that impedes the performance of a response
action.''.
(c) Effective Date and Transition Rules.--The amendments
made by this section--
(1) shall take effect with respect to an action under
section 106, 107, or 113 of the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980 (42 U.S.C.
9606, 9607, and 9613) that becomes final on or after the date
of enactment of this Act; but
(2) shall not apply to an action brought by any person
under section 107 or 113 of that Act (42 U.S.C. 9607 and
9613) for costs or damages incurred by the person before the
date of enactment of this Act.
SEC. 502. CONTRIBUTION FROM THE FUND.
Section 112 of the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (42 U.S.C. 9612) is
amended by adding at the end the following:
``(g) Contribution From the Fund.--
``(1) Completion of obligations.--A person that is subject
to an administrative order issued under section 106 or has
entered into a settlement decree with the United States or a
State as of the date of enactment of this subsection shall
complete the person's obligations under the order or
settlement decree.
``(2) Contribution.--A person described in paragraph (1)
shall receive contribution from the Fund for any portion of
the costs (excluding attorneys' fees) incurred for the
performance of the response action after the date of
enactment of this subsection if the person is not liable for
such costs by reason of a liability exemption or limitation
under this section.
``(3) Application for contribution.--
``(A) In general.--Contribution under this section shall be
made upon receipt by the Administrator of an application
requesting contribution.
``(B) Periodic applications.--Beginning with the 7th month
after the date of enactment of this subsection, 1 application
for each facility shall be submitted every 6 months for all
persons with contribution rights (as determined under
subparagraph (2)).
``(4) Regulations.--Contribution shall be made in
accordance with such regulations as the Administrator shall
issue within 180 days after the date of enactment of this
section.
``(5) Documentation.--The regulations under paragraph (4)
shall, at a minimum, require that an application for
contribution contain such documentation of costs and
expenditures as the Administrator considers necessary to
ensure compliance with this subsection.
``(6) Expedition.--The Administrator shall develop and
implement such procedures as may be necessary to provide
contribution to such persons in an expeditious manner, but in
no case shall a contribution be made later than 1 year after
submission of an application under this subsection.
``(7) Consistency with national contingency plan.--No
contribution shall be made under this subsection unless the
Administrator determines that such costs are consistent with
the National Contingency Plan.''.
SEC. 503. ALLOCATION OF LIABILITY FOR CERTAIN FACILITIES.
Title I of the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (42 U.S.C. 9601 et
seq.), as amended by section 406, is amended by adding at the
end the following:
``SEC. 136. ALLOCATION OF LIABILITY FOR CERTAIN FACILITIES.
``(a) Definitions.--In this section:
``(1) Allocated share.--The term `allocated share' means
the percentage of liability assigned to a potentially
responsible party by the allocator in an allocation report
under subsection (f)(4).
``(2) Allocation party.--The term `allocation party'--
``(A) means a party, named on a list of parties that will
be subject to the allocation process under this section,
issued by an allocator; and
``(B) with respect to a facility described in subparagraph
(4)(C), includes only parties that are, by virtue of section
107(t)(3), not entitled to the exemption under section
107(t)(1) or the limitation under section 107(t)(2).
``(3) Allocator.--The term `allocator' means an allocator
retained to conduct an allocation for a facility.
``(4) Mandatory allocation facility.--The term `mandatory
allocation facility' means--
``(A) a non-federally owned vessel or facility listed on
the National Priorities List with respect to which response
costs are incurred after the date of enactment of this
section and at which there are 2 or more potentially
responsive persons (including 1 or more persons that are
qualified for an exemption under section 107 (q), (r), or
(s)), if at least 1 potentially responsible person is viable
and not entitled to an exemption under section 107 (q), (r),
or (s);
``(B) a federally owned vessel or facility listed on the
National Priorities List with respect to which response costs
are incurred after the date of enactment of this section, and
with respect to which 1 or more potentially responsible
parties (other that a department, agency, or instrumentality
of the United States) are liable or potentially liable if at
least 1 potentially liable party is liable and not entitled
to an exemption under section 107 (q), (r), or (s); and
``(C) a codisposal landfill listed on the National
Priorities List with respect to which--
``(i) costs are incurred after the date of enactment of
this section; and
(ii) by virtue of section 107(t)(3), 1 or more persons are
not entitled to the exemption under section 107(t)(1) or the
limitation under section 107(t)(2).
``(5) Orphan share.--The term `orphan share' means the
total of the allocated shares determined by the allocator
under subsection (h).
``(b) Allocations of Liability.--
``(1) Mandatory allocations.--For each mandatory allocation
facility involving 2 or more potentially responsible parties
(including 1 or more potentially responsible parties that are
qualified for an exemption under section 107 (q), (r), or
(s)), the Administrator shall conduct the allocation process
under this section.
``(2) Requested allocations.--For a facility (other than a
mandatory allocation facility) involving 2 or more
potentially responsible parties, the Administrator shall
conduct the allocation process under this section if the
allocation is requested in writing by a potentially
responsible party that has--
``(A) incurred response costs with respect to a response
action; or
``(B) resolved any liability to the United States with
respect to a response action in order to assist in allocating
shares among potentially responsible parties.
``(3) Permissive allocations.--For any facility (other than
a mandatory allocation facility or a facility with respect to
which a request is made under paragraph (2)) involving 2 or
more potentially responsible parties, the Administrator may
conduct the allocation process under this section if the
Administrator considers it to be appropriate to do so.
``(4) Orphan share.--An allocation performed at a vessel or
facility identified under subsection (b) (2) or (3) shall not
require payment of an orphan share under subsection (h) or
contribution under subsection (p).
``(5) Excluded facilities.--
``(A) In general.--A codisposal landfill listed on the
Natural Priorities List at which costs are incurred after
January 1, 1997, and at which all potentially responsible
persons are entitled to the liability exemption under section
107(t)(1). This section does not apply to a response action
at a mandatory allocation facility for which there was in
effect as of the date of enactment of this section, a
settlement, decree, or order that determines the liability
and allocated shares of all potentially responsible parties
with respect to the response action.
``(B) Availability of orphan share.--For any mandatory
allocation facility that is otherwise excluded by
subparagraph (A) and for which there was not in effect as of
the date of enactment of this section a final judicial order
that determined the liability of all parties to the action
for response costs incurred after the date of enactment of
this section, an allocation shall be conducted for the sole
purpose of determining the availability of orphan share
funding pursuant to subsection (h)(2) for any response costs
incurred after the date of enactment of this section.
``(6) Scope of allocations.--An allocation under this
section shall apply to--
``(A) response costs incurred after the date of enactment
of this section, with respect to a mandatory allocation
facility described in subsection (a)(4) (A), (B), or (C); and
``(B) response costs incurred at a facility that is the
subject of a requested or permissive allocation under
subsection (b) (2) or (3).
``(8) Other matters.--This section shall not limit or
affect--
``(A) the obligation of the Administrator to conduct the
allocation process for a response action at a facility that
has been the subject of a partial or expedited settlement
with respect to a response action that is not within the
scope of the allocation;
``(B) the ability of any person to resolve any liability at
a facility to any other person at any time before initiation
or completion
[[Page S255]]
of the allocation process, subject to subsection (h)(3);
``(C) the validity, enforceability, finality, or merits of
any judicial or administrative order, judgment, or decree,
issued prior to the date of enactment of this section with
respect to liability under this Act; or
``(D) the validity, enforceability, finality, or merits of
any preexisting contract or agreement relating to any
allocation of responsibility or any indemnity for, or sharing
of, any response costs under this Act.
``(c) Moratorium on Litigation and Enforcement.--
``(1) In general.--No person may assert a claim for
recovery of a response cost or contribution toward a response
cost (including a claim for insurance proceeds) under this
Act or any other Federal or State law in connection with a
response action--
``(A) for which an allocation is required to be performed
under subsection (b)(1); or
``(B) for which the Administrator has initiated the
allocation process under this section,
until the date that is 120 days after the date of issuance of
a report by the allocator under subsection (f)(4) or, if a
second or subsequent report is issued under subsection (m),
the date of issuance of the second or subsequent report.
``(2) Pending actions or claims.--If a claim described in
paragraph (1) is pending on the date of enactment of this
section or on initiation of an allocation under this section,
the portion of the claim pertaining to response costs that
are the subject of the allocation shall be stayed until the
date that is 120 days after the date of issuance of a report
by the allocator under subsection (f)(4) or, if a second or
subsequent report is issued under subsection (m), the date of
issuance of the second or subsequent report, unless the court
determines that a stay would result in manifest injustice.
``(3) Tolling of period of limitation.--
``(A) Beginning of tolling.--Any applicable period of
limitation with respect to a claim subject to paragraph (1)
shall be tolled beginning on the earlier of--
``(i) the date of listing of the facility on the National
Priorities List if the listing occurs after the date of
enactment of this section; or
``(ii) the date of initiation of the allocation process
under this section.
``(B) End of tolling.--A period of limitation shall be
tolled under subparagraph (A) until the date that is 180 days
after the date of issuance of a report by the allocator under
subsection (f)(4), or of a second or subsequent report under
subsection (m).
``(4) Retained authority.--Except as specifically provided
in this section, this section does not affect the authority
of the Administrator to--
``(A) exercise the powers conferred by section 103, 104,
105, 106, or 122;
``(B) commence an action against a party if there is a
contemporaneous filing of a judicial consent decree resolving
the liability of the party;
``(C) file a proof of claim or take other action in a
proceeding under title 11, United States Code; or
``(D) require implementation of a response action at an
allocation facility during the conduct of the allocation
process.
``(d) Allocation Process.--
(1) Establishment.--Not later than 180 days after the date
of enactment of this section, the Administrator shall
establish by regulation a process for conduct of mandatory,
requested, and permissive allocations.
``(2) Requirements.--In developing the allocation process
under paragraph (1), the Administrator shall--
``(A) ensure that parties that are eligible for an
exemption from liability under section 107 (q), (r), (s),
(t), (v), and (w)--
``(i) are identified by the Administrator (before selection
of an allocator or by an allocator);
``(ii) at the earliest practicable opportunity, are
notified of their status; and
``(iii) are provided with appropriate written assurances
that they are not liable for response costs under this Act;
``(B) establish an expedited process for the selection,
appointment, and retention by contract of a impartial
allocator, acceptable to both potentially responsible parties
and a representative of the Fund, to conduct the allocation
process in a fair, efficient, and impartial manner;
``(C) permit any person to propose to name additional
potentially responsible parties as allocation parties, the
costs of any such nominated party's costs (including
reasonable attorney's fees) to be borne by the party that
proposes the addition of the party to the allocation process
if the allocator determines that there is no adequate basis
in law or fact to conclude that a party is liable based on
the information presented by the nominating party or
otherwise available to the allocator; and
``(D) require that the allocator adopt any settlement that
allocates 100 percent of the recoverable costs of a response
action at a facility to the signatories to the settlement, if
the settlement contains a waiver of--
``(i) a right of recovery from any other party of any
response cost that is the subject of the allocation; and
``(ii) a right to contribution under this Act,
with respect to any response action that is within the scope
of allocation process.
``(2) Time limit.--The Administrator shall initiate the
allocation process for a facility not later than the earlier
of--
``(A) the date of completion of the facility evaluation or
remedial investigation for the facility; or
``(B) the date that is 60 days after the date of selection
of a removal action.
``(3) No judicial review.--There shall be no judicial
review of any action regarding selection of an allocator
under the regulation issued under this subsection.
``(4) Recovery of contract costs.--The costs of the
Administrator in retaining an allocator shall be considered
to be a response cost for all purposes of this Act.
``(e) Federal, State, and Local Agencies.--
``(1) In general.--Other than as set forth in this Act, any
Federal, State, or local governmental department, agency, or
instrumentality that is named as a potentially responsible
party or an allocation party shall be subject to, and be
entitled to the benefits of, the allocation process and
allocation determination under this section to the same
extent as any other party.
``(2) Orphan share.--The Administrator or the Attorney
General shall participate in the allocation proceeding as the
representative of the Fund from which any orphan share shall
be paid.
``(f) Allocation Authority.--
``(1) Information-gathering authorities.--
``(A) In general.--An allocator may request information
from any person in order to assist in the efficient
completion of the allocation process.
``(B) Requests.--Any person may request that an allocator
request information under this paragraph.
``(C) Authority.--An allocator may exercise the
information-gathering authority of the Administrator under
section 104(e), including issuing an administrative subpoena
to compel the production of a document or the appearance of a
witness.
``(D) Disclosure.--Notwithstanding any other law, any
information submitted to the allocator in response to a
subpoena issued under subparagraph (C) shall be exempt from
disclosure to any person under section 552 of title 5, United
States Code.
``(E) Orders.--In a case of contumacy or failure of a
person to obey a subpoena issued under subparagraph (C), an
allocator may request the Attorney General to--
``(i) bring a civil action to enforce the subpoena; or
``(ii) if the person moves to quash the subpoena, to defend
the motion.
``(F) Failure of attorney general to respond.--If the
Attorney General fails to provide any response to the
allocator within 30 days of a request for enforcement of a
subpoena or information request, the allocator may retain
counsel to commence a civil action to enforce the subpoena or
information request.
``(2) Additional authority.--An allocator may--
``(A) schedule a meeting or hearing and require the
attendance of allocation parties at the meeting or hearing;
``(B) sanction an allocation party for failing to cooperate
with the orderly conduct of the allocation process;
``(C) require that allocation parties wishing to present
similar legal or factual positions consolidate the
presentation of the positions;
``(D) obtain or employ support services, including
secretarial, clerical, computer support, legal, and
investigative services; and
``(E) take any other action necessary to conduct a fair,
efficient, and impartial allocation process.
``(3) Conduct of allocation process.--
``(A) In general.--The allocator shall conduct the
allocation process and render a decision based solely on the
provisions of this section, including the allocation factors
described in subsection (g).
``(B) Opportunity to be heard.--Each allocation party shall
be afforded an opportunity to be heard (orally or in writing,
at the option of an allocation party) and an opportunity to
comment on a draft allocation report.
``(C) Responses.--The allocator shall not be required to
respond to comments.
``(D) Streamlining.--The allocator shall make every effort
to streamline the allocation process and minimize the cost of
conducting the allocation.
``(4) Allocation report.--The allocator shall provide a
written allocation report to the Administrator and the
allocation parties that specifies the allocation share of
each allocation party and any orphan shares, as determined by
the allocator.
``(g) Equitable Factors for Allocation.--The allocator
shall prepare a nonbinding allocation of percentage shares of
responsibility to each allocation party and to the orphan
share, in accordance with this section and without regard to
any theory of joint and several liability, based on--
``(1) the amount of hazardous substances contributed by
each allocation party;
``(2) the degree of toxicity of hazardous substances
contributed by each allocation party;
``(3) the mobility of hazardous substances contributed by
each allocation party;
``(4) the degree of involvement of each allocation party in
the generation, transportation, treatment, storage, or
disposal of hazardous substances;
``(5) the degree of care exercised by each allocation party
with respect to hazardous substances, taking into account the
characteristics of the hazardous substances;
[[Page S256]]
``(6) the cooperation of each allocation party in
contributing to any response action and in providing complete
and timely information to the allocator; and
``(7) such other equitable factors as the allocator
determines are appropriate.
``(h) Orphan Shares.--
``(1) In general.--The allocator shall determine whether
any percentage of responsibility for the response action
shall be allocable to the orphan share.
``(2) Makeup of orphan share.--The orphan share shall
consist of--
``(A) any share that the allocator determines is
attributable to an allocation party that is insolvent or
defunct and that is not affiliated with any financially
viable allocation party;
``(B) the difference between the aggregate share that the
allocator determines is attributable to a person and the
aggregate share actually assumed by the person in a
settlement with the United States otherwise if--
``(i) the person is eligible for an expedited settlement
with the United States under section 122 based on limited
ability to pay response costs;
``(ii) the liability of the person is eliminated, limited,
or reduced by any provision of this Act; or
``(iii) the person settled with the United States before
the completion of the allocation.; and
``(C) all response costs at a codisposal landfill listed on
the National Priorities incurred after the date of enactment
of this section attributable to any person or group of
persons entitled to an exemption or limitation under section
107 (q), (r), (s), or (t).
``(4) Unattributable shares.--A share attributable to a
hazardous substance that the allocator determines was
disposed at the facility that cannot be attributed to any
identifiable party shall be distributed among the allocation
parties and the orphan share in accordance with the allocated
share assigned to each.
``(i) Information Requests.--
``(1) Duty to answer.--Each person that receives an
information request or subpoena from the allocator shall
provide a full and timely response to the request.
``(2) Certification.--An answer to an information request
by an allocator shall include a certification by a
representative that meets the criteria established in section
270.11(a) of title 40, Code of Federal Regulations (or any
successor regulation), that--
``(A) the answer is correct to the best of the
representative's knowledge;
``(B) the answer is based on a diligent good faith search
of records in the possession or control of the person to whom
the request was directed;
``(C) the answer is based on a reasonable inquiry of the
current (as of the date of the answer) officers, directors,
employees, and agents of the person to whom the request was
directed;
``(D) the answer accurately reflects information obtained
in the course of conducting the search and the inquiry;
``(E) the person executing the certification understands
that there is a duty to supplement any answer if, during the
allocation process, any significant additional, new, or
different information becomes known or available to the
person; and
``(F) the person executing the certification understands
that there are significant penalties for submitting false
information, including the possibility of a fine or
imprisonment for a knowing violation.
``(j) Penalties.--
``(1) Civil.--
``(A) In general.--A person that fails to submit a complete
and timely answer to an information request, a request for
the production of a document, or a summons from an allocator,
submits a response that lacks the certification required
under subsection (i)(2), or knowingly makes a false or
misleading material statement or representation in any
statement, submission, or testimony during the allocation
process (including a statement or representation in
connection with the nomination of another potentially
responsible party) shall be subject to a civil penalty of not
more than $10,000 per day of violation.
``(B) Assessment of penalty.--A penalty may be assessed by
the Administrator in accordance with section 109 or by any
allocation party in a citizen suit brought under section 310.
``(2) Criminal.--A person that knowingly and willfully
makes a false material statement or representation in the
response to an information request or subpoena issued by the
allocator under subsection (i) shall be considered to have
made a false statement on a matter within the jurisdiction of
the United States within the meaning of section 1001 of title
18, United States Code.
``(k) Document Repository; Confidentiality.--
``(1) Document repository.--
``(A) In general.--The allocator shall establish and
maintain a document repository containing copies of all
documents and information provided by the Administrator or
any allocation party under this section or generated by the
allocator during the allocation process.
``(B) Availability.--Subject to paragraph (2), the
documents and information in the document repository shall be
available only to an allocation party for review and copying
at the expense of the allocation party.
``(2) Confidentiality.--
``(A) In general.--Each document or material submitted to
the allocator or placed in the document repository and the
record of any information generated or obtained during the
allocation process shall be confidential.
``(B) Maintenance.--The allocator, each allocation party,
the Administrator, and the Attorney General--
``(i) shall maintain the documents, materials, and records
of any depositions or testimony adduced during the allocation
as confidential; and
``(ii) shall not use any such document or material or the
record in any other matter or proceeding or for any purpose
other than the allocation process.
``(C) Disclosure.--Notwithstanding any other law, the
documents and materials and the record shall not be subject
to disclosure to any person under section 552 of title 5,
United States Code.
``(D) Discovery and admissibility.--
``(i) In general.--Subject to clause (ii), the documents
and materials and the record shall not be subject to
discovery or admissible in any other Federal, State, or local
judicial or administrative proceeding, except--
``(I) a new allocation under subsection (m) or (r) for the
same response action; or
``(II) an initial allocation under this section for a
different response action at the same facility.
``(ii) Otherwise discoverable or admissible.--
``(I) Document or material.--If the original of any
document or material submitted to the allocator or placed in
the document repository was otherwise discoverable or
admissible from a party, the original document, if
subsequently sought from the party, shall remain
discoverable or admissible.
``(II) Facts.--If a fact generated or obtained during the
allocation was otherwise discoverable or admissible from a
witness, testimony concerning the fact, if subsequently
sought from the witness, shall remain discoverable or
admissible.
``(3) No waiver of privilege.--The submission of testimony,
a document, or information under the allocation process shall
not constitute a waiver of any privilege applicable to the
testimony, document, or information under any Federal or
State law or rule of discovery or evidence.
``(4) Procedure if disclosure sought.--
``(A) Notice.--A person that receives a request for a
statement, document, or material submitted for the record of
an allocation proceeding, shall--
``(i) promptly notify the person that originally submitted
the item or testified in the allocation proceeding; and
``(ii) provide the person that originally submitted the
item or testified in the allocation proceeding an opportunity
to assert and defend the confidentiality of the item or
testimony.
``(B) Release.--No person may release or provide a copy of
a statement, document, or material submitted, or the record
of an allocation proceeding, to any person not a party to the
allocation except--
``(i) with the written consent of the person that
originally submitted the item or testified in the allocation
proceeding; or
``(ii) as may be required by court order.
``(5) Civil penalty.--
``(A) In general.--A person that fails to maintain the
confidentiality of any statement, document, or material or
the record generated or obtained during an allocation
proceeding, or that releases any information in violation of
this section, shall be subject to a civil penalty of not more
than $25,000 per violation.
``(B) Assessment of penalty.--A penalty may be assessed by
the Administrator in accordance with section 109 or by any
allocation party in a citizen suit brought under section 310.
``(C) Defenses.--In any administrative or judicial
proceeding, it shall be a complete defense that any
statement, document, or material or the record at issue under
subparagraph (A)--
``(i) was in, or subsequently became part of, the public
domain, and did not become part of the public domain as a
result of a violation of this subsection by the person
charged with the violation;
``(ii) was already known by lawful means to the person
receiving the information in connection with the allocation
process; or
``(iii) became known to the person receiving the
information after disclosure in connection with the
allocation process and did not become known as a result of
any violation of this subsection by the person charged with
the violation.
``(l) Rejection of Allocation Report.--
``(1) Rejection.--The Administrator and the Attorney
General may jointly reject a report issued by an allocator
only if the Administrator and the Attorney General jointly
publish, not later than 180 days after the Administrator
receives the report, a written determination that--
``(A) no rational interpretation of the facts before the
allocator, in light of the factors required to be considered,
would form a reasonable basis for the shares assigned to the
parties; or
``(B) the allocation process was directly and substantially
affected by bias, procedural error, fraud, or unlawful
conduct.
``(2) Finality.--A report issued by an allocator may not be
rejected after the date that is 180 days after the date on
which the United States accepts a settlement offer (excluding
an expedited settlement under section 122) based on the
allocation.
[[Page S257]]
``(3) Judicial review.--Any determination by the
Administrator or the Attorney General under this subsection
shall not be subject to judicial review unless 2 successive
allocation reports relating to the same response action are
rejected, in which case any allocation party may obtain
judicial review of the second rejection in a United States
district court under subchapter II of chapter 5 of part I of
title 5, United States Code.
``(4) Delegation.--The authority to make a determination
under this subsection may not be delegated to any officer or
employee below the level of an Assistant Administrator or
Acting Assistant Administrator or an Assistant Attorney
General or Acting Assistant Attorney General with authority
for implementing this Act.
``(m) Second and Subsequent Allocations.--
``(1) In general.--If a report is rejected under subsection
(l), the allocation parties shall select an allocator to
perform, on an expedited basis, a new allocation based on the
same record available to the previous allocator.
``(2) Moratorium and tolling.--The moratorium and tolling
provisions of subsection (c) shall be extended until the date
that is 180 days after the date of the issuance of any second
or subsequent allocation report under paragraph (1).
``(3) Same allocator.--The allocation parties may select
the same allocator who performed 1 or more previous
allocations at the facility, except that the Administrator
may determine that an allocator whose previous report at the
same facility has been rejected under subsection (l) is
unqualified to serve.
``(n) Settlements Based on Allocations.--
``(1) Definition.--In this subsection, the term `all
settlements' includes any orphan share allocated under
subsection (h).
``(2) In general.--Unless an allocation report is rejected
under subsection (l), any allocation party at a mandatory
allocation facility (including an allocation party whose
allocated share is funded partially or fully by orphan share
funding under subsection (h)) shall be entitled to resolve
the liability of the party to the United States for response
actions subject to allocation if, not later than 90 days
after the date of issuance of a report by the allocator, the
party--
``(A) offers to settle with the United States based on the
allocated share specified by the allocator; and
``(B) agrees to the other terms and conditions stated in
this subsection.
``(3) Provisions of settlements.--
``(A) In general.--A settlement based on an allocation
under this section--
``(i) may consist of a cash-out settlement or an agreement
for the performance of a response action; and
``(ii) shall include--
``(I) a waiver of contribution rights against all persons
that are potentially responsible parties for any response
action addressed in the settlement;
``(II) a covenant not to sue that is consistent with
section 122(f) and, except in the case of a cash-out
settlement, provisions regarding performance or adequate
assurance of performance of the response action;
``(III) a premium, calculated on a facility-specific basis
and subject to the limitations on premiums stated in
paragraph (5), that reflects the actual risk to the United
States of not collecting unrecovered response costs for the
response action, despite the diligent prosecution of
litigation against any viable allocation party that has not
resolved the liability of the party to the United States,
except that no premium shall apply if all allocation parties
participate in the settlement or if the settlement covers 100
percent of the response costs subject to the allocation;
``(IV) complete protection from all claims for contribution
regarding the response action addressed in the settlement;
and
``(V) provisions through which a settling party shall
receive prompt contribution from the Fund under subsection
(o) of any response costs incurred by the party for any
response action that is the subject of the allocation in
excess of the allocated share of the party, including the
allocated portion of any orphan share.
``(B) Right to contribution.--A right to contribution under
subparagraph (A)(ii)(V) shall not be contingent on recovery
by the United States of any response costs from any person
other than the settling party.
``(4) Report.--The Administrator shall report annually to
Congress on the administration of the allocation process
under this section, providing in the report--
``(A) information comparing allocation results with actual
settlements at multiparty facilities;
``(B) a cumulative analysis of response action costs
recovered through post-allocation litigation or settlements
of post-allocation litigation;
``(C) a description of any impediments to achieving
complete recovery; and
``(D) a complete accounting of the costs incurred in
administering and participating in the allocation process.
``(5) Premium.--In each settlement under this subsection,
the premium authorized--
``(A) shall be determined on a case-by-case basis to
reflect the actual litigation risk faced by the United States
with respect to any response action addressed in the
settlement; but
``(B) shall not exceed--
``(i) 5 percent of the total costs assumed by a settling
party if all settlements (including any orphan share) account
for more than 80 percent and less than 100 percent of
responsibility for the response action;
``(ii) 10 percent of the total costs assumed by a settling
party if all settlements (including any orphan share) account
for more than 60 percent and not more than 80 percent of
responsibility for the response action;
``(iii) 15 percent of the total costs assumed by a settling
party if all settlements (including any orphan share) account
for more than 40 percent and not more than 60 percent of
responsibility for the response action; or
``(iv) 20 percent of the total costs assumed by a settling
party if all settlements (including any orphan share) account
for 40 percent or less of responsibility for the response;
and
``(C) shall be reduced proportionally by the percentage of
the allocated share for that party paid through orphan
funding under subsection (h).
``(o) Funding of Orphan Shares.--
``(1) Contribution.--For each settlement agreement entered
into under subsection (n), the Administrator shall promptly
reimburse the allocation parties for any costs incurred that
are attributable to the orphan share, as determined by the
allocator.
``(2) Entitlement.--Paragraph (1) constitutes an
entitlement to any allocation party eligible to receive a
reimbursement.
``(3) Amounts owed.--
``(A) Delay if funds are unavailable.--If funds are
unavailable in any fiscal year to reimburse all allocation
parties pursuant to paragraph (1), the Administrator may
delay payment until funds are available.
``(B) Priority.--The priority for reimbursement shall be
based on the length of time that has passed since the
settlement between the United States and the allocation
parties pursuant to subsection (n).
``(C) Payment from funds made available in subsequent
fiscal years.--Any amount due and owing in excess of
available appropriations in any fiscal year shall be paid
from amounts made available in subsequent fiscal years, along
with interest on the unpaid balances at the rate equal to
that of the current average market yield on outstanding
marketable obligations of the United States with a maturity
of 1 year.
``(4) Documentation and auditing.--The Administrator--
``(A) shall require that any claim for contribution be
supported by documentation of actual costs incurred; and
``(B) may require an independent auditing of any claim for
contribution.
``(p) Post-Allocation Contribution.--
``(1) In general.--An allocation party (including a party
that is subject to an order under section 106 or a settlement
decree) that incurs costs after the date of enactment of this
section for implementation of a response action that is the
subject of an allocation under this section to an extent that
exceeds the percentage share of the allocation party, as
determined by the allocator, shall be entitled to prompt
payment of contribution for the excess amount, including any
orphan share, from the Fund, unless the allocation report is
rejected under subsection (l).
``(2) Not contingent.--The right to contribution under
paragraph (1) shall not be contingent on recovery by the
United States of a response cost from any other person.
``(3) Terms and conditions.--
``(A) Risk premium.--A contribution payment shall be
reduced by the amount of the litigation risk premium under
subsection (n)(5) that would apply to a settlement by the
allocation party concerning the response action, based on the
total allocated shares of the parties that have not reached a
settlement with the United States.
``(B) Timing.--
``(i) In general.--A contribution payment shall be paid out
during the course of the response action that was the subject
of the allocation, using reasonable progress payments at
significant milestones.
``(ii) Construction.--Contribution for the construction
portion of the work shall be paid out not later than 120 days
after the date of completion of the construction.
``(C) Equitable offset.--A contribution payment is subject
to equitable offset or recoupment by the Administrator at any
time if the allocation party fails to perform the work in a
proper and timely manner.
``(D) Independent auditing.--The Administrator may require
independent auditing of any claim for contribution.
``(E) Waiver.--An allocation party seeking contribution
waives the right to seek recovery of response costs in
connection with the response action, or contribution toward
the response costs, from any other person.
``(F) Bar.--An administrative order shall be in lieu of any
action by the United States or any other person against the
allocation party for recovery of response costs in connection
with the response action, or for contribution toward the
costs of the response action.
``(q) Post-Settlement Litigation.--
``(1) In general.--Subject to subsections (m) and (n), and
on the expiration of the moratorium period under subsection
(c)(4), the Administrator may commence an action under
section 107 against an allocation party that has not resolved
the liability of the party to the United States following
allocation and may seek to recover response costs not
recovered through settlements with other persons.
``(2) Orphan share.--The recoverable costs shall include
any orphan share determined under subsection (h), but shall
not include any share allocated to a Federal, State, or
[[Page S258]]
local governmental agency, department, or instrumentality.
``(3) Impleader.--A defendant in an action under paragraph
(1) may implead an allocation party only if the allocation
party did not resolve liability to the United States.
``(4) Certification.--In commencing or maintaining an
action under section 107 against an allocation party after
the expiration of the moratorium period under subsection
(c)(4), the Attorney General shall certify in the complaint
that the defendant failed to settle the matter based on the
share that the allocation report assigned to the party.
``(5) Response costs.--
``(A) Allocation procedure.--The cost of implementing the
allocation procedure under this section, including reasonable
fees and expenses of the allocator, shall be considered as a
necessary response cost.
``(B) Funding of orphan shares.--The cost attributable to
funding an orphan share under this section--
``(i) shall be considered as a necessary cost of response
cost; and
``(ii) shall be recoverable in accordance with section 107
only from an allocation party that does not reach a
settlement and does not receive an administrative order under
subsection (n) or (p).
``(r) New Information.--
``(1) In general.--An allocation under this section shall
be final, except that any settling party, including the
United States, may seek a new allocation with respect to the
response action that was the subject of the settlement by
presenting the Administrator with clear and convincing
evidence that--
``(A) the allocator did not have information concerning--
``(i) 35 percent or more of the materials containing
hazardous substances at the facility; or
``(ii) 1 or more persons not previously named as an
allocation party that contributed 15 percent or more of
materials containing hazardous substances at the facility;
and
``(B) the information was discovered subsequent to the
issuance of the report by the allocator.
``(2) New allocation.--Any new allocation of
responsibility--
``(A) shall proceed in accordance with this section;
``(B) shall be effective only after the date of the new
allocation report; and
``(C) shall not alter or affect the original allocation
with respect to any response costs previously incurred.
``(s) Discretion of Allocator.--A contract by which the
Administrator retain an allocator shall give the allocator
broad discretion to conduct the allocation process in a fair,
efficient, and impartial manner, and the Administrator shall
not issue any rule or order that limits the discretion of the
allocator in the conduct of the allocation.
``(t) Illegal Activities.--Section 107 (o), (p), (q), (r),
(s), (t), (u), (v), and (w) and section 112(g) shall not
apply to any person whose liability for response costs under
section 107(a)(1) is otherwise based on any act, omission, or
status that is determined by a court or administrative body
of competent jurisdiction, within the applicable statute of
limitation, to have been a violation of any Federal or State
law pertaining to the treatment, storage, disposal, or
handling of hazardous substances if the violation pertains to
a hazardous substance, the release or threat of release of
which caused the incurrence of response costs at the vessel
or facility.''.
SEC. 504. LIABILITY OF RESPONSE ACTION CONTRACTORS.
(a) Liability of Contractors.--Section 101(20) of the
Comprehensive Environmental Response, Compensation, and
Liability Act of 1980 (42 U.S.C. 9601(20)) is amended by
adding at the end the following:
``(H) Liability of contractors.--
``(i) In general.--The term `owner or operator' does not
include a response action contractor (as defined in section
119(e)).
``(ii) Liability limitations.--A person described in clause
(i) shall not, in the absence of negligence by the person, be
considered to--
``(I) cause or contribute to any release or threatened
release of a hazardous substance, pollutant, or contaminant;
``(II) arrange for disposal or treatment of a hazardous
substance, pollutant, or contaminant;
``(III) arrange with a transporter for transport or
disposal or treatment of a hazardous substance, pollutant, or
contaminant; or
``(IV) transport a hazardous substance, pollutant, or
contaminant.
``(iii) Exception.--This subparagraph does not apply to a
person potentially responsible under section 106 or 107 other
than a person associated solely with the provision of a
response action or a service or equipment ancillary to a
response action.''.
(b) National Uniform Negligence Standard.--Section 119(a)
of the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980 (42 U.S.C. 9619(a)) is amended--
(1) in paragraph (1) by striking ``title or under any other
Federal law'' and inserting ``title or under any other
Federal or State law''; and
(2) in paragraph (2)--
(A) by striking ``(2) Negligence, etc.--Paragraph (1)'' and
inserting the following:
``(2) Negligence and intentional misconduct; application of
state law.--
``(A) Negligence and intentional misconduct.--
``(i) In general.--Paragraph (1)''; and
(B) by adding at the end the following:
``(ii) Standard.--Conduct under clause (i) shall be
evaluated based on the generally accepted standards and
practices in effect at the time and place at which the
conduct occurred.
``(iii) Plan.--An activity performed in accordance with a
plan that was approved by the Administrator shall not be
considered to constitute negligence under clause (i).
``(B) Application of state law.--Paragraph (1) shall not
apply in determining the liability of a response action
contractor under the law of a State if the State has adopted
by statute a law determining the liability of a response
action contractor.''.
(c) Extension of Indemnification Authority.--Section
119(c)(1) of the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (42 U.S.C.
9619(c)(1)) is amended by adding at the end the following:
``The agreement may apply to a claim for negligence arising
under Federal or State law.''.
(d) Indemnification Determinations.--Section 119(c) of the
Comprehensive Environmental Response, Compensation, and
Liability Act of 1980 (42 U.S.C. 9619(c)) is amended by
striking paragraph (4) and inserting the following:
``(4) Decision to indemnify.--
``(A) In general.--For each response action contract for a
vessel or facility, the Administrator shall make a decision
whether to enter into an indemnification agreement with a
response action contractor.
``(B) Standard.--The Administrator shall enter into an
indemnification agreement to the extent that the potential
liability (including the risk of harm to public health,
safety, environment, and property) involved in a response
action exceed or are not covered by insurance available to
the contractor at the time at which the response action
contract is entered into that is likely to provide adequate
long-term protection to the public for the potential
liability on fair and reasonable terms (including
consideration of premium, policy terms, and deductibles).
``(C) Diligent efforts.--The Administrator shall enter into
an indemnification agreement only if the Administrator
determines that the response action contractor has made
diligent efforts to obtain insurance coverage from non-
Federal sources to cover potential liabilities.
``(D) Continued diligent efforts.--An indemnification
agreement shall require the response action contractor to
continue, not more frequently than annually, to make diligent
efforts to obtain insurance coverage from non-Federal sources
to cover potential liabilities.
``(E) Limitations on indemnification.--An indemnification
agreement provided under this subsection shall include
deductibles and shall place limits on the amount of
indemnification made available in amounts determined by the
contracting agency to be appropriate in light of the unique
risk factors associated with the cleanup activity.''.
(e) Indemnification for Threatened Releases.--Section
119(c)(5)(A) of the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (42 U.S.C.
9619(c)(5)(A)) is amended by inserting ``or threatened
release'' after ``release'' each place it appears.
(f) Extension of Coverage to All Response Actions.--Section
119(e)(1) of the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (42 U.S.C.
9619(e)(1)) is amended--
(1) in subparagraph (D) by striking ``carrying out an
agreement under section 106 or 122''; and
(2) in the matter following subparagraph (D)--
(A) by striking ``any remedial action under this Act at a
facility listed on the National Priorities List, or any
removal under this Act,'' and inserting ``any response
action,''; and
(B) by inserting before the period at the end the
following: ``or to undertake appropriate action necessary to
protect and restore any natural resource damaged by the
release or threatened release''.
(g) Definition of Response Action Contractor.--Section
119(e)(2)(A)(i) of the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (42 U.S.C.
9619(e)(2)(A)(i)) is amended by striking ``and is carrying
out such contract'' and inserting ``covered by this section
and any person (including any subcontractor) hired by a
response action contractor''.
(h) Surety Bonds.--Section 119 of the Comprehensive
Environmental Response, Compensation, and Liability Act of
1980 (42 U.S.C. 9619) is amended--
(1) in subsection (e)(2)(C) by striking ``, and before
January 1, 1996,''; and
(2) in subsection (g)(5) by striking ``, or after December
31, 1995''.
(i) National Uniform Statute of Repose.--Section 119 of the
Comprehensive Environmental Response, Compensation, and
Liability Act of 1980 (42 U.S.C. 9619) is amended by adding
at the end the following:
``(h) Limitation on Actions Against Response Action
Contractors.--
``(1) In general.--No action may be brought as a result of
the performance of services under a response contract against
a response action contractor after the date that is 7 years
after the date of completion of work at any facility under
the contract to recover--
``(A) injury to property, real or personal;
``(B) personal injury or wrongful death;
[[Page S259]]
``(C) other expenses or costs arising out of the
performance of services under the contract; or
``(D) contribution or indemnity for damages sustained as a
result of an injury described in subparagraphs (A) through
(C).
``(2) Exception.--Paragraph (1) does not bar recovery for a
claim caused by the conduct of the response action contractor
that is grossly negligent or that constitutes intentional
misconduct.
``(3) Indemnification.--This subsection does not affect any
right of indemnification that a response action contractor
may have under this section or may acquire by contract with
any person.
``(i) State Standards of Repose.--Subsections (a)(1) and
(h) shall not apply in determining the liability of a
response action contractor if the State has enacted a statute
of repose determining the liability of a response action
contractor.''.
SEC. 505. RELEASE OF EVIDENCE.
(a) Timely Access to Information Furnished Under Section
104(e).--Section 104(e)(7)(A) of the Comprehensive
Environmental Response, Compensation, and Liability Act of
1980 (42 U.S.C. 9604(e)(7)(A)) is amended by inserting after
``shall be available to the public'' the following: ``not
later than 14 days after the records, reports, or information
is obtained''.
(b) Requirement To Provide Potentially Responsible Parties
Evidence of Liability.--
(1) Abatement actions.--Section 106(a) of the Comprehensive
Environmental Response, Compensation, and Liability Act of
1980 (42 U.S.C. 9606(a)) is amended--
(A) by striking ``(a) In addition'' and inserting the
following: ``(a) Order.--''
``(1) In general.--In addition''; and
(B) by adding at the end the following:
``(2) Contents of order.--An order under paragraph (1)
shall provide information concerning the evidence that
indicates that each element of liability described in section
107(a)(1) (A), (B), (C), and (D), as applicable, is
present.''.
(2) Settlements.--Section 122(e)(1) of the Comprehensive
Environmental Response, Compensation, and Liability Act of
1980 (42 U.S.C. 9622(e)(1)) is amended by inserting after
subparagraph (C) the following:
``(D) For each potentially responsible party, the evidence
that indicates that each element of liability contained in
section 107(a)(1) (A), (B), (C), and (D), as applicable, is
present.''.
SEC. 506. CONTRIBUTION PROTECTION.
Section 113(f)(2) of the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980 (42 U.S.C.
9613(f)(2)) is amended in the first sentence by inserting
``or cost recovery'' after ``contribution''.
SEC. 507. TREATMENT OF RELIGIOUS, CHARITABLE, SCIENTIFIC, AND
EDUCATIONAL ORGANIZATIONS AS OWNERS OR
OPERATORS.
(a) Definition.--Section 101(20) of the Comprehensive
Environmental Response, Compensation, and Liability Act of
1980 (42 U.S.C. 9601(20)) (as amended by section 502(a)) is
amended by adding at the end the following:
``(I) Religious, charitable, scientific, and educational
organizations.--The term `owner or operator' includes an
organization described in section 501(c)(3) of the Internal
Revenue Code of 1986 that is organized and operated
exclusively for religious, charitable, scientific, or
educational purposes and that holds legal or equitable title
to a vessel or facility.''.
(b) Limitation on Liability.--Section 107 of the
Comprehensive Environmental Response, Compensation, and
Liability Act of 1980 (42 U.S.C. 9607) (as amended by section
501(b)) is amended by adding at the end the following:
``(u) Religious, Charitable, Scientific, and Educational
Organizations.--
``(1) Limitation on liability.--Subject to paragraph (2),
if an organization described in section 101(20)(I) holds
legal or equitable title to a vessel or facility as a result
of a charitable gift that is allowable as a deduction under
section 170, 2055, or 2522 of the Internal Revenue Code of
1986 (determined without regard to dollar limitations), the
liability of the organization shall be limited to the lesser
of the fair market value of the vessel or facility or the
actual proceeds of the sale of the vessel or facility
received by the organization.
``(2) Conditions.--In order for an organization described
in section 101(20)(I) to be eligible for the limited
liability described in paragraph (1), the organization
shall--
``(A) provide full cooperation, assistance, and vessel or
facility access to persons authorized to conduct response
actions at the vessel or facility, including the cooperation
and access necessary for the installation, preservation of
integrity, operation, and maintenance of any complete or
partial response action at the vessel or facility;
``(B) provide full cooperation and assistance to the United
States in identifying and locating persons who recently
owned, operated, or otherwise controlled activities at the
vessel or facility;
``(C) establish by a preponderance of the evidence that all
active disposal of hazardous substances at the vessel or
facility occurred before the organization acquired the vessel
or facility; and
``(D) establish by a preponderance of the evidence that the
organization did not cause or contribute to a release or
threatened release of hazardous substances at the vessel or
facility.
``(3) Limitation.--Nothing in this subsection affects the
liability of a person other than a person described in
section 101(20)(I) that meets the conditions specified in
paragraph (2).''.
SEC. 508. COMMON CARRIERS.
Section 107(b)(3) of the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980 (42 U.S.C.
9607(b)(3)) is amended by striking ``a published tariff and
acceptance'' and inserting ``a contract''.
SEC. 509. LIMITATION ON LIABILITY OF RAILROAD OWNERS.
Section 107 of the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (42 U.S.C. 9607) (as
amended by section 507(b)) is amended by adding at the end
the following:
``(v) Limitation on Liability of Railroad Owners.--
Notwithstanding subsection (a)(1), a person that does not
impede the performance of a response action or natural
resource restoration shall not be liable under this Act to
the extent that liability is based solely on the status of
the person as a railroad owner or operator of a spur track,
including a spur track over land subject to an easement, to a
facility that is owned or operated by a person that is not
affiliated with the railroad owner or operator, if--
``(1) the spur track provides access to a main line or
branch line track that is owned or operated by the railroad;
``(2) the spur track is 10 miles long or less; and
``(3) the railroad owner or operator does not cause or
contribute to a release or threatened release at the spur
track.''.
SEC. 510. LIABILITY OF RECYCLERS.
(a) Definitions.--Section 101 of the Comprehensive
Environmental Response, Compensation, and Liability Act of
1980 (42 U.S.C. 9601) (as amended by section 501(a)) is
amended by adding at the end the following:
``(47) Recyclable material.--The term `recyclable
material'--
``(A) means--
``(i) scrap glass, paper, plastic, rubber, or textile;
``(ii) scrap metal; and
``(iii) a spent battery; and
``(B) includes small amounts of any type of material that
is incident to or adherent to material described in
subparagraph (A) as a result of the normal and customary use
of the material prior to the exhaustion of the useful life of
the material.
``(48) Scrap metal.--The term `scrap metal'--
``(A) means--
``(i) scrap metal (as that term is defined by the
Administrator for purposes of the Solid Waste Disposal Act
(42 U.S.C. 6901 et seq.) in section 261.1(c)(6) of title 40,
Code of Federal Regulations, or any successor regulation);
and
``(ii) a metal byproduct (such as slag, skimming, or dross)
that is not 1 of the primary products of, and is not solely
or separately produced by, a production process; but
``(B) does not include--
``(i) any steel shipping container that--
``(I) has (or, when intact, had) a capacity of not less
than 30 and not more than 3,000 liters; and
``(II) has any hazardous substance contained in or adherent
to it (not including any small pieces of metal that may
remain after a hazardous substance has been removed from the
container or any alloy or other material that may be
chemically or metallurgically bonded in the steel itself); or
``(ii) any material described in subparagraph (A) that the
Administrator may by regulation exclude from the meaning of
the term based on a finding that inclusion of the material
within the meaning of the term would result in a threat to
human health or the environment.''.
(b) Liability of Recyclers.--Section 107 of the
Comprehensive Environmental Response, Compensation, and
Liability Act of 1980 (42 U.S.C. 9607) (as amended by section
509) is amended by adding at the end the following:
``(w) Liability of Recyclers.--
``(1) Applicability of subsection.--Subject to paragraph
(10), this subsection shall be applied to determine the
liability of any person with respect to a transaction engaged
in before, on, or after the date of enactment of this
subsection.
``(2) Relief from liability.--Except as provided in
paragraph (6), a person that arranges for the recycling of
recyclable material shall not be liable under subsection
(a)(1) (C) or (D).
``(3) Scrap glass, paper, plastic, rubber, or textile.--For
the purposes of paragraph (2), a person shall be considered
to arrange for the recycling of scrap glass, paper, plastic,
rubber, or textile if the person sells or otherwise arranges
for the recycling of the recyclable material in a transaction
in which, at the time of the transaction--
``(A) the recyclable material meets a commercial
specification;
``(B) a market exists for the recyclable material;
``(C) a substantial portion of the recyclable material is
made available for use as a feedstock for the manufacture of
a new saleable product; and
``(D)(i) the recyclable material is a replacement or
substitute for a virgin raw material; or
``(ii) the product to be made from the recyclable material
is a replacement or substitute for a product made, in whole
or in part, from a virgin raw material.
[[Page S260]]
``(4) Scrap metal.--For the purposes of paragraph (2), a
person shall be considered to arrange for the recycling of
scrap metal if the person sells or otherwise arranges for the
recycling of the scrap metal in a transaction in which, at
the time of the transaction--
``(A) the conditions stated in subparagraphs (A) through
(D) of paragraph (3) are met; and
``(B) in the case of a transaction that occurs after the
effective date of a standard, established by the
Administrator by regulation under the Solid Waste Disposal
Act (42 U.S.C. 6901 et seq.), regarding the storage,
transport, management, or other activity associated with the
recycling of scrap metal, the person is in compliance with
the standard.
``(5) Spent batteries.--
``(A) In general.--For the purposes of paragraph (1), a
person shall be considered to arrange for the recycling of a
spent lead-acid battery, nickel-cadmium battery, or other
battery if the person sells or otherwise arranges for the
recycling of the battery in a transaction in which, at the
time of the transaction--
``(i) the conditions stated in subparagraphs (A) through
(D) of paragraph (3) are met;
``(ii) the person does not reclaim the valuable components
of the battery; and
``(iii) in the case of a transaction that occurs after the
effective date of a standard, established by the
Administrator by regulation under authority of the Solid
Waste Disposal Act (42 U.S.C. 6901 et seq.) or the Mercury-
Containing and Rechargeable Battery Management Act),
regarding the storage, transport, management, or other
activity associated with the recycling of batteries, the
person is in compliance with the standard.
``(B) Tolling arrangements.--A person that, by contract,
arranges for reclamation and smelting of a battery by a third
party not a party to a transaction under subparagraph (A) and
receives from the third party material reclaimed from the
battery shall not, by reason of the receipt of the reclaimed
material, be considered to reclaim the valuable components of
the battery for purposes of subparagraph (A)(ii).
``(6) Grounds for establishing liability.--
``(A) In general.--A person that arranges for the recycling
of recyclable material that would be liable under subsection
(a)(1) (C) or (D) but for paragraph (2) shall be liable
notwithstanding that paragraph if--
``(i) the person has an objectively reasonable basis to
believe at the time of the recycling transaction that--
``(I) the recyclable material will not be recycled;
``(II) the recyclable material will be burned as fuel, for
energy recovery or incineration;
``(III) the consuming facility is not in compliance with a
substantive provision (including a requirement to obtain a
permit for handling, processing, reclamation, or other
management activity associated with recyclable material) of
any Federal, State, or local environmental law (including a
regulation), or a compliance order or decree issued under
such a law, applicable to the handling, processing,
reclamation, or other management activity associated with the
recyclable material; or
``(IV) a hazardous substance has been added to the
recyclable material for purposes other than processing for
recycling;
``(ii) the person fails to exercise reasonable care with
respect to the management or handling of the recyclable
material (for which purpose a failure to adhere to customary
industry practices current at the time of the recycling
transaction designed to minimize, through source control,
contamination of the recyclable material by hazardous
substances shall be considered to be a failure to exercise
reasonable care); or
``(iii) any item of the recyclable material contains--
``(I) polychlorinated biphenyls at a concentration in
excess of 50 parts per million (or any different
concentration specified in any applicable standard that may
be issued under other Federal law after the date of enactment
of this subsection); or
``(II) in the case of a transaction involving scrap paper,
any concentration of a hazardous substance that the
Administrator determines by regulation, issued after the date
of enactment of this subsection and before the date of the
transaction, to be likely to cause significant risk to human
health or the environment as a result of its inclusion in the
paper recycling process.
``(B) Objectively reasonable basis for belief.--Whether a
person has an objectively reasonable basis for belief
described in subparagraph (A)(i) shall be determined using
criteria that include--
``(i) the size of the person's business;
``(ii) customary industry practices (including practices
designed to minimize, through source control, contamination
of recyclable material by hazardous substances);
``(iii) the price paid or received in the recycling
transaction; and
``(iv) the ability of the person to detect the nature of
the consuming facility's operations concerning handling,
processing, or reclamation of the recyclable material or
other management activities associated with the recyclable
material.
``(7) Regulations.--The Administrator may issue a
regulation that clarifies the meaning of any term used in
this subsection or by any other means makes clear the
application of this subsection to any person.
``(8) Liability for attorney's fees for certain actions.--A
person that, after the date of enactment of this subsection,
commences a civil action in contribution against a person
that is not liable by operation of this subsection shall be
liable to that person for all reasonable costs of defending
the action, including all reasonable attorney's fees and
expert witness fees.
``(9) Relationship to liability under other laws.--Nothing
in this subsection shall affect--
``(A) liability under any other Federal, State, or local
law (including a regulation); or
``(B) the authority of the Administrator to issue
regulations under the Solid Waste Disposal Act (42 U.S.C.
6901 et seq.) or any other law.
``(10) Transition rules.--
``(A) Decree or order entered prior to january 1, 1997.--
This subsection shall not affect any judicial decree or order
that was entered or any administrative order that became
effective prior to January 1, 1997, unless, as of the date of
enactment of this subsection, the judicial decree or order
remained subject to appeal or the administrative order
remained subject to judicial review.
``(B) Decree or order entered on or after january 1,
1997.--Any consent decree with the United States,
administrative order, or judgment in favor of the United
States that was entered, or in the case of an administrative
order, became effective, on or after January 1, 1997, and
before the date of enactment of this subsection shall be
reopened at the request of any party to the recycling
transaction for a determination of the party's liability to
the United States based on this subsection.
``(C) Effect on nonrecyclers.--
``(i) Costs borne by the united states.--All costs
attributable to a recycling transaction that, absent this
subsection, would be borne by a person that is relieved of
liability (in whole or in part) by this subsection shall be
borne by the United States, to the extent that the person is
relieved of liability.
``(ii) No recovery from the united states.--Notwithstanding
clause (i), no person shall be entitled to recover any sums
paid to the United States prior to the date of enactment of
this subsection in satisfaction of any liability attributable
to a recycling transaction.
``(D) Contribution among parties to recycling
transactions.--Notwithstanding the other provisions of this
subsection, a person that is relieved of liability by this
subsection, but incurred response costs for a response action
taken prior to the date of enactment of this subsection, may
bring a civil action for contribution for the costs against--
``(i) any person that is liable under section 107(a)(1) (A)
or (B); or
``(ii) any person that, before the date of enactment of
this subsection--
``(I) received and failed to comply with an administrative
order issued under section 104 or 106; or
``(II) received and did not accept a written offer from the
United States to enter into a consent decree or
administrative order.''.
TITLE VI--FEDERAL FACILITIES
SEC. 601. TRANSFER OF AUTHORITIES.
Section 120 of the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (42 U.S.C. 9620) is
amended by striking subsection (g) and inserting the
following:
``(g) Transfer of Authorities.--
``(1) Definitions.--In this section:
``(A) Interagency agreement.--The term `interagency
agreement' means an interagency agreement under this section.
``(B) Transfer agreement.--The term `transfer agreement'
means a transfer agreement under paragraph (3).
``(C) Transferee state.--The term `transferee State' means
a State to which authorities have been transferred under a
transfer agreement.
``(2) State application for transfer of authorities.--A
State may apply to the Administrator to exercise the
authorities vested in the Administrator under this Act at any
facility located in the State that is--
``(A) owned or operated by any department, agency, or
instrumentality of the United States (including the
executive, legislative, and judicial branches of government);
and
``(B) listed on the National Priorities List.
``(3) Transfer of authorities.--
``(A) Determinations.--The Administrator shall enter into a
transfer agreement to transfer to a State the authorities
described in paragraph (2) if the Administrator determines
that--
``(i) the State has the ability to exercise such
authorities in accordance with this Act, including adequate
legal authority, financial and personnel resources,
organization, and expertise;
``(ii) the State has demonstrated experience in exercising
similar authorities;
``(iii) the State has agreed to be bound by all Federal
requirements and standards under section 133 governing the
design and implementation of the facility evaluation,
remedial action plan, and remedial design; and
``(iv) the State has agreed to abide by the terms of any
interagency agreement or agreements covering the Federal
facility or facilities with respect to which authorities are
being transferred in effect at the time of the transfer of
authorities.
``(B) Contents of transfer agreement.--A transfer
agreement--
[[Page S261]]
``(i) shall incorporate the determinations of the
Administrator under subparagraph (A); and
``(ii) in the case of a transfer agreement covering a
facility with respect to which there is no interagency
agreement that specifies a dispute resolution process, shall
require that within 120 days after the effective date of the
transfer agreement, the State shall agree with the head of
the Federal department, agency, or instrumentality that owns
or operates the facility on a process for resolution of any
disputes between the State and the Federal department,
agency, or instrumentality regarding the selection of a
remedial action for the facility; and
``(iii) shall not impose on the transferee State any term
or condition other than that the State meet the requirements
of subparagraph (A).
``(4) Effect of transfer.--
``(A) State authorities.--A transferee State--
``(i) shall not be deemed to be an agent of the
Administrator but shall exercise the authorities transferred
under a transfer agreement in the name of the State; and
``(ii) shall have exclusive authority to exercise
authorities that have been transferred.
``(B) Effect on interagency agreements.--Nothing in this
subsection shall require, authorize, or permit the
modification or revision of an interagency agreement covering
a facility with respect to which authorities have been
transferred to a State under a transfer agreement (except for
the substitution of the transferee State for the
Administrator in the terms of the interagency agreement,
including terms stating obligations intended to preserve the
confidentiality of information) without the written consent
of the Governor of the State and the head of the department,
agency, or instrumentality.
``(5) Selected remedial action.--The remedial action
selected for a facility under section 133 by a transferee
State shall constitute the only remedial action required to
be conducted at the facility, and the transferee State shall
be precluded from enforcing any other remedial action
requirement under Federal or State law, except for--
``(A) any corrective action under the Solid Waste Disposal
Act (42 U.S.C. 6901 et seq.) that was initiated prior to the
date of enactment of this subsection; and
``(B) any remedial action in excess of remedial action
under section 133 that the State selects in accordance with
paragraph (10).
``(6) Deadline.--
``(A) In general.--The Administrator shall make a
determination on an application by a State under paragraph
(2) not later than 120 days after the date on which the
Administrator receives the application.
``(B) Failure to act.--If the Administrator does not issue
a notice of approval or notice of disapproval of an
application within the time period stated in subparagraph
(A), the application shall be deemed to have been granted.
``(7) Resubmission of application.--
``(A) In general.--If the Administrator disapproves an
application under paragraph (1), the State may resubmit the
application at any time after receiving the notice of
disapproval.
``(B) Failure to act.--If the Administrator does not issue
a notice of approval or notice of disapproval of a
resubmitted application within the time period stated in
paragraph (6)(A), the resubmitted application shall be deemed
to have been granted.
``(8) Judicial review.--The State (but no other person)
shall be entitled to judicial review under section 113(b) of
a disapproval of a resubmitted application.
``(9) Withdrawal of authorities.--The Administrator may
withdraw the authorities transferred under a transfer
agreement in whole or in part if the Administrator determines
that the State--
``(A) is exercising the authorities, in whole or in part,
in a manner that is inconsistent with the requirements of
this Act;
``(B) has violated the transfer agreement, in whole or in
part; or
``(C) no longer meets one of the requirements of paragraph
(3).
``(10) State cost responsibility.--The State may require a
remedial action that exceeds the remedial action selection
requirements of section 121 if the State pays the incremental
cost of implementing that remedial action over the most cost-
effective remedial action that would result from the
application of section 133.
``(11) Dispute resolution and enforcement.--
``(A) Dispute resolution.--
``(i) Facilities covered by both a transfer agreement and
an interagency agreements.--In the case of a facility with
respect to which there is both a transfer agreement and an
interagency agreement, if the State does not concur in the
remedial action proposed for selection by the Federal
department, agency, or instrumentality, the Federal
department, agency, or instrumentality and the State shall
engage in the dispute resolution process provided for in the
interagency agreement, except that the final level for
resolution of the dispute shall be the head of the Federal
department, agency, or instrumentality and the Governor of
the State.
``(ii) Facilities covered by a transfer agreement but not
an interagency agreement.--In the case of a facility with
respect to which there is a transfer agreement but no
interagency agreement, if the State does not concur in the
remedial action proposed for selection by the Federal
department, agency, or instrumentality, the Federal
department, agency, or instrumentality and the State shall
engage in dispute resolution as provided in paragraph
(3)(B)(ii) under which the final level for resolution of the
dispute shall be the head of the Federal department, agency,
or instrumentality and the Governor of the State.
``(iii) Failure to resolve.--If no agreement is reached
between the head of the Federal department, agency, or
instrumentality and the Governor in a dispute resolution
process under clause (i) or (ii), the Governor of the
State shall make the final determination regarding selection
of a remedial action. To compel implementation of the State's
selected remedy, the State must bring a civil action in
United States district court.
``(B) Enforcement.--
``(i) Authority; jurisdiction.--An interagency agreement
with respect to which there is a transfer agreement or an
order issued by a transferee State shall be enforceable by a
transferee State or by the Federal department, agency, or
instrumentality that is a party to the interagency agreement
only in the United States district court for the district in
which the facility is located.
``(ii) Remedies.--The district court shall--
``(I) enforce compliance with any provision, standard,
regulation, condition, requirement, order, or final
determination that has become effective under the interagency
agreement;
``(II) impose any appropriate civil penalty provided for
any violation of an interagency agreement, not to exceed
$25,000 per day;
``(III) compel implementation of the selected remedial
action; and
``(IV) review a challenge by the Federal department,
agency, or instrumentality to the remedial action selected by
the State under this section, in accordance with section
113(j).
``(12) Community participation.--If, prior to the date of
enactment of this section, a Federal department, agency, or
instrumentality had established for a facility covered by a
transfer agreement a facility-specific advisory board or
other community-based advisory group (designated as a `site-
specific advisory board', a `restoration advisory board', or
otherwise), and the Administrator determines that the board
or group is willing and able to perform the responsibilities
of a community response organization under section 117(e)(2),
the board or group--
``(A) shall be considered to be a community response
organization for the purposes of section 117 (e) (2), (3),
(4), and (9), and (g) and sections 131 and 133; but
``(B) shall not be required to comply with, and shall not
be considered to be a community response organization for the
purposes of, section 117 (e) (1), (5), (6), (7), or (8) or
(f).''.
SEC. 602. LIMITATION ON CRIMINAL LIABILITY OF FEDERAL
OFFICERS, EMPLOYEES, AND AGENTS.
Section 120 of the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (42 U.S.C. 9620) is
amended by adding at the end the following:
``(k) Criminal Liability.--Notwithstanding any other
provision of this Act or any other law, an officer, employee,
or agent of the United States shall not be held criminally
liable for a failure to comply, in any fiscal year, with a
requirement to take a response action at a facility that is
owned or operated by a department, agency, or instrumentality
of the United States, under this Act, the Solid Waste
Disposal Act (42 U.S.C. 6901 et seq.), or any other Federal
or State law unless--
``(1) the officer, employee, or agent has not fully
performed any direct responsibility or delegated
responsibility that the officer, employee, or agent had under
Executive Order 12088 (42 U.S.C. 4321 note) or any other
delegation of authority to ensure that a request for funds
sufficient to take the response action was included in the
President's budget request under section 1105 of title 31,
United States Code, for that fiscal year; or
``(2) appropriated funds were available to pay for the
response action.''.
SEC. 603. INNOVATIVE TECHNOLOGIES FOR REMEDIAL ACTION AT
FEDERAL FACILITIES.
(a) In General.--Section 311 of the Comprehensive
Environmental Response, Compensation, and Liability Act of
1980 (42 U.S.C. 9660) is amended by adding at the end the
following:
``(h) Federal Facilities.--
``(1) Designation.--The President may designate a facility
that is owned or operated by any department, agency, or
instrumentality of the United States, and that is listed or
proposed for listing on the National Priorities List, to
facilitate the research, development, and application of
innovative technologies for remedial action at the facility.
``(2) Use of facilities.--
``(A) In general.--A facility designated under paragraph
(1) shall be made available to Federal departments and
agencies, State departments and agencies, and public and
private instrumentalities, to carry out activities described
in paragraph (1).
``(B) Coordination.--The Administrator--
``(i) shall coordinate the use of the facilities with the
departments, agencies, and instrumentalities of the United
States; and
``(ii) may approve or deny the use of a particular
innovative technology for remedial action at any such
facility.
``(3) Considerations.--
[[Page S262]]
``(A) Evaluation of schedules and penalties.--In
considering whether to permit the application of a particular
innovative technology for remedial action at a facility
designated under paragraph (1), the Administrator shall
evaluate the schedules and penalties applicable to the
facility under any agreement or order entered into under
section 120.
``(B) Amendment of agreement or order.--If, after an
evaluation under subparagraph (A), the Administrator
determines that there is a need to amend any agreement or
order entered into pursuant to section 120, the Administrator
shall comply with all provisions of the agreement or order,
respectively, relating to the amendment of the agreement or
order.''.
(b) Report to Congress.--Section 311(e) of Comprehensive
Environmental Response, Compensation, and Liability Act of
1980 (42 U.S.C. 9660(e)) is amended--
(1) by striking ``At the time'' and inserting the
following:
``(1) In general.--At the time''; and
(2) by adding at the end the following:
``(2) Additional information.--A report under paragraph (1)
shall include information on the use of facilities described
in subsection (h)(1) for the research, development, and
application of innovative technologies for remedial activity,
as authorized under subsection (h).''.
TITLE VII--NATURAL RESOURCE DAMAGES
SEC. 701. RESTORATION OF NATURAL RESOURCES.
Section 107(f) of the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (42 U.S.C. 9607(f))
is amended--
(1) by inserting ``Natural Resource Damages.--'' after
``(f)'';
(2) by striking ``(1) Natural Resources Liability.--In the
case'' and inserting the following:
``(1) Liability.--
``(A) In general.--In the case''; and
(3) in paragraph (1)(A), as designated by paragraph (2)--
(A) by inserting after the fourth sentence the following:
``Sums recovered by an Indian tribe as trustee under this
subsection shall be available for use only for restoration,
replacement, or acquisition of the equivalent of such natural
resources by the Indian tribe. A restoration, replacement, or
acquisition conducted by the United States, a State, or an
Indian tribe shall proceed only if it is technologically
feasible from an engineering perspective at a reasonable cost
and consistent with all known or anticipated response actions
at or near the facility.''; and
(B) by striking ``The measure of damages in any action''
and all that follows through the end of the paragraph and
inserting the following:
``(B) Limitations on liability.--
``(i) Measure of damages.--The measure of damages in any
action for damages for injury to, destruction of, or loss of
natural resources shall be limited to--
``(I) the reasonable costs of restoration, replacement, or
acquisition of the equivalent of natural resources that
suffer injury, destruction, or loss caused by a release; and
``(II) the reasonable costs of assessing damages.
``(ii) Nonuse values.--There shall be no recovery under
this Act for any impairment of nonuse values.
``(iii) No double recovery.--A person that obtains a
recovery of damages, response costs, assessment costs, or any
other costs under this Act for the costs of restoring an
injury to or destruction or loss of a natural resource
(including injury assessment costs) shall not be entitled to
recovery under this Act or any other Federal or State law for
the same injury to or destruction or loss of the natural
resource.
``(iv) Restrictions on recovery.--
``(I) Limitation on lost use damages.--There shall be no
recovery from any person under this section for the costs of
a loss of use of a natural resource for a natural resource
injury, destruction, or loss that occurred before December
11, 1980.
``(II) Restoration, replacement, or acquisition.--There
shall be no recovery from any person under this section for
the costs of restoration, replacement, or acquisition of the
equivalent of a natural resource if the natural resource
injury, destruction, or loss for which the restoration,
replacement, or acquisition is sought and the release of the
hazardous substance from which the injury resulted occurred
wholly before December 11, 1980.''.
SEC. 702. ASSESSMENT OF INJURY TO AND RESTORATION OF NATURAL
RESOURCES.
(a) Natural Resource Injury and Restoration Assessments.--
Section 107(f)(2) of the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980 (42 U.S.C.
9607(f)(2)) is amended by striking subparagraph (C) and
inserting the following:
``(C) Natural resource injury and restoration assessment.--
``(i) Regulation.--A natural resource injury and
restoration assessment conducted for the purposes of this Act
made by a Federal, State, or tribal trustee shall be
performed, to the extent practicable, in accordance with--
``(I) the regulation issued under section 301(c); and
``(II) generally accepted scientific and technical
standards and methodologies to ensure the validity and
reliability of assessment results.
``(ii) Facility-specific conditions.--Injury assessment,
restoration planning, and quantification of restoration costs
shall, to the extent practicable, be based on facility-
specific information.
``(iii) Recoverable costs.--A trustee's claim for
assessment costs--
``(I) may include only--
``(aa) costs that arise from work performed for the purpose
of assessing injury to a natural resource to support a claim
for restoration of the natural resource; and
``(bb) costs that arise from developing and evaluating a
reasonable range of alternative restoration measures; but
``(II) may not include the costs of conducting any type of
study relying on the use of contingent valuation methodology.
``(iv) Payment period.--In a case in which injury to or
destruction or loss of a natural resource was caused by a
release that occurred over a period of years, payment of
damages shall be permitted to be made over a period of years
that is appropriate in view of the period of time over which
the damages occurred, the amount of the damages, the
financial ability of the responsible party to pay the
damages, and the time period over which and the pace at which
expenditures are expected to be made for restoration,
replacement, and acquisition activities.
``(v) Trustee restoration plans.--
``(I) Administrative record.--Participating natural
resource trustees may designate a lead administrative trustee
or trustees. The lead administrative trustee may establish an
administrative record on which the trustees will base the
selection of a plan for restoration of a natural resource.
The restoration plan shall include a determination of the
nature and extent of the natural resource injury. The
administrative record shall be made available to the public
at or near the facility at which the release occurred.
``(II) Public participation.--The Administrator shall issue
a regulation for the participation of interested persons,
including potentially responsible parties, in the development
of the administrative record on which the trustees will base
selection of a restoration plan and on which judicial review
of restoration plans will be based. The procedures for
participation shall include, at a minimum, each of the
requirements stated in section 113(k)(2)(B).''.
(b) Regulations.--Section 301 of the Comprehensive
Environmental Response, Compensation, and Liability Act of
1980 (42 U.S.C. 9651) is amended by striking subsection (c)
and inserting the following:
``(c) Regulations for Injury and Restoration Assessments.--
``(1) In general.--The President, acting through Federal
officials designated by the National Contingency Plan under
section 107(f)(2), shall issue a regulation for the
assessment of injury to natural resources and the costs of
restoration of natural resources (including the costs of
assessment) for the purposes of this Act and for
determination of the time periods in which payment of damages
will be required.
``(2) Contents.--The regulation under paragraph (1) shall--
``(A) specify protocols for conducting assessments in
individual cases to determine the injury, destruction, or
loss of natural resources;
``(B) identify the best available procedures to determine
the reasonable costs of restoration and assessment;
``(C) take into consideration the ability of a natural
resource to recover naturally and the availability of
replacement or alternative resources;
``(D) provide for the designation of a single lead Federal
decisionmaking trustee for each facility at which an injury
to natural resources has occurred within 180 days after the
date of first notice to the responsible parties that an
assessment of injury and restoration alternatives will be
made; and
``(E) set forth procedures under which--
``(i) all pending and potential trustees identify the
injured natural resources within their respective trust
responsibilities, and the authority under which such
responsibilities are established, as soon as practicable
after the date on which a release occurs;
``(ii) assessment of injury and restoration alternatives
will be coordinated to the greatest extent practicable
between the lead Federal decisionmaking trustee and any
present or potential State or tribal trustees, as applicable;
and
``(iii) time periods for payment of damages in accordance
with section 107(f)(2)(C)(iv) shall be determined.
``(3) Deadline for issuance of regulation; periodic
review.--The regulation under paragraph (1) shall be issued
not later than 1 year after the date of enactment of the
Superfund Cleanup Acceleration Act of 1997 and shall be
reviewed and revised as appropriate every 5 years.''.
SEC. 703. CONSISTENCY BETWEEN RESPONSE ACTIONS AND RESOURCE
RESTORATION STANDARDS.
(a) Restoration Standards and Alternatives.--Section 107(f)
of the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980 (42 U.S.C. 9607(f)) is amended by
adding at the end the following:
``(3) Compatibility with remedial action.--Both response
actions and restoration measures may be implemented at the
same facility, or to address releases from the same facility.
Such response actions and restoration measures shall not be
inconsistent with
[[Page S263]]
one another and shall be implemented, to the extent
practicable, in a coordinated and integrated manner.''.
(b) Consideration of Natural Resources in Response
Actions.--Section 121(a) of the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980 (42 U.S.C.
9621(a)) (as amended by section 402(1)) is amended by adding
at the end the following:
``(6) Coordination.--In evaluating and selecting remedial
actions, the Administrator shall take into account the
potential for injury to a natural resource resulting from
such actions.''.
SEC. 704. CONTRIBUTION.
Subparagraph (A) of section 113(f)(1) of the Comprehensive
Environmental Response, Compensation, and Liability Act of
1980 (42 U.S.C. 9613(f)(1)) is amended in the third sentence
by inserting ``and natural resource damages'' after
``costs''.
TITLE VIII--MISCELLANEOUS
SEC. 801. RESULT-ORIENTED CLEANUPS.
(a) Amendment.--Section 105(a) of the Comprehensive
Environmental Response, Compensation, and Liability Act of
1980 (42 U.S.C. 9605(a)) is amended--
(1) by striking ``and'' at the end of paragraph (9);
(2) by striking the period at the end of paragraph (10) and
inserting ``; and''; and
(3) by inserting after paragraph (10) the following:
``(11) procedures for conducting response actions,
including facility evaluations, remedial investigations,
feasibility studies, remedial action plans, remedial designs,
and remedial actions, which procedures shall--
``(A) use a results-oriented approach to minimize the time
required to conduct response measures and reduce the
potential for exposure to the hazardous substances,
pollutants, and contaminants in an efficient, timely, and
cost-effective manner;
``(B) require, at a minimum, expedited facility evaluations
and risk assessments, timely negotiation of response action
goals, a single engineering study, streamlined oversight of
response actions, and consultation with interested parties
throughout the response action process;
``(C) be subject to the requirements of sections 117, 120,
121, and 133 in the same manner and to the same degree as
those sections apply to response actions; and
``(D) be required to be used for each remedial action
conducted under this Act unless the Administrator determines
that their use would not be cost-effective or result in the
selection of a response action that achieves the goals of
protecting human health and the environment stated in section
121(a)(1)(B).''.
(b) Amendment of National Hazardous Substance Response
Plan.--Not later than 180 days after the date of enactment of
this Act, the Administrator, after notice and opportunity for
public comment, shall amend the National Hazardous Substance
Response Plan under section 105(a) of the Comprehensive
Environmental Response, Compensation, and Liability Act of
1980 (42 U.S.C. 9605(a)) to include the procedures required
by the amendment made by subsection (a).
SEC. 802. NATIONAL PRIORITIES LIST.
Section 105 of the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (42 U.S.C. 9605) (as
amended by section 407(a)(2)) is amended by adding at the end
the following:
``(i) National Priorities List.--
``(1) Limitation.--
``(A) In general.--After the date of the enactment of this
subsection, the President may add vessels and facilities to
the National Priorities List only in accordance with the
following schedule:
``(i) Not more than 30 vessels and facilities in 1997.
``(ii) Not more than 25 vessels and facilities in 1998.
``(iii) Not more than 20 vessels and facilities in 1999.
``(iv) Not more than 15 vessels and facilities in 2000.
``(v) Not more than 10 vessels and facilities in any year
after 2000.
``(B) Relisting.--The relisting of a vessel or facility
under section 130(d)(5)(C)(ii) shall not be considered to be
an addition to the National Priorities List for purposes of
this subsection.
``(2) Prioritization.--The Administrator shall prioritize
the vessels and facilities added under paragraph (1) on a
national basis in accordance with the threat to human health
and the environment presented by each of the vessels and
facilities, respectively.
``(3) State concurrence.--A vessel or facility may be added
to the National Priorities List under paragraph (1) only with
the concurrence of the Governor of the State in which the
vessel or facility is located.''.
SEC. 803. OBLIGATIONS FROM THE FUND FOR RESPONSE ACTIONS.
Section 104(c)(1) of the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980 (42 U.S.C.
9604(c)(1)) is amended--
(1) in subparagraph (C) by striking ``consistent with the
remedial action to be taken'' and inserting ``not
inconsistent with any remedial action that has been selected
or is anticipated at the time of any removal action at a
facility.'';
(2) by striking ``$2,000,000'' and inserting
``$4,000,000''; and
(3) by striking ``12 months'' and inserting ``2 years''.
TITLE IX--FUNDING
Subtitle A--General Provisions
SEC. 901. AUTHORIZATION OF APPROPRIATIONS FROM THE FUND.
Section 111(a) of the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (42 U.S.C. 9611(a))
is amended in the first sentence by striking ``not more than
$8,500,000,000 for the 5-year period beginning on the date of
enactment of the Superfund Amendments and Reauthorization Act
of 1986, and not more than $5,100,000,000 for the period
commencing October 1, 1991, and ending September 30, 1994''
and inserting ``a total of $8,500,000,000 for fiscal years
1998, 1999, 2000, 2001, and 2002''.
SEC. 902. ORPHAN SHARE FUNDING.
Section 111(a) of the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (42 U.S.C. 9611(a)),
as amended by section 301(c), is amended by inserting after
paragraph (8) the following:
``(9) Orphan share funding.--Payment of orphan shares under
section 136.''.
SEC. 903. DEPARTMENT OF HEALTH AND HUMAN SERVICES.
Section 111 of the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (42 U.S.C. 9611) is
amended by striking subsection (m) and inserting the
following:
``(m) Health Authorities.--There are authorized to be
appropriated from the Fund to the Secretary of Health and
Human Services to be used for the purposes of carrying out
the activities described in subsection (c)(4) and the
activities described in section 104(i), $50,000,000 for each
of fiscal years 1998, 1999, 2000, 2001, and 2002. Funds
appropriated under this subsection for a fiscal year, but not
obligated by the end of the fiscal year, shall be returned to
the Fund.''.
SEC. 904. LIMITATIONS ON RESEARCH, DEVELOPMENT, AND
DEMONSTRATION PROGRAMS.
Section 111 of the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (42 U.S.C. 9611) is
amended by striking subsection (n) and inserting the
following:
``(n) Limitations on Research, Development, and
Demonstration Programs.--
``(1) Alternative or innovative technologies research,
development, and demonstration programs.--
``(A) Limitation.--For each of fiscal years 1998, 1999,
2000, 2001, and 2002, not more than $30,000,000 of the
amounts available in the Fund may be used for the purposes of
carrying out the applied research, development, and
demonstration program for alternative or innovative
technologies and training program authorized under section
311(b) other than basic research.
``(B) Continuing availability.--Such amounts shall remain
available until expended.
``(2) Hazardous substance research, demonstration, and
training.--
``(A) Limitation.--From the amounts available in the Fund,
not more than the following amounts may be used for the
purposes of section 311(a):
``(i) For fiscal year 1998, $37,000,000.
``(ii) For fiscal year 1999, $39,000,000.
``(iii) For fiscal year 2000, $41,000,000.
``(iv) For each of fiscal years 2001 and 2002, $43,000,000.
``(B) Further limitation.--No more than 15 percent of such
amounts shall be used for training under section 311(a) for
any fiscal year.
``(3) University hazardous substance research centers.--For
each of fiscal years 1998, 1999, 2000, 2001, and 2002, not
more than $5,000,000 of the amounts available in the Fund may
be used for the purposes of section 311(d).''.
SEC. 905. AUTHORIZATION OF APPROPRIATIONS FROM GENERAL
REVENUES.
Section 111(p) of the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (42 U.S.C. 9611(p))
is amended by striking paragraph (1) and inserting the
following:
``(1) Authorization of appropriations.--
``(A) In general.--There are authorized to be appropriated,
out of any money in the Treasury not otherwise appropriated,
to the Hazardous Substance Superfund--
``(i) for fiscal year 1998, $250,000,000;
``(ii) for fiscal year 1999, $250,000,000;
``(iii) for fiscal year 2000, $250,000,000;
``(iv) for fiscal year 2001, $250,000,000; and
``(v) for fiscal year 2002, $250,000,000.
``(B) Additional amounts.--There is authorized to be
appropriated to the Hazardous Substance Superfund for each
such fiscal year an amount, in addition to the amount
authorized by subparagraph (A), equal to so much of the
aggregate amount authorized to be appropriated under this
subsection and section 9507(b) of the Internal Revenue Code
of 1986 as has not been appropriated before the beginning of
the fiscal year.''.
SEC. 906. ADDITIONAL LIMITATIONS.
Section 111 of the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (42 U.S.C. 9611) (as
amended by section 102(c)) is amended by adding at the end
the following:
``(t) Community Response Organization.--For the period
commencing January 1, 1997, and ending September 30, 2002,
not more than $15,000,000 of the amounts available in the
Fund may be used to make grants under section 117(f)
(relating to Community Response Organizations).
``(u) Recoveries.--Effective beginning January 1, 1997, any
response cost recoveries collected by the United States under
this Act
[[Page S264]]
shall be credited as offsetting collections to the Superfund
appropriations account.''.
SEC. 907. REIMBURSEMENT OF POTENTIALLY RESPONSIBLE PARTIES.
Section 111(a) of the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (42 U.S.C. 9611(a))
(as amended by section 902) is amended by inserting after
paragraph (9) the following:
``(10) Reimbursement of potentially responsible parties.--
If--
``(A) a potentially responsible party and the Administrator
enter into a settlement under this Act under which the
Administrator is reimbursed for the response costs of the
Administrator; and
``(B) the Administrator determines, through a Federal audit
of response costs, that the costs for which the Administrator
is reimbursed--
``(i) are unallowable due to contractor fraud;
``(ii) are unallowable under the Federal Acquisition
Regulation; or
``(iii) should be adjusted due to routine contract and
Environmental Protection Agency response cost audit
procedures,
a potentially responsible party may be reimbursed for those
costs.''.
Mr. ABRAHAM. Mr. President, I would like to join the others on the
Senate floor here today to congratulate Senator Chafee and Senator
Smith on the introduction of their Superfund reform legislation. As an
original cosponsor of this legislation, I support their efforts to
speed the cleanup of polluted sites across this country.
And while this legislation has provisions targeting those sites
currently on the national priority list, I should point out it also has
provisions to speed the remediation of less seriously contaminated
sites--so-called brownfields.
I am someone who is deeply concerned about brownfields and the
economic and environmental damage they impose on communities.
First, Senator Chafee, thank you very much for agreeing to speak with
me on this very important issue. As the Senator knows, last year I
introduced legislation along with Senator Lieberman which would provide
tax incentives for the remediation of brownfields. This legislation is
very important to communities across the country, and I intend to
reintroduce similar legislation this Congress. It is my understanding
that the bill introduced today focuses, in part, on our brownfields
problem.
Mr. CHAFEE. The Senator from Michigan is correct. The focus of the
Environment and Public Works Committee will extend beyond the National
Priorities List to include solutions to our national brownfields
problem. And while my committee does not have jurisdiction over tax
measures, I recognize the leadership exerted by Senator Abraham to
address the problem of brownfields and I hope to work with him on a
variety of solutions to the environmental problems faced by this
Nation's communities.
Mr. ABRAHAM. I thank the Senator and I yield the floor.
______
By Mr. NICKLES (for himself, Mr. Gregg, Mr. Warner, Mr. Lott, Mr.
Allard, Mr. Ashcroft, Mr. Coverdell, Mr. Craig, Mr. Domenici,
Mr. Enzi, Mr. Faircloth, Mr. Gorton, Mr. Grams, Mr. Hagel, Mr.
Hatch, Mr. Helms, Mrs. Hutchison, Mr. Hutchinson, Mr. Kyl, Mr.
Murkowski, Mr. Roberts, Mr. Sessions, Mr. Smith, Mr. Thomas,
Mr. Thurmond, Mr. Coats, and Mr. Kempthorne):
S. 9. A bill to protect individuals from having their money
involuntarily collected and used for politics by a corporation or labor
organization; to the Committee on Rules and Administration.
THE PAYCHECK PROTECTION ACT
Mr. NICKLES. Madam President, this bill, the Paycheck Protection Act,
sponsored by myself, Senators Gregg, Lott, Inhofe, Hutchison from
Texas, Cochran, Roberts, Hagel, Smith from New Hampshire, and
Kempthorne, deals with making sure that no one is compelled to
contribute to political campaigns with which they disagree. Senator
Ford made an eloquent speech on campaign finance reform. I don't
disagree with everything he said. I just disagree with parts of it.
Campaign reform is an issue a lot of us are going to be dealing with
this year. It is important, in my opinion, Madam President, that we
encourage people to participate in campaigns. We want more people all
across the country to participate in the electoral process. It is a sad
day when only half of the people vote in a Presidential election. Madam
President, it is very important that nobody be compelled to contribute
to a campaign with which they disagree. You might think, well, wait a
minute, how in the world in 1997, in this day and age, would anybody be
compelled to contribute to a campaign with which they disagree? But it
happens. Unfortunately, Madam President, every week millions of
Americans are having money taken out of their paycheck to contribute to
candidates that they may well disagree with, but they didn't have a
voice, a choice, or an option.
Madam President, that is wrong. I will tell you that the origin of
the bill we are introducing came from a town meeting that I had, where
an individual--a union member--stood up in a town meeting and said, ``I
really resent the fact that my money is taken from me, without my vote,
without my voice, without my option, and given to candidates and
parties which I totally oppose.'' I said, ``I agree with you. We will
try to remedy that.''
That should not happen in America. That is something that sounds like
it might happen in some totalitarian state where moneys or assets are
confiscated and some corrupt politician would use it against their
will. It is happening today. Millions of Americans are finding part of
their paychecks taken from them without their voice or choice and used
for political purposes with which they disagree.
Madam President, this bill, the Paycheck Protection Act, which is
sponsored by several of us, basically is very simple. It says that no
individual, no employee working for a corporation, would be compelled
to contribute to a political organization without their express
consent. As a matter of fact, it says that no deduction from their
wages would be used for political purposes unless they give prior
written consent.
Consent is the big issue. If we are going to have campaign reform, I
am going to tell my colleague, this is going to have to be part of the
package.
This is America. No one should be compelled to contribute to
political purposes for which they disagree. And that applies for an
individual where maybe their company has a PAC (political action
committee), and maybe the board of directors or the officers say, ``We
want everybody to contribute.'' They can say what they want, but they
cannot compel. No one should be compelled to contribute to a political
organization, a political action committee, or to a labor organization
against their will for political purposes. It is that simple.
As Thomas Jefferson said, ``To compel a man to furnish funds for the
propagation of ideas he disbelieves or abhors . . . is sinful and
tyrannical.''
We're not talking about nickels and dimes here, but untold millions
of dollars in partisan political campaigns and propaganda. Since such
funds are not required to be disclosed, it is impossible to determine
the exact amount of this spending. However, estimates of this under-
the-radar spending is somewhere between $300 million and $1 billion for
this most recent election.
The way it is now, an employee paying dues to a labor organization
has no choice over whether or not that labor organization can collect
the money for politics. The only choice these employees have in the
matter is to ask for a refund of the portion dues which is to be used
for politics. This refund process is so lengthy and burdensome that it
is next to impossible for someone to get their money back. Furthermore,
for an employee to exercise their right to a refund of such dues, they
are required to give up their right to vote in the labor organization
that they are still required to pay for representing them. This is
taxation without representation.
The Supreme Court has consistently ruled that employees paying dues
to a labor organization cannot be forced to also pay for the activities
outside the core representational activities, such as costs associated
with political activities. The Clinton administration, however, has
kept employees in the dark regarding the minimal rights they do have.
One of the first acts of this administration was to repeal the very
regulations to carry out the Supreme Court's decision, which protected
employees forced to pay for politics.
[[Page S265]]
People are recognizing the wrong brought upon Americans who have been
given no choice in supporting causes for which they oppose. Even the
administration's own National Labor Relations Board [NLRB], which has
strong labor organization sentiments, recently ruled dues-paying
employees are in the least entitled to information setting forth the
percentage of those dues not related to collective bargaining
activities. While this is a step in the right direction, more needs to
be done.
The Paycheck Protection Act protects employees from having their
money involuntarily taken from them and used for politics. The act
protects stockholders and employees of a corporation from having, as a
condition of employment, dues, initiation fees, or other payments for
politics taken from them without the separate, prior, written,
voluntary authorization. Similarly, the act protects employees paying
dues to a labor organization from having such dues, initiation fees, or
other payments taken from them which are used for politics.
Mr. President, this act furthers the basic civil right spoken of by
Thomas Jefferson. It does so by requiring that individuals not be
compelled to fund or support activities outside the legitimate scope of
the employer or labor organization. This bill pro-worker, pro-labor
organization, and most importantly, pro-American.
I look forward to a broad bipartisan support for this bill.
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. 9
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 ``Paycheck Protection Act''.
SEC. 2. WORKERS' POLITICAL RIGHTS.
Section 316 of the Federal Election Campaign Act of 1971 (2
U.S.C. 441b) is amended by adding the following new
subsection:
``(c)(1) Except with the separate, prior, written,
voluntary authorization of each individual, it shall be
unlawful--
(A) for any national bank or corporation described in this
section to collect from or assess its stockholders or
employees any dues, initiation fee, or other payment as a
condition of employment if any part of such dues, fee, or
payment will be used for political activities in which the
national bank or corporation, as the case may be, is engaged;
and
(B) for any labor organization described in this section to
collect from or assess its members or nonmembers any dues,
initiation fee, or other payment if any part of such dues,
fee, or payment will be used for political activities.
``(2) an authorization described in paragraph (1) shall
remain in effect until revoked and may be revoked at any
time.
``(3) for purposes of this subsection, the term ``political
activities'' includes communications or other activities
which involve carrying on propaganda, attempting to influence
legislation, or participating or intervening in any political
campaign or political party.''
______
By Mr. HATCH (for himself, Mr. Sessions, Mr. Ashcroft, Mr.
Domenici, Mr. Lott, Mr. Abraham, Mr. Allard, Mr. Bond, Mr.
Coverdell, Mr. Craig, Mr. D'Amato, Mr. Enzi, Mr. Faircloth, Mr.
Gorton, Mr. Grams, Mr. Grassley, Mr. Hagel, Mr. Helms, Mr.
Hutchinson, Mr. Kyl, Mr. Murkowski, Mr. Roberts, Mr. Smith, Mr.
Thomas, Mr. Thurmond, and Mr. Warner):
S. 10. A bill to reduce violent juvenile crime, promote
accountability by juvenile criminals, punish and deter violent gang
crime, and for other purposes; to the Committee on the Judiciary.
violent and repeat juvenile offender act of 1997
Mr. ASHCROFT. Mr. President, earlier today Senator Hatch introduced
S. 10, the Violent and Repeat Offender Act of 1997. Senators Lott
Domenici, Sessions, and I worked with him in developing the bill. While
not perfect, the bill does take the initial steps in dealing with the
epidemic of violent juvenile crime sweeping the Nation.
Mr. President, the face of crime in America is indeed changing.
Throughout our history, one thing has been clear: Government's first
responsibility is to keep the citizenry safe. John Jay wrote in The
Federalist, No. 3 ``Among the many objects to which a wise and free
people find it necessary to direct their attention, that of providing
for their safety seems to be first.''
The murderers, robbers, rapists, and drug dealers of yesteryear were
typically adults. Now they are typically juveniles. As the age of these
criminal predators becomes younger and younger with each passing year,
so does the age of their victims.
Last Wednesday afternoon, 12-year-old Darryl Dayan Hall was abducted
at gunpoint from the Southeast Washington area by three teenagers of a
gang known as the Simple City Crew. This is the same gang that opened
gunfire at a crowded community swimming pool in June 1993, wounding six
children. This past Saturday, police found Darryl's frozen body. He had
been shot once in the back of the head and at least once in the body.
The three teenagers who are now charged with Darryl's murder have had
numerous prior brushes with the law. One of Darryl's assailants was
charged as a juvenile with possession of PCP in 1995 and then was
released--as is too often the case--promising not to run afoul of the
law again. Another of Darryl's assailants was, and is, on probation
following his juvenile conviction last spring for possession of PCP
with intent to distribute. Darryl's third assailant was charged as a
juvenile just last month with carrying a deadly weapon.
Mr. President, from 1984 to 1994, the number of juveniles murdered in
this country increased 82 percent. In 1994, one of every five juveniles
murdered were killed by another juvenile. The rate at which juveniles
14 to 17 years old were arrested for murder grew by 22 percent from
1990 to 1994 and the problem is going to get worse, much worse.
Congress, over the last three decades, has established 131 separate
Federal programs--administered by 16 different departments and
agencies--to serve delinquent and at-risk youth, according to a report
issued by GAO last March. Conservative estimates of Federal
appropriations used for these at-risk and delinquent youth programs was
more than $4 billion in fiscal year 1995.
Despite this ongoing massive expenditure, the Federal Government has
failed to meet its responsibility of providing public safety in this
arena because it has not focused on holding juveniles accountable for
their actions, it must focus on the problem of rising juvenile
violence. We have a new category of offenders that deserve a new
category of responses. We have criminals in our midst--young criminals.
The juvenile offenders of today will become the career offenders of
tomorrow, if Government continues to fail to recognize that America has
an acute social illness that cannot be cured with money spent solely on
social programs. This legislation takes a commonsense approach in
dealing with the epidemic of juvenile violence. It would help States
restore safety in urban, suburban, and rural communities.
This legislation would provide $2.5 billion in new incentive grants
for States to enact certain accountability-based reforms to their
juvenile justice systems. This legislation would authorize funding for
various programs, including trying violent juveniles as adults;
establishing the ability of States to collect juvenile criminal
records, fingerprints, and photographs, and to share that criminal
history information within the State, with other States, and with the
Federal Government; and establishing the Serious Habitual Offender
Comprehensive Action Program [SHOCAP]. In addition, religious
organizations would be permitted to participate in rehabilitative
programs.
Serious, violent, and repeat juvenile offenders must be held
responsible for their crimes. Today we are living with a juvenile
justice system that was created around the time of the silent film. We
are living with a juvenile justice system that reprimands the crime
victim for being at the wrong place at the wrong time, and then turns
around and hugs the juvenile terrorist, whispering ever so softly into
his ear, ``Don't worry, the State will cure you.''
The juvenile justice system's primary goal is to treat and
rehabilitate the juvenile offender. Such a system can handle runaways,
truants, and other status offenders; but it is ill-equipped to deal
with those who commit serious, violent, and repeat juvenile crime.
[[Page S266]]
The criminal justice system, not the juvenile justice system, can
emphasize that adult criminal acts have real consequences. The purpose
of the criminal justice system is to punish, that is, to hold
defendants accountable.
This legislation would provide financial assistance to States to help
them reform their juvenile system. A State would be eligible to receive
Federal funds if the State agrees to enact legislation that would
provide for the adult prosecution--as a matter of law or prosecutorial
discretion--of juveniles 14 or older who commit a violent crime, such
as murder, forcible rape, armed robbery and assault with a deadly
weapon; an offense involving a controlled substance; or an offense
involving possession of a firearm or a destructive device.
Punishment of dangerous juvenile offenders as adults is an effective
tool in fighting violent juvenile crime. For example, Jacksonville, FL
State Attorney Harry Shorstein instituted a program to prosecute and
incarcerate such offenders in 1992. Two years later, arrests for
juveniles dropped from 7,184 to 5,475. While juvenile arrests increased
for the Nation, Jacksonville's arrest rate decreased by 30 percent.
States need to create and maintain juvenile criminal records.
Typically, State statutes seal juvenile criminal records and expunge
these records when the juvenile reaches age 18. The time has come to
discard anachronistic ideas that crimes, no matter how heinous, by
juveniles must be kept confidential.
Our laws view juveniles through the benevolent prism of kids gone
astray. It should view them as young criminals who know that they can
commit crimes, repeatedly as juveniles because their juvenile records
are kept hidden under the veil of secrecy. These young criminals know
that when they reach their 18th birthday, they can begin their second
career as adult criminals with an unblemished record. In rhetoric we
are protecting juveniles from the stigma of a record but in reality we
are coddling criminals. We must separate rhetoric from reality by
lifting the veil of secrecy.
Law enforcement officers need to know the prior juvenile criminal
records of individuals to assist them in criminal investigations and
apprehension.
Law enforcement is in desperate need of access to juvenile criminal
records, according to Police Chief David G. Walchak, who is also
president of the International Association of Chiefs of Police. The
police chief says, ``Current juvenile records (both arrest and
adjudication) are inconsistent across the states, and are usually
unavailable to the various programs' staff who work with youthful
offenders.'' The police chief further states that ``There are only 26
states that even allow law enforcement access to juvenile records.''
In the words of Chief Walchak, ``If we [law enforcement] don't know
who the youthful offenders are, we can't appropriately intervene.'' It
is that simple. As juvenile gangs spread from urban to suburban to
rural areas, as they travel from State to State, the veil of secrecy
draped over their criminal history records undermines law enforcement
efforts.
This legislation would also provide money to States to create,
maintain, and share juvenile criminal records, and to share those
records with other Federal, State, and local law enforcement agencies.
Strengthening law enforcement should be a top priority.
School officials need access to juvenile criminal records to assist
them in providing for the best interests of all students. Students are
vulnerable in unsafe school environments. The decline in school safety
can be attributed to laws that protect dangerous students rather than
innocent students. While visiting with school officials in Sikeston,
MO, a teacher told me that a student came to school wearing an
electronic monitoring ankle bracelet. The student told the teacher,
``You don't know if I'm a murderer or a rapist and I ain't gonna tell
you.'' That student was brutally honest. No one had any knowledge of
what he had done and, more important, no way of finding out.
If schools know the identity of a violent juvenile, they can respond
to misbehavior by imposing stricter sanctions, assigning particular
teachers, or having the student's locker near a teacher's doorway
entrance so that the teacher can monitor his conduct during the
changing of class periods. In short, this bill would allow school
officials to take measures that could prevent violence at schools.
For purposes of adult sentencing, adult courts need to know if a
convicted felon has a history of criminal behavior. According to the
1991 Survey of Inmates in State Correctional Facilities, nearly 40
percent of prison inmates had a prior record as a juvenile. That is
approximately 4 in 10 prison inmates. This legislation will not enable
criminals to masquerade as neophytes before the criminal justice
system.
The bill allows State and local governments to use Federal funds to
implement the Serious Habitual Offenders Comprehensive Action Program
[SHOCAP].
SHOCAP is a multiagency crime analysis and case management process
for identifying and targeting the violent and hard-core juvenile
offenders in a community.
SHOCAP targets these serious habitual offenders for most intensive
social supervisory interventions, the most intensive accountability in
school attendance and discipline, and the most investigation and
prosecution when they commit a crime.
The OJJDP conducted five test pilots of SHOCAP. Oxnard, CA was one of
the selected sites. SHOCAP was implemented in 1983. Oxnard found that
less than 2 percent of all juveniles arrested in that community were
responsible for 35 percent of felonies by juveniles. Four years later,
Oxnard's violent crime dropped 38 percent. Illinois and Florida both
have recently established statewide SHOCAP's. This bill would allow all
jurisdictions to use Federal funds to implement SHOCAP.
Reforms are necessary at the Federal level as well. This legislation
would make it easier for Federal prosecutors to try juveniles as
adults. Under the bill, U.S. attorneys would have discretion to decide
whether to try as adults juveniles 14 years or older who are alleged to
have committed an act which if committed by an adult would be a felony.
This would eliminate juvenile transfer hearings that leave the transfer
decision to juvenile court judges.
Federal juvenile court proceedings would be open to the general
public. When imposing a sentence, the district court would be allowed
to consider the juvenile's entire prior juvenile records. In any case
in which a juvenile is tried as an adult, access to the record of the
offenses of the juvenile shall be made available in the same manner as
is applicable to adult defendants. And in those cases in which the
juvenile was adjudicated delinquent in Federal juvenile delinquency
proceedings, the U.S. attorney would be allowed to release such records
to law enforcement authorities of any jurisdiction and to school
officials.
When the act committed by the juvenile is heinous, the punishment
will be weighed accordingly. If tried and sentenced as an adult, the
juvenile would be subject to the death penalty as an adult. In
addition, the death penalty would be lowered from age 18 to 16.
The Government should mount a counterattack on gang violence. This
legislation targets violent youth gangs, like the notorious Simple City
Crew in the District. There would be new Federal penalties for offenses
committed by criminal street gangs. Gangs are no longer concentrated in
the big cities, they are now in rural towns. The bill would also
provide $100 million to hire assistant U.S. attorneys to prosecute
juvenile criminal street gangs.
We must challenge this culture of violence and restore the culture of
personal responsibility. It is high time to consider hardheaded and
sensible juvenile justice policies. Where possible we must give second
chances. Where necessary we must punish severely. This is a first step
to restore justice to a nation that has grown weary of injustice.
In sum, this legislation would send a clear, cogent, and convincing
message: serious acts have serious consequences.
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. 10
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
[[Page S267]]
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Violent
and Repeat Juvenile Offender Act of 1997''.
(b) Table of Contents.--The table of contents for this Act
is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Findings and purposes.
Sec. 3. Severability.
TITLE I--JUVENILE JUSTICE REFORM
Sec. 101. Repeal of general provision.
Sec. 102. Treatment of Federal juvenile offenders.
Sec. 103. Capital cases.
Sec. 104. Definitions.
Sec. 105. Notification after arrest.
Sec. 106. Detention prior to disposition.
Sec. 107. Speedy trial.
Sec. 108. Dispositional hearings.
Sec. 109. Use of juvenile records.
Sec. 110. Incarceration of violent offenders.
Sec. 111. Federal sentencing guidelines.
TITLE II--JUVENILE GANGS
Sec. 201. Short title.
Sec. 202. Increase in offense level for participation in crime as a
gang member.
Sec. 203. Amendment of title 18 with respect to criminal street gangs.
Sec. 204. Interstate and foreign travel or transportation in aid of
criminal street gangs.
Sec. 205. Solicitation or recruitment of persons in criminal gang
activity.
Sec. 206. Crimes involving the recruitment of persons to participate in
criminal street gangs and firearms offenses as RICO
predicates.
Sec. 207. Prohibitions relating to firearms.
Sec. 208. Amendment of sentencing guidelines with respect to body
armor.
Sec. 209. Additional prosecutors.
TITLE III--JUVENILE CRIME CONTROL AND ACCOUNTABILITY
Sec. 301. Findings; declaration of purpose; definitions.
Sec. 302. Youth Crime Control and Accountability Block Grants.
Sec. 303. Runaway and homeless youth.
Sec. 304. Authorization of appropriations.
Sec. 305. Repeal.
Sec. 306. Transfer of functions and savings provisions.
Sec. 307. Repeal of unnecessary and duplicative programs.
Sec. 308. Housing juvenile offenders.
Sec. 309. Civil monetary penalty surcharge.
SEC. 2. FINDINGS AND PURPOSES.
(a) Findings.--Congress finds that--
(1) at the outset of the twentieth century, the States
adopted 2 separate juvenile justice systems for violent and
nonviolent offenders;
(2) violent crimes committed by juveniles, such as
homicide, rape, and robbery, were an unknown phenomenon at
that time, but the rate at which juveniles commit such crimes
has escalated astronomically since that time;
(3) in 1994--
(A) the number of persons arrested overall for murder in
the United States decreased by 5.8 percent, but the number of
persons who are less than 15 years of age arrested for murder
increased by 4 percent; and
(B) the number of persons arrested for all violent crimes
increased by 1.3 percent, but the number of persons who are
less than 15 years of age arrested for violent crimes
increased by 9.2 percent, and the number of persons less than
18 years of age arrested for such crimes increased by 6.5
percent;
(4) from 1985 to 1996, the number of persons arrested for
all violent crimes increased by 52.3 percent, but the number
of persons under age 18 arrested for violent crimes rose by
75 percent;
(5) the number of juvenile offenders is expected to undergo
a massive increase during the first 2 decades of the twenty-
first century, culminating in an unprecedented number of
violent offenders who are less than 18 years of age;
(6) the rehabilitative model of sentencing for juveniles,
which Congress rejected for adult offenders when Congress
enacted the Sentencing Reform Act of 1984, is inadequate and
inappropriate for dealing with violent and repeat juvenile
offenders;
(7) the Federal Government should encourage the States to
experiment with progressive solutions to the escalating
problem of juveniles who commit violent crimes and who are
repeat offenders, including prosecuting all such offenders as
adults, but should not impose specific strategies or programs
on the States;
(8) an effective strategy for reducing violent juvenile
crime requires greater collection of investigative data and
other information, such as fingerprints and DNA evidence, as
well as greater sharing of such information among Federal,
State, and local agencies, including the courts, in the law
enforcement and educational systems;
(9) data regarding violent juvenile offenders must be made
available to the adult criminal justice system if recidivism
by criminals is to be addressed adequately;
(10) holding juvenile proceedings in secret denies victims
of crime the opportunity to attend and be heard at such
proceedings, helps juvenile offenders to avoid accountability
for their actions, and shields juvenile proceedings from
public scrutiny and accountability;
(11) the injuries and losses suffered by the victims of
violent crime are no less painful or devastating because the
offender is a juvenile; and
(12) the investigation, prosecution, adjudication, and
punishment of criminal offenses committed by juveniles is,
and should remain, primarily the responsibility of the
States, to be carried out without interference from the
Federal Government.
(b) Purposes.--The purposes of this Act are--
(1) to reform juvenile law so that the paramount concerns
of the juvenile justice system are providing for the safety
of the public and holding juvenile wrongdoers accountable for
their actions, while providing the wrongdoer a genuine
opportunity for self reform;
(2) to revise the procedures in Federal court that are
applicable to the prosecution of juvenile offenders;
(3) to address specifically the problem of violent crime
and controlled substance offenses committed by youth gangs;
and
(4) to encourage and promote, consistent with the ideals of
federalism, adoption of policies by the States to ensure that
the victims of crimes of violence committed by juveniles
receive the same level of justice as do victims of violent
crimes that are committed by adults.
SEC. 3. SEVERABILITY.
If any provision of this Act, an amendment made by this
Act, or the application of such provision or amendment to any
person or circumstance is held to be unconstitutional, the
remainder of this Act, the amendments made by this Act, and
the application of the provisions of such to any person or
circumstance shall not be affected thereby.
TITLE I--JUVENILE JUSTICE REFORM
SEC. 101. REPEAL OF GENERAL PROVISION.
(a) In General.--Chapter 401 of title 18, United States
Code, is amended--
(1) by striking section 5001; and
(2) by redesignating section 5003 as section 5001.
(b) Technical Amendments.--The chapter analysis for chapter
401 of title 18, United States Code, is amended--
(1) by striking the item relating to section 5001; and
(2) by redesignating the item relating to section 5003 as
5001.
SEC. 102. TREATMENT OF FEDERAL JUVENILE OFFENDERS.
(a) In General.--Section 5032 of title 18, United States
Code, is amended to read as follows:
``Sec. 5032. Delinquency proceedings in district courts;
juveniles tried as adults; transfer for other criminal
prosecution
``(a) In General.--A juvenile who is not less than 14 years
of age and who is alleged to have committed an act that, if
committed by an adult, would be a criminal offense, shall be
tried in the appropriate district court of the United
States--
``(1) as an adult at the discretion of the United States
Attorney in the appropriate jurisdiction, upon a finding by
that United States Attorney, which finding shall not be
subject to review in or by any court, trial or appellate,
that there is a substantial Federal interest in the case or
the offense to warrant the exercise of Federal jurisdiction,
if the juvenile is charged with a Federal offense that--
``(A) is a crime of violence (as that term is defined in
section 16); or
``(B) involves a controlled substance (as that term is
defined in section 102 of the Controlled Substances Act (21
U.S.C. 802)) for which the penalty is a term of imprisonment
of not less than 5 years; and
``(2) in all other cases, as a juvenile.
``(b) Referral by United States Attorney.--
``(1) In general.--If the United States Attorney in the
appropriate jurisdiction declines prosecution of a charged
offense under subsection (a)(2), the United States Attorney
may refer the matter to the appropriate legal authorities of
the State or Indian tribe.
``(2) Definitions.--In this section--
``(A) the term `State' includes a State of the United
States, the District of Columbia, and any commonwealth,
territory, or possession of the United States; and
``(B) the term `Indian tribe' has the same meaning as in
section 4(e) of the Indian Self-Determination and Education
Assistance Act.
``(c) Applicable Procedures.--Any action prosecuted in a
district court of the United States under this section--
``(1) shall proceed in the same manner as is required by
this title and by the Federal Rules of Criminal Procedure in
proceedings against an adult in the case of a juvenile who is
being tried as an adult in accordance with subsection (a);
and
``(2) in all other cases, shall proceed in accordance with
this chapter, unless the juvenile has requested in writing,
upon advice of counsel, to be proceeded against as an adult.
``(d) Capital Cases.--Subject to section 3591, if a
juvenile is tried and sentenced as an adult, the juvenile
shall be subject to being sentenced to death on the same
terms and in accordance with the same procedures as an adult.
``(e) Application of Laws.--In any case in which a juvenile
is prosecuted in a district court of the United States as an
adult, the juvenile shall be subject to the same laws, rules,
and proceedings regarding sentencing that would be applicable
in the case of an adult. No juvenile sentenced to a term of
imprisonment shall be released from custody simply because
the juvenile reaches the age of 18 years.
[[Page S268]]
``(f) Open Proceedings.--
``(1) In general.--Any offense tried in a district court of
the United States pursuant to this section shall be open to
the general public, in accordance with rules 10, 26, 31(a),
and 53 of the Federal Rules of Criminal Procedure, unless
good cause is established by the moving party or is otherwise
found by the court, for closure.
``(2) Status alone insufficient.--The status of the
defendant as a juvenile, absent other factors, shall not
constitute good cause for purposes of this subsection.
``(g) Availability of Records.--
``(1) In general.--In making a determination concerning the
prosecution of a juvenile in a district court of the United
States under this section, subject to the requirements of
section 5038, the United States Attorney of the appropriate
jurisdiction shall have complete access to the prior Federal
juvenile records of the subject juvenile, and to the extent
permitted by State law, the prior State juvenile records of
the subject juvenile.
``(2) Consideration of entire record.--In any case in which
a juvenile is found guilty in an action pursuant to this
section, the district court responsible for imposing sentence
shall have complete access to the prior juvenile records of
the subject juvenile, and, to the extent permitted under
State law, the prior State juvenile records of the subject
juvenile. At sentencing, the district court shall consider
the entire available prior juvenile record of the subject
juvenile.
``(3) Release of records.--The United States Attorney may
release such Federal records, and, to the extent permitted by
State law, such State records, to law enforcement authorities
of any jurisdiction and to officials of any school, school
district, or postsecondary school at which the individual who
is the subject of the juvenile record is enrolled or seeks,
intends, or is instructed to enroll, if such school officials
are held liable to the same standards and penalties to which
law enforcement and juvenile justice system employees are
held liable under Federal and State law, for the handling and
disclosure of such information.''.
(b) Technical Amendment.--The chapter analysis for chapter
403 of title 18, United States Code, is amended by striking
the item relating to section 5032 and inserting the
following:
``5032. Delinquency proceedings in district courts; juveniles tried
as adults; transfer for other criminal prosecution.''.
SEC. 103. CAPITAL CASES.
Section 3591 of title 18, United States Code, is amended by
striking ``18 years'' each place that term appears and
inserting ``16 years''.
SEC. 104. DEFINITIONS.
Section 5031 of title 18, United States Code, is amended to
read as follows:
``Sec. 5031. Definitions
``In this chapter--
``(1) the term `juvenile' means a person who is less than
18 years of age; and
``(2) the term `juvenile delinquency' means the violation
of a law of the United States committed by a juvenile that
would be a crime if committed by an adult.''.
SEC. 105. NOTIFICATION AFTER ARREST.
Section 5033 of title 18, United States Code, is amended in
the first sentence by striking ``Attorney General'' and
inserting ``United States Attorney of the appropriate
jurisdiction''.
SEC. 106. DETENTION PRIOR TO DISPOSITION.
Section 5035 of title 18, United States Code, is amended--
(1) by striking ``A juvenile'' and inserting the following:
``(a) In General.--A juvenile''; and
(2) by adding at the end the following:
``(b) Detention of Certain Juveniles.--Notwithstanding
subsection (a), a juvenile who is to be tried as an adult
pursuant to section 5032 shall be subject to detention in
accordance with chapter 203 in the same manner and to the
same extent as an adult would be subject to that chapter.''.
SEC. 107. SPEEDY TRIAL.
Section 5036 of title 18, United States Code, is amended--
(1) by striking ``thirty'' and inserting ``70''; and
(2) by striking ``the court,'' and all that follows through
the end of the section and inserting ``the court. The periods
of exclusion under section 3161(h) shall apply to this
section.''.
SEC. 108. DISPOSITIONAL HEARINGS.
Section 5037 of title 18, United States Code, is amended--
(1) in subsection (a), by striking ``(a)'' and all that
follows through ``After the'' and inserting the following:
``(a) In General.--
``(1) Dispositional hearing.--In any case in which a
juvenile is found to be a juvenile delinquent in district
court pursuant to section 5032, but is not tried as an adult
under that section, not later than 20 days after the hearing
in which a finding of juvenile delinquency is made, the court
shall hold a disposition hearing concerning the appropriate
disposition unless the court has ordered further study
pursuant to subsection (d).
``(2) Actions of court after hearing.--After the'';
(2) in subsection (b), by striking ``extend--'' and all
that follows through ``The provisions'' and inserting the
following: ``extend, in the case of a juvenile, beyond the
maximum term that would be authorized by section 3561(b), if
the juvenile had been tried and convicted as an adult. The
provisions'';
(3) in subsection (c), by striking ``extend--'' and all
that follows through ``Section 3624'' and inserting the
following: ``extend beyond the maximum term of imprisonment
that would be authorized if the juvenile had been tried and
convicted as an adult. No juvenile sentenced to a term of
imprisonment shall be released from custody simply because
the juvenile reaches the age of 18 years. Section 3624'';
(4) by redesignating subsection (d) as subsection (e); and
(5) by inserting after subsection (c) the following:
``(d) Applicability of Restitution Provisions.--If a
juvenile has been tried and convicted as an adult, or
adjudicated delinquent for any offense in which the juvenile
is otherwise tried pursuant to section 5032, the restitution
provisions contained in this title (including sections 3663,
3663A, 2248, 2259, 2264, and 2327) and title 21 shall apply
to that juvenile in the same manner and to the same extent as
those provisions apply to adults.''.
SEC. 109. USE OF JUVENILE RECORDS.
Section 5038 of title 18, United States Code, is amended--
(1) in subsection (a)--
(A) in paragraph (5), by striking ``and'' at the end;
(B) in paragraph (6), by striking the period at the end and
inserting ``; and'';
(C) by inserting after paragraph (6) the following:
``(7) inquiries from any school or other educational
institution for the purpose of ensuring the public safety and
security at such institution.''; and
(D) by striking ``Unless'' and inserting the following:
``(c) Prohibition on Release of Certain Information.--
Unless'';
(2) by redesignating subsections (b) and (c) as subsections
(d) and (e), respectively;
(3) by inserting immediately after subsection (a) the
following:
``(b) Access by United States Attorney.--Notwithstanding
subsection (a), in determining the appropriate disposition of
a juvenile matter under section 5032, the United States
Attorney of the appropriate jurisdiction shall have complete
access to the official records of the juvenile proceedings
conducted under this title.'';
(4) by inserting after subsection (e), as redesignated, the
following:
``(f) Records of Juveniles Tried as Adults.--In any case in
which a juvenile is tried as an adult, access to the record
of the offenses of the juvenile shall be made available in
the same manner as is applicable to adult defendants.'';
(5) by striking ``(d) Whenever'' and all that follows
through ``adult defendants.'' and inserting the following:
``(g) Fingerprints and Photographs.--Fingerprints and
photographs of a juvenile--
``(1) who is prosecuted as an adult, shall be made
available in the same manner as is applicable to an adult
defendant; and
``(2) who is not prosecuted as an adult, shall be made
available only as provided in subsection (a).'';
(6) by striking ``(e) Unless,'' and inserting the
following:
``(h) No Publication of Name or Picture.--Unless'';
(7) by striking ``(f) Whenever'' and inserting the
following:
``(i) Information to Federal Bureau of Investigation.--
Whenever''; and
(8) in subsection (i), as redesignated--
(A) by striking ``of committing an act'' and all that
follows through ``5032 of this title'' and inserting ``by a
district court of the United States pursuant to section 5032
of committing an act''; and
(B) by inserting ``involved a juvenile tried as an adult
or'' before ``were juvenile adjudications''.
SEC. 110. INCARCERATION OF VIOLENT OFFENDERS.
Section 5039 of title 18, United States Code, is amended--
(1) by designating the first 3 undesignated paragraphs as
subsections (a) through (c), respectively; and
(2) by adding at the end the following:
``(d) Segregation of Juveniles Convicted of Violent
Offenses.--
``(1) Definition.--In this subsection, the term `crime of
violence' has the same meaning as in section 16 of title 18,
United States Code.
``(2) Segregation.--The Director of the Bureau of Prisons
shall ensure that juveniles who are alleged to be or
determined to be delinquent are not confined in any
institution in which the juvenile has regular sustained
physical contact with adult persons who are detained or
confined.''.
SEC. 111. FEDERAL SENTENCING GUIDELINES.
Section 994(h) of title 28, United States Code, is amended
by inserting ``, or in which the defendant is a juvenile who
is tried as an adult,'' after ``old or older''.
TITLE II--JUVENILE GANGS
SEC. 201. SHORT TITLE.
This title may be cited as the ``Federal Gang Violence
Act''.
SEC. 202. INCREASE IN OFFENSE LEVEL FOR PARTICIPATION IN
CRIME AS A GANG MEMBER.
(a) Definition.--In this section, the term ``criminal
street gang'' has the same meaning as in section 521(a) of
title 18, United States Code, as amended by section 203 of
this title.
(b) Amendment of Sentencing Guidelines.--Pursuant to its
authority under section 994(p) of title 28, United States
Code, the
[[Page S269]]
United States Sentencing Commission shall amend the Federal
sentencing guidelines to provide an appropriate enhancement,
increasing the offense level by not less than 6 levels, for
any offense, if the offense was both committed in connection
with, or in furtherance of, the activities of a criminal
street gang and the defendant was a member of the criminal
street gang at the time of the offense.
(c) Construction With Other Guidelines.--The amendment made
pursuant to subsection (b) shall provide that the increase in
the offense level shall be in addition to any other
adjustment under chapter 3 of the Federal sentencing
guidelines.
SEC. 203. AMENDMENT OF TITLE 18 WITH RESPECT TO CRIMINAL
STREET GANGS.
(a) In General.--Section 521 of title 18, United States
Code, is amended--
(1) in subsection (a)--
(A) by striking ``(a) Definitions.--'' and inserting the
following:
``(a) Definitions.--In this section:'', and
(B) by striking `` `conviction'' and all that follows
through the end of the subsection and inserting the
following:
``(1) Criminal street gang.--The term `criminal street
gang' means an ongoing group, club, organization, or
association of 3 or more persons, whether formal or
informal--
``(A) a primary activity of which is the commission of 1 or
more predicate gang crimes;
``(B) any members of which engage, or have engaged during
the 5-year period preceding the date in question, in a
pattern of criminal gang activity; and
``(C) the activities of which affect interstate or foreign
commerce.
``(2) Pattern of criminal gang activity.--The term `pattern
of criminal gang activity' means the commission of 2 or more
predicate gang crimes committed in connection with, or in
furtherance of, the activities of a criminal street gang--
``(A) at least 1 of which was committed after the date of
enactment of the Federal Gang Violence Act;
``(B) the first of which was committed not more than 5
years before the commission of another predicate gang crime;
and
``(C) that were committed on separate occasions.
``(3) Predicate gang crime.--The term `predicate gang
crime' means an offense, including an act of juvenile
delinquency that, if committed by an adult, would be an
offense that is--
``(A) a Federal offense--
``(i) that is a crime of violence (as that term is defined
in section 16) including carjacking, drive-by-shooting,
shooting at an unoccupied dwelling or motor vehicle, assault
with a deadly weapon, and homicide;
``(ii) that involves a controlled substance (as that term
is defined in section 102 of the Controlled Substances Act
(21 U.S.C. 802)) for which the penalty is imprisonment for
not less than 5 years;
``(iii) that is a violation of section 844, section 875 or
876 (relating to extortion and threats), section 1084
(relating to gambling), section 1955 (relating to gambling),
chapter 44 (relating to firearms), or chapter 73 (relating to
obstruction of justice);
``(iv) that is a violation of section 1956 (relating to
money laundering), insofar as the violation of such section
is related to a Federal or State offense involving a
controlled substance (as that term is defined in section 102
of the Controlled Substances Act (21 U.S.C. 802)); or
``(v) that is a violation of section 274(a)(1)(A), 277, or
278 of the Immigration and Nationality Act (8 U.S.C.
1324(a)(1)(A), 1327, or 1328) (relating to alien smuggling);
``(B) a State offense involving conduct that would
constitute an offense under subparagraph (A) if Federal
jurisdiction existed or had been exercised; or
``(C) a conspiracy, attempt, or solicitation to commit an
offense described in subparagraph (A) or (B).
``(3) State.--The term `State' includes a State of the
United States, the District of Columbia, Puerto Rico, Guam,
the Virgin Islands, and any other territory of possession of
the United States.''; and
(2) by striking subsections (b), (c), and (d) and inserting
the following:
``(b) Criminal Penalties.--Any person who engages in a
pattern of criminal gang activity--
``(1) shall be sentenced to--
``(A) a term of imprisonment of not less than 10 years and
not more than life, fined in accordance with this title, or
both; and
``(B) the forfeiture prescribed in section 413 of the
Controlled Substances Act (21 U.S.C. 853); and
``(2) if any person engages in such activity after 1 or
more prior convictions under this section have become final,
shall be sentenced to--
``(A) a term of imprisonment of not less than 20 years and
not more than life, fined in accordance with this title, or
both; and
``(B) the forfeiture prescribed in section 412 of the
Controlled Substances Act (21 U.S.C. 853).''.
(b) Conforming Amendment.--Section 3663(c)(4) of title 18,
United States Code, is amended by inserting before ``chapter
46'' the following: ``section 521 of this title,''.
SEC. 204. INTERSTATE AND FOREIGN TRAVEL OR TRANSPORTATION IN
AID OF CRIMINAL STREET GANGS.
(a) Travel Act Amendments.--
(1) Prohibited conduct and penalties.--Section 1952(a) of
title 18, United States Code, is amended to read as follows:
``(a) Prohibited Conduct and Penalties.--
``(1) In general.--Any person who--
``(A) travels in interstate or foreign commerce or uses the
mail or any facility in interstate or foreign commerce, with
intent to--
``(i) distribute the proceeds of any unlawful activity; or
``(ii) otherwise promote, manage, establish, carry on, or
facilitate the promotion, management, establishment, or
carrying on, of any unlawful activity; and
``(B) after travel or use of the mail or any facility in
interstate or foreign commerce described in subparagraph (A),
performs, attempts to perform, or conspires to perform an act
described in clause (i) or (ii) of subparagraph (A),
shall be fined under this title, imprisoned not more than 10
years, or both.
``(2) Crimes of violence.--Any person who--
``(A) travels in interstate or foreign commerce or uses the
mail or any facility in interstate or foreign commerce, with
intent to commit any crime of violence to further any
unlawful activity; and
``(B) after travel or use of the mail or any facility in
interstate or foreign commerce described in subparagraph (A),
commits, attempts to commit, or conspires to commit any crime
of violence to further any unlawful activity,
shall be fined under this title, imprisoned for not more than
20 years, or both, and if death results shall be sentenced to
death or be imprisoned for any term of years or for life.''.
(2) Definitions.--Section 1952(b) of title 18, United
States Code, is amended to read as follows:
``(b) Definitions.--In this section:
``(1) Controlled substance.--The term `controlled
substance' has the same meaning as in section 102(6) of the
Controlled Substances Act (21 U.S.C. 802(6)).
``(2) State.--The term `State' includes a State of the
United States, the District of Columbia, and any
commonwealth, territory, or possession of the United States.
``(3) Unlawful activity.--The term `unlawful activity'
means--
``(A) predicate gang crime (as that term is defined in
section 521);
``(B) any business enterprise involving gambling, liquor on
which the Federal excise tax has not been paid, narcotics or
controlled substances, or prostitution offenses in violation
of the laws of the State in which the offense is committed or
of the United States;
``(C) extortion, bribery, arson, robbery, burglary, assault
with a deadly weapon, retaliation against or intimidation of
witnesses, victims, jurors, or informants, assault resulting
in bodily injury, possession of or trafficking in stolen
property, illegally trafficking in firearms, kidnapping,
alien smuggling, or shooting at an occupied dwelling or motor
vehicle, in each case, in violation of the laws of the State
in which the offense is committed or of the United States; or
``(D) any act that is indictable under section 1956 or 1957
of this title or under subchapter II of chapter 53 of title
31.''.
(b) Amendment of Sentencing Guidelines.--
(1) In general.--Pursuant to its authority under section
994(p) of title 28, United States Code, the United States
Sentencing Commission shall amend chapter 2 of the Federal
sentencing guidelines so that--
(A) the base offense level for traveling in interstate or
foreign commerce in aid of a criminal street gang or other
unlawful activity is increased to 12; and
(B) the base offense level for the commission of a crime of
violence in aid of a criminal street gang or other unlawful
activity is increased to 24.
(2) Definitions.--In this subsection--
(A) the term ``crime of violence'' has the same meaning as
in section 16 of title 18, United States Code;
(B) the term ``criminal street gang'' has the same meaning
as in 521(a) of title 18, United States Code, as amended by
section 203 of this title; and
(C) the term ``unlawful activity'' has the same meaning as
in section 1952(b) of title 18, United States Code, as
amended by this section.
SEC. 205. SOLICITATION OR RECRUITMENT OF PERSONS IN CRIMINAL
GANG ACTIVITY.
(a) Prohibited Acts.--Chapter 26 of title 18, United States
Code, is amended by adding at the end the following:
``Sec. 522. Recruitment of persons to participate in criminal
street gang activity
``(a) Prohibited Act.--It shall be unlawful for any person
to--
``(1) use any facility in, or travel in, interstate or
foreign commerce, or cause another to do so, to recruit,
solicit, request, induce, counsel, command, or cause another
person to be a member of a criminal street gang, or conspire
to do so; or
``(2) recruit, solicit, request, induce, counsel, command,
or cause another person to engage in a predicate gang crime
for which such person may be prosecuted in a court of the
United States, or conspire to do so.
``(b) Penalties.--A person who violates subsection (a)
shall--
``(1) if the person recruited--
``(A) is a minor, be imprisoned for a term of not less than
4 years and not more than 10 years, fined in accordance with
this title, or both; or
[[Page S270]]
``(B) is not a minor, be imprisoned for a term of not less
than 1 year and not more than 10 years, fined in accordance
with this title, or both; and
``(2) be liable for any costs incurred by the Federal
Government or by any State or local government for housing,
maintaining, and treating the minor until the minor reaches
the age of 18.
``(c) Definitions.--In this section--
``(1) the terms `criminal street gang' and `predicate gang
crime' have the same meanings as in section 521; and
``(2) the term `minor' means a person who is younger than
18 years of age.''.
(b) Sentencing Guidelines.--Pursuant to its authority under
section 994(p) of title 28, United States Code, the United
States Sentencing Commission shall amend chapter 2 of the
Federal sentencing guidelines to provide an appropriate
enhancement for any offense involving the recruitment of a
minor to participate in a gang activity.
(c) Technical Amendment.--The chapter analysis for chapter
26 of title 18, United States Code, is amended by adding at
the end the following:
``522. Recruitment of persons to participate in criminal street gang
activity.''.
SEC. 206. CRIMES INVOLVING THE RECRUITMENT OF PERSONS TO
PARTICIPATE IN CRIMINAL STREET GANGS AND
FIREARMS OFFENSES AS RICO PREDICATES.
Section 1961(1) of title 18, United States Code, is
amended--
(1) by striking ``or'' before ``(F)''; and
(2) by inserting before the semicolon at the end the
following: ``, (G) an offense under section 522 of this
title, or (H) an act or conspiracy to commit any violation of
chapter 44 of this title (relating to firearms)''.
SEC. 207. PROHIBITIONS RELATING TO FIREARMS.
(a) Penalties.--Section 924(a)(6) of title 18, United
States Code, is amended--
(1) by striking subparagraph (A);
(2) by redesignating subparagraph (B) as subparagraph (A);
(3) in subparagraph (A), as redesignated--
(A) by striking ``(B) A person other than a juvenile who
knowingly'' and inserting ``(A) A person who knowingly'';
(B) in clause (i), by striking ``not more than 1 year'' and
inserting ``not less than 1 year and not more than 5 years'';
and
(C) in clause (ii), by inserting ``not less than 1 year
and'' after ``imprisoned''; and
(4) by adding at the end the following:
``(B) Notwithstanding subparagraph (A), no mandatory
minimum sentence shall apply to a juvenile who is less than
13 years of age.''.
(b) Serious Juvenile Drug Offenses as Armed Career Criminal
Predicates.--Section 924(e)(2)(A) of title 18, United States
Code, is amended--
(1) in clause (i), by striking ``or'' at the end;
(2) in clause (ii), by adding ``or'' at the end; and
(3) by adding at the end the following:
``(iii) any act of juvenile delinquency that if committed
by an adult would be an offense described in clause (i) or
(ii);''.
(c) Transfer of Firearms to Minors for Use in Crime.--
Section 924(h) of title 18, United States Code, is amended by
striking ``10 years, fined in accordance with this title, or
both'' and inserting ``10 years, and if the transferee is a
person who is under 18 years of age, imprisoned for a term of
not less than 3 years, fined in accordance with this title,
or both''.
SEC. 208. AMENDMENT OF SENTENCING GUIDELINES WITH RESPECT TO
BODY ARMOR.
(a) Definitions.--In this section--
(1) the term ``body armor'' means any product sold or
offered for sale as personal protective body covering
intended to protect against gunfire, regardless of whether
the product is to be worn alone or is sold as a complement to
another product or garment; and
(2) the term ``law enforcement officer'' means any officer,
agent, or employee of the United States, a State, or a
political subdivision of a State, authorized by law or by a
government agency to engage in or supervise the prevention,
detection, investigation, or prosecution of any violation of
criminal law.
(b) Sentencing Enhancement.--The United States Sentencing
Commission shall amend the Federal sentencing guidelines to
provide an appropriate sentencing enhancement, increasing the
offense level not less than 2 levels, for any crime in which
the defendant used body armor.
(c) Applicability.--No Federal sentencing guideline
amendment made pursuant to this section shall apply if the
Federal crime in which the body armor is used constitutes a
violation of, attempted violation of, or conspiracy to
violate the civil rights of a person by a law enforcement
officer acting under color of the authority of such law
enforcement officer.
SEC. 209. ADDITIONAL PROSECUTORS.
There are authorized to be appropriated $20,000,000 for
each of the fiscal years 1998, 1999, 2000, 2001, and 2002 for
the hiring of Assistant United States Attorneys and attorneys
in the Criminal Division of the Department of Justice to
prosecute juvenile criminal street gangs (as that term is
defined in section 521(a) of title 18, United States Code, as
amended by section 203 of this title).
TITLE III--JUVENILE CRIME CONTROL AND ACCOUNTABILITY
SEC. 301. FINDINGS; DECLARATION OF PURPOSE; DEFINITIONS.
Title I of the Juvenile Justice and Delinquency Prevention
Act of 1974 (42 U.S.C. 5601 et seq.) is amended to read as
follows:
``TITLE I--FINDINGS AND DECLARATION OF PURPOSE
``SEC. 101. FINDINGS.
``Congress finds that--
``(1) during the past several years, the United States has
experienced an alarming increase in arrests of adolescents
for murder, assault, and weapons offenses;
``(2) in 1994, juveniles accounted for 1 in 5 arrests for
violent crimes, including murder, robbery, aggravated
assault, and rape, including 514 such arrests per 100,000
juveniles 10 through 17 years of age;
``(3) understaffed, overcrowded juvenile courts,
prosecutorial and public defender offices, probation
services, and correctional facilities no longer adequately
address the changing nature of juvenile crime, protect the
public, and correct youth offenders;
``(4) the juvenile justice system has proven inadequate to
meet the needs of society, because insufficient sanctions are
imposed on serious youth offenders and the needs of children,
who may be at risk of becoming delinquents;
``(5) existing programs and policies have not adequately
responded to the particular threat of drugs, alcohol abuse,
violence, and gangs pose to the youth of the Nation;
``(6) demographic increases projected in the number of
youth offenders require reexamination of the prosecution and
incarceration policies for serious violent youth offenders;
``(7) State and local communities that experience directly
the devastating failures of the juvenile justice system
require assistance to deal comprehensively with the problems
of juvenile delinquency;
``(8) Existing Federal programs have not provided the
States with necessary flexibility, and have not provided
coordination, resources, and leadership required to meet the
crisis of youth violence.
``(9) Overlapping and uncoordinated Federal programs have
created a multitude of Federal funding streams to State and
local governments, that have become a barrier to effective
program coordination, responsive public safety initiatives,
and the provision of comprehensive services for children and
youth.
``(10) Violent crime by juveniles constitutes a growing
threat to the national welfare that requires an immediate and
comprehensive governmental response, combining flexibility
and coordinated evaluation.
``(11) Limited State and local resources are being wasted
complying with the unnecessary Federal mandate that status
offenders be desinstitutionalized. Some communities believe
that curfews are appropriate for juveniles, and those
communities should not be prohibited by the Federal
Government from using confinement for status offenses as a
means of dealing with delinquent behavior before it becomes
criminal conduct.
``(12) Limited State and local resources are being wasted
complying with the unnecessary Federal mandate that no
juvenile be detained or confined in any jail or lockup for
adults, because it can be feasible to separate adults and
juveniles in 1 facility. This mandate is particularly
burdensome for rural communities.
``(13) The role of the Federal Government should be to
encourage and empower communities to develop and implement
policies to protect adequately the public from serious
juvenile crime as well as comprehensive programs to reduce
risk factors and prevent juvenile delinquency.
``(14) A strong partnership among law enforcement, local
government, juvenile and family courts, schools, businesses,
philanthropic organizations, families, and the religious
community, can create a community environment that supports
the youth of the Nation in reaching their highest potential
and reduces the destructive trend of juvenile crime.
``SEC. 102. PURPOSE AND STATEMENT OF POLICY.
``(a) In General.--The purposes of this Act are--
``(1) to protect the public and to hold juveniles
accountable for their acts;
``(2) to empower States and communities to develop and
implement comprehensive programs that support families and
reduce risk factors and prevent serious youth crime and
juvenile delinquency;
``(3) to provide for the thorough and ongoing evaluation of
all federally funded programs addressing juvenile crime and
delinquency;
``(4) to provide technical assistance to public and private
nonprofit entities that protect public safety, administer
justice and corrections to delinquent youth, or provide
services to youth at risk of delinquency, and their families;
``(5) to establish a centralized research effort on the
problems of youth crime and juvenile delinquency, including
the dissemination of the findings of such research and all
related data;
``(6) to establish a Federal assistance program to deal
with the problems of runaway and homeless youth;
``(7) to assist State and local governments in improving
the administration of justice for juveniles;
``(8) to assist the State and local governments in reducing
the level of youth violence;
``(9) to assist State and local governments in promoting
public safety by supporting juvenile delinquency prevention
and control activities;
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``(10) to encourage and promote programs designed to keep
in school juvenile delinquents expelled or suspended for
disciplinary reasons;
``(11) to assist State and local governments in promoting
public safety by encouraging accountability through the
imposition of meaningful sanctions for acts of juvenile
delinquency;
``(12) to assist State and local governments in promoting
public safety by improving the extent, accuracy, availability
and usefulness of juvenile court and law enforcement records
and the openness of the juvenile justice system;
``(13) to assist State and local governments in promoting
public safety by encouraging the identification of violent
and hardcore juveniles and transferring such juveniles out of
the jurisdiction of the juvenile justice system and into the
jurisdiction of adult criminal court;
``(14) to assist State and local governments in promoting
public safety by providing resources to States to build or
expand juvenile detention facilities;
``(15) to provide for the evaluation of federally assisted
juvenile crime control programs, and training necessary for
the establishment and operation of such programs;
``(16) to ensure the dissemination of information regarding
juvenile crime control programs by providing a national
clearinghouse; and
``(17) to provide technical assistance to public and
private nonprofit juvenile justice and delinquency prevention
programs.
``(b) Statement of Policy.--It is the policy of Congress to
provide resources, leadership, and coordination--
``(1) to combat youth violence and to prosecute and punish
effectively violent juvenile offenders; and
``(2) to improve the quality of juvenile justice in the
United States.
``SEC. 103. DEFINITIONS.
``In this Act:
``(1) Administrator.--The term `Administrator' means the
Administrator of the Office of Juvenile Crime Control and
Accountability.
``(2) Construction.--The term `construction' means
acquisition, expansion, remodeling, and alteration of
existing buildings, and initial equipment of any such
buildings, or any combination of such activities (including
architects' fees but not the cost of acquisition of land for
buildings).
``(3) Juvenile population.--The term `juvenile population'
means the population of a State under 18 years of age.
``(4) Office.--The term `Office' means the Office of
Juvenile Crime Control and Accountability established under
section 201.
``(5) Outcome objective.--The term `outcome objective'
means an objective that relates to the impact of a program or
initiative, that measures the reduction of high risk
behaviors, such as incidence of arrest, the commission of
criminal acts or acts of delinquency, failure in school,
violence, the use of alcohol or illegal drugs, involvement of
youth gangs, and teenage pregnancy, among youth in the
community.
``(6) Process objective.--The term `process objective'
means an objective that relates to the manner in which a
program or initiative is carried out, including--
``(A) an objective relating to the degree to which the
program or initiative is reaching the target population; and
``(B) an objective relating to the degree to which the
program or initiative addresses known risk factors for youth
problem behaviors and incorporates activities that inhibit
the behaviors and that build on protective factors for youth.
``(7) State.--The term `State' means any State of the
United States, the District of Columbia, the Commonwealth of
Puerto Rico, the Trust Territory of the Pacific Islands, the
Virgin Islands, Guam, American Samoa, and the Commonwealth of
the Northern Mariana Islands.
``(8) State office.--The term `State office' means an
office designated by the chief executive officer of a State
to carry out this title, as provided in section 507 of the
Omnibus Crime Control and Safe Streets Act of 1968 (42 U.S.C.
3757).
``(9) Treatment.--The term `treatment' includes medical and
other rehabilitative services designed to protect the public,
including any services designed to benefit addicts and other
users by--
``(A) eliminating their dependence on alcohol or other
addictive or nonaddictive drugs; or
``(B) controlling their dependence and susceptibility to
addiction or use.
``(10) Youth.--The term `youth' means an individual who is
not less than 6 years of age and not more than 17 years of
age.''.
SEC. 302. YOUTH CRIME CONTROL AND ACCOUNTABILITY BLOCK
GRANTS.
(a) Office of Juvenile Crime Control and Accountability.--
Section 201 of the Juvenile Justice and Delinquency
Prevention Act of 1974 (42 U.S.C. 5611) is amended--
(1) in subsection (a), by striking ``Office of Juvenile
Justice and Delinquency Prevention'' and inserting ``Office
of Juvenile Crime Control and Accountability''; and
(2) by adding at the end the following:
``(d) Delegation and Assignment.--
``(1) In general.--Except as otherwise expressly prohibited
by law or otherwise provided by this title, the Administrator
may--
``(A) delegate any of the functions of the Administrator,
and any function transferred or granted to the Administrator
after the date of enactment of this Act, to such officers and
employees of the Office as the Administrator may designate;
and
``(B) authorize successive redelegations of such functions
as may be necessary or appropriate.
``(2) Responsibility.--No delegation of functions by the
Administrator under this subsection or under any other
provision of this title shall relieve the Administrator of
responsibility for the administration of such functions.
``(e) Reorganization.--The Administrator may allocate or
reallocate any function transferred among the officers of the
Office, and establish, consolidate, alter, or discontinue
such organizational entities in that Office as may be
necessary or appropriate.''.
(b) National Program.--Section 204 of the Juvenile Justice
and Delinquency Prevention Act of 1974 (42 U.S.C. 5614) is
amended to read as follows:
``SEC. 204. NATIONAL PROGRAM.
``(a) National Juvenile Crime Control and Juvenile Offender
Accountability Plan.--
``(1) In general.--The Administrator shall develop
objectives, priorities, and short- and long-term plans, and
shall implement overall policy and a strategy to carry out
such plan, for all Federal juvenile crime control and
juvenile offender accountability programs and activities
relating to improving juvenile crime control and the
enhancement of accountability by offenders within the
juvenile justice system in the United States.
``(2) Contents of plans.--
``(A) In general.--Each plan described in paragraph (1)
shall--
``(i) contain specific, measurable goals and criteria for
reducing the incidence of crime and delinquency among
juveniles, improving juvenile crime control, and ensuring
accountability by offenders within the juvenile justice
system in the United States, and shall include criteria for
any discretionary grants and contracts, for conducting
research, and for carrying out other activities under this
title;
``(ii) provide for coordinating the administration of
programs and activities under this title with the
administration of all other Federal juvenile crime control
and juvenile offender accountability programs and activities,
including proposals for joint funding to be coordinated by
the Administrator;
``(iii) provide a detailed summary and analysis of the most
recent data available regarding the number of juveniles taken
into custody, the rate at which juveniles are taken into
custody, and the trends demonstrated by such data.
``(iv) provide a description of the activities for which
amounts are expended under this title;
``(v) provide specific information relating to the
attainment of goals set forth in the plan, including
specific, measurable standards for assessing progress toward
national juvenile crime reduction and juvenile offender
accountability goals; and
``(vi) provide for the coordination of Federal, State, and
local initiatives for the reduction of youth crime and
ensuring accountability for juvenile offenders.
``(B) Summary and analysis.--Each summary and analysis
under subparagraph (A)(iii) shall set out the information
required by clauses (i), (ii), and (iii) of this subparagraph
separately for juvenile nonoffenders, juvenile status
offenders, and other juvenile offenders. Such summary and
analysis shall separately address with respect to each
category of juveniles specified in the preceding sentence--
``(i) the types of offenses with which the juveniles are
charged;
``(ii) the ages of the juveniles;
``(iii) the types of facilities used to hold the juveniles
(including juveniles treated as adults for purposes of
prosecution) in custody, including secure detention
facilities, secure correctional facilities, jails, and
lockups; and
``(iv) the number of juveniles who died while in custody
and the circumstances under which each juvenile died.
``(3) Annual review.--The Administrator shall annually--
``(A) review each plan submitted under this subsection;
``(B) revise the plans, as the Administrator considers
appropriate; and
``(C) not later than March 1 of each year, present the
plans to the Committees on the Judiciary of the Senate and
the House of Representatives.
``(b) Duties of Administrator.--In carrying out this title,
the Administrator shall--
``(1) advise the President through the Attorney General as
to all matters relating to federally assisted juvenile crime
control and juvenile offender accountability programs, and
Federal policies regarding juvenile crime and justice,
including policies relating to juveniles prosecuted or
adjudicated in the Federal courts;
``(2) implement and coordinate Federal juvenile crime
control and juvenile offender accountability programs and
activities among Federal departments and agencies and between
such programs and activities and other Federal programs and
activities that the Administrator determines may have an
important bearing on the success of the entire national
juvenile crime control and juvenile offender accountability
effort;
``(3) provide for the auditing of grants provided pursuant
to this title;
[[Page S272]]
``(4) collect, prepare, and disseminate useful data
regarding the prevention, correction, and control of juvenile
crime and delinquency, and issue, not less frequently than
once each calendar year, a report on successful programs and
juvenile crime reduction methods utilized by States,
localities, and private entities;
``(5) ensure the performance of comprehensive rigorous
independent scientific evaluations, each of which shall--
``(A) be independent in nature, and shall employ rigorous
and scientifically valid standards and methodologies; and
``(B) include measures of outcome and process objectives,
such as reductions in juvenile crime, youth gang activity,
youth substance abuse, and other high risk factors, as well
as increases in protective factors that reduce the likelihood
of delinquency and criminal behavior;
``(6) involve consultation with appropriate authorities in
the States and with appropriate private entities in the
development, review, and revision of the plans required by
subsection (a) and in the development of policies relating to
juveniles prosecuted or adjudicated in the Federal courts;
and
``(7) provide technical assistance to the States, units of
local government, and private entities in implementing
programs funded by grants under this title.
``(c) National Juvenile Crime Control and Juvenile Offender
Accountability Budget.--
``(1) In general.--The Administrator shall--
``(A) develop for each fiscal year, with the advice of the
program managers of departments and agencies with
responsibilities for any Federal juvenile crime control or
juvenile offender accountability program, a consolidated
National Juvenile Crime Control and Juvenile Offender
Accountability Plan budget proposal to implement the National
Juvenile Crime Control and Juvenile Offender Accountability
Plan; and
``(B) transmit such budget proposal to the President and to
Congress.
``(2) Submission of juvenile offender accountability budget
request.--
``(A) In general.--Each Federal Government program manager,
agency head, and department head with responsibility for any
Federal juvenile crime control or juvenile offender
accountability program shall submit the juvenile crime
control and juvenile offender accountability budget request
of the program, agency, or department to the Administrator at
the same time as such request is submitted to their superiors
(and before submission to the Office of Management and
Budget) in the preparation of the budget of the President
submitted to Congress under section 1105(a) of title 31,
United States Code.
``(B) Timely development and submission.--The head of each
department or agency with responsibility for a Federal
juvenile crime control or juvenile offender accountability
program shall ensure timely development and submission to the
Administrator of juvenile crime control and juvenile offender
accountability budget requests transmitted pursuant to this
subsection, in such format as may be designated by the
Administrator with the concurrence of the Administrator of
the Office of Management and Budget.
``(3) Review and certification.--The Administrator shall--
``(A) review each juvenile crime control and juvenile
offender accountability budget request transmitted to the
Administrator under paragraph (2);
``(B) certify in writing as to the adequacy of such request
in whole or in part to implement the objectives of the
National Juvenile Crime Control and Juvenile Offender
Accountability Plan for the year for which the request is
submitted and, with respect to a request that is not
certified as adequate to implement the objectives of the
National Juvenile Crime Control and Juvenile Offender
Accountability Plan, include in the certification an
initiative or funding level that would make the request
adequate; and
``(C) notify the program manager, agency head, or
department head, as applicable, regarding the certification
of the Administrator under subparagraph (B).
``(4) Recordkeeping requirement.--The Administrator shall
maintain records regarding certifications under paragraph
(3)(B).
``(5) Funding requests.--The Administrator shall request
the head of a department or agency to include in the budget
submission of the department or agency to the Office of
Management and Budget, funding requests for specific
initiatives that are consistent with the priorities of the
President for the National Juvenile Crime Control and
Juvenile Offender Accountability Plan and certifications made
pursuant to paragraph (3), and the head of the department or
agency shall comply with such a request.
``(6) Reprogramming and transfer requests.--
``(A) In general.--No department or agency with
responsibility for a Federal juvenile crime control or
juvenile offender accountability program shall submit to
Congress a reprogramming or transfer request with respect to
any amount of appropriated amounts greater than $5,000,000
that is included in the National Juvenile Crime Control and
Juvenile Offender Accountability Plan budget unless such
request has been approved by the Administrator.
``(B) The head of any department or agency with
responsibility for a Federal juvenile crime control or
juvenile offender accountability program may appeal to the
President any disapproval by the Administrator of a
reprogramming or transfer request.
``(7) Quarterly reports.--The Administrator shall report to
Congress on a quarterly basis regarding the need for any
reprogramming or transfer of appropriated amounts for
National Juvenile Crime Control and Juvenile Offender
Accountability Plan activities.
``(d) Information, Reports, Studies, and Surveys From Other
Agencies.--The Administrator may require, through appropriate
authority, Federal departments and agencies engaged in any
activity involving any Federal juvenile crime control and
juvenile offender accountability program to provide the
Administrator with such information and reports, and to
conduct such studies and surveys, as the Administrator
determines to be necessary to carry out the purposes of this
title.
``(e) Utilization of Services and Facilities of Other
Agencies; Reimbursement.--The Administrator may utilize the
services and facilities of any agency of the Federal
Government and of any other public agency or institution in
accordance with appropriate agreements, and to pay for such
services either in advance or by way of reimbursement as may
be agreed upon.
``(f) Coordination of Functions of Administrator and
Secretary of Health and Human Services.--All functions of the
Administrator under title shall be coordinated as appropriate
with the functions of the Secretary of Health and Human
Services under title III.
``(g) Annual Juvenile Delinquency Development Statements.--
``(1) In general.--The Administrator shall require through
appropriate authority each Federal agency that administers a
Federal juvenile crime control and juvenile offender
accountability program to submit annually to the Office a
juvenile crime control and juvenile offender accountability
development statement. Such statement shall be in addition to
any information, report, study, or survey that the
Administrator may require under subsection (d).
``(2) Contents.--Each development statement submitted to
the Administrator under paragraph (1) shall contain such
information, data, and analyses as the Administrator may
require. Such analyses shall include an analysis of the
extent to which the program of the Federal agency submitting
such development statement conforms with and furthers Federal
juvenile crime control and juvenile offender accountability
prevention and treatment goals and policies.
``(3) Review and comment.--
``(A) In general.--The Administrator shall review and
comment upon each juvenile crime control and juvenile
offender accountability development statement transmitted to
the Administrator under paragraph (1).
``(B) Inclusion in other documentation.--Such development
statement, together with the comments of the Administrator,
shall be included by the Federal agency involved in every
recommendation or request made by such agency for Federal
legislation that significantly affects juvenile crime control
and juvenile offender accountability.
``(h) Juvenile Crime Control and Juvenile Offender
Accountability Incentive Block Grants.--
``(1) In general.--The Administrator shall make, subject to
the availability of appropriations, grants to States to
assist them in planning, establishing, operating,
coordinating, and evaluating projects, directly or through
grants and contracts with public and private agencies, for
the development of more effective investigation, prosecution,
and punishment (including the imposition of graduated
sanctions) of crimes or acts of delinquency committed by
juveniles, programs to improve the administration of justice
for and ensure accountability by juvenile offenders, and
programs to reduce the risk factors (such as truancy, drug or
alcohol use, and gang involvement) associated with juvenile
crime or delinquency.
``(2) Use of grants.--Grants under this title may be used--
``(A) for programs to enhance the identification,
investigation, prosecution, and punishment of juvenile
offenders, such as--
``(i) the utilization of graduated sanctions;
``(ii) the utilization of short-term confinement of
juveniles who are charged with or who are convicted of--
``(I) a crime of violence (as that term is defined in
section 16 of title 18, United States Code);
``(II) an offense involving a controlled substance (as that
term is defined in section 102 of the Controlled Substances
Act (21 U.S.C. 802);
``(III) an offense involving possession of a firearm (as
that term is defined in section 921(a) of title 18, United
States Code); or
``(IV) an offense involving possession of a destructive
device (as that term is defined in section 921(a) of title
18, United States Code);
``(iii) the hiring of prosecutors, judges, and probation
officers to implement policies to control juvenile crime and
ensure accountability of juvenile offenders; and
``(iv) the incarceration of violent juvenile offenders for
extended periods of time (including up to the length of adult
sentences);
``(B) for programs that provide restitution to the victims
of crimes committed by juveniles;
``(C) for programs that require juvenile offenders to
attend and successfully complete school or vocational
training;
[[Page S273]]
``(D) for programs that require juvenile offenders who are
parents to demonstrate parental responsibility by working and
paying child support;
``(E) for programs that seek to curb or punish truancy;
``(F) for programs designed to collect, record, and
disseminate information useful in the identification,
prosecution, and sentencing of offenders, such as criminal
history information, fingerprints, and DNA tests;
``(G) for programs that provide that, whenever a juvenile
who is not less than 14 years of age is adjudicated
delinquent, as defined by Federal or State law in a juvenile
delinquency proceeding for conduct that, if committed by an
adult, would constitute a felony under Federal or State law,
the State shall ensure that a record is kept relating to the
adjudication that is--
``(i) equivalent to the record that would be kept of an
adult conviction for such an offense;
``(ii) retained for a period of time that is equal to the
period of time that records are kept for adult convictions;
``(iii) made available to law enforcement agencies of any
jurisdiction; and
``(iv) made available to officials of a school, school
district, or postsecondary school where the individual who is
the subject of the juvenile record seeks, intends, or is
instructed to enroll, and that such officials are held liable
to the same standards and penalties that law enforcement and
juvenile justice system employees are held liable to, under
Federal and State law, for handling and disclosing such
information;
``(H) for juvenile crime control and prevention programs
(such as curfews, youth organizations, antidrug programs,
antigang programs, and after school activities) that include
a rigorous, comprehensive evaluation component that measures
the decrease in risk factors associated with the juvenile
crime and delinquency and employs scientifically valid
standards and methodologies;
``(I) for the development and implementation of coordinated
multijurisdictional or multiagency programs for the
identification, control, supervision, prevention,
investigation, and treatment of the most serious juvenile
offenses and offenders, sometimes known as a `SHOCAP Program'
(Serious Habitual Offenders Comprehensive Action Program); or
``(J) for the development and implementation of coordinated
multijurisdictional or multiagency programs for the
identification, control, supervision, prevention,
investigation, and disruption of youth gangs.
``(3) Requirements.--To be eligible to receive a grant
under this title, a State shall make reasonable efforts, as
certified by the Governor, to ensure that, not later than
July 1, 2000--
``(A) juveniles age 14 and older can be prosecuted under
State law as adults, as a matter of law or prosecutorial
discretion for a crime of violence (as that term is defined
in section 16 of title 18, United States Code) such as murder
or armed robbery, an offense involving a controlled substance
(as defined in section 102 of the Controlled Substances Act
(21 U.S.C. 802)), or the unlawful possession of a firearm (as
that term is defined in section 921(a) of title 18, United
States Code) or a destructive device (as that term is defined
in section 921(a) of title 18, United States Code);
``(B) the State has in place a system of graduated
sanctions for juvenile offenders;
``(C) the State has in place a juvenile court system that
treats juvenile offenders uniformly throughout the State;
``(D) the State collects, records, and disseminates
information useful in the identification, prosecution, and
sentencing of offenders, such as criminal history
information, fingerprints, and DNA tests (if taken), to other
Federal, State, and local law enforcement agencies;
``(E) the State ensures that religious organizations can
participate in rehabilitative programs designed to purposes
authorized by this title; and
``(F) the State shall not detain or confine juveniles who
are alleged to be or determined to be delinquent in any
institution in which the juvenile has regular sustained
physical contact with adult persons who are detained or
confined.
``(j) Distribution by State Offices to Eligible
Applicants.--
``(1) In general.--Of amounts made available to the State,
not more than 20 percent shall be used for programs pursuant
to paragraph (2)(ii).
``(2) Eligible Applicants.--Entities eligible to receive
amounts distributed by the State office under this title
are--
``(A) a unit of local government;
``(B) local police or sheriff's departments;
``(C) State or local prosecutor's offices;
``(D) State or local courts responsible for the
administration of justice in cases involving juvenile
offenders;
``(E) schools;
``(F) nonprofit, educational, religious, or community
groups active in crime prevention or drug use prevention and
treatment; or
``(G) any combination of the entities described in
subparagraphs (A) through (F).
``(k) Application to State Office.--
``(1) In general.--To be eligible to receive amounts from
the State office, the applicant shall prepare and submit to
the State office an application in written form that--
``(A) describes the types of activities and services for
which the amount will be provided;
``(B) includes information indicating the extent to which
the activities and services achieve the purposes of the
title;
``(C) provide for the evaluation component required by
subsection (b)(2), which evaluation shall be conducted by an
independent entity; and
``(D) provides any other information that the State office
may require.
``(2) Priority.--In approving applications under this
subsection, the State office should give priority to those
applicants demonstrating coordination with, consolidation of,
or expansion of existing State or local juvenile crime
control and juvenile offender accountability programs.
``(l) Funding Period.--The State office may award such a
grant for a period of not more than 3 years.
``(m) Renewal of Grants.--The State office may renew grants
made under this title. After the initial grant period, in
determining whether to renew a grant to an entity to carry
out activities, the State office shall give substantial
weight to the effectiveness of the activities in achieving
reductions in crimes committed by juveniles and in improving
the administration of justice to juvenile offenders.
``(n) Special Grants.--Of amounts made available under this
title in any fiscal year, the Administrator may use--
``(1) not more than 7 percent for grants for research and
evaluation;
``(2) not more than 3 percent for grants to Indian tribes
for purposes authorized by this title; and
``(3) not more than 5 percent for salaries and expenses of
the Office related to administering this title.''.
(c) Repeals; Administrative Provisions.--Title II of the
Juvenile Justice and Delinquency Prevention Act of 1974 (42
U.S.C. 5611 et seq.) is amended--
(1) by striking sections 206 and 207 and inserting the
following:
``SEC. 206. ALLOCATION OF GRANTS AND AUTHORIZATION OF
APPROPRIATIONS.--
``(a) Allocation of Grant Amounts.--
``(1) In general.--Amounts made available under section
204(h) or part B shall be allocated to the States as follows:
``(A) 0.25 percent shall be allocated to each State; and
``(B) of the total amount remaining after the allocation
under subparagraph (A), there shall be allocated to each
State an amount that bears the same ratio to the amount of
remaining funds described in this paragraph as the juvenile
population of such State bears to the juvenile population of
all the States.
``(2) Exceptions.--The amount allocated to the Virgin
Islands of the United States, Guam, American Samoa, the Trust
Territory of the Pacific Islands, and the Commonwealth of the
Northern Mariana Islands shall be not less than $75,000 and
not more than $100,000.
``(3) Reallocation prohibited.--Any amounts appropriated
but not allocated due to the ineligibility or
nonparticipation of any State shall not be reallocated, but
shall revert to the Treasury at the end of the fiscal year
for which they were appropriated.
``(4) Restrictions on the use of amounts.--
``(A) Experimentation on individuals.--
``(i) In general.--No amounts made available to carry out
this title may be used for any biomedical or behavior control
experimentation on individuals or any research involving such
experimentation.
``(ii) Definition of `behavior control'.--In this
subparagraph, the term `behavior control'--
``(I) means any experimentation or research employing
methods that--
``(aa) involve a substantial risk of physical or
psychological harm to the individual subject; and
``(bb) are intended to modify or alter criminal and other
antisocial behavior, including aversive conditioning therapy,
drug therapy, chemotherapy (except as part of routine
clinical care), physical therapy of mental disorders,
electroconvulsive therapy, or physical punishment; and
``(II) does not include a limited class of programs
generally recognized as involving no such risk, including
methadone maintenance and certain alcohol treatment programs,
psychological counseling, parent training, behavior
contracting, survival skills training, restitution, or
community service, if safeguards are established for the
informed consent of subjects (including parents or guardians
of minors).
``(B) Prohibition against use of amounts in construction.--
No amount made available to any public or private agency, or
institution or to any individual under this title (either
directly or through a State office) may be used for
construction, except for minor renovations or additions to an
existing structure.
``(C) Job training.--No amount made available under this
title may be used to carry out a youth employment program to
provide subsidized employment opportunities, job training
activities, or school-to-work activities for participants.
``(D) Lobbying.--
``(i) In general.--Except as provided in clause (ii), no
amount made available under this title to any public or
private agency, organization, or institution or to any
individual shall be used to pay for any personal service,
advertisement, telegram, telephone communication, letter,
printed or written matter, or other device intended or
designed
[[Page S274]]
to influence a Member of Congress or any other Federal,
State, or local elected official to favor or oppose any Act,
bill, resolution, or other legislation, or any referendum,
initiative, constitutional amendment, or any other procedure
of Congress, any State legislature, any local council, or any
similar governing body.
``(ii) Exception.--This subparagraph does not preclude the
use of amounts made available under this title in connection
with communications to Federal, State, or local elected
officials, upon the request of such officials through proper
official channels, pertaining to authorization,
appropriation, or oversight measures directly affecting the
operation of the program involved.
``(E) Legal action.--No amounts made available under this
title to any public or private agency, organization,
institution, or to any individual, shall be used in any way
directly or indirectly to file an action or otherwise take
any legal action against any Federal, State, or local agency,
institution, or employee.
``(F) Religious organizations.--
``(i) In general.--The purpose of this subparagraph is to
allow State and local governments to contract with religious
organizations, or to allow religious organizations to accept
certificates, vouchers, or other forms of disbursement under
any program described in this title, on the same basis as any
other nongovernmental provider without impairing the
religious character of such organizations, and without
impairing the religious character of such organizations, and
without diminishing the religious freedom of beneficiaries of
assistance funded under such program.
``(ii) Nondiscrimination against religious organizations.--
If a State or local government exercises its authority under
religious organizations are eligible, on the same basis as
any other private organization, as contractors to provide
assistance, or to accept certificates, vouchers, or other
forms of disbursement, under any program described in this
title, so long as the programs are implemented consistent
with the Establishment Clause of the United States
Constitution. Except as provided in clause (x), neither the
Federal Government nor a State receiving funds under such
programs shall discriminate against an organization which is
or applies to be a contractor to provide assistance, or which
is or applies to be a contractor to provide assistance, or
which accepts certificates, vouchers, or other forms of
disbursement, on the basis that the organization has a
religious character.
``(iii) Religious character and freedom.--
``(I) Religious organizations.--A religious organization
that participates in a program authorized by this title shall
retain its independence from Federal, State, and local
governments, including such organization's control over the
definition, development, practice, and expression of its
religious beliefs.
``(II) Additional safeguards.--Neither the Federal
Government nor a State shall require a religious organization
to--
``(aa) alter its form of internal governance; or
``(bb) remove religious art, icons, scripture, or other
symbols;
in order to be eligible to contract to provide assistance, or
to accept certificates, vouchers, or other forms of
disbursements, funded under a program described in this
title.
``(iv) Rights of beneficiaries of assistance.--If juvenile
offender has an objection to the religious character of the
organization or institution from which the juvenile offender
receives, or would receive, assistance funded under any
program described in this title, the State in which the
individual resides shall provide such individual (if
otherwise eligible for such assistance) within a reasonable
period of time after the date of such objection with
assistance from an alternative provider.
``(v) Employment practices.--A religious organization's
exemption provided under section 702 of the Civil Rights Act
of 1964 (42 U.S.C. 2000e-1a) regarding employment practices
shall not be affected by its participation in, or receipt of
funds from, programs described in this title.
``(vi) Nondiscrimination against beneficiaries.--Except as
otherwise provided in law, a religious organization shall not
discriminate against an individual in regard to rendering
assistance funded under any program described in this title
on the basis of religion, a religious belief, or refusal to
actively participate in a religious practice.
``(vii) Fiscal accountability.--
``(I) In general.--Subject to subclause (II), any religious
organization contracting to provide assistance funded under
any program described in clause (i)(II) shall be subject to
the same regulations as other contractors to account in
accord with generally accepted auditing principles for the
use of such funds provided under such programs.
``(II) Limited audit.--If such organization segregates
Federal funds provided under such programs into separate
accounts, then only the financial assistance provided with
such funds shall be subject to audit.
``(viii) Compliance.--Any party which seeks to enforce its
rights under this subparagraph may assert a civil action for
injunctive relief exclusively in an appropriate State court
against the entity or agency that allegedly commits such
violation.
``(ix) Limitations on use of funds for certain purposes.--
No funds provided directly to institutions or organizations
to provide services and administer programs under this title
shall be expended for sectarian worship, instruction, or
proselytization.
``(x) Preemption.--Nothing in this subparagraph shall be
construed to preempt any provision of a State constitution or
State statute that prohibits or restricts the expenditure of
State funds in or by religious organizations.
``(5) Penalties.--
``(A) In general.--If any amounts are used for the purposes
prohibited in either subparagraph (D) or (E) of paragraph
(4)--
``(i) all funding for the agency, organization,
institution, or individual at issue shall be immediately
discontinued;
``(ii) the agency, organization, institution, or individual
using amounts for the purpose prohibited in subparagraph (D)
or (E) of paragraph (4) shall be liable for reimbursement of
all amounts granted to the individual or entity for the
fiscal year for which the amounts were granted.
``(B) Liability for expenses and damages.--In relation to a
violation of paragraph (4)(D), the individual filing the
lawsuit or responsible for taking the legal action against
the Federal, State, or local agency or institution, or
individual working for the Government, shall be individually
liable for all legal expenses and any other expenses of the
government agency, institution, or individual working for the
Government, including damages assessed by the jury against
the Government agency, institution, or individual working for
the government, and any punitive damages.
``(b) Authorization of Appropriations.--
``(1) In general.--There are authorized to be appropriated
to carry out this title--
``(A) $650,000,000 for fiscal year 1998;
``(B) $650,000,000 for fiscal year 1999;
``(C) $650,000,000 for fiscal year 2000;
``(D) $650,000,000 for fiscal year 2001; and
``(E) $650,000,000 for fiscal year 2002.
``(2) Allocation of appropriations.--Of amounts authorized
to be appropriated under paragraph (1) in each fiscal year--
``(A) $500,000,000 shall be for programs under section
204(h); and
``(B) $150,000,000 shall be for programs under part B.
``(3) Availability of funds.--Amounts made available
pursuant to this subsection, and allocated pursuant to
paragraph (1) in any fiscal year shall remain available until
expended.
``SEC. 207. ADMINISTRATIVE PROVISIONS.
``(a) Authority of Administrator.--The Office shall be
administered by the Administrator under the general authority
of the Attorney General.
``(b) Applicability of Certain Crime Control Provisions.--
Sections 809(c), 811(a), 811(b), 811(c), 812(a), 812(b), and
812(d) of the Omnibus Crime Control and Safe Streets Act of
1968 (42 U.S.C. 3789d(c), 3789f(a), 3789f(b), 3789f(c),
3789g(a), 3789g(b), 3789g(d)) shall apply with respect to the
administration of and compliance with this Act, except that
for purposes of this Act--
``(1) any reference to the Office of Justice Programs in
such sections shall be considered to be a reference to the
Assistant Attorney General who heads the Office of Justice
Programs; and
``(2) the term `this title' as it appears in such sections
shall be considered to be a reference to this Act.
``(c) Applicability of Certain Other Crime Control
Provisions.--Sections 801(a), 801(c), and 806 of the Omnibus
Crime Control and Safe Streets Act of 1968 (42 U.S.C.
3711(a), 3711(c), and 3787) shall apply with respect to the
administration of and compliance with this Act, except that,
for purposes of this Act--
``(1) any reference to the Attorney General, the Assistant
Attorney General who heads the Office of Justice Programs,
the Director of the National Institute of Justice, the
Director of the Bureau of Justice Statistics, or the Director
of the Bureau of Justice Assistance shall be considered to be
a reference to the Administrator;
``(2) any reference to the Office of Justice Programs, the
Bureau of Justice Assistance, the National Institute of
Justice, or the Bureau of Justice Statistics shall be
considered to be a reference to the Office of Juvenile
Justice and Delinquency Prevention; and
``(3) the term `this title' as it appears in such sections
shall be considered to be a reference to this Act.
``(d) Rules, Regulations, and Procedures.--The
Administrator may, after appropriate consultation with
representatives of States and units of local government,
establish such rules, regulations, and procedures as are
necessary for the exercise of the functions of the Office and
as are consistent with the purpose of this Act.
``(e) Withholding.--The Administrator shall initiate such
proceedings as the Administrator determines to be appropriate
if the Administrator, after giving reasonable notice and
opportunity for hearing to a recipient of financial
assistance under this title, finds that--
``(1) the program or activity for which the grant or
contract involved was made has been so changed that the
program or activity no longer complies with this title; or
``(2) in the operation of such program or activity there is
failure to comply substantially with any provision of this
title.'';
(2) in part B--
(A) in section 221(b)--
(i) in paragraph (1)--
(I) by striking ``section 223'' and inserting ``section
222''; and
[[Page S275]]
(II) by striking ``section 223(c)'' and inserting ``section
222(c)''; and
(ii) in paragraph (2), by striking ``section 299(c)(1)''
and inserting ``section 222(a)(1)''; and
(B) by striking sections 222 and 223 and inserting the
following:
``SEC. 222. STATE PLANS.
``(a) In General.--In order to receive formula grants under
this part, a State shall submit a plan for carrying out its
purposes applicable to a 3-year period. The State shall
submit annual performance reports to the Administrator which
shall describe progress in implementing programs contained in
the original plan, and shall describe the status of
compliance with State plan requirements. In accordance with
regulations which the Administrator shall prescribe, such
plan shall--
``(1) designate a State agency as the sole agency for
supervising the preparation and administration of the plan;
``(2) contain satisfactory evidence that the State agency
designated in accordance with paragraph (1) has or will have
authority, by legislation if necessary, to implement such
plan in conformity with this part;
``(3) provide for the active consultation with and
participation of units of general local government or
combinations thereof in the development of a State plan which
adequately takes into account the needs and requests of local
governments, except that nothing in the plan requirements, or
any regulations promulgated to carry out such requirements,
shall be construed to prohibit or impede the State from
making grants to, or entering into contracts with, local
private agencies, including religious organizations;
``(4) provide that the chief executive officer of the unit
of general local government shall assign responsibility for
the preparation and administration of the local government's
part of a State plan, or for the supervision of the
preparation and administration of the local government's part
of the State plan, to that agency within the local
government's structure or to a regional planning agency (in
this part referred to as the `local agency') which can most
effectively carry out the purposes of this part and shall
provide for supervision of the programs funded under this
part by that local agency;
``(5)(A) provide for--
``(i) an analysis of juvenile crime problems (including the
joining of gangs that commit crimes) and juvenile justice and
delinquency prevention needs (including educational needs)
within the relevant jurisdiction (including any geographical
area in which an Indian tribe performs law enforcement
functions), a description of the services to be provided, and
a description of performance goals and priorities, including
a specific statement of the manner in which programs are
expected to meet the identified juvenile crime problems
(including the joining of gangs that commit crimes) and
juvenile justice and delinquency prevention needs (including
educational needs) of the jurisdiction;
``(ii) an indication of the manner in which the programs
relate to other similar State or local programs which are
intended to address the same or similar problems; and
``(iii) a plan for the concentration of State efforts which
shall coordinate all State juvenile delinquency programs with
respect to overall policy and development of objectives and
priorities for all State juvenile delinquency programs and
activities, including provision for regular meetings of State
officials with responsibility in the area of juvenile justice
and delinquency prevention;
``(B) contain--
``(i) an analysis of services for the prevention and
treatment of juvenile delinquency in rural areas, including
the need for such services, the types of such services
available in rural areas, and geographically unique barriers
to providing such services; and
``(ii) a plan for providing needed services for the
prevention and treatment of juvenile delinquency in rural
areas; and
``(C) contain--
``(i) an analysis of mental health services available to
juveniles in the juvenile justice system (including an
assessment of the appropriateness of the particular
placements of juveniles in order to receive such services)
and of barriers to access to such services; and
``(ii) a plan for providing needed mental health services
to juveniles in the juvenile justice system;
``(6) provide for the active consultation with and
participation of private agencies in the development and
execution of the State plan; and provide for coordination and
maximum utilization of existing juvenile delinquency programs
and other related programs, such as education, special
education, recreation, health, and welfare within the State;
``(7) provide for the development of an adequate research,
training, and evaluation capacity within the State;
``(8) provide that not less than 75 percent of the funds
made available to the State pursuant to grants under section
221, whether expended directly by the State, by the unit of
general local government, or by a combination thereof, or
through grants and contracts with public or private nonprofit
agencies, shall be used for--
``(A) community-based alternatives (including home-based
alternatives) to incarceration and institutionalization,
specifically--
``(i) for youth who can remain at home with assistance,
home probation and programs providing professional supervised
group activities or individualized mentoring relationships
with adults that involve the family and provide counseling
and other supportive services;
``(ii) for youth who need temporary placement, crisis
intervention, shelter, and after-care; and
``(iii) for youth who need residential placement, a
continuum of foster care or group home alternatives that
provide access to a comprehensive array of services;
``(B) community-based programs and services to work with--
``(i) parents and other family members to strengthen
families, including parent self-help groups, so that
juveniles may be retained in their homes;
``(ii) juveniles during their incarceration, and with their
families, to ensure the safe return of such juveniles to
their homes and to strengthen the families; and
``(iii) parents with limited English-speaking ability,
particularly in areas where there is a large population of
families with limited-English speaking ability;
``(C) comprehensive juvenile justice and delinquency
prevention programs that meet the needs of youth through the
collaboration of the many local systems before which a youth
may appear, including schools, courts, law enforcement
agencies, child protection agencies, mental health agencies,
welfare services, health care agencies, and private nonprofit
agencies offering youth services;
``(D) projects designed to develop and implement programs
stressing advocacy activities aimed at improving services for
and protecting the rights of youth affected by the juvenile
justice system;
``(E) educational programs or supportive services for
delinquent or other juveniles, provided equitably regardless
of sex, race, or family income, designed to--
``(i) encourage juveniles to remain in elementary and
secondary schools or in alternative learning situations,
including--
``(I) education in settings that promote experiential,
individualized learning and exploration of academic and
career options;
``(II) assistance in making the transition to the world of
work and self-sufficiency;
``(III) alternatives to suspension and expulsion; and
``(IV) programs to counsel delinquent juveniles and other
juveniles regarding the opportunities that education
provides; and
``(ii) enhance coordination with the local schools that
such juveniles would otherwise attend, to ensure that--
``(I) the instruction that juveniles receive outside school
is closely aligned with the instruction provided in school;
and
``(II) information regarding any learning problems
identified in such alternative learning situations are
communicated to the schools;
``(F) expanded use of home probation and recruitment and
training of home probation officers, other professional and
paraprofessional personnel, and volunteers to work
effectively to allow youth to remain at home with their
families as an alternative to incarceration or
institutionalization;
``(G) youth-initiated outreach programs designed to assist
youth (including youth with limited proficiency in English)
who otherwise would not be reached by traditional youth
assistance programs;
``(H) programs designed to develop and implement projects
relating to juvenile delinquency and learning disabilities,
including on-the-job training programs to assist community
services, law enforcement, and juvenile justice personnel to
more effectively recognize and provide for learning disabled
and other handicapped youth;
``(I) projects designed both to deter involvement in
illegal activities and to promote involvement in lawful
activities on the part of gangs whose membership is
substantially composed of youth;
``(J) programs and projects designed to provide for the
treatment of youths' dependence on or abuse of alcohol or
other addictive or nonaddictive drugs;
``(K) law-related education programs (and projects) for
delinquent and at-risk youth designed to prevent juvenile
delinquency;
``(L) programs for positive youth development that assist
delinquent and other at-risk youth in obtaining--
``(i) a sense of safety and structure;
``(ii) a sense of belonging and membership;
``(iii) a sense of self-worth and social contribution;
``(iv) a sense of independence and control over one's life;
``(v) a sense of closeness in interpersonal relationships;
and
``(vi) a sense of competence and mastery including health
and physical competence, personal and social competence,
cognitive and creative competence, vocational competence, and
citizenship competence, including ethics and participation;
``(M) programs that, in recognition of varying degrees of
the seriousness of delinquent behavior and the corresponding
gradations in the responses of the juvenile justice system in
response to that behavior, are designed to--
``(i) encourage courts to develop and implement a continuum
of post-adjudication restraints that bridge the gap between
traditional probation and confinement in a correctional
setting (including expanded use of probation, mediation,
restitution, community service, treatment, home detention,
intensive supervision, electronic monitoring, boot camps and
similar programs, and secure community-based treatment
facilities linked
[[Page S276]]
to other support services such as health, mental health,
education (remedial and special), job training, and
recreation); and
``(ii) assist in the provision by the Administrator of
information and technical assistance, including technology
transfer, to States in the design and utilization of risk
assessment mechanisms to aid juvenile justice personnel in
determining appropriate sanctions for delinquent behavior;
``(N) programs designed to prevent and reduce hate crimes
committed by juveniles, including educational programs and
sentencing programs designed specifically for juveniles who
commit hate crimes and that provide alternatives to
incarceration; and
``(O) programs (including referral to literacy programs and
social service programs) to assist families with limited
English-speaking ability that include delinquent juveniles to
overcome language and cultural barriers that may prevent the
complete treatment of such juveniles and the preservation of
their families;
``(9) provide for the development of an adequate research,
training, and evaluation capacity within the State;
``(10) provide that the State shall not detain or confine
juveniles who are alleged to be or determined to be
delinquent in any institution in which the juvenile has
regular sustained physical contact with adult persons who are
detained or confined;
``(11) provide for an adequate system of monitoring jails,
detention facilities, correctional facilities, and non-secure
facilities to insure that the requirements of paragraph (10)
are met, and for annual reporting of the results of such
monitoring to the Administrator, except that such reporting
requirements shall not apply in the case of a State which is
in compliance with the other requirements of this paragraph,
which is in compliance with the requirements in paragraph
(10), and which has enacted legislation which conforms to
such requirements and which contains, in the opinion of the
Administrator, sufficient enforcement mechanisms to ensure
that such legislation will be administered effectively;
``(12) provide assurance that youth in the juvenile justice
system are treated equitably on the basis of gender, race,
family income, and mentally, emotionally, or physically
handicapping conditions;
``(13) provide assurance that consideration will be given
to and that assistance will be available for approaches
designed to strengthen the families of delinquent and other
youth to prevent juvenile delinquency (which approaches
should include the involvement of grandparents or other
extended family members when possible and appropriate and the
provision of family counseling during the incarceration of
juvenile family members and coordination of family services
when appropriate and feasible);
``(14) provide for procedures to be established for
protecting the rights of recipients of services and for
assuring appropriate privacy with regard to records relating
to such services provided to any individual under the State
plan;
``(15) provide for such fiscal control and fund accounting
procedures necessary to assure prudent use, proper
disbursement, and accurate accounting of funds received under
this title;
``(16) provide reasonable assurances that Federal funds
made available under this part for any period shall be so
used as to supplement and increase (but not supplant) the
level of the State, local, and other non-Federal funds that
would in the absence of such Federal funds be made available
for the programs described in this part, and shall in no
event replace such State, local, and other non-Federal funds;
and
``(17) provide that the State agency designated under
paragraph (1) will from time to time, but not less often than
annually, review its plan and submit to the Administrator an
analysis and evaluation of the effectiveness of the programs
and activities carried out under the plan, and any
modifications in the plan, including the survey of State and
local needs, which it considers necessary.
``(b) Approval by State Agency.--The State agency
designated under subsection (a)(1) shall approve the State
plan and any modification thereof prior to submission to the
Administrator.
``(c) Approval by Administrator; Compliance With Statutory
Requirements.--
``(1) In general.--The Administrator shall approve any
State plan and any modification thereof that meets the
requirements of this section.
``(2) Reduced allocations.--If a State fails to comply with
any requirement of subsection (a)(8) in any fiscal year
beginning after January 1, 1998, the State shall be
ineligible to receive any allocation under that section for
such fiscal year unless--
``(A) the State agrees to expend all the remaining funds
the State receives under this part (excluding funds required
to be expended to comply with subsection (a)(4)(C)) for that
fiscal year only to achieve compliance with such paragraph;
or
``(B) the Administrator determines, in the discretion of
the Administrator, that the State--
``(i) has achieved substantial compliance with such
paragraph; and
``(ii) has made, through appropriate executive or
legislative action, an unequivocal commitment to achieving
full compliance within a reasonable time.''; and
(3) by striking parts C, D, E, F, G, and H, and each part
designated as part I.
SEC. 303. RUNAWAY AND HOMELESS YOUTH.
Section 385 of the Juvenile Justice and Delinquency
Prevention Act of 1974 (42 U.S.C. 5751) is amended--
(1) in subsection (a)--
(A) in paragraph (1), by striking ``1993 and such sums as
may be necessary for fiscal years 1994, 1995, and 1996'' and
inserting ``1998 and such sums as may be necessary for fiscal
years 1999, 2000, 2001, and 2002''; and
(B) by striking paragraph (3) and redesignating paragraphs
(4) and (5) as paragraphs (3) and (4), respectively;
(2) in subsection (b), by striking ``1993 and such sums as
may be necessary for fiscal years 1994, 1995, and 1996'' and
inserting ``1998 and such sums as may be necessary for fiscal
years 1999, 2000, 2001, and 2002''; and
(3) in subsection (c), by striking ``1993, 1994, 1995, and
1996'' and inserting ``1998, 1999, 2000, 2001, and 2002''.
SEC. 304. AUTHORIZATION OF APPROPRIATIONS.
Title IV of the Juvenile Justice and Delinquency Prevention
Act of 1974 (42 U.S.C. 5771 et seq.) is amended--
(1) in section 403, by striking paragraph (2) and inserting
the following:
``(2) the term `Administrator' means the Administrator of
the Office of Juvenile Crime Control and Accountability.'';
(2) by striking section 404; and
(3) in section 408, by striking ``1993, 1994, 1995, and
1996'' and inserting ``1998, 1999, 2000, 2001, and 2002''.
SEC. 305. REPEAL.
Title V of the Juvenile Justice and Delinquency Prevention
Act of 1974 (42 U.S.C. 5781 et seq.) is repealed.
SEC. 306. TRANSFER OF FUNCTIONS AND SAVINGS PROVISIONS.
(a) Definitions.--In this section, unless otherwise
provided or indicated by the context--
(1) the term ``Administrator of the Office'' means the
Administrator of the Office of Juvenile Justice and
Delinquency Prevention;
(2) the term ``Bureau of Justice Assistance'' means the
bureau established under section 401 of title I of the
Omnibus Crime Control and Safe Streets Act of 1968;
(3) the term ``Administrator'' means the Administrator of
the Office of Juvenile Crime Control and Accountability
established by operation of subsection (b);
(4) the term ``Federal agency'' has the meaning given the
term ``agency'' by section 551(1) of title 5, United States
Code;
(5) the term ``function'' means any duty, obligation,
power, authority, responsibility, right, privilege, activity,
or program;
(6) the term ``Office of Juvenile Crime Control and
Accountability'' means the office established by operation of
subsection (b);
(7) the term ``Office of Juvenile Justice and Delinquency
Prevention'' means the Office of Juvenile Justice and
Delinquency Prevention within the Department of Justice,
established by section 201 of the Juvenile Justice and
Delinquency Prevention Act of 1974, as in effect on the day
before the date of enactment of this Act; and
(8) the term ``office'' includes any office,
administration, agency, institute, unit, organizational
entity, or component thereof.
(b) Transfer of Functions.--There are transferred to the
Office of Juvenile Crime Control and Accountability all
functions that the Administrator of the Office exercised
before the date of enactment of this Act (including all
related functions of any officer or employee of the Office of
Juvenile Justice and Delinquency Prevention), and authorized
after the enactment of this Act, relating to carrying out the
Juvenile Justice and Delinquency Prevention Act of 1974.
(c) Transfer and Allocations of Appropriations and
Personnel.--
(1) In general.--Except as otherwise provided in this
section and in section 101(a) (relating to Juvenile Justice
Programs) of the Omnibus Consolidated Appropriations Act,
1997, the personnel employed in connection with, and the
assets, liabilities, contracts, property, records, and
unexpended balances of appropriations, authorizations,
allocations, and other amounts employed, used, held, arising
from, available to, or to be made available in connection
with the functions transferred by this section, subject to
section 1531 of title 31, United States Code, shall be
transferred to the Office of Juvenile Crime Control and
Accountability.
(2) Unexpended amounts.--Any unexpended amounts transferred
pursuant to this subsection shall be used only for the
purposes for which the amounts were originally authorized and
appropriated.
(d) Incidental Transfers.--
(1) In general.--The Director of the Office of Management
and Budget, at such time or times as the Director of that
Office shall provide, may make such determinations as may be
necessary with regard to the functions transferred by this
section, and to make such additional incidental dispositions
of personnel, assets, liabilities, grants, contracts,
property, records, and unexpended balances of appropriations,
authorizations, allocations, and other amounts held, used,
arising from, available to, or to be made available in
connection with such functions, as may be necessary to carry
out this section.
(2) Termination of affairs.--The Director of the Office of
Management and Budget shall provide for the termination of
the affairs of all entities terminated by this section and
for such further measures and dispositions as may be
necessary to effectuate the purposes of this section.
(e) Effect on Personnel.--
[[Page S277]]
(1) In general.--Except as otherwise provided by this
section, the transfer pursuant to this section of full-time
personnel (except special Government employees) and part-time
personnel holding permanent positions shall not cause any
such employee to be separated or reduced in grade or
compensation for 1 year after the date of transfer of such
employee under this section.
(2) Executive schedule positions.--Except as otherwise
provided in this section, any person who, on the day before
the date of enactment of this Act, held a position
compensated in accordance with the Executive Schedule
prescribed in chapter 53 of title 5, United States Code, and
who, without a break in service, is appointed in the Office
of Juvenile Crime Control and Accountability to a position
having duties comparable to the duties performed immediately
preceding such appointment shall continue to be compensated
in such new position at not less than the rate provided for
such previous position, for the duration of the service of
such person in such new position.
(3) Transition rule.--
(A) In general.--The incumbent Administrator of the Office
as of the date immediately preceding the date of enactment of
this Act shall continue to serve as Administrator after the
enactment of this Act until such time as the incumbent
resigns, is relieved of duty by the President, or an
Administrator is appointed by the President, by and with the
advice and consent of the Senate.
(B) Nominee.--Not later than 6 months after the date of
enactment of this Act, the President shall submit to the
Senate for consideration the name of the individual nominated
to be appointed as the Administrator.
(f) Savings Provisions.--
(1) Continuing effect of legal documents.--All orders,
determinations, rules, regulations, permits, agreements,
grants, contracts, certificates, licenses, registrations,
privileges, and other administrative actions--
(A) that have been issued, made, granted, or allowed to
become effective by the President, any Federal agency or
official thereof, or by a court of competent jurisdiction, in
the performance of functions that are transferred under this
section; and
(B) that are in effect at the time this section takes
effect, or were final before the date of enactment of this
Act and are to become effective on or after the date of
enactment of this Act, shall continue in effect according to
their terms until modified, terminated, superseded, set
aside, or revoked in accordance with law by the President,
the Administrator, or other authorized official, a court of
competent jurisdiction, or by operation of law.
(2) Proceedings not affected.--
(A) In general.--This section shall not affect any
proceedings, including notices of proposed rulemaking, or any
application for any license, permit, certificate, or
financial assistance pending before the Office of Juvenile
Justice and Delinquency Prevention on the date on which this
section takes effect, with respect to functions transferred
by this section but such proceedings and applications shall
be continued.
(B) Orders; appeals; payments.--Orders shall be issued in
such proceedings, appeals shall be taken therefrom, and
payments shall be made pursuant to such orders, as if this
section had not been enacted, and orders issued in any such
proceedings shall continue in effect until modified,
terminated, superseded, or revoked by a duly authorized
official, by a court of competent jurisdiction, or by
operation of law.
(C) Discontinuance or modification.--Nothing in this
paragraph shall be construed to prohibit the discontinuance
or modification of any such proceeding under the same terms
and conditions and to the same extent that such proceeding
could have been discontinued or modified if this paragraph
had not been enacted.
(3) Suits not affected.--This section shall not affect
suits commenced before the date of enactment of this Act, and
in all such suits, proceedings shall be had, appeals taken,
and judgments rendered in the same manner and with the same
effect as if this section had not been enacted.
(4) Nonabatement of actions.--No suit, action, or other
proceeding commenced by or against the Office of Juvenile
Justice and Delinquency Prevention, or by or against any
individual in the official capacity of such individual as an
officer of the Office of Juvenile Justice and Delinquency
Prevention, shall abate by reason of the enactment of this
section.
(5) Administrative actions relating to promulgation of
regulations.--Any administrative action relating to the
preparation or promulgation of a regulation by the Office of
Juvenile Justice and Delinquency Prevention relating to a
function transferred under this section may be continued, to
the extent authorized by this section, by the Office of
Juvenile Crime Control and Accountability with the same
effect as if this section had not been enacted.
(g) Transition.--The Administrator may utilize--
(1) the services of such officers, employees, and other
personnel of the Office of Juvenile Justice and Delinquency
Prevention with respect to functions transferred to the
Office of Juvenile Crime Control and Accountability by this
section; and
(2) amounts appropriated to such functions for such period
of time as may reasonably be needed to facilitate the orderly
implementation of this section.
(h) References.--Reference in any other Federal law,
Executive order, rule, regulation, or delegation of
authority, or any document of or relating to--
(1) the Administrator of the Office of Juvenile Justice and
Delinquency Prevention with regard to functions transferred
by operation of subsection (b), shall be considered to refer
to the Administrator of the Office of Juvenile Crime Control
and Accountability; and
(2) the Office of Juvenile Justice and Delinquency
Prevention with regard to functions transferred by operation
of subsection (b), shall be considered to refer to the Office
of Juvenile Crime Control and Accountability.
(i) Technical and Conforming Amendment.--Section 5315 of
title 5, United States Code, is amended by striking
``Administrator, Office of Juvenile Crime Control and
Accountability''.
SEC. 307. REPEAL OF UNNECESSARY AND DUPLICATIVE PROGRAMS.
(a) Violent Crime Control and Law Enforcement Act of
1994.--
(1) Title iii.--Title III of the Violent Crime Control and
Law Enforcement Act of 1994 (42 U.S.C. 13741 et seq.) is
amended by striking subtitles A through S, subtitle U, and
subtitle X.
(2) Title v.--Title V of the Violent Crime Control and Law
Enforcement Act of 1994 (42 U.S.C. 3797 et seq.) is repealed.
(3) Title xxvii.--Title XXVII of the Violent Crime Control
and Law Enforcement Act of 1994 (42 U.S.C. 14191 et seq.) is
repealed.
(b) Elementary and Secondary Education Act.--
(1) Title IV.--Title IV of the Elementary and Secondary
Education Act of 1965 (20 U.S.C. 7101) is repealed.
(2) Title V.--Part C of title V of the Elementary and
Secondary Education Act of 1965 (20 U.S.C. 7261 et seq.) is
repealed.
(d) Public Health Service Act.--Section 517 of the Public
Health Service Act (42 U.S.C. 290bb-23) is repealed.
(e) Human Services Reauthorization Act.--Section 408 of the
Human Services Reauthorization Act is repealed.
(f) Community Services Block Grants Act.--Section 682 of
the Community Services Block Grants Act (42 U.S.C. 9901) is
repealed.
(g) Anti-Drug Abuse Act.--Subtitle B of title III of the
Anti-Drug Abuse Act of 1988 (42 U.S.C. 11801 et seq.) is
amended by striking chapters 1 and 2.
SEC. 308. HOUSING JUVENILE OFFENDERS.
Section 20105(a)(1) of subtitle A of title II of the
Violent Crime Control and Law Enforcement Act of 1994 (42
U.S.C. 13705(a)(1)) is amended by striking ``15'' and
inserting ``30''.
SEC. 309. CIVIL MONETARY PENALTY SURCHARGE.
(a) Imposition.--Subject to subsection (b) and
notwithstanding any other provision of law, a surcharge of 40
percent of the principal amount of a civil monetary penalty
shall be added to each civil monetary penalty assessed by the
United States or any agency thereof at the time the penalty
is assessed.
(b) Limitation.--This section does not apply to any
monetary penalty assessed under the Internal Revenue Code of
1986.
(c) Use of Surcharges.--Amounts collected from the
surcharge imposed under this section shall be used for
Federal programs to combat youth violence.
(d) Effective Dates.--
(1) In general.--A surcharge under subsection (b) shall be
added to each civil monetary penalty assessed on or after the
later of October 1, 1997 and the date of enactment of this
Act.
(2) Expiration of authority.--The authority to add a
surcharge under this subsection shall terminate at the close
of September 30, 2002.
______
By Mr. DASCHLE (for himself, Mr. Ford, Mr. Glenn, Mr. Levin, Ms.
Mikulski, Mr. Reid, Ms. Moseley-Braun, Mr. Durbin, Mr.
Wellstone, Mr. Kerry, and Mr. Lautenberg):
S. 11. A bill to reform the Federal election campaign laws applicable
to Congress; to the Committee on Rules and Administration.
CONGRESSIONAL ELECTION CAMPAIGN SPENDING LIMIT AND REFORM ACT OF 1997
Mr. LEVIN. Mr. President, this Congress faces no more important task
in these first few months than passing legislation to reform the
campaign finance system. We just witnessed the most expensive campaign
in the history of our country. According to the Washington Post, both
major political party committees raised over $880 million in 1995 and
1996. That is estimated to be a 73 percent increase since the last
Presidential election cycle.
The increase in ``soft'' money raised by the parties during that same
period was threefold--a 300 percent increase in ``soft'' money raised
by the parties. The Washington Post again estimates that ``soft'' money
contributions for 1995 and 1996 for Democrats was about $122 million,
``soft'' money contributions for Republicans was about $141 million.
For a system that was supposed to eliminate contributions from
[[Page S278]]
corporations and unions, we have seen corporations and unions
contribute or spend millions of dollars to aid in the election or
defeat of congressional and Presidential candidates.
For a system that was supposed to cap contributions from individuals
at no more than $25,000 a year to national political parties and
individual campaigns combined, we have seen hundreds of contributions
from individuals to both parties that equal or exceed $100,000. For a
system that was supposed to require that campaign advertisements be
paid for with money subject to the contribution restrictions of our
campaign finance laws, we have seen probably hundreds of commercials,
many of which had a significant impact on the outcome of elections in
which they were run, hundreds of commercials paid for with unregulated,
unrestricted, undisclosed, so-called ``soft'' money.
For the vast majority of these ads, the public does not know the
basic facts of who contributed to the payments for these ads or how
much was spent to air them. For years, we have pretended that we
actually have had somewhat meaningful restrictions on campaign
contributions. But with this past election cycle, the facade has fallen
and we are faced with the naked truth that this system is wide open.
That is why I am joining with Senator Daschle today in sponsoring his
proposal for campaign finance reform which would eliminate or rein in
many of the worst loopholes in the current system including the raising
and spending of unregulated or ``soft'' money, independent expenditures
by national parties, and campaign ads which masquerade as so-called
issue ads.
Senator Daschle's bill is a comprehensive response to the problem and
on balance it is an achievable and meaningful reform proposal. Senator
Daschle has incorporated in his bill several provisions that I authored
dealing with issue ads and independent expenditures by parties. The
approach that my provision in this bill takes with respect to so-called
issue ads is to redefine ``express advocacy'' to include any
advertising broadcast on radio or television 90 days before a primary
or general election which specifically mentions a candidate.
The Supreme Court has tried to draw a bright line in defining
``express advocacy'' by applying it only to those ads which include
certain magic phrases like ``Vote for Mrs. X'' or ``Defeat Mr. Y.''
Such a test though leaves out ads which target a specific candidate and
do not use the magic words that deliver the same message--for example,
an ad that says, ``Write to candidate Z and let him know how you feel''
about an issue, which the ad has just strongly advocated or attacked.
Now, my approach would treat any broadcast ad, any broadcast ad that
appears within 90 days of an election in which a candidate is
explicitly mentioned as ``express advocacy'' and payable therefore out
of regulated funds. The approach which my provision takes with respect
to independent expenditures by a party is to require a party to choose
between making coordinated expenditures on behalf of a candidate or
making independent expenditures. A party would not be allowed to have
it both ways. And that is because it is impossible, practically
speaking, for a national party to be truly independent from a candidate
if it is also engaged in coordinated expenditures on that candidate's
behalf. To argue otherwise defies common sense. It is one way or the
other. If there is a coordinated campaign on the candidate's behalf, it
is kind of hard to argue that that same national party can engage in
coordinated expenditures relative to that campaign.
We should not delay the consideration of campaign finance reform
legislation, but we can always find a reason not to do it. This year
there is a new reason. I have heard the suggestion that we should put
off consideration of campaign finance reform until the hearings before
the Governmental Affairs Committee on campaign finance irregularities
are finished, but the argument for delay has been used in one form or
another for many, many Congresses and our job now is to show the
American people that we can do it and we can do it now.
The typical sophisticated analysis of the likelihood of campaign
finance reform is that any reform is virtually impossible. ``It will
not happen,'' you hear among those so-called well-informed folks. ``The
gap simply cannot be bridged,'' some people say.
We witnessed the end of the cold war 5 years ago. No one ever thought
that was going to end. If we can achieve the end of the nuclear arms
race, we surely can achieve the end of the money race in the American
campaign system. I think most of us--and I, surely--want to be part of
that effort. I want to do whatever it takes to facilitate action now.
That is why I will be introducing in the next few days a more limited
form of campaign finance reform to address certain limited, specific,
but extensive abuses. Then, if we come to loggerheads over a
comprehensive approach with more limited bills being offered as
backups, there will be no excuse to not tackle at least some of the
more pressing problems.
Let me take a minute, Mr. President, to show you how out of kilter
this system has become. There's an article in today's Roll Call about
the treatment of the Business Roundtable by the Republican Party. Now
the Business Roundtable, which is an organization of the biggest and
most influential corporations in America, doesn't need me or anybody
else, probably, to stand up for it. I am sure it can handle itself
quite adequately when it is picked on. But when you have the Republican
Party calling in 24 CEO's of companies who are members of the Business
Roundtable to begin the ``process of behavior modification'' according
to the persons who spoke to Roll Call, you've got a serious problem.
According to Roll Call,
Still angry that big business failed to adequately bankroll
their campaigns and counter the AFL-CIO's onslaught of attack
ads last fall, the Republicans want the BRT (Business
Roundtable) to purge Democrats from its staff of nine
directors.
``You have to fix the problem. You have to fix the Business
Roundtable,'' one Republican source said, according to Roll Call,
``explaining that the GOP leadership is urging the prestigious
organization of corporate bigwigs to purge its staff.''
The article goes on.
The lawmakers are also urging the CEOs of some 200
corporations that comprise the BRT to dump their Democratic
lobbyists, hire Republicans, and significantly increase the
percentage of PAC contributions that go to GOP candidates.
Later on, the article says,
If the Republicans can get the BRT to change its ways the
payoff could be big. Just as Willie Sutton robbed banks
because ``that's where the money is,'' the GOP Congressional
leaders realize that BRT members could handily boost
Republican election efforts if the BRT would agree to fund
issue-advocacy campaigns in future elections.
What a sad state of affairs, Mr. President. Congressional leaders,
according to this article, are trying to pressure a private
organization as to whom its members should employ to lobby their
offices, the amount of support these corporations should give to their
party activities and how they should spend their money to influence
elections on issue ads. And it is all done with what seems to be a
threat--a ``do this or else'' attitude.
The Wall Street Journal, reporting on this CEO meeting, suggests that
the threat is more explicit than implied. The Wall Street Journal of
January 9, 1997, reported:
Companies that want to have it both ways, vows one top GOP
strategist, no longer will be involved in Republican
decision-making ``or invited to our cocktail parties.''
And this action is not because the Business Roundtable did not
contribute to Republican candidates. No, according to the Wall Street
Journal, the BRT gave twice as much to Republicans as they did to
Democrats--$25 million to Republicans and only $11 million to
Democrats. It is not enough that the BRT members already give to
Republicans, they ``should give a bigger percentage to the
Republicans'' than they are now giving, according to Haley Barbour, the
Republican Party Chairman.
This is punishment, Mr. President, to be imposed on an organization
by party and Congressional leaders. That is the message behind this
action--no money, no access--and it looks awful. That is how far we
have come in this scramble for campaign money, and that is why we have
to make the effort now to get going on campaign finance reform.
Mr. President, I ask unanimous consent the two articles I referred to
be printed in the Record.
[[Page S279]]
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the materials were ordered to be printed in
the Record, as follows:
S. 11
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
(a) Short Title.--This title may be cited as the
``Congressional Election Campaign Spending Limit and Reform
Act of 1997''.
(b) Table of Contents.--
Sec. 1. Short title.
TITLE I--CONTROL OF CONGRESSIONAL CAMPAIGN SPENDING
Subtitle A--Senate Election Campaign Spending Limits and Benefits
Sec. 101. Senate spending limits and benefits.
Sec. 102. Ban on activities of political action committees in senate
elections.
Sec. 103. Reporting requirements.
Sec. 104. Disclosure by candidates other than eligible senate
candidates.
Sec. 105. Excess campaign funds of senate candidates.
Sec. 106. Contribution limit for eligible senate candidates.
Subtitle B--General Provisions
Sec. 111. Broadcast rates and preemption.
Sec. 112. Reporting requirements for certain independent expenditures.
Sec. 113. Campaign advertising amendments.
Sec. 114. Definitions.
Sec. 115. Provisions relating to franked mass mailings.
TITLE II--INDEPENDENT EXPENDITURES
Sec. 201. Definition of independent expenditure.
Sec. 202. Independent versus coordinated expenditures by political
party committees.
Sec. 203. Treatment of qualified nonprofit corporations.
Sec. 204. Equal broadcast time.
TITLE III--EXPENDITURES
Subtitle A--Personal Funds; Credit
Sec. 301. Contributions and loans from personal funds.
Sec. 302. Extensions of credit.
Subtitle B--Soft Money of Political Parties
Sec. 311. Preparation and distribution by volunteers of materials in
connection with State and local political party voter
registration and get-out-the-vote activities so as not to
be considered a contribution or expenditure.
Sec. 312. Contributions to political party committees.
Sec. 313. Provisions relating to national, State, and local party
committees.
Sec. 314. Restrictions on fundraising by candidates and officeholders.
Sec. 315. Reporting requirements.
Subtitle C--Soft Money of Persons Other Than Political Parties
Sec. 321. Soft money of persons other than political parties.
TITLE IV--CONTRIBUTIONS
Sec. 401. Prohibition of certain contributions by lobbyists.
Sec. 402. Contributions by dependents not of voting age.
Sec. 403. Contributions to candidates from State and local committees
of political parties to be aggregated.
Sec. 404. Contributions and expenditures using money secured by
physical force or other intimidation.
Sec. 405. Prohibition of acceptance by a candidate of cash
contributions from any one person aggregating more than
$100.
TITLE V--AUTHORITIES AND DUTIES OF THE FEDERAL ELECTION COMMISSION
Sec. 501. Filing of reports using computers and facsimile machines.
Sec. 502. Increase in threshold for reporting requirements.
Sec. 503. Audits.
Sec. 504. Authority to seek injunction.
Sec. 505. Penalties.
Sec. 506. Independent litigating authority.
Sec. 507. Reference of suspected violation to the attorney general.
Sec. 508. Powers of the commission.
TITLE VI--MISCELLANEOUS
Sec. 601. Prohibition of leadership committees.
Sec. 602. Telephone voting by persons with disabilities.
Sec. 603. Certain tax-exempt organizations not subject to corporate
limits.
Sec. 604. Aiding and abetting violations of the Federal election
campaign act of 1971.
Sec. 605. Campaign advertising that refers to an opponent.
Sec. 606. Limit on congressional use of the franking privilege.
Sec. 607. Participation by foreign nationals in political activities.
Sec. 608. Certification of compliance with foreign contribution and
solicitation limitations.
TITLE VII--EFFECTIVE DATES; AUTHORIZATIONS
Sec. 701. Effective date.
Sec. 702. Budget neutrality.
Sec. 703. Severability.
Sec. 704. Expedited review of constitutional issues.
Sec. 705. Regulations.
TITLE I--CONTROL OF CONGRESSIONAL CAMPAIGN SPENDING
Subtitle A--Senate Election Campaign Spending Limits and Benefits
SEC. 101. SENATE SPENDING LIMITS AND BENEFITS.
(a) In General.--The Federal Election Campaign Act of 1971
(2 U.S.C. 431 et seq.) is amended by adding at the end the
following:
``TITLE V--SPENDING LIMITS AND BENEFITS FOR SENATE ELECTION CAMPAIGNS
``SEC. 501. DEFINITIONS.
``In this title:
``(1) Eligible senate candidate.--The term `eligible Senate
candidate' means a candidate who is certified under section
505 as being eligible to receive benefits under this title.
``(2) Excess expenditure amount.--The term `excess
expenditure amount', with respect to an eligible Senate
candidate, means the amount applicable to the eligible Senate
candidate under section 504(b).
``(3) Expenditure.--The term `expenditure' has the meaning
given in paragraph (9) of section 301, excluding subparagraph
(B)(ii) of that paragraph.
``(4) General election expenditure limit.--The term
`general election expenditure limit', with respect to an
eligible Senate candidate, means the limit applicable to the
eligible Senate candidate under section 503(b).
``(5) Personal funds expenditure limit.--The term `personal
funds expenditure limit' means the limit stated in section
503(a).
``(6) Primary election expenditure limit.--The term
`primary election expenditure limit', with respect to an
eligible Senate candidate, means the limit applicable to the
eligible Senate candidate under section 502(d)(1)(A).
``(7) Runoff election expenditure limit.--The term `runoff
election expenditure limit', with respect to an eligible
Senate candidate, means the limit applicable to the eligible
Senate candidate under section 502(d)(1)(B).
``SEC. 502. ELIGIBLE SENATE CANDIDATES.
``(a) In General.--For purposes of this title, a candidate
is an eligible Senate candidate if the candidate--
``(1) files a primary election eligibility declaration
under subsection (b) and is in compliance with the
representations made in the declaration;
``(2) files a general election eligibility certification
and declaration under subsection (c) and is in compliance
with the representations made in the certification and
declaration; and
``(3) meets the threshold contribution requirements of
subsection (e).
``(b) Primary Election Eligibility Declaration.--
``(1) In general.--The requirements of this subsection are
met if the candidate files with the Secretary of the Senate a
declaration that--
``(A) the candidate and the candidate's authorized
committees--
``(i) will meet the primary and runoff election expenditure
limits of subsection (d); and
``(ii) will accept only an amount of contributions for the
primary and runoff elections that does not exceed those
limits;
``(B) the candidate and the candidate's authorized
committees will meet the personal funds expenditure limit;
``(C) the candidate and the candidate's authorized
committees will meet the general election expenditure limit;
and
``(D) the candidate and the candidate's authorized
committees will meet the closed captioning requirements of
section 510.
``(2) Deadline for filing declaration.--The declaration
under paragraph (1) shall be filed not later than the date on
which the candidate files as a candidate for the primary
election.
``(c) General Election Eligibility Certification and
Declaration.--
``(1) In general.--The requirements of this subsection are
met if the candidate files with the Secretary of the Senate--
``(A) a certification, under penalty of perjury, that--
``(i) the candidate and the candidate's authorized
committees--
``(I) met the primary and runoff election expenditure
limits under subsection (d); and
``(II) did not accept contributions for the primary or
runoff election in excess of the primary or runoff
expenditure limit under subsection (d), whichever is
applicable, reduced by any amounts transferred to the current
election cycle from a preceding election cycle;
``(ii) the candidate met the threshold contribution
requirement under subsection (e), and that only allowable
contributions were taken into account in meeting such
requirement; and
``(iii) at least 1 other candidate has qualified for the
same general election ballot under the law of the candidate's
State; and
``(B) a declaration that the candidate and the authorized
committees of the candidate--
``(i) except as otherwise provided by this title, will not
make expenditures that exceed the general election
expenditure limit;
``(ii) will not accept any contributions in violation of
section 315;
``(iii) except as otherwise provided by this title, will
not accept any contribution for
[[Page S280]]
the general election to the extent that the contribution
would cause the aggregate amount of contributions to exceed
the sum of the amount of the general election expenditure
limit and the amounts described in subsections (c), (d), and
(e) of section 503, reduced by any amounts transferred to the
current election cycle from a previous election cycle and not
taken into account under subparagraph (A)(ii)(II);
``(iv) will deposit all payments received under this title
in an account insured by the Federal Deposit Insurance
Corporation from which funds may be withdrawn by check or
similar means of payment to third parties;
``(v) will furnish campaign records, evidence of
contributions, and other appropriate information to the
Commission;
``(vi) will cooperate in the case of any audit and
examination by the Commission under section 506 and will pay
any amounts required to be paid under that section; and
``(vii) will meet the closed captioning requirements of
section 510.
``(2) Deadline for filing certification.--The certification
under paragraph (1) shall be filed not later than 7 days
after the earlier of--
``(A) the date on which the candidate qualifies for the
general election ballot under State law; or
``(B) if, under State law, a primary or runoff election to
qualify for the general election ballot occurs after
September 1, the date on which the candidate wins the primary
or runoff election.
``(d) Primary and Runoff Expenditure Limits.--
``(1) In general.--The requirements of this subsection are
met if--
``(A) the candidate or the candidate's authorized
committees did not make expenditures for the primary election
in excess of the lesser of--
``(i) 67 percent of the general election expenditure limit;
or
``(ii) $2,750,000; and
``(B) the candidate and the candidate's authorized
committees did not make expenditures for any runoff election
in excess of 20 percent of the general election expenditure
limit.
``(2) Indexing.--The $2,750,000 amount under paragraph
(1)(A)(ii) shall be increased as of the beginning of each
calendar year based on the increase in the price index
determined under section 315(c), except that the base period
shall be calendar year 1996.
``(3) Increase.--The limitations under subparagraphs (A)
and (B) of paragraph (1) with respect to any candidate shall
be increased by the aggregate amount of independent
expenditures in opposition to, or on behalf of any opponent
of, the candidate during the primary or runoff election
period, whichever is applicable, that are required to be
reported to the Secretary of the Senate or to the Commission
with respect to that period under section 304.
``(4) Excess amount of contributions.--
``(A) In general.--If the contributions received by a
candidate or the candidate's authorized committees for the
primary election or runoff election exceed the expenditures
for either election--
``(i) the excess amount of contributions shall be treated
as contributions for the general election; and
``(ii) expenditures for the general election may be made
from the excess amount of contributions.
``(B) Limitation.--Subparagraph (A) shall not apply to the
extent that treatment of excess contributions in accordance
with subparagraph (A)--
``(i) would result in the violation of any limitation under
section 315; or
``(ii) would cause the aggregate amount of contributions
received for the general election to exceed the limits under
subsection (c)(1)(D)(iii).
``(e) Threshold Contribution Requirements.--
``(1) In general.--The requirements of this subsection are
met if the candidate and the candidate's authorized
committees have received allowable contributions during the
applicable period in an amount at least equal to 5 percent of
the general election expenditure limit.
``(2) Definitions.--In this section and subsections (b) and
(c) of section 504:
``(A) Allowable contribution.--The term `allowable
contribution' means a contribution that is made as a gift of
money by an individual pursuant to a written instrument
identifying the individual as the contributor.
``(B) Applicable period.--The term `applicable period'
means--
``(i) the period beginning on January 1 of the calendar
year preceding the calendar year of a general election and
ending on--
``(I) the date on which the certification under subsection
(c) is filed by the candidate; or
``(II) for purposes of subsections (b) and (c) of section
504, the date of the general election; or
``(ii) in the case of a special election for the office of
United States Senator, the period beginning on the date on
which the vacancy in the office occurs and ending on the date
of the general election.
``SEC. 503. LIMIT ON EXPENDITURES.
``(a) Personal Funds Expenditure Limit.--
``(1) In general.--The aggregate amount of expenditures
that may be made during an election cycle by an eligible
Senate candidate or the candidate's authorized committees
from the sources described in paragraph (2) shall not exceed
$25,000.
``(2) Sources.--A source is described in this paragraph if
it is--
``(A) personal funds of the candidate or a member of the
candidate's immediate family; or
``(B) proceeds of indebtedness incurred by the candidate or
a member of the candidate's immediate family.
``(b) General Election Expenditure Limit.--
``(1) In general.--Except as otherwise provided in this
title, the aggregate amount of expenditures for a general
election by an eligible Senate candidate and the candidate's
authorized committees shall not exceed the lesser of--
``(A) $5,500,000; or
``(B) the greater of--
``(i) $1,200,000; or
``(ii) $400,000; plus
``(I) 30 cents multiplied by the voting age population not
in excess of 4,000,000; and
``(II) 25 cents multiplied by the voting age population in
excess of 4,000,000.
``(2) Exception.--In the case of an eligible Senate
candidate in a State that has not more than 1 transmitter for
a commercial Very High Frequency (VHF) television station
licensed to operate in that State, paragraph (1)(B)(ii) shall
be applied by substituting--
``(A) `92 cents' for `30 cents' in subclause (I); and
``(B) `90 cents' for `25 cents' in subclause (II).
``(3) Indexing.--The amount otherwise determined under
paragraph (1) for any calendar year shall be increased by the
same percentage as the percentage increase for the calendar
year under section 502(d)(2).
``(c) Legal and Accounting Compliance Fund.--
``(1) In general.--The general election expenditure limit,
shall not apply to qualified legal or accounting expenditures
made by a candidate or the candidate's authorized committees
or a Federal officeholder from a legal and accounting
compliance fund meeting the requirements of paragraph (2).
``(2) Requirements.--A legal and accounting compliance fund
meets the requirements of this paragraph if--
``(A) the fund is established with respect to qualified
legal or accounting expenditures incurred with respect to a
particular election;
``(B) the only amounts transferred to the fund are amounts
received in accordance with the limitations, prohibitions,
and reporting requirements of this Act;
``(C) the aggregate amounts transferred to, and
expenditures made from, the fund do not exceed the sum of--
``(i) the lesser of--
``(I) 15 percent of the general election expenditure limit
for the election for which the fund was established; or
``(II) $300,000; plus
``(ii) the amount determined under paragraph (4); and
``(D) no funds received by the candidate under section
504(a)(3) are transferred to the fund.
``(3) Definition of qualified legal or accounting
expenditure.--For purposes of this subsection, the term
`qualified legal or accounting expenditure' means--
``(A) an expenditure for costs of legal or accounting
services provided in connection with--
``(i) an administrative or court proceeding initiated under
this Act for the election for which the legal and accounting
fund was established; or
``(ii) the preparation of a document or report required by
this Act or by the Commission;
``(B) an expenditure for legal or accounting service
provided in connection with the election cycle for which the
legal and accounting compliance fund was established to
ensure compliance with this Act with respect to the election
cycle.
``(4) Increase.--
``(A) Petition.--If, after a general election, primary
election, or runoff election, a candidate determines that
qualified legal or accounting expenditures will exceed the
limit under paragraph (2)(C)(i), the candidate may petition
the Commission for an increase in the limit by filing the
petition with the Secretary of the Senate.
``(B) Determination.--The Commission shall authorize an
increase in the limit under paragraph (2)(C)(i) in the amount
(if any) by which the Commission determines the qualified
legal or accounting expenditures exceed the limit.
``(C) Judicial review.--A determination under subparagraph
(B) shall be subject to judicial review under section 507.
``(D) Contributions and expenditures not counted.--Except
as provided in section 315, a contribution received or
expenditure made under this paragraph shall not be counted
against any contribution or expenditure limit applicable to
the candidate under this title.
``(5) Treatment.--Funds in a legal and accounting
compliance fund shall be treated for purposes of this Act as
a separate segregated fund, except that any portion of the
fund not used to pay qualified legal or accounting
expenditures, and not transferred to a legal and accounting
compliance fund for the election cycle for the next general
election, shall be treated in the same manner as other
campaign funds for purposes of section 313(b).
[[Page S281]]
``(d) Payment of Taxes on Earnings.--The limitation under
subsection (b) shall not apply to any expenditure for
Federal, State, or local income taxes on the earnings of a
candidate's authorized committees.
``(e) Certain Expenses.--In the case of an eligible Senate
candidate who holds a Federal office, the limitation under
subsection (b) shall not apply to ordinary and necessary
expenses of travel of the candidate and the candidate's
spouse and children between Washington, District of Columbia,
and the candidate's State in connection with the candidate's
activities as a holder of Federal office.
``SEC. 504. BENEFITS FOR ELIGIBLE SENATE CANDIDATES.
``(a) In General.--An eligible Senate candidate shall be
entitled to--
``(1) the broadcast media rates provided under section
315(b) of the Communications Act of 1934; and
``(2) payments in an amount equal to--
``(A) the excess expenditure amount determined under
subsection (b); and
``(B) the independent expenditure amount determined under
subsection (c).
``(b) Excess Expenditure Amount.--
``(1) Determination.--The excess expenditure amount is--
``(A) in the case of a major party candidate, an amount
equal to the sum of--
``(i) if the opponent's excess is less than 33\1/3\ percent
of the general election expenditure limit, an amount equal to
one-third of the general election expenditure limit; plus
``(ii) if the opponent's excess equals or exceeds 33\1/3\
percent but is less than 66\2/3\ percent of the general
election expenditure limit, an amount equal to one-third of
the general election expenditure limit; plus
``(iii) if the opponent's excess equals or exceeds 66\2/3\
percent of the general election expenditure limit, an amount
equal to one-third of the general election expenditure limit;
and
``(B) in the case of an eligible Senate candidate who is
not a major party candidate, an amount equal to the least
of--
``(i) the amount of allowable contributions accepted by the
eligible Senate candidate during the applicable period in
excess of the threshold contribution requirement under
section 502(e);
``(ii) 50 percent of the general election expenditure
limit; or
``(iii) the opponent's excess.
``(2) Definition of opponent's excess.--In this subsection,
the term `opponent's excess' means the amount by which an
opponent of an eligible Senate candidate in the general
election accepts contributions or makes (or obligates to
make) expenditures for the election in excess of the general
election expenditure limit.
``(c) Independent Expenditure Amount.--The independent
expenditure amount is the total amount of independent
expenditures made, or obligated to be made, during the
general election period by 1 or more persons in opposition
to, or on behalf of an opponent of, an eligible Senate
candidate that are required to be reported by the persons
under section 304(d) with respect to the general election
period and are certified by the Commission under section
304(d).
``(d) Waiver of Expenditure and Contribution Limits.--
``(1) Recipients of excess expenditure amount payments and
independent expenditure amount payments.--
``(A) In general.--An eligible Senate candidate who
receives payments under subsection (a)(2) may make
expenditures from the payments for the general election
without regard to the general election expenditure limit.
``(B) Nonmajor party candidates.--In the case of an
eligible Senate candidate who is not a major party candidate,
the general election expenditure limit shall be increased by
the amount (if any) by which the opponent's excess
expenditure amount exceeds the amount determined under
subsection (b)(2)(B) with respect to the candidate.
``(2) All benefit recipients.--
``(A) In general.--An eligible Senate candidate who
receives benefits under this section may make expenditures
for the general election without regard to the personal funds
expenditure limit or general election expenditure limit if
any 1 of the eligible Senate candidate's opponents who is not
an eligible Senate candidate raises an amount of
contributions or makes or becomes obligated to make an amount
of expenditures for the general election that exceeds 200
percent of the general election expenditure limit.
``(B) Limitation.--The amount of the expenditures that may
be made by reason of subparagraph (A) shall not exceed 100
percent of the general election expenditure limit.
``(3) Acceptance of contribution without regard to section
502(c)(1)(D)(iii).--
``(A) A candidate who receives benefits under this section
may accept a contribution for the general election without
regard to section 502(c)(1)(D)(iii) if--
``(i) a major party candidate in the same general election
is not an eligible Senate candidate; or
``(ii) any other candidate in the same general election who
is not an eligible Senate candidate raises an amount of
contributions or makes or becomes obligated to make an amount
of expenditures for the general election that exceeds 75
percent of the general election expenditure limit applicable
to such other candidate.
``(B) Limitation.--The amount of contributions that may be
received by reason of subparagraph (A) shall not exceed 100
percent of the general election expenditure limit.
``(e) Use of Payments.--
``(1) Permitted use.--Payments received by an eligible
Senate candidate under subsection (a)(2) shall be used to
make expenditures with respect to the general election period
for the candidate.
``(2) Prohibited use.--Payments received by an eligible
Senate candidate under subsection (a)(2) shall not be used--
``(A) except as provided in paragraph (4), to make any
payments, directly or indirectly, to the candidate or to any
member of the immediate family of the candidate;
``(B) to make any expenditure other than an expenditure to
further the general election of the candidate;
``(C) to make an expenditure the making of which
constitutes a violation of any law of the United States or of
the State in which the expenditure is made; or
``(D) subject to section 315(i), to repay any loan to any
person except to the extent that proceeds of the loan were
used to further the general election of the candidate.
``SEC. 505. CERTIFICATION BY THE COMMISSION.
``(a) Certification of Status as Eligible Senate
Candidate.--
``(1) In general.--The Commission shall certify to any
candidate meeting the requirements of section 502 that the
candidate is an eligible Senate candidate entitled to
benefits under this title.
``(2) Revocation.--The Commission shall revoke a
certification under paragraph (1) if the Commission
determines that a candidate fails to continue to meet the
requirements of section 502.
``(b) Certification of Eligibility To Receive Benefits.--
``(1) In general.--Not later than 48 hours after an
eligible Senate candidate files a request with the Secretary
of the Senate to receive benefits under section 504, the
Commission shall issue a certification stating whether the
candidate is eligible for payments under this title and the
amount of such payments to which such candidate is entitled.
``(2) Contents of request.--A request under paragraph (1)
shall--
``(A) contain such information and be made in accordance
with such procedures as the Commission may provide by
regulation; and
``(B) contain a verification signed by the candidate and
the treasurer of the principal campaign committee of the
candidate stating that the information furnished in support
of the request, to the best of their knowledge, is correct
and fully satisfies the requirements of this title.
``(c) Determinations by the Commission.--All determinations
made by the Commission under this title (including
certifications under subsections (a) and (b)) shall be final
and conclusive, except to the extent that a determination is
subject to examination and audit by the Commission under
section 506 and judicial review under section 507.
``SEC. 506. EXAMINATIONS AND AUDITS; REPAYMENTS; CIVIL
PENALTIES.
``(a) Examinations and Audits.--
``(1) After a general election.--After each general
election, the Commission shall conduct an examination and
audit of the campaign accounts of all candidates in 5 percent
of the elections to the Senate in which there was an eligible
Senate candidate on the ballot, as designated by the
Commission through the use of an appropriate statistical
method of random selection, to determine whether the
candidates have complied with the conditions of eligibility
and other requirements of this title.
``(2) After a special election.--After each special
election in which an eligible Senate candidate was on the
ballot, the Commission shall conduct an examination and audit
of the campaign accounts of all candidates in the election to
determine whether the candidates have complied with the
conditions of eligibility and other requirements of this
title.
``(3) With reason to believe there may have been a
violation.--The Commission may conduct an examination and
audit of the campaign accounts of any eligible Senate
candidate in a general election if the Commission determines
that there exists reason to believe that the eligible Senate
candidate failed to comply with this title.
``(b) Excess Payment.--If the Commission determines any
payment was made to an eligible Senate candidate under this
title in excess of the aggregate amounts to which the
eligible Senate candidate was entitled, the Commission shall
notify the eligible Senate candidate, and the eligible Senate
candidate shall pay an amount equal to the excess.
``(c) Revocation of Status.--If the Commission revokes the
certification of an eligible Senate candidate as an eligible
Senate candidate under section 505(a)(1), the Commission
shall notify the eligible Senate candidate, and the eligible
Senate candidate shall pay an amount equal to the payments
received under this title.
``(d) Misuse of Benefit.--If the Commission determines that
any amount of any benefit made available to an eligible
Senate candidate under this title was not used as provided
for in this title, the Commission shall notify the eligible
Senate candidate, and the eligible Senate candidate shall pay
the amount of that amount.
``(e) Excess Expenditures.--If the Commission determines
that an eligible Senate candidate who received benefits under
this title made expenditures that in the aggregate exceed the
primary election expenditure, the runoff election expenditure
limit,
[[Page S282]]
or the general election expenditure limit, the Commission
shall notify the eligible Senate candidate, and the eligible
Senate candidate shall pay an amount equal to the amount of
the excess expenditures.
``(f) Civil Penalties.--
``(1) Misuse of benefit.--If the Commission determines that
an eligible Senate candidate has committed a violation
described in subsection (d), the Commission may assess a
civil penalty against the eligible Senate candidate in an
amount not greater than 200 percent of the amount of the
benefit that was misused.
``(2) Excess expenditures.--
``(A) Low amount of excess expenditures.--If the Commission
determines that an eligible Senate candidate made
expenditures that exceeded by 2.5 percent or less the primary
election expenditure limit, the runoff election expenditure
limit, or the general election expenditure limit, the
Commission shall assess a civil penalty against the eligible
Senate candidate in an amount equal to the amount of the
excess expenditures.
``(B) Medium amount of excess expenditures.--If the
Commission determines that an eligible Senate candidate made
expenditures that exceeded by more than 2.5 percent and less
than 5 percent the primary election expenditure limit, the
runoff election expenditure limit, or the general election
expenditure limit, the Commission shall assess a civil
penalty against the eligible Senate candidate in an amount
equal to 3 times the amount of the excess expenditures.
``(C) Large amount of excess expenditures.--If the
Commission determines that an eligible Senate candidate made
expenditures that exceeded by 5 percent or more the primary
election expenditure limit, the runoff election expenditure
limit, or the general election expenditure limit, the
Commission shall assess a civil penalty against the eligible
Senate candidate in an amount equal to the amount of the
excess expenditures an amount equal to the sum of--
``(i) 3 times the amount of the excess expenditures plus an
additional amount determined by the Commission; plus
``(ii) if the Commission determines that the exceeding of
the expenditure limit was willful, an amount equal to the
amount of benefits that the eligible Senate candidate
received under this title.
``(g) Unexpended Funds.--
``(1) Repayment.--Subject to paragraph (2), any amount
received by an eligible Senate candidate under this title and
not expended on or before the date of the general election
shall be repaid not later than 30 days after the date of the
general election.
``(2) Retention for purposes of liquidation of
obligations.--An eligible Senate candidate may retain for a
period not exceeding 120 days after the date of a general
election a reasonable portion of unexpended funds received
under this title for the liquidation of all obligations to
pay expenditures for the general election incurred during the
general election period. At the end of the 120-day period,
any unexpended funds received under this title shall be
promptly repaid.
``(h) Payments Returned to Source.--Any payment, repayment,
or civil penalty under this section shall be paid to the
entity that afforded benefits under this title to the
eligible Senate candidate.
``(i) Limit on Period for Notification.--No notification
shall be made by the Commission under this section with
respect to an election more than 3 years after the date of
the election.
``SEC. 507. JUDICIAL REVIEW.
``(a) Judicial Review.--Any agency action by the Commission
under this title shall be subject to review by the United
States Court of Appeals for the District of Columbia Circuit
upon petition filed in that court within 30 days after the
date of the agency action.
``(b) Application of Title 5, United States Code.--Chapter
7 of title 5, United States Code, shall apply to judicial
review of any agency action by the Commission under this
title.
``(c) Agency Action.--For purposes of this section, the
term `agency action' has the meaning given the term in
section 551(13) of title 5, United States Code.
``SEC. 508. PARTICIPATION BY COMMISSION IN JUDICIAL
PROCEEDINGS.
``(a) Appearances.--The Commission may appear in and defend
against any action instituted under this section and under
section 507 by attorneys employed in the office of the
Commission or by counsel whom it may appoint without regard
to the provisions of title 5, United States Code, governing
appointments in the competitive service, and whose
compensation it may fix without regard to chapter 51 and
subchapter III of chapter 53 of that title.
``(b) Actions for Recovery of Amount of Benefits.--The
Commission, by attorneys and counsel described in subsection
(a), may bring an action in United States district court to
recover any amounts determined under this title to be payable
to any entity that afforded a benefit to an eligible Senate
candidate under this title.
``(c) Action for Injunctive Relief.--The Commission, by
attorneys and counsel described in subsection (a), may
petition the courts of the United States for such injunctive
relief as is appropriate in order to implement any provision
of this title.
``(d) Appeals.--The Commission, on behalf of the United
States, may appeal from, and may petition the Supreme Court
for certiorari to review, any judgment or decree entered with
respect to actions in which the Commission under this
section.
``SEC. 509. REPORTS TO CONGRESS; REGULATIONS.
``(a) Reports.--
``(1) In general.--As soon as practicable after each
general election, the Commission shall submit a full report
to the Senate setting forth--
``(A) the expenditures (shown in such detail as the
Commission determines to be appropriate) made by each
eligible Senate candidate and the authorized committees of
the candidate;
``(B) the amounts certified by the Commission under section
505 as benefits available to each eligible Senate candidate;
and
``(C) the amount of repayments, if any, required under
section 506 and the reason why each repayment was required.
``(2) Printing.--Each report under paragraph (1) shall be
printed as a Senate document.
``(b) Regulations.--
``(1) In general.--The Commission may issue such
regulations, conduct such examinations and investigations,
and require the keeping and submission of such books,
records, and information, as the Commission considers
necessary to carry out the functions and duties of the
Commission under this title.
``(2) Statement to senate.--Not less than 30 days before
issuing a regulation under paragraph (1), the Commission
shall submit to the Senate a statement setting forth the
proposed regulation and containing a detailed explanation and
justification for the regulation.
``SEC. 510. CLOSED CAPTIONING IN TELEVISION BROADCASTS.
``Any television broadcast prepared or distributed by an
eligible Senate candidate shall be prepared in a manner that
contains, is accompanied by, or otherwise readily permits
closed captioning of the oral content of the broadcast to be
broadcast by way of line 21 of the vertical blanking interval
or by way of a comparable successor technology.
``SEC. 511. LIMITATIONS ON PAYMENTS.
``(a) Payments on Certification.--On receipt of a
certification from the Commission under section 505, except
as provided in subsection (b), the Secretary shall, subject
to the availability of appropriations, promptly pay the
amount certified by the Commission to the candidate.
``(b) Insufficient Funds.--
``(1) Withholding.--If, at the time of a certification by
the Commission under section 505 for payment to an eligible
Senate candidate, the Secretary determines that there are
not, or may not be, sufficient funds to satisfy the full
entitlement of all eligible Senate candidates, the Secretary
shall withhold from the amount of the payment such amount as
the Secretary determines to be necessary to ensure that each
eligible Senate candidate will receive the same pro rata
share of the candidate's full entitlement.
``(2) Subsequent payment.--Amounts withheld under paragraph
(1) shall be paid when the Secretary determines that there
are sufficient funds to pay all or a portion of the funds
withheld from all eligible Senate candidates, but, if only a
portion is to be paid, the portion shall be paid in such a
manner that each eligible Senate candidate receives an equal
pro rata share.
``(3) Notification of estimated withholding.--
``(A) Advance estimate of available funds and projected
costs.--Not later than December 31 of any calendar year
preceding a calendar year in which there is a regularly
scheduled general election, the Secretary, after consultation
with the Commission, shall make an estimate of--
``(i) the amount of funds that will be available to make
payments under this title in the general election year; and
``(ii) the costs of implementing this title in the general
election year.
``(B) Notification.--If the Secretary determines under
subparagraph (A) that there will be insufficient funds for
any calendar year, the Secretary shall notify by registered
mail each candidate for the Senate on January 1 of that year
(or, if later, the date on which an individual becomes such a
candidate) of the amount that the Secretary estimates will be
the pro rata withholding from each eligible Senate
candidate's payments under this subsection.
``(C) Increase in contribution limit.--The amount of an
eligible candidate's contribution limit under section
502(c)(1)(D)(iii) shall be increased by the amount of the
estimated pro rata withholding under subparagraph (B).
``(4) Notification of actual withholding.--
``(A) In general.--The Secretary shall notify the
Commission and each eligible Senate candidate by registered
mail of any actual reduction in the amount of any payment by
reason of this subsection.
``(B) Greater amount of withholding.--If the amount of a
withholding exceeds the amount estimated under paragraph (3),
an eligible Senate candidate's contribution limit under
section 502(c)(1)(D)(iii) shall be increased by the amount of
the excess.''.
(b) Effective Dates.--
(1) In general.--Except as provided in this subsection, the
amendment made by subsection (a) shall apply to elections
occurring after December 31, 1996.
[[Page S283]]
(2) Applicability to contributions and expenditures.--For
purposes of any expenditure or contribution limit imposed by
the amendment made by subsection (a)--
(A) no expenditure made before January 1, 1997, shall be
taken into account, except that there shall be taken into
account any such expenditure for goods or services to be
provided after that date; and
(B) all cash, cash items, and Government securities on hand
as of January 1, 1997, shall be taken into account in
determining whether the contribution limit is met, except
that there shall not be taken into account amounts used
during the 60-day period beginning on January 1, 1997, to pay
for expenditures that were incurred (but unpaid) before that
date.
(c) Effect of Invalidity on Other Provisions of Title.--If
section 502, 503, or 504 of the Federal Election Campaign Act
of 1971 (as added by subsection (a)) or any part of those
sections is held to be invalid, this Act and all amendments
made by this Act shall be treated as invalid.
SEC. 102. BAN ON ACTIVITIES OF POLITICAL ACTION COMMITTEES IN
SENATE ELECTIONS.
(a) In General.--Title III of the Federal Election Campaign
Act of 1971 (2 U.S.C. 431 et seq.) is amended by adding at
the end the following:
``SEC. 324. BAN ON SENATE ELECTION ACTIVITIES BY POLITICAL
ACTION COMMITTEES.
``(a) In General.--Notwithstanding any other provision of
this Act, no person other than an individual or a political
committee may make contributions, solicit or receive
contributions, or make expenditures for the purpose of
influencing an election, or nomination for election, to the
office of United States Senator.
``(b) Executive Officers and Administrative Employees.--In
the case of an individual who is an executive officer or
administrative employee of an employer--
``(1) the individual shall not make a contribution--
``(A) to any political committee established and maintained
by any political party for use in an election, or nomination
for election, to the office of United States Senator; or
``(B) to any candidate for nomination for election, or
election, to the office of United States Senator or the
candidate's authorized committees;
if the contribution is made at the direction of, or is
otherwise controlled or influenced by, the employer; and
``(2) the individual shall not make any such contribution
if the making of the contribution would cause the aggregate
amount of contributions made by all executive officers and
administrative employees of the employer in any calendar year
to exceed--
``(A) $20,000 in the case of such political committees; and
``(B) $5,000 in the case of any such candidate and the
candidate's authorized committees.''.
(b) Candidate's Committees.--Section 315(a) of the Federal
Election Campaign Act of 1971 (2 U.S.C. 441a(a)) is amended
by adding at the end the following:
``(9) For the purposes of the limitations under paragraphs
(1) and (2), any political committee that is established or
financed or maintained or controlled by any candidate or
Federal officeholder shall be considered to be an authorized
committee of the candidate or officeholder. Nothing in this
paragraph shall be construed to permit the establishment,
financing, maintenance, or control of any committee that is
prohibited by paragraph (3) or (6) of section 302(e).''.
(c) Rules Applicable When Ban Not in Effect.--For purposes
of the Federal Election Campaign Act of 1971 (2 U.S.C. 431 et
seq.), during any period beginning after the effective date
in which the limitation under section 324 of that Act (as
added by subsection (a)) is not in effect, the amendments
made by subsections (a) and (b) shall not be in effect.
(d) Rule Ensuring Prohibition of Direct Corporate and Labor
Organization Spending.--If section 316(a) of the Federal
Election Campaign Act of 1971 (2 U.S.C. 441b(a)) is held to
be invalid by reason of the amendments made by this section,
the amendments made by subsections (a) and (b) shall not
apply to contributions by any political committee that is
directly or indirectly established, administered, or
supported by a connected organization that is a bank,
corporation, or other organization described in section
316(a) of that Act.
(e) Restrictions on Contributions to Political
Committees.--Paragraphs (1)(D) and (2)(D) of section 315(a)
of the Federal Election Campaign Act of 1971 (2 U.S.C.
441a(a)), as redesignated by section 312, are amended by
striking ``$5,000'' and inserting ``$1,000''.
(f) Effective Dates.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to elections (and
the election cycles relating thereto) occurring after
December 31, 1996.
(2) Applicability.--In applying the amendments made by this
section, there shall not be taken into account--
(A) a contribution made or received before January 1, 1997;
or
(B) a contribution made to, or received by, a candidate on
or after January 1, 1997, to the extent that the aggregate
amount of such contributions made to or received by the
candidate is not greater than the excess (if any) of--
(i) the aggregate amount of such contributions made to or
received by any opponent of the candidate before January 1,
1997; over
(ii) the aggregate amount of such contributions made to or
received by the candidate before January 1, 1997.
SEC. 103. REPORTING REQUIREMENTS.
Title III of the Federal Election Campaign Act of 1971 (2
U.S.C. 431 et seq.) is amended by inserting after section 304
the following:
``SEC. 304A. REPORTING REQUIREMENTS FOR SENATE CANDIDATES.
``(a) Meanings of Terms.--Any term used in this section
that is used in title V shall have the same meaning as when
used in title V.
``(b) Candidate Other Than Eligible Senate Candidate.--
``(1) Declaration of intent.--A candidate for the office of
Senator who does not file a certification with the Secretary
of the Senate under section 502(c) shall, at the time
provided in section 501(c)(2), file with the Secretary of the
Senate a declaration as to whether the candidate intends to
make expenditures for the general election in excess of the
general election expenditure limit.
``(2) Reports.--
``(A) Initial report.--A candidate for the Senate who
qualifies for the ballot for a general election--
``(i) who is not an eligible Senate candidate under section
502; and
``(ii) who receives contributions in an aggregate amount or
makes or obligates to make expenditures in an aggregate
amount for the general election that exceeds 75 percent of
the general election expenditure limit;
shall file a report with the Secretary of the Senate within 2
business days after aggregate contributions have been
received or aggregate expenditures have been made or
obligated to be made in that amount (or, if later, within 2
business days after the date of qualification for the general
election ballot), setting forth the candidate's aggregate
amount of contributions received and aggregate amount of
expenditures made or obligated to be made for the election as
of the date of the report.
``(B) Additional reports.--After an initial report is filed
under subparagraph (A), the candidate shall file additional
reports (until the amount of such contributions or
expenditures exceeds 200 percent of the general election
expenditure limit) with the Secretary of the Senate within 2
business days after each time additional contributions are
received, or expenditures are made or are obligated to be
made, that in the aggregate exceed an amount equal to 10
percent of the general election expenditure limit and after
the aggregate amount of contributions or expenditures exceeds
100, 133\1/3\, 166\2/3\, and 200 percent of the general
election expenditure limit.
``(3) Notification of other candidates.--The Commission--
``(A) shall, within 2 business days after receipt of a
declaration or report under paragraph (1) or (2), notify each
eligible Senate candidate of the filing of the declaration or
report; and
``(B) if an opposing candidate has received aggregate
contributions, or made or obligated to make aggregate
expenditures, in excess of the general election expenditure
limit, shall certify, under subsection (e), the eligibility
for payment of any amount to which an eligible Senate
candidate in the general election is entitled under section
504(a).
``(4) Action by the commission absent report.--
``(A) In general.--Notwithstanding the reporting
requirements under this subsection, the Commission may make
its own determination that a candidate in a general election
who is not an eligible Senate candidate has raised aggregate
contributions, or made or has obligated to make aggregate
expenditures, in the amounts that would require a report
under paragraph (2).
``(B) Notification of eligible senate candidates.--The
Commission shall--
``(i) within 2 business days after making a determination
under subparagraph (A), notify each eligible Senate candidate
in the general election of the making of the determination;
and
``(ii) when the aggregate amount of contributions or
expenditures exceeds the general election expenditure limit,
certify under subsection (e) an eligible Senate candidate's
eligibility for payment of any amount under section 504(a).
``(c) Reports on Personal Funds.--
``(1) Filing.--A candidate for the Senate who, during an
election cycle, expends more than the personal funds
expenditure limit during the election cycle shall file a
report with the Secretary of the Senate within 2 business
days after expenditures have been made or loans incurred in
excess of the personal funds expenditure limit.
``(2) Notification of eligible senate candidates.--Within 2
business days after a report has been filed under paragraph
(1), the Commission shall notify each eligible Senate
candidate in the general election of the filing of the
report.
``(3) Action by the commission absent report.--
``(A) In General.--Notwithstanding the reporting
requirements under this subsection, the Commission may make
its own determination that a candidate for the Senate has
made expenditures in excess of the amount under paragraph
(1).
``(B) Notification of eligible senate candidates.--Within 2
business days after making a determination under subparagraph
(A),
[[Page S284]]
the Commission shall notify each eligible Senate candidate in
the general election of the making of the determination.
``(d) Candidates for Other Offices.--
``(1) Filing.--Each individual--
``(A) who becomes a candidate for the office of United
States Senator;
``(B) who, during the election cycle for that office, held
any other Federal, State, or local office or was a candidate
for any such office; and
``(C) who expended any amount during the election cycle
before becoming a candidate for the office of United States
Senator that would have been treated as an expenditure if the
individual had been such a candidate (including amounts for
activities to promote the image or name recognition of the
individual);
shall, within 7 days after becoming a candidate for the
office of United States Senator, report to the Secretary of
the Senate the amount and nature of such expenditures.
``(2) Applicability.--Paragraph (1) shall not apply to any
expenditures in connection with a Federal, State, or local
election that has been held before the individual becomes a
candidate for the office of United States Senator.
``(3) Determination.--The Commission shall, as soon as
practicable, make a determination as to whether any amounts
reported under paragraph (1) were made for purposes of
influencing the election of the individual to the office of
Senator.
``(4) Certification.--The Commission shall certify to the
individual and the individual's opponents the amounts the
Commission determines to be described in paragraph (3), and
such amounts shall be treated as expenditures for purposes of
this Act.
``(e) Basis of Certifications.--Notwithstanding section
505(a), the certification required by this section shall be
made by the Commission on the basis of reports filed in
accordance with this Act or on the basis of the Commission's
own investigation or determination.
``(f) Shorter Periods for Reports and Notices During
Election Week.--Any report, determination, or notice required
by reason of an event occurring during the 7-day period
ending on the date of the general election shall be made
within 24 hours (rather than 2 business days) of the event.
``(g) Copies of Reports and Public Inspection.--The
Secretary of the Senate shall--
``(1) transmit a copy of any report or filing received
under this section or under title V as soon as possible (but
not later than 4 working hours of the Commission) after
receipt of the report or filing;
``(2) make the report or filing available for public
inspection and copying in the same manner as the Commission
under section 311(a)(4); and
``(3) preserve the reports and filings in the same manner
as the Commission under section 311(a)(5).''.
SEC. 104. DISCLOSURE BY CANDIDATES OTHER THAN ELIGIBLE SENATE
CANDIDATES.
Section 318 of the Federal Election Campaign Act of 1971 (2
U.S.C. 441d) (as amended by section 113) is amended by adding
at the end the following:
``(e) Disclosure by Candidates Other Than Eligible Senate
Candidates.--A broadcast, cablecast, or other communication
that is paid for or authorized by a candidate in the general
election for the office of United States Senator who is not
an eligible Senate candidate, or the authorized committee of
such a candidate, shall contain the following sentence: `This
candidate has not agreed to voluntary campaign spending
limits.'.''.
SEC. 105. EXCESS CAMPAIGN FUNDS OF SENATE CANDIDATES.
Section 313 of the Federal Election Campaign Act of 1971 (2
U.S.C. 439a) is amended--
(1) by inserting ``(a) In General.--'' before ``Amounts''
and adjusting the margin appropriately; and
(2) by adding at the end the following:
``(b) Disposition of Excess Campaign Funds.--
``(1) Except as provided in paragraph (2), and
notwithstanding subsection (a), a candidate for the Senate
who has amounts in excess of amounts necessary to defray
expenditures for an election cycle, including any fines or
penalties relating thereto, shall, not later than 1 year
after the date of the general election for the election
cycle--
``(A) expend the excess in the manner described in
subsection (a); or
``(B) pay the excess to the general fund of the Treasury of
the United States.
``(2) Applicability.--Paragraph (1) shall not apply to any
amount--
``(A) that is transferred to a legal and accounting
compliance fund under section 503(c); or
``(B) that is transferred for use in the next election
cycle, to the extent that the amount transferred does not
exceed 20 percent of the sum of the primary election
expenditure limit under section 501(d)(1)(A) and the general
election expenditure limit for the election cycle from which
the amounts are transferred.''.
SEC. 106. CONTRIBUTION LIMIT FOR ELIGIBLE SENATE CANDIDATES.
Section 315(a)(1) of the Federal Election Campaign Act of
1971 (2 U.S.C. 441a(a)(1)) is amended--
(1) in subparagraph (A), by inserting ``except as provided
in subparagraph (B),'' before ``to'';
(2) by redesignating subparagraphs (B) and (C) as
subparagraphs (C) and (D), respectively; and
(3) by inserting after subparagraph (A) the following:
``(B) to an eligible Senate candidate (as defined in
section 501) and the authorized political committees of the
candidate which, in the aggregate, exceed $2,000, if an
opponent of the eligible Senate candidate fails to comply
with the expenditure limits contained in this Act and has
received contributions in excess of 10 percent of the general
election limits contained in this Act or has expended
personal funds in excess of 10 percent of the general
election limits contained in this Act;''.
Subtitle B--General Provisions
SEC. 111. BROADCAST RATES AND PREEMPTION.
(a) Broadcast Rates.--Section 315(b) of the Communications
Act of 1934 (47 U.S.C. 315(b)) is amended--
(1) by striking ``(b) The charges'' and inserting the
following:
``(b) Broadcast Media Rates.--
``(1) In general.--The charges'';
(2) by redesignating paragraphs (1) and (2) as
subparagraphs (A) and (B), respectively, and adjusting the
margins accordingly;
(3) in paragraph (1)(A) (as redesignated by paragraph
(2))--
(A) by striking ``forty-five'' and inserting ``30''; and
(B) by striking ``lowest unit charge of the station for the
same class and amount of time for the same period'' and
inserting ``lowest charge of the station for the same amount
of time for the same period on the same date''; and
(4) by adding at the end the following:
``(2) Eligible senate candidates.--
``(A) In general.--In the case of an eligible Senate
candidate (as described in section 501 of the Federal
Election Campaign Act), the charges for the use of a
television broadcasting station during the 30-day period and
60-day period referred to in paragraph (1)(A) shall not
exceed 50 percent of the lowest charge described in paragraph
(1)(A).
``(B) Applicability.--Subparagraph (A) shall not apply to
broadcasts that are to be paid from amounts received under
section 504(a)(2)(B) of the Federal Election Campaign Act of
1971.''.
(b) Preemption; Access.--Section 315 of the Communications
Act of 1947 (47 U.S.C. 315) is amended--
(1) by redesignating subsections (c) and (d) as subsections
(d) and (e), respectively; and
(2) by inserting after subsection (b) the following:
``(c) Preemption.--
``(1) In general.--Except as provided in paragraph (2), a
licensee shall not preempt the use, during any period
specified in subsection (b)(1), of a broadcasting station by
a legally qualified candidate for public office who has
purchased and paid for such use pursuant to subsection
(b)(1).
``(2) Circumstances beyond control of licensee.--If a
program to be broadcast by a broadcasting station is
preempted because of circumstances beyond the control of the
broadcasting station, any candidate advertising spot
scheduled to be broadcast during that program may also be
preempted.''.
(c) Revocation of License for Failure To Permit Access.--
Section 312(a)(7) of the Communications Act of 1947 (47
U.S.C. 312(a)(7)) is amended--
(1) by striking ``or repeated'';
(2) by inserting ``or cable system'' after ``broadcasting
station''; and
(3) by striking ``his candidacy'' and inserting ``his or
her candidacy, under the same terms, conditions, and business
practices as apply to the broadcasting station's most favored
advertiser''.
SEC. 112. REPORTING REQUIREMENTS FOR CERTAIN INDEPENDENT
EXPENDITURES.
(a) In General.--Section 304 of the Federal Election
Campaign Act of 1971 (2 U.S.C. 434) (as amended by section
608) is amended by adding at the end the following:
``(e) Time for Reporting Certain Expenditures.--
``(1) Expenditures aggregating $1,000.--A person that makes
independent expenditures aggregating $1,000 or more after the
20th day, but more than 24 hours, before an election shall
file a report describing the expenditures within 24 hours
after that amount of independent expenditures has been made.
``(2) Expenditures aggregating $10,000.--
``(A) Initial report.--A person that makes independent
expenditures aggregating $10,000 or more at any time up to
and including the 20th day before an election shall file a
report describing the expenditures within 48 hours that
amount of independent expenditures has been made.
``(B) Additional reports.--After a person files a report
under subparagraph (A), the person filing the report shall
file an additional report each time that independent
expenditures aggregating an additional $10,000 are made with
respect to the same election as that to which the initial
report relates.
``(3) Place of filing; contents; transmittal.--
``(A) Place of filing; contents.--A report under this
subsection--
``(i) shall be filed with the Secretary of the Senate or
the Commission, and the Secretary of State of the candidate's
State; and
``(ii) shall contain the information required by subsection
(b)(6)(B)(iii), including whether each independent
expenditure was made in support of, or in opposition to, a
candidate.
``(B) Transmittal.--
[[Page S285]]
``(i) To the commission.--As soon as possible (but not
later than 4 working hours of the Commission) after receipt
of a report under this subsection, the Secretary of the
Senate shall transmit the report to the Commission.
``(ii) To candidates.--Not later than 48 hours after
receipt of a report under this subsection, the Commission
shall transmit a copy of the report to each candidate seeking
nomination for election to, or election to, the office in
question.
``(4) Obligation to make expenditure.--For purposes of this
subsection, an expenditure shall be treated as being made
when it is made or obligated to be made.
``(5) Advance notice of intention to make independent
expenditures.--
``(A) In general.--A person that intends to make
independent expenditures totaling $5,000 or more during the
20 days before an election shall file a notice of that
intention not later than the 20th day before the election.
``(B) Place of filing; contents; transmittal.--
``(i) Place of filing; contents.--A statement under
subparagraph (A)--
``(I) shall be filed with the Secretary of the Senate or
the Commission, and the Secretary of State of the candidate's
State; and
``(II) shall identify each candidate whom the expenditure
will support or oppose.
``(ii) Transmittal.--
``(I) To the commission.--As soon as possible (but not
later than 4 working hours of the Commission) after receipt
of a notice of intention under this paragraph, the Commission
shall transmit the notice to the Commission.
``(II) To candidates.--Not later than 48 hours after the
receipt of a notice of intention under this paragraph, the
Commission shall transmit a copy of the notice to each
candidate identified in the notice.
``(6) Determinations by the commission.--
``(A) In general.--The Commission may make its own
determination that a person has made, or has incurred
obligations to make, independent expenditures with respect to
any Federal election that in the aggregate exceed the
applicable amounts under paragraph (1) or (2).
``(B) Notification.--The Commission shall notify each
candidate in the election of the making of the determination
within 24 hours after making the determination.
``(7) Certification of eligibility to receive benefits.--At
the same time as a candidate is notified under paragraph (3),
(5), or (6) with respect to expenditures during a general
election period, the Commission shall certify eligibility to
receive benefits under section 504(a).
``(8) Public availability; preservation.--The Secretary of
the Senate shall make any report or notice of intention
received under this subsection available for public
inspection and copying in the same manner as under section
311(a)(4), and shall preserve the reports and notices in the
same manner as under section 311(a)(5).''.
(b) Conforming Amendment.--Section 304(c)(2) of the Federal
Election Campaign Act of 1971 (2 U.S.C. 434(c)(2)) is amended
by striking the undesignated matter after subparagraph (C).
SEC. 113. CAMPAIGN ADVERTISING AMENDMENTS.
Section 318 of the Federal Election Campaign Act of 1971 (2
U.S.C. 441d) is amended--
(1) in subsection (a)--
(A) by striking ``Whenever'' and inserting the following:
``(a) Disclosure.--When a political committee makes a
disbursement for the purpose of financing any communication
through any broadcasting station, newspaper, magazine,
outdoor advertising facility, mailing, or any other type of
general public political advertising, or when'';
(B) by striking ``an expenditure'' and inserting ``a
disbursement'';
(C) by striking ``direct''; and
(D) in paragraph (3), by inserting ``and permanent street
address'' after ``name'';
(2) in subsection (b), by inserting ``Same Charge as Charge
for Comparable Use.--'' before ``No''; and
(3) by adding at the end the following:
``(c) Requirements for Printed Communications.--A printed
communication described in subsection (a) shall be--
``(1) of sufficient type size to be clearly readable by the
recipient of the communication;
``(2) contained in a printed box set apart from the other
contents of the communication; and
``(3) consist of a reasonable degree of color contrast
between the background and the printed statement.
``(d) Requirements for Broadcast and Cablecast
Communications.--
``(1) Paid for or authorized by the candidate.--
``(A) In general.--A broadcast or cablecast communication
described in paragraph (1) or (2) of subsection (a) shall
include, in addition to the requirements of those paragraphs,
an audio statement by the candidate that identifies the
candidate and states that the candidate has approved the
communication.
``(B) Televised communications.--A broadcast or cablecast
communication described in paragraph (1) that is broadcast or
cablecast by means of television shall include, in addition
to the audio statement under subparagraph (A), a written
statement--
``(i) that states: `I [name of candidate] am a candidate
for [the office the candidate is seeking], and I have
approved this message';
``(ii) that appears at the end of the communication in a
clearly readable manner with a reasonable degree of color
contrast between the background and the printed statement,
for a period of at least 4 seconds; and
``(iii) that is accompanied by a clearly identifiable
photographic or similar image of the candidate.
``(2) Not paid for or authorized by the candidate.--A
broadcast or cablecast communication described in subsection
(a)(3) shall include, in addition to the requirements of that
paragraph, in a clearly spoken manner, the statement--
`____________________ is responsible for the content of
this advertisement.';
with the blank to be filled in with the name of the political
committee or other person paying for the communication and
the name of any connected organization of the payor; and, if
the communication is broadcast or cablecast by means of
television, the statement shall also appear in a clearly
readable manner with a reasonable degree of color contrast
between the background and the printed statement, for a
period of at least 4 seconds.''.
SEC. 114. DEFINITIONS.
(a) In General.--Section 301 of the Federal Election
Campaign Act of 1971 (2 U.S.C. 431) is amended by striking
paragraph (19) and inserting the following:
``(19) The term `general election'--
``(A) means an election that will directly result in the
election of a person to a Federal office; and
``(B) includes a primary election that may result in the
election of a person to a Federal office.
``(20) The term `general election period' means, with
respect to a candidate, the period beginning on the day after
the date of the primary or runoff election for the specific
office that the candidate is seeking, whichever is later, and
ending on the earlier of--
``(A) the date of the general election; or
``(B) the date on which the candidate withdraws from the
campaign or otherwise ceases actively to seek election.
``(21) The term `immediate family' means--
``(A) a candidate's spouse;
``(B) a child, stepchild, parent, grandparent, brother,
half-brother, sister, or half-sister of the candidate or the
candidate's spouse; and
``(C) the spouse of any person described in subparagraph
(B).
``(22) The term `major party' has the meaning given the
term in section 9002(6) of the Internal Revenue Code of 1986,
except that if a candidate qualified for the ballot in a
general election in an open primary in which all the
candidates for the office participated and which resulted in
the candidate and at least 1 other candidate's qualifying for
the ballot in the general election, the candidate shall be
treated as a candidate of a major party for purposes of title
V.
``(23) The term `primary election' means an election that
may result in the selection of a candidate for the ballot in
a general election for a Federal office.
``(24) The term `primary election period' means, with
respect to a candidate, the period beginning on the day
following the date of the last election for the specific
office that the candidate is seeking and ending on the
earlier of--
``(A) the date of the first primary election for that
office following the last general election for that office;
or
``(B) the date on which the candidate withdraws from the
election or otherwise ceases actively to seek election.
``(25) The term `runoff election' means an election held
after a primary election that is prescribed by applicable
State law as the means for deciding which candidate will be
on the ballot in the general election for a Federal office.
``(26) The term `runoff election period' means, with
respect to any candidate, the period beginning on the day
following the date of the last primary election for the
specific office that the candidate is seeking and ending on
the date of the runoff election for that office.
``(27) The term `voting age population' means the number of
residents of a State who are 18 years of age or older, as
certified under section 315(e).
``(28) The term `election cycle' means--
``(A) in the case of a candidate or the authorized
committees of a candidate, the period beginning on the day
after the date of the most recent general election for the
specific office or seat that the candidate is seeking and
ending on the date of the next general election for that
office or seat; and
``(B) in the case of all other persons, the period
beginning on the first day following the date of the last
general election and ending on the date of the next general
election.''.
(b) Identification.--Section 301(13) of the Federal
Election Campaign Act of 1971 (2 U.S.C. 431(13)) is amended
by striking ``mailing address'' and inserting ``permanent
residence address''.
SEC. 115. PROVISIONS RELATING TO FRANKED MASS MAILINGS.
Section 3210(a)(6)(C) of title 39, United States Code, is
amended--
(1) by striking ``if the mass mailing is postmarked fewer
than 60 days immediately before the date'' and inserting ``if
the mass mailing is postmarked during the calendar year'';
and
(2) by inserting ``or reelection'' before the period.
[[Page S286]]
TITLE II--INDEPENDENT EXPENDITURES
SEC. 201. DEFINITION OF INDEPENDENT EXPENDITURE.
Section 301 of the Federal Election Campaign Act of 1971 (2
U.S.C. 431) is amended by striking paragraph (17) and
inserting the following:
``(17) Independent Expenditure.--
``(A) In general.--The term ``independent expenditure''
means an expenditure by a person other than a candidate or
candidate's authorized committee--
``(i) that is made for a communication that contains
express advocacy; and
``(ii) is made without the participation or cooperation of
and without coordination with a candidate.
``(B) Express advocacy.--The term `express advocacy' means
a communication advocating the election or defeat of a
clearly identified candidate and includes any communication
that--
``(i)(I) contains a phrase such as `vote for', `re-elect',
`support', `cast your ballot for', `(name of candidate) for
Congress', `(name of candidate) in 1997', `vote against',
`defeat', `reject';
``(II) recommends a position on an issue and clearly
identifies 1 or more candidates as supporting or opposing
that position; or
``(III) contains campaign slogans or individual words that
in context can have no reasonable meaning other than to
recommend the election or defeat of 1 or more clearly
identified candidates;
``(ii) clearly identifies 1 or more candidates and is
broadcast by a radio broadcast station or a television
broadcast station (including a cable system) within 60
calendar days preceding the date of an election (or with
respect to a candidate for the office of Vice President or
President in a general election, within 90 calendar days
preceding the date of the general election); or
``(iii) taken as a whole and with limited reference to
external events, such as proximity to an election, expresses
unmistakable support for or opposition to 1 or more clearly
identified candidates.
``(C) Without the participation or cooperation of and
without coordination with a candidate.--The term `without the
participation or cooperation of and without coordination with
a candidate', with respect to an expenditure, means an
expenditure that is made--
``(i) without any request or suggestion from or any
involvement of a candidate or candidate's representative;
``(ii) without the involvement of any person who, during
the election cycle in which the expenditure is made, has
raised funds on behalf of the candidate, counseled or advised
the candidate or the candidate's representative regarding the
election (other than to provide legal and accounting services
to ensure compliance with this Act), engaged in campaign-
related research or polling analysis with respect to the
election, or communicated with or received information from
the candidate or the candidate's representative about the
candidate's plans, resources, expenditures, or needs
regarding the election; and
``(iii) without the involvement of any person who received
compensation, during the election cycle in which the
expenditure is made, from the candidate or candidate's
representative and from the person making the independent
expenditure.''.
SEC. 202. INDEPENDENT VERSUS COORDINATED EXPENDITURES BY
POLITICAL PARTY COMMITTEES.
(a) Definition of Coordinated Expenditure.--Section 301 of
the Federal Election Campaign Act of 1971 (2 U.S.C. 431) is
amended by adding at the end the following:
``(19) Coordinated Expenditure.--The term `coordinated
expenditure' means an expenditure that is made by a person
other than the candidate and that is not an independent
expenditure.''.
(b) Independent Versus Coordinated Expenditures by
Political Party Committees.--Section 315(d) of the Federal
Election Campaign Act of 1971 (2 U.S.C. 441a(d)) is amended--
(1) in paragraph (1) by striking ``and (3)'' and inserting
``, (3) and (4)''; and
(2) by adding at the end the following:
``(4) Prohibition against making both coordinated
expenditures and independent expenditures.--
``(A) In general.--A committee of a political party shall
not make both a coordinated expenditure and an independent
expenditure with respect to the same candidate during a
single election cycle.
``(B) Certification.--Before making a coordinated
expenditure or an independent expenditure with respect to a
candidate, a committee of a political party that is subject
to this subsection shall file with the Commission a
certification, signed by the treasurer, stating whether the
committee will make coordinated expenditures or independent
expenditures with respect to the candidate.
``(C) Transfers.--A party committee that certifies under
this paragraph that the committee will make coordinated
expenditures with respect to a candidate shall not, in the
same election cycle, make a transfer of funds to, or receive
a transfer of funds from, any other party committee that has
certified under this paragraph that it will make independent
expenditures with respect to the candidate.''.
SEC. 203. TREATMENT OF QUALIFIED NONPROFIT CORPORATIONS.
Section 316 of the Federal Election Campaign Act of 1971 (2
U.S.C. 441b) is amended by adding at the end the following:
``(c) Exception for Certain Tax-Exempt Corporations.--
``(1) In general.--Notwithstanding the prohibitions of this
section, a qualified nonprofit corporation may make an
independent expenditure.
``(2) Definition of qualified nonprofit corporation.--For
purposes of this Act, the term `qualified nonprofit
corporation' means a corporation that meets the following
requirements:
``(A) Tax-exempt status.--The corporation is exempt from
taxation under section 501(a) of the Internal Revenue Code of
1986 and is described in section 501(c)(4) of the Code.
``(B) Purposes.--The corporation is organized exclusively
to promote specific political ideas.
``(C) No trade or business.--The corporation does not
engage in any activity that constitutes a trade or business.
``(D) Establishment.--The corporation was not established
by--
``(i) a corporation that is carrying on a trade or
business;
``(ii) a labor organization; or
``(iii) a business league or other organization described
in section 501(c)(6) of the Internal Revenue Code of 1986.
``(E) Contributions.--The corporation does not accept,
directly or indirectly, donations of anything of value from
any corporation, labor organization or organization described
in subparagraph (D)(iii), and does not serve, directly or
indirectly, as a conduit for expenditures by such entities.
``(F) Claims and incentives.--The corporation--
``(i) has no shareholder or other person, other than an
employee or creditor without an ownership interest, whose
affiliation could allow a claim on the assets or earnings of
such corporation; and
``(ii) offers no incentives or disincentives for persons to
associate or not to associate with the corporation other than
the positions of the corporation on political issues.
``(3) Status as political committee.--If a qualified
nonprofit corporation meets the qualifications of section
301(4), the corporation shall be treated as a political
committee.
``(4) Disclosure to donors.--All solicitations of donations
by the qualified nonprofit corporation shall inform potential
donors that donations may be used by the corporation for
political purposes, such as supporting or opposing candidates
for public office.''.
SEC. 204. EQUAL BROADCAST TIME.
Section 315 of the Communications Act of 1934 (47 U.S.C.
315) is amended by striking subsection (a) and inserting the
following:
``(a) Equal Opportunity To Use Broadcasting Station.--
``(1) In general.--A licensee that permits any person who
is a legally qualified candidate for public office to use a
broadcasting station (other than any use required to be
provided under paragraph (2)) shall afford equal
opportunities to all other such candidates for that office in
the use of the broadcasting station.
``(2) Independent expenditures.--
``(A) Information to be provided to licensee by person
reserving broadcast time.--A person that reserves broadcast
time the payment for which would constitute an independent
expenditure (as defined in section 301 of the Federal
Election Campaign Act of 1971 (2 U.S.C. 431)) shall--
``(i) inform the licensee that payment for the broadcast
time will constitute an independent expenditure;
``(ii) inform the licensee of the names of all candidates
for the office to which the proposed broadcast relates and
state whether the message to be broadcast is intended to be
made in support of or in opposition to each such candidate;
and
``(iii) provide the licensee a copy of the statement
described in section 304(d) of the Federal Election Campaign
Act of 1971 (2 U.S.C. 434(d)).
``(B) Response by licensee.--A licensee that is informed as
described in subparagraph (A) shall--
``(i) if any of the candidates described in subparagraph
(A)(ii) has provided the licensee the name and address of a
person to whom notification under this subparagraph is to be
given--
``(I) notify the person of the proposed making of the
independent expenditure; and
``(II) allow any such candidate (other than a candidate for
whose benefit the independent expenditure is made) to
purchase the same amount of broadcast time immediately after
the broadcast time paid for by the independent expenditure;
and
``(ii) in the case of an opponent of a candidate for whose
benefit the independent expenditure is made who certifies to
the licensee that the opponent is eligible to have the cost
of response broadcast time paid using funds derived from a
payment made under section 504(a)(2)(B) of the Federal
Election Campaign Act of 1971, afford the opponent such
broadcast time without requiring payment in advance and at
the cost specified in subsection (b).
``(3) No censorship.--A licensee shall have no power of
censorship over the material broadcast under this section.
``(4) No obligation.--Except as provided in paragraph (2),
no obligation is imposed under this subsection on any
licensee to allow the use of its station by any candidate.
[[Page S287]]
``(5) Certain appearances not considered use of
broadcasting station.--
``(A) In general.--An appearance by a legally qualified
candidate on a--
``(i) bona fide newscast;
``(ii) bona fide news interview;
``(iii) bona fide news documentary (if the appearance of
the candidate is incidental to the presentation of the
subject or subjects covered by the news documentary); or
``(iv) on-the-spot coverage of bona fide news events
(including political conventions and activities incidental
thereto);
shall not be considered to be use of a broadcasting station
within the meaning of this subsection.
``(B) No relief from other obligations.--Nothing in
subparagraph (A) relieves a licensee, in connection with the
presentation of newscasts, news interviews, news
documentaries, and on-the-spot coverage of news events, from
the obligation under this Act to operate in the public
interest and to afford reasonable opportunity for the
discussion of conflicting views on issues of public
importance.
``(6) Endorsement of candidate by licensee.--
``(A) In general.--A licensee that endorses a candidate for
Federal office in an editorial shall, within the time stated
in subparagraph (B), provide to all other candidates for
election to the same office--
``(i) notice of the date and time of broadcast of the
editorial;
``(ii) a taped or printed copy of the editorial; and
``(iii) a reasonable opportunity to broadcast a response
using the licensee's facilities.
``(B) Time for response.--
``(i) 72 hours or more before election.--In the case of an
editorial described in subparagraph (A) that is first
broadcast 72 hours or more before the date of a primary,
runoff, or general election, the notice and copy described in
subparagraph (A) (i) and (ii) shall be provided not later
than 24 hours after the time of the first broadcast of the
editorial.
``(ii) Less than 72 hours before election.--In the case of
an editorial described in subparagraph (A) that is first
broadcast less than 72 hours before the date of an election,
the notice and copy shall be provided at a time prior to the
first broadcast that will be sufficient to enable candidates
a reasonable opportunity to prepare and broadcast a
response.''.
TITLE III--EXPENDITURES
Subtitle A--Personal Funds; Credit
SEC. 301. CONTRIBUTIONS AND LOANS FROM PERSONAL FUNDS.
Section 315 of the Federal Election Campaign Act of 1971 (2
U.S.C. 441a) is amended by adding at the end the following:
``(i) Limitations on Repayment of Loans and Return of
Contributions From Personal Funds.--
``(1) Repayment of loans.--If a candidate or a member of
the candidate's immediate family made a loan to the candidate
or to the candidate's authorized committees during an
election cycle, no contribution received after the date of
the general election for the election cycle may be used to
repay the loan.
``(2) Return of contributions.--No contribution by a
candidate or member of the candidate's immediate family may
be returned to the candidate or member other than as part of
a pro rata distribution of excess contributions to all
contributors.''.
SEC. 302. EXTENSIONS OF CREDIT.
Section 301(8)(A) of the Federal Election Campaign Act of
1971 (2 U.S.C. 431(8)(A)) (as amended by section 201(b)), is
amended--
(1) by striking ``or'' at the end of clause (ii);
(2) by striking the period at the end of clause (iii) and
inserting ``; or''; and
(3) by inserting at the end the following:
``(iv) with respect to a candidate and the candidate's
authorized committees, any extension of credit for goods or
services relating to advertising on a broadcasting station,
in a newspaper or magazine, or by a mailing, or relating to
other similar types of general public political advertising,
if the extension of credit is--
``(I) in an amount greater than $1,000; and
``(II) for a period greater than the period, not in excess
of 60 days, for which credit is generally extended in the
normal course of business after the date on which the goods
or services are furnished or the date of a mailing.''.
Subtitle B--Soft Money of Political Parties
SEC. 311. PREPARATION AND DISTRIBUTION BY VOLUNTEERS OF
MATERIALS IN CONNECTION WITH STATE AND LOCAL
POLITICAL PARTY VOTER REGISTRATION AND GET-OUT-
THE-VOTE ACTIVITIES SO AS NOT TO BE CONSIDERED
A CONTRIBUTION OR EXPENDITURE.
(a) Contribution.--Section 301(8)(B)(xii) of the Federal
Election Campaign Act of 1971 (2 U.S.C. 431(8)(B)(xii)) is
amended--
(1) by striking ``such committee'' and inserting ``the
committee in connection with volunteer activities'';
(2) by striking ``: Provided, That'' and inserting ``if'';
(3) by redesignating the items designated as items ``(1)'',
``(2)'', and ``(3)'', respectively, as subclauses (I), (II),
and (III);
(4) by striking ``and'' at the end of subclause (II) (as
redesignated);
(5) by inserting ``and'' at the end of subclause (III) (as
redesignated); and
(6) by adding at the end the following:
``(IV) the activities are conducted solely by, and any
materials are distributed solely by, volunteers;''.
(b) Expenditure.--Section 301(9)(B)(ix) of the Federal
Election Campaign Act of 1971 (2 U.S.C. 431(9)(B)(ix)) is
amended--
(1) by striking ``such committee'' and inserting ``the
committee in connection with volunteer activities'';
(2) by striking ``: Provided, That'' and inserting ``if'';
(3) by redesignating the items designated as items ``(1)'',
``(2)'', and ``(3)'', respectively, as subclauses (I), (II),
and (III);
(4) by striking ``and'' at the end of subclause (II) (as
redesignated);
(5) by inserting ``and'' at the end of subclause (III) (as
redesignated); and
(6) by adding at the end the following:
``(IV) any materials in connection with the activities are
prepared for distribution (and are distributed) solely by
volunteers; and''.
SEC. 312. CONTRIBUTIONS TO POLITICAL PARTY COMMITTEES.
(a) Individual Contributions to State Party.--Section
315(a)(1) of the Federal Election Campaign Act of 1971 (2
U.S.C. 441a(a)(1)) (as amended by section 106) is amended--
(1) by striking ``or'' at the end of subparagraph (B);
(2) by redesignating subparagraph (D) as subparagraph (E);
and
(3) by inserting after subparagraph (C) the following:
``(D) to--
``(i) a State Party Grassroots Fund established and
maintained by a State committee of a political party in any
calendar year that, in the aggregate, exceed $20,000; or
``(ii) any other political committee established and
maintained by a State committee of a political party in any
calendar year that, in the aggregate, exceed $5,000;
except that the aggregate contributions described in this
subparagraph that may be made by a person to the State Party
Grassroots Fund and all committees of a State Committee of a
political party in any State in any calendar year shall not
exceed $20,000; or''.
(b) Multicandidate Committee Contributions to State
Party.--Section 315(a)(2) of the Federal Election Campaign
Act of 1971 (2 U.S.C. 441a(a)(2)) is amended--
(1) by striking ``or'' at the end of subparagraph (B);
(2) by redesignating subparagraph (C) as subparagraph (D);
and
(3) by inserting after subparagraph (B) the following:
``(C) to--
``(i) a State Party Grassroots Fund established and
maintained by a State committee of a political party in any
calendar year that, in the aggregate, exceed $15,000; or
``(ii) to any other political committee established and
maintained by a State committee of a political party that, in
the aggregate, exceed $5,000;
except that the aggregate contributions described in this
subparagraph that may be made by a multicandidate political
committee to the State Party Grassroots Fund and all
committees of a State Committee of a political party in any
State in any calendar year shall not exceed $15,000; or''.
(c) Overall Limit.--Section 315(a) of the Federal Election
Campaign Act of 1971 (2 U.S.C. 441a(a)) is amended by
striking paragraph (3) and inserting the following:
``(3) Overall limit.--
``(A) Election cycle.--No individual shall make
contributions during any election cycle (as defined in
section 301(28)(B)) that, in the aggregate, exceed $60,000.
``(B) Calendar year.--
``(i) In general.--No individual shall make contributions
during any calendar year--
``(I) to all candidates and their authorized political
committees that, in the aggregate, exceed $25,000; or
``(II) to all political committees established and
maintained by State committees of a political party that, in
the aggregate, exceed $20,000.
``(ii) Nonelection year.--For purposes of clause (i), a
contribution made to a candidate or the candidate's
authorized political committees in a year other than the
calendar year in which the election is held with respect to
which the contribution is made shall be treated as being made
during the calendar year in which the election is held.
(d) Presidential Candidate Committee Transfers.--
(1) Amendment of feca.--Section 315(b)(1) of the Federal
Election Campaign Act of 1971 (2 U.S.C. 441a(b)(1)) is
amended by striking subparagraph (B) and inserting the
following:
``(B) in the case of a campaign for election to that
office, an amount equal to the sum of--
``(i) $20,000,000; plus
``(ii) the lesser of--
``(I) 2 cents multiplied by the voting age population of
the United States (as certified under subsection (e); or
``(II) the amounts transferred by the candidate and the
authorized committees of the candidate to the national
committee of the candidate's political party for distribution
to State Party Grassroots Funds.''.
(2) Amendment of internal revenue code.--Subparagraph (A)
of section 9002(11) of the Internal Revenue Code of 1986
(defining qualified campaign expense) is amended--
(A) by striking ``or'' at the end of clause (ii);
[[Page S288]]
(B) by inserting ``or'' at the end of clause (iii); and
(C) by adding at the end the following:
``(iv) any transfers to the national committee of the
candidate's political party for distribution to State Party
Grassroots Funds (as defined in section 301(30) of the
Federal Election Campaign Act of 1971) to the extent that
such transfers do not exceed the amount determined under
section 315(b)(1)(B)(ii) of that Act;''.
SEC. 313. PROVISIONS RELATING TO NATIONAL, STATE, AND LOCAL
PARTY COMMITTEES.
(a) Soft Money of Committees of Political Parties.--Title
III of the Federal Election Campaign Act of 1971 (2 U.S.C.
431 et seq.) (as amended by section 102(a)) is amended by
adding at the end the following:
``SEC. 325. POLITICAL PARTY COMMITTEES.
``(a) Limitations on National Committees.--
``(1) In general.--A national committee of a political
party and the congressional campaign committees of a
political party shall not solicit or accept any amount, or
solicit or accept a transfer from another political
committee, that is not subject to the limitations,
prohibitions, and reporting requirements of this Act.
``(2) Exclusions.--Paragraph (1) shall not apply to any
amount received--
``(A) that--
``(i) is to be transferred to a State committee of a
political party and is used solely for an activity described
in clause (xi), (xii), (xiii), (xiv), (xv), (xvi), or (xvii)
of section 301(9)(B); or
``(ii) is described in section 301(8)(B)(viii); and
``(B) with respect to which a contributor has been notified
that the amount will be used solely for the purposes
described in subparagraph (A).
``(b) Transfers to Tax-exempt Organizations.--A national
committee or a State committee of a political party shall not
transfer any funds to an organization that is exempt from
taxation under section 501(a) of the Internal Revenue Code of
1986 and is described in section 501(c)(3) of the Code.
``(c) Activities Subject to This Act.--
``(1) In general.--Any amount solicited, received,
expended, or disbursed directly or indirectly by a national,
State, district, or local committee of a political party
(including any subordinate committee) with respect to any of
the following activities shall be treated as a contribution
subject to the limitations, prohibitions, and reporting
requirements of this Act:
``(A)(i) Any get-out-the-vote activity conducted during a
calendar year in which an election for the office of
President is held.
``(ii) Any other get-out-the-vote activity unless
subsection (c)(2) applies to the activity.
``(B) Any generic campaign activity.
``(C) Any activity that identifies or promotes a Federal
candidate, regardless of whether--
``(i) a State or local candidate is also identified or
promoted; or
``(ii) any portion of the funds disbursed constitutes a
contribution or expenditure under this Act.
``(D) Voter registration.
``(E) Development and maintenance of voter files during an
even-numbered calendar year.
``(F) Any other activity that--
``(i) significantly affects a Federal election; or
``(ii) is not described in section 301(8)(B)(xvii).
``(2) Fundraising costs.--Any amount spent to raise funds
that are used, in whole or in part, in connection with an
activity described in paragraph (1) shall be treated as an
expenditure subject to the limitations, prohibitions, and
reporting requirements of this Act.
``(d) Get-Out-The-Vote Activities by State, District, and
Local Committees of a Political Party.--
``(1) In general.--Except as provided in paragraph (2), any
get-out-the-vote activity for a State or local candidate, or
for a ballot measure, that is conducted by a State, district,
or local committee of a political party (including any
subordinate committee) shall be treated as an expenditure
subject to the limitations, prohibitions, and reporting
requirements of this Act.
``(2) Exclusions.--Paragraph (1) shall not apply to any
activity that the State committee of a political party
certifies to the Commission is an activity that--
``(A) is conducted during a calendar year other than a
calendar year in which an election for the office of
President is held;
``(B) is exclusively on behalf of (and specifically
identifies only) 1 or more State or local candidates or
ballot measures; and
``(C) does not include any effort or means used to identify
or turn out those identified to be supporters of any Federal
candidate (including any activity that is undertaken in
coordination with, or on behalf of, a candidate for Federal
office).
``(e) State Party Grassroots Funds.--
``(1) In general.--A State committee of a political party
may make disbursements and expenditures from its State Party
Grassroots Fund only for--
``(A) a generic campaign activity;
``(B) the making of a payment described in clause (v), (x),
or (xii) of paragraph (8)(B) or clause (iv), (viii), or (ix)
of paragraph (9)(B) of section 301;
``(C) subject to the limitations of section 315(d), the
making of a payment described in paragraph (8)(B)(xii) or
(9)(B)(ix) of section 301 on behalf of a candidate other than
a candidate for President or Vice President;
``(D) voter registration; and
``(E) development and maintenance of voter files during an
even-numbered calendar year.
``(2) Transfers.--
``(A) In general.--Notwithstanding section 315(a)(4) and
except as provided in subparagraph (B), no funds may be
transferred by a State committee of a political party from
its State Party Grassroots Fund to any other State Party
Grassroots Fund or to any other political committee.
``(B) Transfer to separate segregated fund of district or
local committee.--A transfer may be made from a State Party
Grassroots Fund to a district or local committee of the same
political party in the same State if the district or local
committee--
``(i) has established a separate fund for the purposes
described in paragraph (1); and
``(ii) uses the transferred funds solely for those
purposes.
``(f) Amounts Received by State Party Grassroots Fund From
Non-Federal Candidate Committees.--
``(1) In general.--Any amount received by a State Party
Grassroots Fund from a non-Federal candidate committee for
expenditures described in subsection (b) that are for the
benefit of that candidate shall be treated as meeting the
requirements of subsection (b) and section 304(f) if--
``(A) the amount is derived from funds that meet the
requirements of this Act with respect to any limitation or
prohibition as to source or dollar amount specified in
paragraphs (1)(A) and (2)(A) of section 315(a); and
``(B) the non-Federal candidate committee--
``(i) maintains, in the account from which payment is made,
records of the sources and amounts of funds for purposes of
determining whether those requirements are met; and
``(ii) certifies that the requirements were met.
``(2) Determination of compliance.--For purposes of
paragraph (1)(A), in determining whether the funds
transferred meet the requirements of this Act referred to in
paragraph (1)(A)--
``(A) a non-Federal candidate committee's cash on hand
shall be treated as consisting of the funds most recently
received by the committee; and
``(B) the committee must be able to demonstrate that its
cash on hand contains sufficient funds meeting those
requirements as are necessary to cover the transferred funds.
``(3) Reporting.--Notwithstanding paragraph (1), a State
Party Grassroots Fund that receives a transfer described in
paragraph (1) from a non-Federal candidate committee--
``(A) shall meet the reporting requirements of this Act;
and
``(B) shall submit to the Commission all certifications
received with respect to receipt of the transfer from the
candidate committee.''.
(b) Definitions.--
(1) Contribution.--Section 301(8)(B) of the Federal
Election Campaign Act of 1971 (2 U.S.C. 431(8)(B)) is
amended--
(A) by striking ``and'' at the end of clause (xiii);
(B) by striking the period at the end of clause (xiv) and
inserting a semicolon; and
(C) by adding at the end the following:
``(xv) any amount contributed to a candidate for other than
Federal office;
``(xvi) any amount received or expended to pay the costs of
a State or local political convention;
``(xvii) any payment for campaign activities that are
exclusively on behalf of (and specifically identify only)
State or local candidates and do not identify any Federal
candidate, and that are not activities described in section
325(c) (without regard to paragraph (6)(B)) or section
325(d)(1);
``(xviii) any payment for administrative expenses of a
State or local committee of a political party, including
expenses for--
``(I) overhead, including party meetings;
``(II) staff (other than individuals devoting a significant
amount of their time to elections for Federal office and
individuals engaged in conducting get-out-the-vote activities
for a Federal election); and
``(III) party elections or caucuses;
``(xix) any payment for research pertaining solely to State
and local candidates and issues;
``(xx) any payment for development and maintenance of voter
files other than during the 1-year period ending on the date
during an even-numbered calendar year on which regularly
scheduled general elections for Federal office occur; and
``(xxi) any payment for any other activity that is solely
for the purpose of influencing, and that solely affects, an
election for non-Federal office and that is not an activity
described in section 325(c) (without regard to paragraph
(6)(B)) or section 325(d)(1).''.
(2) Expenditure.--Section 301(9)(B) of the Federal Election
Campaign Act of 1971 (2 U.S.C. 431(9)(B)) is amended--
(A) by striking ``and'' at the end of clause (ix);
(B) by striking the period at the end of clause (x) and
inserting a semicolon; and
(C) by adding at the end the following:
``(xi) any amount contributed to a candidate for other than
Federal office;
[[Page S289]]
``(xii) any amount received or expended to pay the costs of
a State or local political convention;
``(xiii) any payment for campaign activities that are
exclusively on behalf of (and specifically identify only)
State or local candidates and do not identify any Federal
candidate, and that are not activities described in section
325(c) (without regard to paragraph (6)(B)) or section
325(d)(1);
``(xiv) any payment for administrative expenses of a State
or local committee of a political party, including expenses
for--
``(I) overhead, including party meetings;
``(II) staff (other than individuals devoting a significant
amount of their time to elections for Federal office and
individuals engaged in conducting get-out-the-vote activities
for a Federal election); and
``(III) conducting party elections or caucuses;
``(xv) any payment for research pertaining solely to State
and local candidates and issues;
``(xvi) any payment for development and maintenance of
voter files other than during the 1-year period ending on the
date during an even-numbered calendar year on which regularly
scheduled general elections for Federal office occur; and
``(xvii) any payment for any other activity that is solely
for the purpose of influencing, and that solely affects, an
election for non-Federal office and that is not an activity
described in section 325(c) (without regard to paragraph
(6)(B)) or section 325(d)(1).''.
(3) Other terms.--Section 301 of the Federal Election
Campaign Act of 1971 (2 U.S.C. 431) (as amended by section
114(a)) is amended by adding at the end the following:
``(29) Generic campaign activity.--The term `generic
campaign activity' means a campaign activity that promotes a
political party rather than a particular candidate or non-
Federal candidate.
``(30) State party grassroots fund.--The term `State Party
Grassroots Fund' means a separate fund established and
maintained by a State committee of a political party solely
for purposes of making expenditures and other disbursements
described in section 325(d).
``(31) Non-federal candidate.--The term `non-Federal
candidate' means a candidate for State or local office.
``(32) Non-federal candidate committee.--For purposes of
this subsection, the term `non-Federal candidate committee'
means a committee established, financed, maintained, or
controlled by a non-Federal candidate.''.
(c) Limitation Applied at National Level.--Section
315(d)(3) of the Federal Election Campaign Act of 1971 (2
U.S.C. 441a(d)(3)) is amended--
(1) by striking ``(3) The national'' and inserting the
following:
``(3) Candidates for the senate and the house of
representatives.--
``(A) In general.--The national'';
(2) by redesignating subparagraphs (A), (B), and (C) as
clauses (i), (ii), and (iii), respectively, and adjusting the
margins as appropriate; and
(3) by adding at the end the following:
``(2) Expenditures by congressional campaign committees.--
Notwithstanding paragraph (1), a congressional campaign
committee of a political party shall make the expenditures
described in paragraph (1) that are authorized to be made by
a national or State committee with respect to a candidate in
any State unless the congressional campaign committee
allocates all or a portion of the expenditures to either or
both of those committees.''.
(d) Application of Limitations to Entire Election Cycle.--
Section 315(d) of the Federal Election Campaign Act of 1971
(2 U.S.C. 441a(d)) is amended--
(1) in paragraph (1) by striking ``general''; and
(2) in the first sentence of paragraph (2) and in paragraph
(3)--
(A) by striking ``general''; and
(B) by striking ``which'' and inserting ``that, during an
election cycle,''.
SEC. 314. RESTRICTIONS ON FUNDRAISING BY CANDIDATES AND
OFFICEHOLDERS.
(a) State Fundraising Activities.--Section 315 of the
Federal Election Campaign Act of 1971 (2 U.S.C. 441a) (as
amended by section 301) is amended by adding at the end the
following:
``(j) Limitations on Fundraising Activities of Federal
Candidates and Officeholders and Certain Political
Committees.--
``(1) In general.--For purposes of this Act, a candidate,
an individual holding Federal office, or any agent of the
candidate or individual may not solicit funds to, or receive
funds on behalf of, any person--
``(A) that are to be expended in connection with any
election for Federal office unless the funds are subject to
the limitations, prohibitions, and requirements of this Act;
or
``(B) that are to be expended in connection with any
election for other than Federal office unless the funds are
not in excess of amounts permitted with respect to Federal
candidates and political committees under paragraphs (1) and
(2) of subsection (a), and are not from sources prohibited by
those paragraphs with respect to elections to Federal office.
``(2) Limitation on solicitations.--
``(A) In general.--The aggregate amount that a person
described in subparagraph (B) may solicit from a
multicandidate political committee for State committees
described in subsection (a)(1)(C) (including subordinate
committees) for any calendar year shall not exceed the dollar
amount in effect under subsection (a)(2)(B) for the calendar
year.
``(B) Applicability.--A person is described in this
subparagraph if the person is a candidate, an individual
holding Federal office, an agent of such a candidate or
individual, or a national, State, district, or local
committee of a political party (including a subordinate
committee) or an agent of such a committee.
``(3) Appearance or participation in a fundraising event.--
The appearance or participation by a candidate or individual
holding Federal office in a fundraising event conducted by a
committee of a political party or a non-Federal candidate
shall not be treated as a solicitation for purposes of
paragraph (1) if the candidate or individual does not solicit
or receive, or make disbursements from, any funds resulting
from the activity.
``(4) State law.--Paragraph (1) shall not apply to the
solicitation or receipt of funds, or disbursements, by an
individual who is a non-Federal candidate if the activity is
permitted under State law.
``(5) Definition.--For purposes of this subsection, an
individual shall be treated as holding Federal office if the
individual--
``(A) holds a Federal office; or
``(B) holds a position described in level I of the
Executive Schedule under section 5312 of title 5, United
States Code.''.
(b) Tax-Exempt Organizations.--Section 315 of the Federal
Election Campaign Act of 1971 (2 U.S.C. 441a) (as amended by
subsection (a)) is amended by adding at the end the
following:
``(k) Tax-Exempt Organizations.--
``(1) In general.--If an individual is a candidate for, or
holds, Federal office during any period, the individual shall
not during that period solicit contributions to, or on behalf
of, any organization that is described in section 501(c) of
the Internal Revenue Code of 1986 if a significant portion of
the activities of the organization include voter registration
or get-out-the-vote campaigns.
``(2) Definition.--For purposes of this section, an
individual shall be treated as holding Federal office if the
individual--
``(A) holds a Federal office; or
``(B) holds a position described in level I of the
Executive Schedule under section 5312 of title 5, United
States Code.''.
SEC. 315. REPORTING REQUIREMENTS.
(a) Reporting Requirements.--Section 304 of the Federal
Election Campaign Act of 1971 (2 U.S.C. 434) (as amended by
section 112(a)) is amended by adding at the end the
following:
``(f) Political Committees.--
``(1) National and congressional political committees.--The
national committee of a political party, a congressional
campaign committee of a political party, and any subordinate
committee of a national committee or congressional campaign
committee of a political party, shall report all receipts and
disbursements during the reporting period, whether or not in
connection with an election for Federal office.
``(2) Other political committees to which section 325
applies.--A political committee (not described in paragraph
(1)) to which section 325 applies shall report all receipts
and disbursements, including separate schedules for receipts
and disbursements for a State Grassroots Fund.
``(3) Transfers.--A political committee to which section
325 applies shall--
``(A) include in a report under paragraph (1) or (2) the
amount of any transfer described in section 325(d)(2); and
``(B) itemize those amounts to the extent required by
section 304(b)(3)(A).
``(4) Other political committees.--Any political committee
to which paragraph (1) or (2) does not apply shall report any
receipts or disbursements that are used in connection with a
Federal election.
``(5) Itemization.--If a political committee has receipts
or disbursements to which this subsection applies from any
person aggregating in excess of $200 for any calendar year,
the political committee shall separately itemize its
reporting for the person in the same manner as under
paragraphs (3)(A), (5), and (6) of subsection (b).
``(6) Reporting periods.--Reports required to be filed by
this subsection shall be filed for the same time periods as
reports are required for political committees under
subsection (a).''.
(b) Report of Exempt Contributions.--Section 301(8) of the
Federal Election Campaign Act of 1971 (2 U.S.C. 431(8)) is
amended by adding at the end the following:
``(C) reporting requirement.--The exclusion provided in
subparagraph (B)(viii) shall not apply for purposes of any
requirement to report contributions under this Act, and all
such contributions aggregating in excess of $200 shall be
reported.''.
(c) Reports by State Committees.--Section 304 of the
Federal Election Campaign Act of 1971 (2 U.S.C. 434 (as
amended by subsection (a)) is amended by adding at the end
the following:
``(g) Filing of State Reports.--In lieu of any report
required to be filed under this Act, the Commission may allow
a State committee of a political party to file with the
Commission a report required to be filed under State law if
the Commission determines that such a report contains
substantially the same information as a report required under
this Act.''.
(d) Other Reporting Requirements.--
(1) Authorized committees.--Section 304(b)(4) of the
Federal Election Campaign Act of 1971 (2 U.S.C. 434(b)(4)) is
amended--
[[Page S290]]
(A) by striking ``and'' at the end of subparagraph (H);
(B) by inserting ``and'' at the end of subparagraph (I);
and
(C) by adding at the end the following:
``(J) in the case of an authorized committee, disbursements
for the primary election, the general election, and any other
election in which the candidate participates;''.
(2) Names and addresses.--Section 304(b)(5)(A) of the
Federal Election Campaign Act of 1971 (2 U.S.C. 434(b)(5)(A))
is amended--
(A) by striking ``within the calendar year''; and
(B) by striking ``such operating expenditure'' and
inserting ``operating expense, and the election to which the
operating expense relates''.
Subtitle C--Soft Money of Persons Other Than Political Parties
SEC. 321. SOFT MONEY OF PERSONS OTHER THAN POLITICAL PARTIES.
Section 304 of the Federal Election Campaign Act of 1971 (2
U.S.C. 434) (as amended by section 315(c)) is amended by
adding at the end the following:
``(h) Election Activity of Persons Other Than Political
Parties.--
``(1) Initial statement.--A person to which section 325
does not apply that makes (or obligates to make) aggregate
disbursements totaling in excess of $2,000 for activities
described in section 325(c) shall file a statement with the
Commission--
``(A) within 48 hours after the disbursements or
obligations in excess of $2,000 are made; or
``(B) in the case of disbursements or obligations that are
made within 14 days of an election, on or before the 14th day
before the election.
``(2) Additional statements.--An additional statement shall
be filed each time additional disbursements aggregating
$2,000 are made by a person described in paragraph (1).
``(4) Applicability.--This subsection does not apply to--
``(A) a candidate or a candidate's authorized committees;
or
``(B) an independent expenditure.
``(5) Contents.--A statement under this section shall
contain such information about the disbursements as the
Commission shall prescribe, including if applicable, whether
the disbursement was in support of, or in opposition to, a
candidate or a political party.
``(6) Place of filing.--A statement under this section
shall be filed with the Secretary of the Senate or the Clerk
of the House of Representatives, and the Secretary of State
(or equivalent official) of the candidate's State. The
Secretary of the Senate or Clerk of the House of
Representatives shall, as soon as possible (but not later
than 24 hours after receipt), transmit a copy of the
statement to the Commission.
``(7) Transmittal.--Not later than 48 hours after receipt,
the Commission shall transmit a statement filed under this
subsection--
``(A) to the candidates or political parties involved in
the election in question; or
``(B) if the disbursement is not in support of, or in
opposition to, a candidate or political party, to the State
committees of each political party in the State in question.
``(8) Determinations by the commission.--The Commission may
make its own determination that disbursements described in
paragraph (1) have been made or are obligated to be made. The
Commission shall notify the candidates or political parties
described in paragraph (2) not later than 24 hours after its
determination.''.
TITLE IV--CONTRIBUTIONS
SEC. 401. PROHIBITION OF CERTAIN CONTRIBUTIONS BY LOBBYISTS.
Section 315 of the Federal Election Campaign Act of 1971 (2
U.S.C. 441a) (as amended by section 314(b)) is amended by
adding at the end the following:
``(m) Prohibition of Certain Contributions by Lobbyists.--
``(1) In general.--A lobbyist, or a political committee
controlled by a lobbyist, shall not make a contribution to--
``(A) a Federal officeholder or candidate for Federal
office if, during the preceding 12 months, the lobbyist has
made a lobbying contact with the officeholder or candidate;
or
``(B) any authorized committee of the President or Vice
President of the United States if, during the preceding 12
months, the lobbyist has made a lobbying contact with a
covered executive branch official.
``(2) Contributions to member of congress or candidate for
congress.--A lobbyist who, or a lobbyist whose political
committee, has made a contribution to a member of Congress or
candidate for Congress (or any authorized committee of the
President) shall not, during the 12 months following such
contribution, make a lobbying contact with the member or
candidate who becomes a member of Congress or with a covered
executive branch official.
``(3) Definitions.--In this subsection the terms `covered
executive branch official', `lobbying contact', and
`lobbyist' have the meanings given those terms in section 3
of the Federal Lobbying Disclosure Act of 1995 (2 U.S.C.
1602) except that--
``(A) the term `lobbyist' includes a person required to
register under the Foreign Agents Registration Act of 1938
(22 U.S.C. 611 et seq.); and
``(B) for purposes of this subsection, a lobbyist shall be
considered to make a lobbying contact or communication with a
member of Congress if the lobbyist makes a lobbying contact
or communication with--
``(i) the member of Congress;
``(ii) any person employed in the office of the member of
Congress; or
``(iii) any person employed by a committee, joint
committee, or leadership office who, to the knowledge of the
lobbyist, was employed at the request of or is employed at
the pleasure of, reports primarily to, represents, or acts as
the agent of the member of Congress.''.
SEC. 402. CONTRIBUTIONS BY DEPENDENTS NOT OF VOTING AGE.
Section 315 of the Federal Election Campaign Act of 1971 (2
U.S.C. 441a) (as amended by section 401(a)) is amended by
adding at the end the following:
``(n) Dependents Not of Voting Age.--
``(1) In general.--For purposes of this section, any
contribution by an individual who--
``(A) is a dependent of another individual; and
``(B) has not, as of the time of the making of the
contribution, attained the legal age for voting in an
election to Federal office in the State in which the
individual resides;
shall be treated as having been made by the other individual.
``(2) Allocation between spouses.--If an individual
described in paragraph (1) is the dependent of another
individual and the other individual's spouse, a contribution
described in paragraph (1) shall be allocated among those
individuals in a manner determined by the individuals.''.
SEC. 403. CONTRIBUTIONS TO CANDIDATES FROM STATE AND LOCAL
COMMITTEES OF POLITICAL PARTIES TO BE
AGGREGATED.
Section 315(a) of the Federal Election Campaign Act of 1971
(2 U.S.C. 441a(a)) (as amended by section 102(b)) is amended
by adding at the end the following:
``(10) Aggregation of contributions from State and local
committees of political parties.--Notwithstanding paragraph
(5)(B), a candidate may not accept, with respect to an
election, any contribution from a State or local committee of
a political party (including any subordinate committee of
such a committee), if the contribution, when added to the
total of contributions previously accepted from all such
committees of that political party, would cause the total
amount of contributions to exceed a limitation on
contributions to a candidate under this section.''.
SEC. 404. CONTRIBUTIONS AND EXPENDITURES USING MONEY SECURED
BY PHYSICAL FORCE OR OTHER INTIMIDATION.
Title III of the Federal Election Campaign Act of 1971 (2
U.S.C. 431) (as amended by section 313) is amended by adding
at the end the following:
``SEC. 326. USE OF PHYSICAL FORCE OR INTIMIDATION TO OBTAIN A
CONTRIBUTION OR EXPENDITURE OR DETER THE FILING
OF A COMPLAINT.
``It shall be unlawful for any person to--
``(1) cause another person to make a contribution or
expenditure by using physical force, job discrimination, a
financial reprisal, a threat of physical force, job
discrimination, or financial reprisal, or taking or
threatening to take other adverse action;
``(2) make a contribution or expenditure utilizing money or
anything of value secured in the manner described in
paragraph (1).''or
``(3) use physical force, job discrimination, or financial
reprisal, a threat of physical force, job discrimination, or
financial reprisal, or take or threaten to take other adverse
action, against an employee, union member, or other person--
``(A) to deter or prevent any person from filing a
complaint, providing testimony, or otherwise cooperating with
enforcement efforts under this Act; or
``(B) to retaliate against any person who has filed a
complaint, provided testimony, or otherwise cooperated with
enforcement efforts under this Act.''.
SEC. 405. PROHIBITION OF ACCEPTANCE BY A CANDIDATE OF CASH
CONTRIBUTIONS FROM ANY ONE PERSON AGGREGATING
MORE THAN $100.
Section 321 of the Federal Election Campaign Act of 1971 (2
U.S.C. 441g) is amended by inserting ``, and no candidate or
authorized committee of a candidate shall accept from any 1
person,'' after ``make''.
TITLE V--AUTHORITIES AND DUTIES OF THE FEDERAL ELECTION COMMISSION
SEC. 501. FILING OF REPORTS USING COMPUTERS AND FACSIMILE
MACHINES.
Section 302(g) of the Federal Election Campaign Act of 1971
(2 U.S.C. 432(g)) is amended by adding at the end the
following:
``(6) Filing of reports using computers and facsimile
machines.--
``(A) Computers.--The Commission, in consultation with the
Secretary of the Senate and the Clerk of the House of
Representatives, may issue a regulation under a person
required to file a designation, statement, or report under
this Act--
``(i) are required to maintain and file the designation,
statement, or report for any calendar year in electronic form
accessible by computers if the person has, or has reason to
expect to have, aggregate contributions or expenditures in
excess of a threshold amount determined by the Commission;
and
[[Page S291]]
``(ii) may maintain and file the designation, statement, or
report in that manner if not required to do so under a
regulation under clause (i).
``(B) Facsimile machines.--The Commission, in consultation
with the Secretary of the Senate and the Clerk of the House
of Representatives, shall prescribe a regulation that allows
a person to file a designation, statement, or report required
by this Act through the use of a facsimile machine.
``(C) Verification.--In a regulation under this paragraph,
the Commission shall provide methods (other than requiring a
signature on the document being filed) for verifying a
designation, statement, or report. Any document verified
under any of the methods shall be treated for all purposes
(including penalties for perjury) in the same manner as a
document verified by signature.
``(D) Compatibility of systems.--The Secretary of the
Senate and the Clerk of the House of Representatives shall
ensure that any computer or other system that the Secretary
or the Clerk may develop and maintain to receive
designations, statements, and reports in the forms required
or permitted under this paragraph is compatible with any
system that the Commission may develop and maintain.''.
SEC. 502. INCREASE IN THRESHOLD FOR REPORTING REQUIREMENTS.
(a) Identification of Contributors.--Section 302(c)(3) of
the Federal Election Campaign Act of 1971 (2 U.S.C.
432(c)(3)) is amended by striking ``$200'' and inserting
``$50''.
(b) Identification of Disbursements.--Section 302(c)(5) of
the Federal Election Campaign Act of 1971 (2 U.S.C.
432(c)(5)) is amended by striking ``$200'' and inserting
``$50''.
SEC. 503. AUDITS.
(a) Random Audits.--Section 311(b) of the Federal Election
Campaign Act of 1971 (2 U.S.C. 438(b)) is amended--
(1) by inserting ``(1)'' before ``The Commission''; and
(2) by adding at the end the following:
``(2) Random audits.--Notwithstanding paragraph (1), the
Commission may from time to time conduct random audits and
investigations to ensure voluntary compliance with this Act.
The subjects of such audits and investigations shall be
selected on the basis of criteria established by vote of at
least 4 members of the Commission to ensure impartiality in
the selection process. This paragraph does not apply to an
authorized committee of a candidate for President or Vice
President subject to audit under title VI or to an authorized
committee of an eligible Senate candidate or an eligible
House candidate subject to audit under section 522(a).''.
(b) Extension of Period During Which Campaign Audits May Be
Begun.--Section 311(b) of the Federal Election Campaign Act
of 1971 (2 U.S.C. 438(b)), as redesignated by subsection (a),
is amended by striking ``6 months'' and inserting ``12
months''.
SEC. 504. AUTHORITY TO SEEK INJUNCTION.
Section 309(a) of the Federal Election Campaign Act of 1971
(2 U.S.C. 437g(a)) is amended--
(1) by adding at the end the following:
``(13)(A) If, at any time in a proceeding described in
paragraph (1), (2), (3), or (4), the Commission believes
that--
``(i) there is a substantial likelihood that a violation of
this Act is occurring or is about to occur;
``(ii) the failure to act expeditiously will result in
irreparable harm to a party affected by the potential
violation;
``(iii) expeditious action will not cause undue harm or
prejudice to the interests of others; and
``(iv) the public interest would be best served by the
issuance of an injunction;
the Commission may initiate a civil action for a temporary
restraining order or a temporary injunction pending the
outcome of the proceedings described in paragraphs (1), (2),
(3), and (4).
``(B) An action under subparagraph (A) shall be brought in
the United States district court for the district in which
the defendant resides, transacts business, or may be found or
in which the violation is occurring, has occurred, or is
about to occur.'';
(2) in paragraph (7), by striking ``(5) or (6)'' and
inserting ``(5), (6), or (13)''; and
(3) in paragraph (11), by striking ``(6)'' and inserting
``(6) or (13)''.
SEC. 505. PENALTIES.
(a) Increased Penalties.--Section 309(a) of the Federal
Election Campaign Act of 1971 (2 U.S.C. 437g(a)) is amended--
(1) in paragraphs (5)(A), (6)(A), and (6)(B) by striking
``$5,000'' and inserting ``$10,000'';
(2) in paragraph (5)(B) by striking ``the greater of
$10,000 or an amount equal to 200 percent'' and inserting
``the greater of $20,000 or 300 percent''; and
(3) in paragraph (6)(C) by striking ``the greater of
$10,000 or an amount equal to 200 percent'' and inserting
``the greater of $20,000 or 300 percent''.
(b) Equitable Remedies.--Section 309(a)(5)(A) of the
Federal Election Campaign Act of 1971 (2 U.S.C. 437g(a)(5))
is amended by striking the period and inserting ``, and, if
authorized by the agreement, may include equitable remedies
or penalties including disgorgement of funds to the United
States Treasury, community service requirements, suspension
or disbarment of treasurers, or public education
requirements.''.
(c) Automatic Penalty For Late Filing.--Section 309(a) of
the Federal Election Campaign Act of 1971 (2 U.S.C. 437g(a))
is amended--
(1) by adding at the end the following:
``(13) Penalty for late filing.--
``(A) In general.--The Commission shall establish a
schedule of mandatory monetary penalties that shall be
imposed by the staff director of the Commission for any
failure to meet the time requirements for filing under
section 304.
``(B) Required filing of late report.--The Commission may
require a report that has not been filed within the time
requirements of section 304 to be filed by a specific date.
``(C) Procedure for assessing penalties and filing
deadlines.--Penalties and filing requirements imposed under
this paragraph shall not be subject to paragraph (1), (2),
(3), (4), (5) or (12).
``(D) Appeals.--
``(i) In general.--A political committee shall have 30 days
after the imposition of penalty or filing requirement under
this paragraph to file an exception with the Commission.
``(ii) Commission determination.--Within 30 days after
receiving the exception, the Commission shall make a
determination that is a final agency action subject to
exclusive review by the United States Court of Appeals for
the District of Columbia Circuit under section 706 of title
5, United States Code, upon petition filed in the court by
the political committee that is the subject of the agency
action, if the petition is filed within 30 days of the
Commission action for which review is sought.'';
(2) in paragraph (5)(D)--
(A) by inserting after the first sentence the following:
``In any case in which a penalty or filing requirement
imposed on a political committee or treasurer under paragraph
(13) has not been satisfied, the Commission may institute a
civil action for enforcement under paragraph 6(A).''; and
(B) by inserting before the period in the last sentence
``or has failed to pay a penalty or meet a filing requirement
imposed under paragraph (13)''; and
(3) in paragraph (6)(A), by striking ``paragraph (4)(A)''
and inserting ``paragraph (4)(A) or (13)''.
SEC. 506. INDEPENDENT LITIGATING AUTHORITY.
(a) Litigating Authority.--Section 306(f) of Federal
Election Campaign Act of 1971 (2 U.S.C. 437c(f)) is amended
by striking paragraph (4) and inserting the following:
``(4) Independent litigating authority.--
``(A) In general.--Notwithstanding paragraph (2) or any
other provision of law, the Commission is authorized to
appear on its own behalf in any action related to the
exercise of its statutory duties or powers in any court as a
party or amicus curiae, either--
``(i) by attorneys employed in the office of the
Commission, or
``(ii) by counsel whom the Commission may appoint, on a
temporary basis, as may be necessary for such purpose,
without regard to the provisions of title 5, United States
Code, and whose compensation the Commission may fix without
regard to the provisions of chapter 51 and subchapter III of
chapter 53 of that title.
``(B) Appeals.--The authority granted under subparagraph
(A) includes the power of the Commission to appeal from, and
petition the Supreme Court for certiorari to review,
judgments, or decrees entered with respect to actions in
which the Commission appears pursuant to the authority
provided by this Act.''.
(b) Power of Commission To Petition the Supreme Court.--
Section 307(a)(6) of Federal Election Campaign Act of 1971 (2
U.S.C. 437d(a)(6)) is amended by striking ``or appeal any
civil action'' and inserting ``, appeal any civil action or
petition the Supreme Court for certiorari to review judgments
or decrees entered with respect to actions in which the
Commission appears''.
SEC. 507. REFERENCE OF SUSPECTED VIOLATION TO THE ATTORNEY
GENERAL.
Section 309(a)(5) of Federal Election Campaign Act of 1971
(2 U.S.C. 437g(a)) is amended by striking subparagraph (C)
and inserting the following:
``(C) Referral to the Attorney General.--The Commission may
at any time, by an affirmative vote of 4 of its members,
refer a possible violation of this Act or chapter 95 or
chapter 96 of the Internal Revenue Code of 1986 to the
Attorney General of the United States, without regard to any
limitations set forth in this section.''.
SEC. 508. POWERS OF THE COMMISSION.
(a) Initiation of Enforcement Proceeding.--Section
309(a)(2) of Federal Election Campaign Act of 1971 (2 U.S.C.
437g(a)(2)) is amended by striking ``reason to believe that''
and inserting ``reason to investigate whether''.
(b) Service of Process.--Section 306(f) of the Federal
Election Campaign Act of 1971 (2 U.S.C. 437c(f)) is amended
by inserting at the end the following:
``(5) Service of process.--In any matter under this Act or
under chapter 95 or chapter 96 of the Internal Revenue Code
of 1986, the Commission may at its discretion, without court
order and with or without reimbursement, require the United
States Marshal Service to serve process on behalf of the
Commission, including serving a summons, subpoena, or
complaint, upon any person.''.
(c) Venue for Violations Adjudicated in Court.--Section
309(a)(6)(A) of Federal Election Campaign Act of 1971 (2
U.S.C. 437g(a)(6)(A)) is amended by striking ``for the
district in which the person against whom
[[Page S292]]
such action is brought is found, resides, or transacts
business'' and inserting ``in which the defendant resides,
transacts business, or is found or in which the violation
occurred''.
(d) Filing of Reports With Commission Instead of the
Secretary of the Senate.--
(1) Section 302.--Section 302(g) of the Federal Election
Campaign Act of 1971 (2 U.S.C. 432(g)) is amended--
(A) by striking ``(g)(1)'' and all that follows through
``(3) All'' and inserting ``(g) Filing.--'';
(B) by striking paragraph (4); and
(C) by striking ``, except designations, statements, and
reports filed in accordance with paragraph (1),''.
(2) Section 304.--Section 304 of Federal Election Campaign
Act of 1971 (2 U.S.C. 434) is amended--
(A) in the first sentence of subsection (a)(6), by striking
``the Secretary, or the Commission,'' and inserting ``the
Commission''; and
(B) in the third sentence of subsection (c)(2), by striking
``the Secretary, or''.
(3) Section 311.--Section 311(a)(4) of Federal Election
Campaign Act of 1971 (2 U.S.C. 438(a)(4)) is amended by
striking ``Secretary, or the''.
(e) Authorization To Accept Gifts.--Section 306(f) of the
Federal Election Campaign Act of 1971 (2 U.S.C. 437c(f)) is
amended by adding at the end the following:
``(6) Authorization to accept gifts.--
``(A) In general.--To carry out the purposes of this Act,
the Commission may accept, hold, administer, and utilize
gifts, devises, and bequests of property, both real and
personal, if the acceptance and use of the gifts, devises, or
bequests does not create a conflict of interest.
``(B) Deposit of gifts.--Gifts and bequests of money and
proceeds from sales of other property received as gifts,
devises, or bequests shall be deposited in the Treasury and
shall be disbursed upon the order of the Commission.
``(C) Use of gifts.--Property accepted pursuant to this
section, and the proceeds from the property, shall be used as
closely as practicable in accordance with the terms of the
gifts, devises, or bequests.''.
TITLE VI--MISCELLANEOUS
SEC. 601. PROHIBITION OF LEADERSHIP COMMITTEES.
Section 302(e) of the Federal Election Campaign Act of 1971
(2 U.S.C. 432(e)) is amended--
(1) by striking paragraph (3) and inserting the following:
``(3) Limitations.--A political committee that supports or
has supported more than 1 candidate shall not be designated
as an authorized committee, except that--
``(A) a candidate for the office of President nominated by
a political party may designate the national committee of the
political party as the candidate's principal campaign
committee if the national committee maintains separate books
of account with respect to its functions as a principal
campaign committee; and
``(B) a candidate may designate a political committee
established solely for the purpose of joint fundraising by
such candidates as an authorized committee.''; and
(2) by adding at the end the following:
``(6) Prohibition of leadership committees.--
``(A) In general.--
``(i) Prohibition.--A candidate or an individual holding
Federal office shall not establish, finance, maintain, or
control any political committee or non-Federal political
committee other than a principal campaign committee of the
candidate, authorized committee, party committee, or other
political committee designated in accordance with paragraph
(3).
``(ii) Candidate for more than 1 office.--A candidate for
more than 1 Federal office may designate a separate principal
campaign committee for the campaign for election to each
Federal office.
``(iii) Candidates for state or local office.--This
paragraph does not preclude a Federal officeholder who is a
candidate for State or local office from establishing,
financing, maintaining, or controlling a political committee
for election of the individual to the State or local office.
``(B) Transition.--
``(i) Continuation for 12 months.--For a period of 12
months after the effective date of this paragraph, any
political committee established before that date but that is
prohibited under subparagraph (A) may continue to make
contributions.
``(ii) Disbursement at the end of 12 months.--At the end of
the 12-month period, the political committee shall disburse
all funds by 1 or more of the following means:
``(I) Making contributions to a person described in section
501(c)(3) of the Internal Revenue Code of 1986 and exempt
from taxation under section 501(a) of the Code.
``(II) Making a contribution to the Treasury of the United
States.
``(III) Contributing to the national, State, or local
committee of a political party.
``(IV) Making a contribution of not to exceed $1,000 each
to 1 or more candidates or non-Federal candidates.''.
SEC. 602. TELEPHONE VOTING BY PERSONS WITH DISABILITIES.
(a) Study of Systems To Permit Persons With Disabilities To
Vote by Telephone.--
(1) In general.--The Federal Election Commission shall
conduct a study to determine the feasibility of developing a
system or systems by which persons with disabilities may be
permitted to vote by telephone.
(2) Consultation.--The Federal Election Commission shall
conduct the study described in paragraph (1) in consultation
with State and local election officials, representatives of
the telecommunications industry, representatives of persons
with disabilities, and other concerned members of the public.
(3) Criteria.--The system or systems developed pursuant to
paragraph (1) shall--
(A) propose a description of the kinds of disabilities that
impose such difficulty in travel to polling places that a
person with a disability who may desire to vote is
discouraged from undertaking such travel;
(B) propose procedures to identify persons who are so
disabled; and
(C) describe procedures and equipment that may be used to
ensure that--
(i) only persons who are entitled to use the system are
permitted to use it;
(ii) the votes of persons who use the system are recorded
accurately and remain secret;
(iii) the system minimizes the possibility of vote fraud;
and
(iv) the system minimizes the financial costs that State
and local governments would incur in establishing and
operating the system.
(4) Requests for proposals.--In developing a system
described in paragraph (1), the Federal Election Commission
may request proposals from private contractors for the design
of procedures and equipment to be used in the system.
(5) Physical access.--Nothing in this section is intended
to supersede or supplant efforts by State and local
governments to make polling places physically accessible to
persons with disabilities.
(6) Deadline.--The Federal Election Commission shall submit
to Congress the study required by this section not later than
1 year after the effective date of this Act.
SEC. 603. CERTAIN TAX-EXEMPT ORGANIZATIONS NOT SUBJECT TO
CORPORATE LIMITS.
Section 316 of the Federal Election Campaign Act of 1971 (2
U.S.C. 441b) is amended by adding at the end the following:
``(c) Prohibitions Not To Apply to Independent Expenditures
of Certain Tax-Exempt Organizations.--
``(1) In general.--Nothing in this section shall preclude a
qualified nonprofit corporation from making an independent
expenditure.
``(2) Definition of qualified nonprofit corporation.--In
this subsection, the term `qualified nonprofit corporation'
means a corporation described in section 501(c)(4) of the
Internal Revenue Code of 1986 that is exempt from taxation
under section 501(a) of the Code and that meets the following
requirements:
``(A) Purpose.--The only express purpose of the corporation
is the promotion of political ideas.
``(B) No trade or business.--The corporation cannot and
does not engage in any activities that constitute a trade or
business.
``(C) Gross receipts.--The gross receipts of the
corporation for the calendar year have not (and will not)
exceed $100,000, and the net value of the total assets at any
time during the calendar year do not exceed $250,000.
``(D) Establishment.--The corporation--
``(i) was not established by--
``(I) a person described in section 501(c)(6) of the
Internal Revenue Code of 1986 that is exempt from taxation
under section 501(a) of the Code;
``(II) a corporation engaged in carrying out a trade or
business; or
``(III) a labor organization; and
``(ii) cannot and does not directly or indirectly accept
donations of anything of value from any such person,
corporation, or labor organization.
``(E) Assets and earnings.--The corporation--
``(i) has no shareholder or other person affiliated with it
that could make a claim on its assets or earnings; and
``(ii) offers no incentives or disincentives for
associating or not associating with it other than on the
basis of its position on any political issue.
``(3) Qualified nonprofit corporation treated as political
committee.--If a major purpose of a qualified nonprofit
corporation is the making of independent expenditures, and
the requirements of section 301(4) are met with respect to
the corporation, the corporation shall be treated as a
political committee.
``(4) Notice requirement.--All solicitations by a qualified
nonprofit corporation shall include a notice informing
contributors that donations may be used by the corporation to
make independent expenditures.
``(5) Reports.--A qualified nonprofit corporation shall
file reports as required by subsections (d) and (e) of
section 304.
SEC. 604. AIDING AND ABETTING VIOLATIONS OF THE FEDERAL
ELECTION CAMPAIGN ACT OF 1971.
Title III of the Federal Election Campaign Act of 1971 (as
amended by section 404) is amended by adding at the end the
following:
``SEC. 327. AIDING AND ABETTING VIOLATIONS.
``With reference to any provision of this Act that places a
requirement or prohibition on any person acting in a
particular capacity, any person who knowingly aids or abets
the person in that capacity in violating that provision may
be proceeded against as a principal in the violation.''.
[[Page S293]]
SEC. 605. CAMPAIGN ADVERTISING THAT REFERS TO AN OPPONENT.
Title III of the Federal Election Campaign Act of 1971 (2
U.S.C. 431 et seq.) (as amended by section 505) is amended by
adding at the end the following:
``SEC. 328. CAMPAIGN ADVERTISING THAT REFERS TO AN OPPONENT.
``(a) Candidates.--A candidate or candidate's authorized
committee that places in the mail a campaign advertisement or
any other communication to the general public that directly
or indirectly refers to an opponent or the opponents of the
candidate in an election, with or without identifying any
opponent in particular, shall file an exact copy of the
communication with the Commission and with the Secretary of
State of the candidate's State by not later than 12:00 p.m.
on the day on which the communication is first placed in the
mail to the general public.
``(b) Persons Other Than Candidates.--
``(1) In general.--A person other than a candidate or
candidate's authorized committee that places in the mail a
campaign advertisement or any other communication described
in paragraph (2) shall file an exact copy of the
communication with the Commission and with the Secretary of
State of the candidate's State by not later than 12:00 p.m.
on the day on which the communication is first placed in the
mail to the general public.
``(2) Advocacy or reference to opponent.--A communication
is described in this paragraph if it is a communication to
the general public that--
``(A) advocates the election of a particular candidate in
an election; and
``(B) directly or indirectly refers to an opponent or the
opponents of the candidate in the election, with or without
identifying any opponent in particular.''.
SEC. 606. LIMIT ON CONGRESSIONAL USE OF THE FRANKING
PRIVILEGE.
Section 3210(a)(6) of title 39, United States Code, is
amended by striking subparagraph (A) and inserting the
following:
``(A) A Member of Congress may not mail any mass mailing as
franked mail during a year in which there will be an election
for the seat held by the Member during the period between
January 1 of that year and the date of the general election
for that office, unless the Member has made a public
announcement that the Member will not be a candidate for
reelection to that seat or for election to any other Federal
office.''.
SEC. 607. PARTICIPATION BY FOREIGN NATIONALS IN POLITICAL
ACTIVITIES.
(a) Prohibition.--Section 319 of the Federal Election
Campaign Act of 1971 (2 U.S.C. 441e) is amended--
(1) by striking the heading and inserting ``participation
by foreign nationals in political activities'';
(2) by striking subsection (a) and inserting the following:
``(a) Prohibited Contributions and Expenditures.--
``(1) It shall be unlawful for a foreign national directly
or through any other person to make any contribution or
expenditure of money or other thing of value, or to promise
expressly or impliedly to make any contribution or
expenditure, in connection with an election to any political
office or in connection with any primary election,
convention, or caucus held to select candidates for any
political office; or
``(2) for any person to solicit, receive, or accept a
contribution from a foreign national.'';
(3) by redesignating subsection (b) as subsection (c); and
(4) by inserting after subsection (a) the following:
``(b) Prohibited Activities.--It shall be unlawful for a
foreign national or an individual lawfully admitted for
permanent residence, as defined by section 101(a)(20) of the
Immigration and Nationality Act (8 U.S.C. 1101(a)(20), to
direct, dictate, control, or directly or indirectly
participate in the decisionmaking process of any other
person, (as defined in 301(11)), with regard to the person's
Federal or non-Federal election-related activities, such as a
decision concerning the making of a contribution or
expenditure in connection with an election for any Federal
office or a decision concerning the administration of a
political committee.''.
(b) Affirmation of Eligibility To Make Contribution.--
Section 319 of the Federal Election Campaign Act of 1971 (2
U.S.C. 441e) (as amended by subsection (a)) is amended by
adding at the end the following:
``(d) Affirmation of Eligibility To Make Contribution.--A
candidate or authorized committee of a candidate shall not
accept a contribution in excess of $500 unless the
contribution is accompanied by a statement, signed by the
person making the contribution, affirming that the person is
not a person prohibited by this section from making the
contribution.''.
SEC. 608. CERTIFICATION OF COMPLIANCE WITH FOREIGN
CONTRIBUTION AND SOLICITATION LIMITATIONS.
Section 304 of the Federal Election Campaign Act of 1971 (2
U.S.C. 434) is amended--
(1) by redesignating subsection (c) as subsection (d); and
(2) by inserting after subsection (b) the following:
``(c) Certification of Compliance With Foreign Contribution
and Solicitation Limitations.--Each report required under
this section shall include a certification under penalty of
perjury that the political committee has not knowingly
solicited or accepted contributions prohibited by section
319.''.
TITLE VII--EFFECTIVE DATES; AUTHORIZATIONS
SEC. 701. EFFECTIVE DATE.
Except as otherwise provided in this Act, this Act and the
amendments made by this Act shall take effect on the date of
enactment of this Act.
SEC. 702. BUDGET NEUTRALITY.
(a) Delayed Effectiveness.--This Act (other than this
section) and the amendments made by this Act shall not be
effective until the Director of the Office of Management and
Budget certifies that the estimated costs under section 252
of the Balanced Budget and Emergency Deficit Control Act of
1985 (2 U.S.C. 902) have been offset by the enactment of
legislation effectuating this Act.
(b) Funding.--Legislation effectuating this Act shall not
provide for general revenue increases, reduce expenditures
for any existing Federal program, or increase the Federal
budget deficit.
SEC. 703. SEVERABILITY.
Except as provided in section 101(c), if any provision of
this Act (including any amendment made by this Act), or the
application of any such provision to any person or
circumstance is held invalid, the validity of any other
provision of this Act, or the application of the provision to
other persons and circumstances shall not be affected
thereby.
SEC. 704. EXPEDITED REVIEW OF CONSTITUTIONAL ISSUES.
(a) Direct Appeal to Supreme Court.--An appeal may be taken
directly to the Supreme Court of the United States from any
interlocutory order or final judgment, decree, or order
issued by any court ruling on the constitutionality of any
provision of this Act or amendment made by this Act.
(b) Acceptance and Expedition.--The Supreme Court shall, if
the Court has not previously ruled on the question addressed
in the ruling below, accept jurisdiction over, advance on the
docket, and expedite the appeal to the greatest extent
possible.
SEC. 705. REGULATIONS.
The Federal Election Commission shall prescribe any
regulations required to carry out this Act and the amendments
made by this Act not later than 270 days after the effective
date of this Act.
There being no objection, the articles were ordered to be printed in
the Record, as follows:
[From the Wall Street Journal Jan. 9, 1997]
GOP To Rebuke Companies for Bipartisan Donations
By Helene Cooper
WASHINGTON--Republican leaders are adopting a tough post-
election strategy: ``Don't get mad, get even.'' And the foe
this time isn't the Democrats or organized labor.
It's Corporate America.
Annoyed that big business has been hedging its bets by
giving lots of money to the Democrats as well as to the
Republicans, the GOP says the Business Roundtable, a group of
200 chief executives from the nation's biggest companies, is
about to receive an ultimatum: Stop donating so much to the
Democrats and become more involved in partisan politics, or
be denied access to Republicans in Congress.
GOP House leaders are expected to deliver the message
tonight at a dinner meeting with some 20 chief executives of
Business Roundtable companies. Scheduled to attend are
Speaker Newt Gingrich, Majority Leader Dick Armey, Rep. Tom
DeLay of Texas and Rep. John Boehner of Ohio, among others.
Corporate bigwigs expected at the meeting include Don Fites,
chief executive officer of Caterpillar Inc. who is chairman
of the Business Roundtable, and John Snow, chief executive of
CSX Corp.
Republican Party Chairman Haley Barbour, who is
spearheading the drive, accuses the business group of
``sitting on its hands'' during the past election campaign;
he calls America's big CEOs ineffectual in the battle against
Democrats and organized labor. ``If their view is going to be
neutral when the left tries to undo their agenda,'' Mr.
Barbour says in an interview, ``they need to paint up a big
billboard that says, `We don't fight.' ''
Companies that want to have it both ways, vows one top GOP
strategist, no longer will be involved in Republican
decision-making ``or invited to our cocktail parties.''
The GOP strategy is a high-risk one. While Business
Roundtable companies gave more than $11.04 million to the
Democrats during the 1996 election cycle, as of figures from
Dec. 2 they gave more than double that amount--$25.76
million--to Republicans, according to the Center for
Responsive Politics, a Washington-based public-interest group
that monitors campaign spending.
Republican leaders insist they aren't selling access. But
their strategy comes at a time when the GOP is gearing up to
investigate Democratic fund raising and has criticized the
Clinton administration for cozying up to wealthy Asians and
Asian-Americans who have donated heavily to the Democratic
Party.
But Mr. Barbour isn't worried about alienating the GOP's
longtime corporate backers. ``The best way to be friends is
to be upfront with them.'' he says. Roundtable companies, he
adds, ``should give a bigger percentage to the Republicans''
than they now are giving.
Mr. Barbour has been sounding the anti-Business Roundtable
drumbeat with increasing ferocity, calling the group
inefficient and
[[Page S294]]
incompetent in numerous interviews. And Business Roundtable
members say he has suddenly become unavailable when they call
to talk about the problem.
``I've been unable to connect with Haley,'' Caterpillar's
Mr. Fites said in a letter to Roundtable members two weeks
ago. ``When I do reach him, I want to explain'' that the
Business Roundtable, as a group, doesn't give money to
political candidates, Mr. Fites said.
But Business Roundtable companies do, and therein lies the
problem for Republicans, who have long thought of Corporate
America as their own private money machine. Lately though,
big companies have been hedging their bets more than before,
and giving substantial money to the Democrats as well. With a
Democratic administration, that is expected to continue.
Telecommunication giants AT&T Corp., MCI Communications
Corp. and Sprint Corp., along with their political-action
groups, for example, rewarded the Democrats in Congress and
the Clinton administration for being sympathetic to their
cause during the telecommunication-legislation fight. They
spread out their huge contributions almost equally, giving
$1.74 million to the Democrats and $1.98 million to
Republicans. Eastman Kodak Co., which is counting on the
Clinton administration to push its trade complaint against
Fuji Photo film Co. of Japan, gave the Democrats $40,711 in
the 1996 cycle, and $39,000 to the Republicans.
Adding to the GOP's corporate-money complaints was the
huge, albeit losing, $35 million campaign by organized labor
to elect a Democratic Congress. When GOP strategists tried to
counter the attack, forming a group called the Coalition, the
business-led group raised just $5 million. In addition, the
Business Roundtable declined to join. ``We do not solicit or
spend money on behalf of candidates for political office,''
the group's spokeswoman, Johanna Schneider, said.
``We've got the labor unions giving 99% to Democrats, and
then the Business Roundtable turns around and says they're
neutral?'' says one top GOP strategist. ``If they're neutral,
then they should pack up their belongings and move out of
town. Washington is a partisan town.''
Republicans say they are drawing up a list of corporations
that will be warned to shape up or ship out of the GOP
decisionmaking circle. Those in the GOP doghouse include
Anheuser-Busch Cos., which isn't a member of the Business
Roundtable, but which, along with its PAC, gave $442,057 to
the Democrats while giving $395,700 to the Republicans; and
UAL Corp.'s United Airlines, which, along with its PAC, gave
$265,007 to Democrats and $148,145 to Republicans.
While clearly concerned, corporate CEOs are also annoyed.
``Quite frankly, I'm puzzled by this entire situation,'' the
Business Roundtable's Mr. Fites says in his letter to fellow
top dogs. ``It is counterproductive to the large number of
mutual goals that the roundtable shares with the Republican
congressional leadership. I'm also concerned that these
unfounded attacks could drive a wedge between roundtable
members and congressional Republicans that will not serve
either side well.''
* * * * *
____
[From Roll Call, Jan. 20, 1997]
GOP Pressures Business Group To Dump Their Dem Lobbyists
(By Amy Keller)
Republican leaders are calling it ``behavior
modification.'' One source described the plan as ``shooting
elephants.''
Either way, the Congressional GOP is turning up the heat on
one of its key allies: the Business Roundtable.
Still angry that big business failed to adequately bankroll
their campaigns and counter the AFL-CIO's onslaught of attack
ads last fall, the Republicans want the BRT to purge
Democrats from its staff of nine directors.
``You have to fix the problem. You have to fix the Business
Roundtable,'' one Republican source said, explaining that the
GOP leadership is urging the prestigious organization of
corporate bigwigs to purge its staff.
The lawmakers are also urging the CEOs of some 200
corporations that comprise the BRT to dump their Democratic
lobbyists, hire Republicans, and significantly increase the
percentage of PAC contributions that go to GOP candidates.
Outgoing Republican National Committee Chairman Haley
Barbour has been scolding corporate America for weeks for
``not [lifting] a finger in that battle'' against labor and
other liberal groups, and on Jan. 9, Republican lawmakers
hosted a dinner meeting with two dozen BRT Members to begin
the ``process of behavior modification,'' sources told Roll
Call.
The CEO summit was run by top GOP leaders, including Senate
Majority Leader Trent Lott (Miss), Republic Conference
Chairman John Boehner (Ohio), and others. The BRT selected 24
CEOs--``friends of the Republican side,'' like Caterpillar
Inc. CEO Donald Fites and BRT chairman and Allied Signal Inc.
CEO Lawrence Bossidy--to attend the closed-door meeting.
One top GOP leadership aid described the CEO summit as a
``good conversation,'' and said both sides walked out ``with
a better understanding'' and a ``commitment'' to work
together.
But other Republican sources say the business group remains
under intense scrutiny. One sore spot, sources said, is BRT
president Sam Maury, whom Republicans are attacking as a
Democratic operative.
As one senior GOP staffer put it: ``We don't feel Sam Maury
fits our definition of'' someone who would ``work well on the
Republican team.''
Maury is a lawyer and former US Steel executive who joined
the BRT in 1982, becoming its number-two man the following
year and moving up to executive director of the entire
organization in 1993.
Maury did not return calls seeking comment, and a
spokeswoman for the BRT also declined to comment on the
matter.
But Maury's not the only one who should be sent packing,
Republicans say.
It's the view of GOP House and Senate leaders that the CEOs
of America's big companies have delegated too much
decisionmaking authority to Washington operatives with
Democratic loyalties. According to the GOP leadership,
corporations that want to maintain their ties with GOP
leaders, and be players in policy debates, need to hire
Republican lobbyists. One aide said the leaders are
encouraging businesses to call them if they need help in this
move--and that they'll be happy to make hiring
``suggestions.''
It's their choice if they want to be part of our team,'' he
added.
Other incidents have also soured the GOP's relationship
with the BRT, Republicans say. For example, lawmakers are
still sore over the way the BRT handled an ad campaign
promoting the GOP budget in 1995.
The BRT's $10 million ad campaign, which funded the
commercials on MTV and other networks to build public support
for the budget reconciliation bill, was viewed by Republicans
as ``tepid'' at best, and GOP sources said they have reason
to believe that Maury was coordinating the campaign with the
White House.
Johanna Schneider, spokeswoman for the BRT, defended her
organization's reputation.
The BRT was founded in 1972 by CEOs who were ``committed to
improving public policy,'' and that's the role of the BRT,
not funding campaigns, she told Roll Call.
The BRT ``does not have a PAC,'' she said, and therefore
does not contribute to campaigns. And, she said, individual
companies that have PACs make those decisions on an
individual basis.
``I think we've been successful in adding to the public
dialogue,'' said Schneider. But Schneider insists that the
BRT doesn't, and won't have anything to do with funding
campaigns.
So why are they being targeted?
The behemoth corporations are, in some ways, easier to go
after. As one GOP supporter pointed out: ``It's much easier
to go out and shoot elephants than to shoot ants.''
If the Republicans can get the BRT to change its ways the
payoff could be big. Just as Willie Sutton robbed banks
because ``that's where the money is,'' the GOP Congressional
leaders realize that BRT members could handily boost
Republican election efforts if the BRT would agree to fund
issue-advocacy campaigns in future elections.
And while no one expects to see 100 percent, or even 90
percent, of corporate PAC money go exclusively to
Republicans--60 or 70 percent would be nice, they say.
While some in the business community say they are angered
by the GOP's tactics, others are downplaying the tongue-
lashing.
Said one corporate source: ``They wanted businesses to stop
and review what they did in light of what labor did * * *.
Just a reminder that things have changed. A reminder to take
a look. . . take a good look at what you did. Look at it
collectively, and look at what other people on the other side
of the issues did.''
Steve Stockmeyer, spokesman for the National Association of
Business PAC, wasn't at the recent meeting of CEOs and
Congressional leaders, but he told Roll Call that he has
sympathies on both sides.
``The Republican leadership is wise to seek out allies and
ask them to be more consistent allies,'' said Stockmeyer,
though he did say that the GOP approach has been rather
``hamhanded.''
``Republicans haven't had 40 years to learn how to be
subtle,'' Stockmeyer said. He also noted that it would be
native for Republicans to expect the business community to
consistently support Republicans, though he admitted
businesses should do more.
``It will never be monolithic to the degree that labor was
* * *. Business is too pragmatic,'' he observed.
As for the push to hire Republican lobbyists, Wright
Andrews, the former president of the American League of
Lobbyists, told Roll Call that he believes it is ``wrong,
wrong, wrong for either Democrats or Republicans to say, ``We
only want to work with our former staffers.' ''
``It's not their job to decide,'' he said.
As Republicans strive to become a permanent majority on
Capitol Hill, many say they expect an influx of GOP lobbyists
to be a natural progression. They simply hope that the
increased pressure will ``speed up the process'' of that
turnover, one source said.
Still, another source with solid GOP connections expressed
reservations about just how far Republican lawmakers can push
their argument.
``You don't start a game of this nature if you don't have a
game plan that takes you to the end of the game,'' he said,
remarking that GOP leaders must remember that in the end,
they need corporate America as much as it needs them.
____
Mr. LEVIN. Mr. President, I could not agree more with something
Senator Daschle said earlier today, when
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he urged us to enact campaign finance reform within the first 100 days
of this Congress. The public is looking at us with greater scrutiny in
this area than they have ever looked before. We have been down this
road before, and I have walked down this road with colleagues, often on
a bipartisan basis.
The likelihood is we cannot get anything done in this area unless we
act on a bipartisan basis. But act we must. That is what the public is
telling us, and I believe the mood they are in will hold us accountable
if we fail that charge.
I thank the Chair and yield the floor.
______
By Mr. DASCHLE (for himself, Mr. Kennedy, Ms. Moseley-Braun, Ms.
Mikulski, Mr. Dodd, Mr. Reid, Mr. Dorgan, Mrs. Murray, Mr.
Ford, Mr. Rockefeller, Mr. Inouye, Mr. Kerry, Mr. Levin, Mr.
Cleland, Mr. Johnson, Mr. Breaux, Mr. Torricelli, Mr. Durbin,
Mr. Glenn, Mrs. Boxer, Mr. Wellstone, and Mr. Bryan):
S. 12. A bill to improve education for the 21st century; to the
Committee on Finance.
education for the 21st century act
Mr. KENNEDY. Mr. President, I give my strong support to the
``Education for the 21st Century Act'' introduced today by Senator
Daschle on one of our principle democratic leadership initiatives.
Education must continue to be a top priority in this Congress. We
need to do more to make college accessible and affordable for all
students, to modernize school classrooms, to help communities build new
school facilities and repair old ones, and to help all children learn
to read so that they can read to learn.
It is not enough to maintain current spending levels for education.
Modest increases are essential to meet rising enrollments and
inflation.
Too often, college is priced out of reach for many families. From
1980 to 1990, the cost of college rose by 126 percent, while family
income increased by only 73 percent. To meet that rising cost, students
are going deeper and deeper into debt. In the 1990s, students have
borrowed more in student loans than in the three preceding decades
combined.
In 1996 alone, students borrowed $30 billion--a 65-percent increase
since 1993. Since 1988, borrowing in the Federal student loan program
has increased by more than 100 percent, while starting salaries for
college graduates failed to increase at all. Eighty percent of young
adults with student loans make under $20,000 in their first year of
repayment, barely enough to support the average repayment.
Communities are struggling to repair decrepit facilities, let alone
build modern classrooms. Fourteen million children in a third of the
Nation's schools are learning in sub-standard classrooms. Half the
schools have unsatisfactory conditions. Forty-six percent of schools
report insufficient electrical wiring for computers and communications
equipment. The repair bill alone is estimated at $112 billion.
And while all this is happening, enrollments are at an all-time high
of 52 million students, and thus are continuing to rise.
Forty percent of all children are now reading below their basic grade
level. Many parents do not read to their children and with their
children, even though we know that when parent involvement is high,
student reading scores are also high.
Technology is a powerful tool for improving schools and encouraging
economic growth. Computers enable teachers to spend more time with
students and teach more effective lessons. By the year 2000, 60 percent
of all jobs in the Nation will require skills in computer and network
use. According to a recent GAO study, one in every four schools does
not have sufficient computers to meet its needs. Only 9 percent of
classrooms are connected to the Internet.
Clearly, we are not prepared to meet the challenges of the next
century. We have to do better, and the Education for the 21st Century
Act will help us to meet the pressing needs of communities, schools,
and families.
The Act includes four separate titles: The Higher Education
Affordability Act, which includes President Clinton's $1,500 Hope
Tuition Tax Credit, the $10,000 tuition tax deduction, and the
restoration of the tax deduction for student loan interest; The
Educational Facilities Improvement Act; The America Reads Challenge
Act, which includes The Parents as First Teachers Act and The
Challenging America's Young Readers Act; and The Investing in
Technology in the Classroom Act.
The Hope Tax Credit will make at least 2 years of community college
affordable for every student. The bill provides a $1,500 a year
refundable tax credit for net tuition payments during the first 2 years
of college after high school for full-time students. Part-time students
may receive $750 per year. The tax benefit is phased out for single
persons between $50,000 and $70,000 in adjusted gross income, and
phased out for couples between $80,000 and $100,000. Only students who
have a cumulative ``B'' average from high school, or its equivalent,
qualify for the credit. Pell grants and the tax credit are additive, up
to the value of the net tuition paid.
The $10,000 tax deduction will be available to all families with
incomes below $100,000. The bill provides an above-the-line deduction
of up to $10,000 per taxpayer per year for net tuition expenses. The
deduction is available for all college and graduate schools, and the
income limits are the same as those provided under the Hope Tax Credit.
The bill also restores the deduction for interest on student loans
that was available before the Tax Reform Act of 1986. Unlike the
previous deduction, this bill provides an above-the-line deduction. The
income limits are the same as those provided under the Hope Tax Credit.
The Educational Facilities Improvement Act instructs the Federal
Government to pay up to 50 percent of the interest costs on State and
local bonds to finance school repair, renovation, modernization and
construction. Twenty percent of the funds will go directly from the
Secretary of Education to the 100 poorest school districts under a
formula based on the number of poor children. The remainder of the
funds will be awarded to States to provide assistance to State or local
bond authorities.
The America Reads Challenge Act includes two components: The Parents
as First Teachers Act and the Challenge America's Young Readers Act.
The Parents as First Teachers Act--recognizing that parents are the
best first teachers--will support national and regional parent networks
that disseminate information on helping parents help their children to
read. It will also fund programs to expand successful programs and
activities that help parents increase the reading skills of their
children.
The Challenging America's Young Readers Act will help State and local
organizations help children learn to read by the third grade. Programs
funded by this act will provide 30,000 reading specialists and
volunteer coordinators to run tutoring assistance programs outside
regular school hours to more than 3 million children.
My hope is that these proposals will receive the bipartisan support
they deserve, so they can be in place for the beginning of the next
academic year this fall. Improving education or opportunities for
education is clearly one of our highest national priorities. Few things
which this Congress does will matter more to the country's future.
Investing in education is investing in a stronger America here at home
and around the world, and I look forward to working with my colleagues
on both sides of the aisle to enact these important measures.
Mr. BREAUX. Mr. President, I would like to make a few remarks about
S. 12, the Education for the 21st Century Act, and our efforts to
improve elementary and secondary educational opportunities for our
Nation's children, as well as make higher education more accessible for
adults.
Quality education is necessary not only for the future of our
children and our families, but for the future of our Nation. A better
educated workforce is essential to compete in the global economy and to
maintain a strong democracy. Every Member of this body knows that a
high school diploma is worth far less in today's marketplace than a
generation ago. According to the U.S. Bureau of Labor Statistics, 60
percent of all jobs created between 1992 and 2005 will require
education beyond
[[Page S296]]
high school. Modern society has little room for those who cannot read,
write, and compute effectively; solve problems; and continually learn
new technologies and skills.
The Education for the 21st Century Act includes a number of important
initiatives that, if enacted, will make educational opportunities more
accessible for Americans: The HOPE Scholarship, the tax deduction for
higher education expenses, the student loan interest deduction, and the
technology literacy and America Reads initiatives. Another area of
concern that S. 12 addresses is the declining physical condition of our
Nation's schools.
According to a June 1996 report by the U.S. General Accounting
Office, nationwide, about a third of public elementary and secondary
schools have at least one building needing extensive repair, and about
60 percent need extensive repair, overhaul, or replacement of at least
one major building feature. Nationwide, about 58 percent of schools
have at least one unsatisfactory environmental condition (i.e.,
lighting, heating, ventilation, indoor air quality, acoustics for noise
control, and physical security). Nationwide, 21 percent of schools need
to spend over the national average ($1.7 million) to bring their
facilities into ``good condition.''
Although a national problem, it is mirrored in every State. In my own
State of Louisiana, about 38 percent of public elementary and secondary
schools have at least one building needing extensive repair. Fifty-six
percent of Louisiana schools have at least one unsatisfactory
environmental condition. Twenty-three percent of Louisiana schools need
to spend over the national average to bring their facilities into
``good condition.'' Sixty-five percent of Louisiana schools lack
telephone lines for computer modems.
It is important that we help schools, libraries, and local
governments bring advanced telecommunications to millions who otherwise
cannot participate in the new information age. Computer services like
the Internet give young people in the most poor and remote communities
access to the same information available in the best libraries and
institutions in the country and the world. Unfortunately, many States
and local governments have had to cut back on investment in education
because of budget problems and limits on debt capacity.
Some have argued that the proper role of Government is to try to
solve everyone's problems from cradle to grave--to create programs to
protect citizens from everything, even themselves, because, as they
say, ``Government knows best.'' Others argue that Government has no
role at all in helping people, other than getting out of the way and
offer only a survival of the fittest solution. My colleagues let me
suggest that the better role for Government to play is one that equips
the American people with the means to solve their own problems.
Some want to abandon the public schools, not make them better--as if
removing the most motivated students and parents will somehow increase
the drive to improve schools for everyone else. Others say education
reform is a question of more resources and better management. Still
others say an education system for the 21st century should be defined
by its results and schools exist only if they attract students and
satisfy parents; they serve everyone; and they operate on the premise
that all students can succeed.
Whatever your point of view, the task of making education work falls
to all of us. If we have learned anything over the past decades, it is
there is no quick fix. This proposal will not transform our schools
overnight. However, over time, it will be a meaningful step toward
improving the lives and futures of families in Louisiana and throughout
this Nation. I believe we should explore, and I am exploring, other
ideas and options to help State and local governments address their
infrastructure needs.
Mr. President, I hope my colleagues will favorably consider this
legislation. As we move through the 105th Congress and consider all of
the various proposals to produce a balanced federal budget, we must be
mindful that our intent is to provide, not deny, American families the
means and the opportunity to take part in our global economy.
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. 12
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 ``Education for the 21st
Century Act''.
SEC. 2. FINDINGS.
Congress finds as follows:
(1) Quality public education is necessary not only for the
future of our children and our families, but for the future
of America. A better educated citizenry and workforce are
essential to compete in the global economy and to maintain a
strong democracy.
(2) The investment America makes today in the education of
its people will determine the future of the Nation. In order
to promote growth and prosperity in our economy, and ensure
individual opportunity, America must maintain education as a
national priority.
(3) Strong leadership in education is needed more than
ever. Schools are facing the challenge of educating more
highly skilled workers to meet the demands of a modern
economy. The Bureau of Labor Statistics estimates that 60
percent of all jobs created between 1992 and 2005 will
require more than a high school education.
(4) Mounting evidence suggests that far more rigorous
levels of academic achievement will be required to equip
American students for the 21st century workplace. Employers
will demand increasingly sophisticated levels of literacy,
communication, mathematical, and technological skills. Sixty
percent of all jobs will require computer skills.
(5) Literacy is a crucial element of academic success.
However, in 1994, 40 percent of 4th grade students failed to
attain the basic level of reading on the National Assessment
of Educational Progress. Seventy percent did not attain the
proficient level. Students who are not reading at grade-level
are very unlikely to graduate from high school. One-on-one
tutoring is a key component of bringing students up to
reading grade-level.
(6) Students are learning in decrepit school buildings.
According to 2 recent Government Accounting Office reports,
14,000,000 children in a third of the Nation's schools are
learning in substandard classrooms. Half of the schools have
at least 1 unsatisfactory environmental condition, such as
poor air quality.
(7) College costs are rising. College tuition has risen in
private colleges and universities and in State institutions
as State appropriations have eroded. From 1985 to 1994, the
average cost of attending college rose by 30 percent after
adjusting for inflation. During the same period, the median
income increased by only 1 percent.
(8) Meeting the challenge of the next century will require
the involvement of all Americans, including public officials,
educators, parents, business and community leaders, and
students. Encouraging active participation by all segments of
communities is essential for the success of students in the
21st century.
TITLE I--TAX INCENTIVES FOR HIGHER EDUCATION
SEC. 101. REFUNDABLE CREDIT FOR HIGHER EDUCATION EXPENSES.
(a) In General.--Subpart C of part IV of subchapter A of
chapter 1 of the Internal Revenue Code of 1986 (relating to
refundable credits) is amended by redesignating section 35 as
section 36 and by inserting after section 34 the following
new section:
``SEC. 35. HIGHER EDUCATION TUITION AND FEES.
``(a) Allowance of Credit.--In the case of an individual,
there shall be allowed as a credit against the tax imposed by
this subtitle for the taxable year the amount of qualified
higher education expenses paid by the taxpayer during such
taxable year.
``(b) Credit Limited To $1,500 Per Academic Year.--
``(1) In general.--The amount allowed as a credit under
subsection (a) for any taxable year with respect to an
eligible student shall not exceed the sum of the credit
amounts for qualified academic periods beginning during such
taxable year or the 1st 3 months of the next taxable year. A
qualified academic period may not be taken into account under
the preceding sentence more than once.
``(2) Credit allowed only for first 2 academic years of
post-secondary education.--For purposes of paragraph (1), the
term `qualified academic period' means, with respect to any
student, any academic period for which such student is an
eligible student if such period, when added to prior periods
that such student was an eligible student, does not exceed 2
full-time academic years (or the equivalent thereof).
``(3) Credit amount.--For purposes of paragraph (1), except
as otherwise provided in regulations prescribed by the
Secretary, the credit amount for any academic period is the
amount equal to--
``(A) $1,500, divided by
``(B) the number of such academic periods during the
academic year.
In the case of an eligible student who is not a full-time
student for an academic period, the credit amount for such
period shall be \1/2\ the amount determined under the
preceding sentence.
``(4) Inflation adjustment of credit limitation for
academic year.--
[[Page S297]]
``(A) In general.--In the case of a taxable year beginning
after 1998, the $1,500 amount in paragraph (3)(A) shall be
increased by an amount equal to--
``(i) such dollar amount, multiplied by
``(ii) the cost-of-living adjustment determined under
section 1(f)(3) for the calendar year in which the taxable
year begins, determined by substituting `calendar year 1997'
for `calendar year 1992' in subparagraph (B) thereof.
``(B) Rounding.--If any amount as adjusted under
subparagraph (A) is not a multiple of $50, such amount shall
be rounded to the next lowest multiple of $50.
``(c) Limitation Based on Modified Adjusted Gross Income.--
``(1) In general.--The amount which would (but for this
subsection) be taken into account under subsection (a) for
the taxable year shall be reduced (but not below zero) by the
amount determined under paragraph (2).
``(2) Amount of reduction.--The amount determined under
this paragraph is the amount which bears the same ratio to
the amount which would be so taken into account as--
``(A) the excess of--
``(i) the taxpayer's modified adjusted gross income for
such taxable year, over
``(ii) $50,000 ($80,000 in the case of a joint return),
bears to
``(B) $20,000.
``(3) Modified adjusted gross income.--The term `modified
adjusted gross income' means the adjusted gross income of the
taxpayer for the taxable year--
``(A) determined without regard to section 221, and
``(B) increased by any amount excluded from gross income
under section 911, 931, or 933.
``(4) Inflation adjustment.--
``(A) In general.--In the case of a taxable year beginning
after 2000, the $50,000 and $80,000 amounts in paragraph (2),
section 221(b)(2)(B)(i)(II), and section 222(b)(2)(A)(ii)
shall each be increased by an amount equal to--
``(i) such dollar amounts, multiplied by
``(ii) the cost-of-living adjustment determined under
section 1(f)(3) for the calendar year in which the taxable
year begins, determined by substituting `calendar year 1999'
for `calendar year 1992' in subparagraph (B) thereof.
``(B) Rounding.--If any amount as adjusted under
subparagraph (A) is not a multiple of $5,000, such amount
shall be rounded to the next lowest multiple of $5,000.
``(d) Qualified Higher Education Expenses.--For purposes of
this section--
``(1) Qualified higher education expenses.--
``(A) In general.--The term `qualified higher education
expenses' means tuition and fees required for the enrollment
or attendance of--
``(i) the taxpayer,
``(ii) the taxpayer's spouse, or
``(iii) any dependent of the taxpayer with respect to whom
the taxpayer is allowed a deduction under section 151,
as an eligible student at an institution of higher education.
``(B) Exception for education involving sports, etc.--Such
term does not include expenses with respect to any course or
other education involving sports, games, or hobbies, unless
such course or other education is part of the student's
degree program.
``(C) Exception for nonacademic fees.--Such term does not
include student activity fees, athletic fees, insurance
expenses, or other expenses unrelated to a student's academic
course of instruction.
``(D) Eligible student.--
``(i) In general.--The term `eligible student' means, with
respect to any academic period, a student who--
``(I) meets the requirements of section 484(a)(1) of the
Higher Education Act of 1965 (20 U.S.C. 1091(a)(1)), as in
effect on the date of the enactment of this section, and
``(II) is carrying at least \1/2\ the normal full-time work
load for the course of study the student is pursuing, as
reasonably determined by the institution of higher education.
``(ii) Grade-point requirement.--A student shall not be
treated as an eligible student if the student did not have a
grade-point average of at least 2.75 on a 4-point scale (or
met a substantially similar measure of achievement) for the
students' high school education (or equivalent).
``(2) Institution of higher education.--The term
`institution of higher education' means an institution--
``(A) which is described in section 481 of the Higher
Education Act of 1965 (20 U.S.C. 1088), as in effect on the
date of the enactment of this section, and
``(B) which is eligible to participate in programs under
title IV of such Act.
``(3) Full-time student.--The term `full-time student'
means any student who is carrying at least the normal full-
time work load for the course of study the student is
pursuing, as reasonably determined by the institution of
higher education.
``(e) Special Rules.--
``(1) Denial of credit if student convicted of drug
offense.--No credit shall be allowed under subsection (a) for
qualified higher education expenses for the enrollment or
attendance of a student for any academic period if such
student has been convicted of a Federal or State offense
consisting of the possession or distribution of a controlled
substance before the end of the taxable year with or within
which such period ends.
``(2) No double benefit.--
``(A) In general.--No credit shall be allowed under
subsection (a) for qualified higher education expenses for
the enrollment or attendance of a student for any academic
period if any such expense for the enrollment or attendance
of such student for such period is allowed as a deduction to
the taxpayer under any other provision of this chapter.
``(B) Dependents.--No credit shall be allowed under
subsection (a) to any individual with respect to whom a
deduction under section 151 is allowable to another taxpayer
for a taxable year beginning in the calendar year in which
such individual's taxable year begins.
``(3) Identification requirement.--No credit shall be
allowed under subsection (a) to a taxpayer with respect to an
eligible student other than the taxpayer unless the taxpayer
includes the name and taxpayer identification number of such
eligible student on the return of tax for the taxable year.
``(4) Adjustment for certain scholarships.--The amount of
qualified higher education expenses otherwise taken into
account under subsection (a) with respect to the education of
an individual for an academic period shall be reduced (before
the application of subsections (b) and (c)) by the sum of--
``(A) the amounts received with respect to such individual
which are allocable to such period as--
``(i) a qualified scholarship which under section 117 is
not includable in gross income,
``(ii) an educational assistance allowance under chapter
30, 31, 32, 34, or 35 of title 38, United States Code, or
``(iii) a payment (other than a gift, bequest, devise, or
inheritance within the meaning of section 102(a)) for
educational expenses, or attributable to enrollment at an
eligible educational institution, which is exempt from income
taxation by any law of the United States, and
``(B) the amount excludable from gross income under section
135 which is allocable to such expenses with respect to such
individual for such period.
``(5) No credit for married individuals filing separate
returns.--If the taxpayer is a married individual (within the
meaning of section 7703), this section shall apply only if
the taxpayer and the taxpayer's spouse file a joint return
for the taxable year.
``(6) Nonresident aliens.--If the taxpayer is a nonresident
alien individual for any portion of the taxable year, this
section shall apply only if such individual is treated as a
resident alien of the United States for purposes of this
chapter by reason of an election under subsection (g) or (h)
of section 6013.
``(7) Regulations.--The Secretary may, in consultation with
the Secretary of Education, prescribe such regulations as may
be necessary or appropriate to carry out this section,
including--
``(A) regulations requiring recordkeeping and information
reporting by the taxpayer and any other person the Secretary
determines appropriate, and
``(B) regulations providing for a recapture of credit
allowed under this section in cases where there is a refund
in a subsequent taxable year of any amount which was taken
into account in determining the amount of such credit.''
(b) Extension of Procedures Applicable to Mathematical or
Clerical Errors.--Paragraph (2) of section 6213(g) of such
Code (relating to the definition of mathematical or clerical
errors) is amended by striking ``and'' at the end of
subparagraph (G), by striking the period at the end of
subparagraph (H) and inserting a comma, and by inserting
after subparagraph (H) the following new subparagraph:
``(I) an omission of a correct TIN required under section
35(e)(3) or under section 220(d)(3)(B) (relating to higher
education tuition and fees) to be included on a return.''
(c) Conforming Amendments.--
(1) Paragraph (2) of section 1324(b) of title 31, United
States Code, is amended by inserting before the period ``or
from section 35 of such Code''.
(2) The table of sections for subpart C of part IV of
subchapter B of chapter 1 of such Code is amended by striking
the last item and inserting the following new items:
``Sec. 35. Higher education tuition and fees.
``Sec. 36. Overpayments of tax.''
(d) Effective Date.--
(1) In general.--The amendments made by this section shall
apply to taxable years beginning after December 31, 1997.
(2) Periods before 1998 taken into account.--For purposes
of applying section 35(b)(2)(A) of the Internal Revenue Code
of 1986 (as added by this section), periods before January 1,
1998, that the student was an eligible student shall be taken
into account.
SEC. 102. DEDUCTION FOR HIGHER EDUCATION EXPENSES.
(a) Deduction Allowed.-- Part VII of subchapter B of
chapter 1 of the Internal Revenue Code of 1986 (relating to
additional itemized deductions for individuals) is amended by
redesignating section 221 as section 222 and by inserting
after section 220 the following new section:
``SEC. 221. HIGHER EDUCATION TUITION AND FEES.
``(a) Allowance of Deduction.--In the case of an
individual, there shall be allowed as a deduction the amount
of qualified higher education expenses paid by the taxpayer
during the taxable year.
``(b) Limitations.--
[[Page S298]]
``(1) Dollar limitation.--
``(A) In general.--The amount allowed as a deduction under
subsection (a) for any taxable year shall not exceed $10,000.
``(B) Phase-in.--In the case of taxable years beginning in
1998 or 1999, subparagraph (A) shall be applied by
substituting `$5,000' for `$10,000'.
``(2) Limitation based on modified adjusted gross income.--
``(A) In general.--The amount allowed as a deduction under
subsection (a) (after application of paragraph (1)) shall be
reduced (but not below zero) by the amount determined under
subparagraph (B).
``(B) Amount of reduction.--The amount determined under
this subparagraph equals the amount which bears the same
ratio to the deduction (determined without regard to this
paragraph) as--
``(i) the excess of--
``(I) the taxpayer's modified adjusted gross income for
such taxable year, over
``(II) $50,000 ($80,000 in the case of a joint return),
bears to
``(ii) $20,000.
``(C) Modified adjusted gross income.--For purposes of
subparagraph (B), the term `modified adjusted gross income'
means the adjusted gross income of the taxpayer for the
taxable year determined--
``(i) without regard to this section and sections 911, 931,
and 933, and
``(ii) after the application of sections 86, 135, 137, 219,
and 469.
For purposes of sections 86, 135, 219, and 469, adjusted
gross income shall be determined without regard to the
deduction allowed under this section.
``(D) Cross Reference.--
``For inflation adjustment of $50,000 and $80,000 amounts, see
section 35(c)(4).
``(c) Definitions.--For purposes of this section--
``(1) In general.--Except as provided in paragraph (2),
terms used in this section which are also used in section 35
have the respective meanings given such terms in section 35.
``(2) Deduction available for education to acquire or
improve job skills.--For purposes of applying this section,
the requirement of section 35(d)(1)(D)(ii) shall be treated
as met if the student is enrolled in a course which enables
the student to improve the student's job skills or to acquire
new job skills.
``(d) Special Rules.--
``(1) Denial of double benefit.--No deduction shall be
allowed under subsection (a) for qualified higher education
expenses with respect to which a deduction is allowable to
the taxpayer under any other provision of this chapter unless
the taxpayer irrevocably waives his right to the deduction of
such expenses under such other provision.
``(2) Limitation on taxable year of deduction.--
``(A) In general.--A deduction shall be allowed under
subsection (a) for any taxable year only to the extent the
qualified higher education expenses are in connection with
enrollment at an institution of higher education during the
taxable year.
``(B) Certain prepayments allowed.--Subparagraph (A) shall
not apply to qualified higher education expenses paid during
a taxable year if such expenses are in connection with an
academic term beginning during such taxable year or during
the 1st 3 months of the next taxable year.
``(3) Certain rules to apply.--Rules similar to the
following rules of section 35(e) shall apply for purposes of
this section:
``(A) Paragraph (2)(B) (relating to denial of double
benefit for dependents).
``(B) Paragraph (3) (relating to identification
requirement).
``(C) Paragraph (4) (relating to adjustment for certain
scholarships).
``(D) Paragraph (5) (relating to no benefit for married
individuals filing separate returns).
``(E) Paragraph (6) (relating to nonresident aliens).
``(4) Regulations.--The Secretary may prescribe such
regulations as may be necessary or appropriate to carry out
this section, including regulations requiring recordkeeping
and information reporting.''
(b) Deduction Allowed in Computing Adjusted Gross Income.--
Section 62(a) of such Code is amended by inserting after
paragraph (16) the following new paragraph:
``(17) Higher education tuition and fees.--The deduction
allowed by section 221.''
(c) Conforming Amendment.--The table of sections for part
VII of subchapter B of chapter 1 of such Code is amended by
striking the item relating to section 221 and inserting:
``Sec. 221. Higher education tuition and fees.
``Sec. 222. Cross reference.''
(d) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
1997.
SEC. 103. DEDUCTION FOR INTEREST ON EDUCATION LOANS.
(a) In General.--Part VII of subchapter B of chapter 1 of
the Internal Revenue Code of 1986 (relating to additional
itemized deductions for individuals), as amended by section
102, is amended by redesignating section 222 as section 223
and by inserting after section 221 the following new section:
``SEC. 222. INTEREST ON EDUCATION LOANS.
``(a) Allowance of Deduction.--In the case of an
individual, there shall be allowed as a deduction for the
taxable year an amount equal to the interest paid by the
taxpayer during the taxable year on any qualified education
loan.
``(b) Limitation Based on Modified Adjusted Gross Income.--
``(1) In general.--The amount allowed as a deduction under
subsection (a) shall be reduced (but not below zero) by the
amount determined under paragraph (2).
``(2) Amount of reduction.--The amount determined under
this paragraph equals the amount which bears the same ratio
to the deduction (determined without regard to this
subsection) as--
``(A) the excess of--
``(i) the taxpayer's modified adjusted gross income for
such taxable year, over
``(ii) $50,000 ($80,000 in the case of a joint return),
bears to
``(B) $20,000.
``(3) Modified adjusted gross income.--For purposes of
paragraph (2), the term `modified adjusted gross income'
means the adjusted gross income of the taxpayer for the
taxable year determined--
``(A) without regard to this section and sections 911, 931,
and 933, and
``(B) after the application of sections 86, 135, 137, 219,
221, and 469.
For purposes of sections 86, 135, 219, 221, and 469, adjusted
gross income shall be determined without regard to the
deduction allowed under this section.
``(4) Cross reference.--
``For inflation adjustment of $50,000 and $80,000 amounts, see
section 35(c)(4).
``(c) Dependents Not Eligible for Deduction.--No deduction
shall be allowed by this section to an individual for the
taxable year if a deduction under section 151 with respect to
such individual is allowed to another taxpayer for the
taxable year beginning in the calendar year in which such
individual's taxable year begins.
``(d) Definitions.--For purposes of this section--
``(1) Qualified education loan.--The term `qualified
education loan' means any indebtedness incurred to pay
qualified higher education expenses--
``(A) which are incurred on behalf of the taxpayer or the
taxpayer's spouse,
``(B) which are paid or incurred within a reasonable period
of time before or after the indebtedness is incurred, and
``(C) which are attributable to education furnished during
a period during which the recipient was at least a half-time
student.
Such term includes indebtedness used to refinance
indebtedness which qualifies as a qualified education loan.
The term `qualified education loan' shall not include any
indebtedness owed to a person who is related (within the
meaning of section 267(b) or 707(b)(1)) to the taxpayer.
``(2) Qualified higher education expenses.--The term
`qualified higher education expenses' has the meaning given
such term by section 35(d) (without regard to paragraph
(1)(D)(ii)), reduced by the sum of--
``(A) the amount excluded from gross income under section
135 by reason of such expenses, and
``(B) the amount of the reduction described in section
135(d)(1).
For purposes of applying section 35(d) under the preceding
sentence, the term `eligible educational institution' shall
also include an institution conducting an internship or
residency program leading to a degree or certificate awarded
by an institution of higher education, a hospital, or a
health care facility which offers postgraduate training.
``(3) Half-time student.--The term `half-time student'
means any individual who would be a student as defined in
section 151(c)(4) if `half-time' were substituted for `full-
time' each place it appears in such section.
``(4) Dependent.--The term `dependent' has the meaning
given such term by section 152.
``(e) Special Rules.--
``(1) Denial of double benefit.--No deduction shall be
allowed under this section for any amount for which a
deduction is allowable under any other provision of this
chapter.
``(2) Married couples must file joint return.--If the
taxpayer is married at the close of the taxable year, the
deduction shall be allowed under subsection (a) only if the
taxpayer and the taxpayer's spouse file a joint return for
the taxable year.
``(3) Marital status.--Marital status shall be determined
in accordance with section 7703.''
(b) Deduction Allowed Whether or Not Taxpayer Itemizes
Other Deductions.--Subsection (a) of section 62 of such Code,
as amended by section 102, is amended by inserting after
paragraph (17) the following new paragraph:
``(18) Interest on education loans.--The deduction allowed
by section 222.''
(c) Reporting Requirement.--
(1) In general.--Subpart B of part III of subchapter A of
chapter 61 of such Code (relating to information concerning
transactions with other persons) is amended by inserting
after section 6050R the following new section:
``SEC. 6050S. RETURNS RELATING TO EDUCATION LOAN INTEREST
RECEIVED IN TRADE OR BUSINESS FROM INDIVIDUALS.
``(a) Education Loan Interest of $600 or More.--Any
person--
``(1) who is engaged in a trade or business, and
[[Page S299]]
``(2) who, in the course of such trade or business,
receives from any individual interest aggregating $600 or
more for any calendar year on 1 or more qualified education
loans,
shall make the return described in subsection (b) with
respect to each individual from whom such interest was
received at such time as the Secretary may by regulations
prescribe.
``(b) Form and Manner of Returns.--A return is described in
this subsection if such return--
``(1) is in such form as the Secretary may prescribe,
``(2) contains--
``(A) the name, address, and TIN of the individual from
whom the interest described in subsection (a)(2) was
received,
``(B) the amount of such interest received for the calendar
year, and
``(C) such other information as the Secretary may
prescribe.
``(c) Application to Governmental Units.--For purposes of
subsection (a)--
``(1) Treated as persons.--The term `person' includes any
governmental unit (and any agency or instrumentality
thereof).
``(2) Special rules.--In the case of a governmental unit or
any agency or instrumentality thereof--
``(A) subsection (a) shall be applied without regard to the
trade or business requirement contained therein, and
``(B) any return required under subsection (a) shall be
made by the officer or employee appropriately designated for
the purpose of making such return.
``(d) Statements To Be Furnished to Individuals With
Respect to Whom Information Is Required.--Every person
required to make a return under subsection (a) shall furnish
to each individual whose name is required to be set forth in
such return a written statement showing--
``(1) the name and address of the person required to make
such return, and
``(2) the aggregate amount of interest described in
subsection (a)(2) received by the person required to make
such return from the individual to whom the statement is
required to be furnished.
The written statement required under the preceding sentence
shall be furnished on or before January 31 of the year
following the calendar year for which the return under
subsection (a) was required to be made.
``(e) Qualified Education Loan Defined.--For purposes of
this section, except as provided in regulations prescribed by
the Secretary, the term `qualified education loan' has the
meaning given such term by section 222(d)(1).
``(f) Returns Which Would Be Required To Be Made by 2 or
More Persons.--Except to the extent provided in regulations
prescribed by the Secretary, in the case of interest received
by any person on behalf of another person, only the person
first receiving such interest shall be required to make the
return under subsection (a).''
(2) Assessable penalties.--Section 6724(d) (relating to
definitions) is amended--
(A) by redesignating clauses (x) through (xv) as clauses
(xi) through (xvi), respectively, in paragraph (1)(B) and by
inserting after clause (ix) of such paragraph the following
new clause:
``(x) section 6050S (relating to returns relating to
education loan interest received in trade or business from
individuals),'', and
(B) by striking ``or'' at the end of the next to last
subparagraph, by striking the period at the end of the last
subparagraph and inserting ``, or'', and by adding at the end
the following new subparagraph:
``(Z) section 6050R (relating to returns relating to
education loan interest received in trade or business from
individuals).''
(d) Clerical Amendment.--The table of sections for part VII
of subchapter B of chapter 1 is amended by striking the last
item and inserting the following new items:
``Sec. 222. Interest on education loans.
``Sec. 223. Cross reference.''
(e) Effective Date.--The amendments made by this section
shall apply to any qualified education loan (as defined in
section 222(d)(1) of the Internal Revenue Code of 1986, as
added by this section) incurred on, before, or after the date
of the enactment of this Act, but only with respect to any
loan interest payment due after December 31, 1997.
TITLE II--EDUCATIONAL FACILITIES IMPROVEMENT
SEC. 201. SHORT TITLE.
This title may be cited as the ``Educational Facilities
Improvement Act''.
SEC. 202. PROVISION OF ASSISTANCE FOR CONSTRUCTION AND
RENOVATION OF EDUCATIONAL FACILITIES.
Title XII of the Elementary and Secondary Education Act of
1965 (20 U.S.C. 8501 et seq.) is amended--
(1) by repealing sections 12002 and 12003;
(2) by redesignating sections 12001 and 12004 through
12013, as sections 12101 and 12102 through 12111,
respectively;
(3) by inserting after the title heading the following:
``SEC. 12001. FINDINGS.
``The Congress finds the following:
``(1) The General Accounting Office performed a
comprehensive survey of the Nation's public elementary and
secondary school facilities, and found severe levels of
disrepair in all areas of the United States.
``(2) The General Accounting Office concluded more than
14,000,000 children attend schools in need of extensive
repair or replacement. Seven million children attend schools
with life safety code violations. Twelve million children
attend schools with leaky roofs.
``(3) The General Accounting Office found the problem of
crumbling schools transcends demographic and geographic
boundaries. At 38 percent of urban schools, 30 percent of
rural schools, and 29 percent of suburban schools, at least 1
building is in need of extensive repair or should be
completely replaced.
``(4) The condition of school facilities has a direct
affect on the safety of students and teachers, and on the
ability of students to learn.
``(5) Academic research has proven a direct correlation
between the condition of school facilities and student
achievement. At Georgetown University, researchers found
students assigned to schools in poor condition can be
expected to fall 10.9 percentage points below those in
buildings in excellent condition. Similar studies have
demonstrated up to a 20 percent improvement in test scores
when students were moved from a poor facility to a new
facility.
``(6) The General Accounting Office found most schools are
not prepared to incorporate modern technology into the
classroom. Forty-six percent of schools lack adequate
electrical wiring to support the full-scale use of
technology. More than a third of schools lack the requisite
electrical power. Fifty-six percent of schools have
insufficient phone lines for modems.
``(7) The Department of Education reported that elementary
and secondary school enrollment, already at a record high
level, will continue to grow during the period between 1996
and 2000, and that in order to accommodate this growth, the
United States will need to build an additional 6,000 schools
over this time period.
``(8) The General Accounting Office found it will cost
$112,000,000,000 just to bring schools up to good, overall
condition, not including the cost of modernizing schools so
the schools can utilize 21st century technology, nor
including the cost of expansion to meet record enrollment
levels.
``(9) State and local financing mechanisms have proven
inadequate to meet the challenges facing today's aging school
facilities. Large numbers of local educational agencies have
difficulties securing financing for school facility
improvement.
``(10) The Federal Government can support elementary and
secondary school facilities, and can leverage additional
funds for the improvement of elementary and secondary school
facilities.
``SEC. 12002. PURPOSE.
``The purpose of this title is to help State and local
authorities improve the quality of education at their public
schools through the provision of Federal funds to enable the
State and local authorities to meet the cost associated with
the improvement of school facilities within their
jurisdictions.
``PART A--GENERAL INFRASTRUCTURE IMPROVEMENT GRANT PROGRAM'';
and
(4) by adding at the end the following:
``PART B--CONSTRUCTION AND RENOVATION BOND SUBSIDY PROGRAM
``SEC. 12201. DEFINITIONS.
``As used in this part:
``(1) Educational facility.--The term educational
facility'' has the meaning given the term `school' in section
12110.
``(2) Local area.--The term `local area' means the
geographic area served by a local educational agency.
``(3) Local bond authority.--The term `local bond
authority' means--
``(A) a local educational agency with authority to issue a
bond for construction or renovation of educational facilities
in a local area; and
``(B) a political subdivision of a State with authority to
issue such a bond for an area including a local area.
``(4) Poverty line.--The term `poverty line' means the
official poverty line (as defined by the Office of Management
and Budget, and revised annually in accordance with section
673(2) of the Omnibus Budget Reconciliation Act of 1981 (42
U.S.C. 9902(2))) applicable to a family of the size involved.
``(5) State.--The term `State' means each of the several
States of the United States, the District of Columbia, and
the Commonwealth of Puerto Rico.
``SEC. 12202. AUTHORIZATION OF PROGRAM.
``(a) Program Authority.--Of the amount appropriated under
section 12210 for a fiscal year and not reserved under
subsection (b), the Secretary shall use--
``(1) 20 percent of such amount to award grants to local
bond authorities for not more than 125 eligible local areas
as provided for under section 12203; and
``(2) 80 percent of such amount to award grants to States
as provided for under section 12204.
``(b) Special Rule.--The Secretary may reserve--
``(1) not more than 1 percent of the amount appropriated
under section 12210 to provide assistance to Indian schools
in accordance with the purpose of this title;
``(2) not more than 0.5 percent of the amount appropriated
under section 12210 to provide assistance to Guam, the United
States Virgin Islands, American Samoa, the Commonwealth of
the Northern Mariana Islands, the Republic of the Marshall
Islands, the Federated States of Micronesia, and the Republic
of Palau to carry out the purpose of this title; and
[[Page S300]]
``(3) not more than 0.1 percent of the amount appropriated
under section 12210 to carry out section 12209.
``SEC. 12203. DIRECT GRANTS TO LOCAL BOND AUTHORITIES.
``(a) In General.--The Secretary shall award a grant under
section 12202(a)(1) to eligible local bond authorities to
provide assistance for construction or renovation of
educational facilities in a local area.
``(b) Use of Funds.--The local bond authority shall use
amounts received through a grant made under section
12202(a)(1) to pay a portion of the interest costs applicable
to any local bond issued to finance an activity described in
section 12205 with respect to the local area.
``(c) Eligibility and Determination.--
``(1) Eligibility.--To be eligible to receive a grant under
section 12202(a)(1) for a local area, a local bond authority
shall demonstrate the capacity to issue a bond for an area
that includes 1 of the 125 local areas for which the
Secretary has made a determination under paragraph (2).
``(2) Determination.--
``(A) Mandatory.--The Secretary shall make a determination
of the 100 local areas that have the highest numbers of
children who are--
``(i) aged 5 to 17, inclusive; and
``(ii) members of families with incomes that do not exceed
100 percent of the poverty line.
``(B) Discretionary.--The Secretary may make a
determination of 25 local areas, for which the Secretary has
not made a determination under subparagraph (A), that have
extraordinary needs for construction or renovation of
educational facilities that the local bond authority serving
the local area is unable to meet.
``(d) Application.--To be eligible to receive a grant under
section 12202(a)(1), a local bond authority shall prepare and
submit to the Secretary an application at such time, in such
manner, and containing such information as the Secretary may
require, including--
``(1) an assurance that the application was developed in
consultation with parents and classroom teachers;
``(2) information sufficient to enable the Secretary to
make a determination under subsection (c)(2) with respect to
such local authority;
``(3) a description of the architectural, civil,
structural, mechanical, or electrical construction or
renovation to be supported with the assistance provided under
this part;
``(4) a cost estimate of the proposed construction or
renovation;
``(5) an identification of other resources, such as unused
bonding capacity, that are available to carry out the
activities for which assistance is requested under this part;
``(6) a description of how activities supported with funds
provided under this part will promote energy conservation;
and
``(7) such other information and assurances as the
Secretary may require.
``(e) Award of Grants.--
``(1) In general.--In awarding grants under section
12202(a)(1), the Secretary shall give preference to a local
bond authority based on--
``(A) the extent to which the local educational agency
serving the local area involved or the educational facility
for which the authority seeks a grant (as appropriate) meets
the criteria described in section 12103(a);
``(B) the extent to which the educational facility is
overcrowded; and
``(C) the extent to which assistance provided through the
grant will be used to fund construction or renovation that,
but for receipt of the grant, would not otherwise be possible
to undertake.
``(2) Amount of assistance.--
``(A) In general.--In determining the amount of assistance
for which local bond authorities are eligible under section
12202(a)(1), the Secretary shall--
``(i) give preference to a local bond authority based on
the criteria specified in paragraph (1); and
``(ii) consider--
``(I) the amount of the cost estimate contained in the
application of the local bond authority under subsection
(d)(4);
``(II) the relative size of the local area several by the
local bond authority; and
``(III) any other factors determined to be appropriate by
the Secretary.
``(B) Maximum amount of assistance.--A local bond authority
shall be eligible for assistance under section 12202(a)(1) in
an amount that does not exceed the appropriate percentage
under section 12204(f)(3) of the interest costs applicable to
any local bond issued to finance an activity described in
section 12205 with respect to the local area involved.
``SEC. 12204. GRANTS TO STATES.
``(a) In General.--The Secretary shall award a grant under
section 12202(a)(2) to each eligible State to provide
assistance to the State, or local bond authorities in the
State, for construction and renovation of educational
facilities in local areas.
``(b) Use of Funds.--The State shall use amounts received
through a grant made under section 12202(a)(2)--
``(1) to pay a portion of the interest costs applicable to
any State bond issued to finance an activity described in
section 12205 with respect to the local areas; or
``(2) to provide assistance to local bond authorities in
the State to pay a portion of the interest costs applicable
to any local bond issued to finance an activity described in
section 12205 with respect to the local areas.
``(c) Amount of Grant to State.--
``(1) In general.--From the amount available for grants
under section 12202(a)(2), the Secretary shall award a grant
to each eligible State that is equal to the total of--
``(A) a sum that bears the same relationship to 50 percent
of such amount as the total amount of funds made available
for all eligible local educational agencies in the State
under part A of title I for such year bears to the total
amount of funds made available for all eligible local
educational agencies in all States under such part for such
year; and
``(B) a sum that bears the same relationship to 50 percent
of such amount as the total amount of funds made available
for all eligible local educational agencies in the State
under title VI for such year bears to the total amount of
funds made available for all eligible local educational
agencies in all States under such title for such year.
``(2) Eligible local educational agencies.--For the purpose
of paragraph (1) the term `eligible local educational agency'
means a local educational agency that does not serve a local
area for which an eligible local bond authority received a
grant under section 12203
``(d) State Applications Required.--To be eligible to
receive a grant under section 12202(a)(2), a State shall
prepare and submit to the Secretary an application at such
time, in such manner, and containing such information as the
Secretary may require. Such application shall contain--
``(1) a description of the process the State will use to
determine which local bond authorities will receive
assistance under subsection (b)(2).
``(2) an assurance that grant funds under this section will
be used to increase the amount of school construction or
renovation in the State for a fiscal year compared to such
amount in the State for the preceding fiscal years.
``(e) Administering Agency.--
``(1) In general.--The State agency with authority to issue
bonds for the construction or renovation of educational
facilities, or with the authority to otherwise finance such
construction or renovation, shall administer the amount
received through the grant.
``(2) Special rule.--If no agency described in paragraph
(1) exits, or if there is more than one such agency, then the
chief executive officer of the State and the chief State
school officer shall designate a State entity or individual
to administer the amounts received through the grant.
``(f) Assistance to Local Bond Authorities.--
``(1) In general.--To be eligible to receive assistance
from a State under this section, a local bond authority shall
prepare and submit to the State agency designated under
subsection (e) an application at such time, in such manner,
and containing such information as the State agency may
require, including the information described in section
12203(d).
``(2) Criteria.--In awarding grants under this section, the
State agency shall give preference to a local bond authority
based on--
``(A) the extent to which the local educational agency
serving the local area involved or the educational facility
for which the authority seeks the grant (as appropriate)
meets the criteria described in section 12103(a);
``(B) the extent to which the educational facility is
overcrowded; and
``(C) the extent to which assistance provided through the
grant will be used to fund construction or renovation that,
but for receipt of the grant, would not otherwise be possible
to undertake.
``(3) Amount of assistance.--A local bond authority seeking
assistance for a local area served by a local educational
agency described in--
``(A) clause (i)(I) or clause (ii)(I) of section
1125(c)(2)(A), shall be eligible for assistance in an amount
that does not exceed 10 percent;
``(B) clause (i)(II) or clause (ii)(II) of section
1125(c)(2)(A), shall be eligible for assistance in an amount
that does not exceed 20 percent;
``(C) clause (i)(III) or clause (ii)(III) of section
1125(c)(2)(A), shall be eligible for assistance in an amount
that does not exceed 30 percent;
``(D) clause (i)(IV) or clause (ii)(IV) of section
1125(c)(2)(A), shall be eligible for assistance in an amount
that does not exceed 40 percent; and
``(E) clause (i)(V) or clause (ii)(V) of section
1125(c)(2)(A), shall be eligible for assistance in an amount
that does not exceed 50 percent;
of the interest costs applicable to any local bond issued to
finance an activity described in section 12205 with respect
to the local area.
``(g) Assistance to State.--
``(1) In general.--If a State issues a bond to finance an
activity described in section 12205 with respect to local
areas, the State shall be eligible for assistance in an
amount that does not exceed the percentage calculated under
the formula described in paragraph (2) of the interest costs
applicable to the State bond with respect to the local areas.
``(2) Formula.--The Secretary shall develop a formula for
determining the percentage referred to in paragraph (1). The
formula
[[Page S301]]
shall specify that the percentage shall consist of a weighted
average of the percentages referred to in subparagraphs (A)
through (E) of subsection (f)(3) for the local areas
involved.
``SEC. 12205. AUTHORIZED ACTIVITIES.
``An activity described in this section is a project of
significant size and scope that consists of--
``(1) the repair or upgrading of classrooms or structures
related to academic learning, including the repair of leaking
roofs, crumbling walls, inadequate plumbing, poor ventilation
equipment, and inadequate heating or light equipment;
``(2) an activity to increase physical safety at the
educational facility involved;
``(3) an activity to enhance the educational facility
involved to provide access for students, teachers, and other
individuals with disabilities;
``(4) an activity to improve the energy efficiency of the
educational facility involved;
``(5) an activity to address environmental hazards at the
educational facility involved, such as poor ventilation,
indoor air quality, or lighting;
``(6) the provision of basic infrastructure that
facilitates educational technology, such as communications
outlets, electrical systems, power outlets, or a
communication closet;
``(7) the construction of new schools to meet the needs
imposed by enrollment growth; and
``(8) any other activity the Secretary determines achieves
the purpose of this title.
``SEC. 12206. STATE GRANT WAIVERS.
``(a) Waiver for State Issuance of Bond.--
``(1) In general.--A State that issues a bond described in
section 12204(b)(1) with respect to a local area may request
that the Secretary waive the limits described in section
12204(f)(3) for the local area, in calculating the amount of
assistance the State may receive under section 12204(g). The
State may request the waiver only if no local entity is able,
for one of the reasons described in subparagraphs (A) through
(F) of paragraph (2), to issue bonds on behalf of the local
area. Under such a waiver, the Secretary may permit the State
to use amounts received through a grant made under section
12202(a)(2) to pay for not more than 80 percent of the
interest costs applicable to the State bond with respect to
the local area.
``(2) Demonstration by state.--To be eligible to receive a
waiver under this subsection, a State shall demonstrate to
the satisfaction of the Secretary that--
``(A) the local bond authority serving the local area has
reached a limit on its borrowing authority as a result of a
debt ceiling or property tax cap;
``(B) the local area has a high percentage of low-income
residents, or an unusually high property tax rate;
``(C) the demographic composition of the local area will
not support additional school spending;
``(D) the local bond authority has a history of failed
attempts to pass bond referenda;
``(E) the local area contains a significant percentage of
Federally-owned land that is not subject to local taxation;
or
``(F) for another reason, no local entity is able to issue
bonds on behalf of the local area.
``(b) Waiver for Other Financing Sources.--
``(1) In general.--A State may request that the Secretary
waive the use requirements of section 12204(b) for a local
bond authority to permit the State to provide assistance to
the local bond authority to finance construction or
renovation by means other than through the issuance of bonds.
``(2) Use of funds.--A State that receives a waiver granted
under this subsection may provide assistance to a local bond
authority in accordance with the criteria described in
section 12204(f)(2) to enable the local bond authority to
repay the costs incurred by the local bond authority in
financing an activity described in section 12205. The local
bond authority shall be eligible to receive the amount of
such assistance that the Secretary estimates the local bond
authority would be eligible to receive under section
12204(f)(3) if the construction or renovation were financed
through the issuance of a bond.
``(3) Matching requirement.--The State shall make available
to the local bond authority (directly or through donations
from public or private entities) non-Federal contributions in
an amount equal to not less than $1 for every $1 of Federal
funds provided to the local bond authority through the grant.
``(c) Waiver for Other Uses.--
``(1) In general.--A State may request that the Secretary
waive the use requirements of section 12204(b) for a State to
permit the State to carry out activities that achieve the
purpose of this title.
``(2) Demonstration by state.--To be eligible to receive a
waiver under this subsection, a State shall demonstrate to
the satisfaction of the Secretary that the use of assistance
provided under the waiver--
``(A) will result in an equal or greater amount of
construction or renovation of educational facilities than the
provision of assistance to defray the interest costs
applicable to a bond for such construction or renovation; and
``(B) will be used to fund activities that are effective in
carrying out the activities described in section 12205, such
as--
``(i) the capitalization of a revolving loan fund for such
construction or renovation;
``(ii) the use of funds for reinsurance or guarantees with
respect to the financing of such construction or renovation;
``(iii) the creation of a mechanism to leverage private
sector resources for such construction or renovation;
``(iv) the capitalization of authorities similar to State
Infrastructure Banks to leverage additional funds for such
construction or renovation; or
``(v) any other activity the Secretary determines achieves
the purpose of this title.
``(d) Local Bond Authority Waiver.--
``(1) In general.--A local bond authority may request the
Secretary waive the use requirements of section 12203(b) for
a local head authority to permit the authority to finance
construction or renovation of educational facilities by means
other than through use of bonds.
``(2) Demonstration.--To be eligible to receive a waiver
under this subsection, a local bond authority shall
demonstrate that the amounts made available through a grant
under the waiver will result in an equal or greater amount of
construction or renovation of educational facilities than the
provision of assistance to defray the interest costs
applicable to a bond for such construction or renovation.
``(e) Request for Waiver.--A State or local bond authority
that desires a waiver under this section shall submit a
waiver request to the Secretary that--
``(1) identifies the type of waiver requested;
``(2) with respect to a waiver described in subsections
(a), (c), or (d), makes the demonstration described in
subsections (a)(2), (c)(2), or (d)(2), respectively;
``(3) describes the manner in which the waiver will further
the purpose of this title; and
``(4) describes the use of assistance provided under such
waiver.
``(f) Action by Secretary.--The Secretary shall make a
determination with respect to a request submitted under
subsection (d) not later than 90 days after the date on which
such request was submitted.
``(g) General Requirements.--
``(1) States.--In the case of a waiver request submitted by
a State under this section, the State shall--
``(A) provide all interested local educational agencies in
the State with notice and a reasonable opportunity to comment
on the request;
``(B) submit the comments to the Secretary; and
``(C) provide notice and information to the public
regarding the waiver request in the manner that the applying
State customarily provides similar notices and information to
the public.
``(2) Local bond authorities.--In the case of a waiver
request submitted by a local bond authority under this
section, the local bond authority shall--
``(A) provide the affected local educational agency with
notice and a reasonable opportunity to comment on the
request;
``(B) submit the comments to the Secretary; and
``(C) provide notice and information to the public
regarding the waiver request in the manner that the applying
local bond authority customarily provides similar notices and
information to the public.
``SEC. 12207. GENERAL PROVISIONS.
``(a) Failure to Issue Bonds.--
``(1) States.--If a State that receives assistance under
this part fails to issue a bond for which the assistance is
provided, the amount of such assistance shall be made
available to the State as provided for under section 12204,
during the first fiscal year following the date of repayment.
``(2) Local bond authorities and local areas.--If a local
bond authority that receives assistance under this part fails
to issue a bond, or a local area that receives such
assistance fails to become the beneficiary of a bond, for
which the assistance is provided, the amount of such
assistance--
``(A) in the case of assistance received under section
12202(a)(1), shall be repaid to the Secretary and made
available as provided for under section 12203; and
``(B) in the case of assistance received under section
12202(a)(2), shall be repaid to the State and made available
as provided for under section 12204.
``(b) Liability of the Federal Government.--The Secretary
shall not be liable for any debt incurred by a State or local
bond authority for which assistance is provided under this
part. If such assistance is used by a local educational
agency to subsidize a debt other than the issuance of a bond,
the Secretary shall have no obligation to repay the lending
institution to whom the debt is owed if the local educational
agency defaults.
``SEC. 12208. FAIR WAGES.
``The provisions of section 12107 shall apply with respect
to all laborers and mechanics employed by contractors or
subcontractors in the performance of any contract and
subcontract for the repair, renovation, alteration, or
construction, including painting and decorating, of any
building or work that is financed in whole or in part using
assistance provided under this part.
``SEC. 12209. REPORT.
``From amounts reserved under section 12202(b)(3) for each
fiscal year the Secretary shall--
``(1) collect such data as the Secretary determines
necessary at the school, local, and State levels;
[[Page S302]]
``(2) conduct studies and evaluations, including national
studies and evaluations, in order to--
``(A) monitor the progress of activities supported with
funds provided under this part; and
``(B) evaluate the state of United States educational
facilities; and
``(3) report to the appropriate committees of Congress
regarding the findings of the studies and evaluations
described in paragraph (2).
``SEC. 12210. FUNDING.
``(a) In General.--There are appropriated $5,000,000,000
for fiscal year 1998 to carry out this part.
``(b) Entitlement.--Subject to subsection (a), each State
or local bond authority awarded a grant under this part shall
be entitled to payments under the grant.
``(c) Availability.--Any amounts appropriated pursuant to
the authority of subsection (a) shall remain available until
expended.''.
SEC. 203. FUNDING.
Section 12111 of the Educated Infrastructure Act of 1994
(as redesignated by section 202(2)) (20 U.S.C. 8513) is
amended to read as follows:
``SEC. 12111. FUNDING.
``(a) Authorization.--There are authorized to be
appropriated to carry out this part $200,000,000 for fiscal
year 1995 and such sums as may be necessary for each of the
four succeeding fiscal years.
``(b) Appropriation.--There are appropriated to carry out
this part $150,000,000 for each of the fiscal years 1998
through 2002.
``(c) Entitlement.--Subject to subsection (b), each State
or local bond authority awarded a grant under this part shall
be entitled to payments under the grant.''.
SEC. 204. CONFORMING AMENDMENTS.
(a) Cross References.--Part A of title XII of the
Elementary and Secondary Education Act of 1965 (as
redesignated by section 202(3)) is amended--
(1) in section 12102(a) (as redesignated by section
202(2))--
(A) in paragraph (1)--
(i) by striking ``12013'' and inserting ``12111'';
(ii) by striking ``12005'' and inserting ``12103''; and
(iii) by striking ``12007'' and inserting ``12105''; and
(B) in paragraph (2), by striking ``12013'' and inserting
``12111''; and
(2) in section 12110(3)(C) (as redesignated by section
202(2)), by striking ``12006'' and inserting ``12104''.
(b) Conforming Amendments.--Part A of title XII of the
Elementary and Secondary Education Act of 1965 (as
redesignated by section 202(3)) (20 U.S.C. 8501 et seq.) is
further amended--
(1) in section 12101 (as redesignated by section 202(2)),
by striking ``This title'' and inserting ``This part''; and
(2) in sections 12102(a)(2), 12102(b)(1), 12103(a),
12103(b), 12103(b)(2), 12103(c), 12103(d), 12104(a),
12104(b)(2), 12104(b)(3), 12104(b)(4), 12104(b)(6),
12104(b)(7), 12105(a), 12105(b), 12106(a), 12106(b),
12106(c), 12106(c)(1), 12106(c)(7), 12106(e), 12107,
12108(a)(1), 12108(a)(2), 12108(b)(1), 12108(b)(2),
12108(b)(3), 12108(b)(4), 12109(2)(A), and 12110 (as
redesignated by section 202(2)), by striking ``this title''
each place it appears and inserting ``this part''.
TITLE III--AMERICA READS CHALLENGE
SEC. 301. FINDINGS.
Congress finds as follows:
(1) With the proper support and teaching, all children can
learn to read at grade-level by the end of the 3d grade.
(2) Students who are not reading at grade-level are very
unlikely to graduate from high school.
(3) Reading is a fundamental skill for learning, but in
1994, 40 percent of 4th grade students failed to attain the
basic level of reading on the National Assessment of
Education Progress. Seventy percent of 4th graders did not
attain the proficient level of reading.
(4) Parents are the best first teachers. Parents can help
to increase their children's reading levels, for example, by
reading with their child 30 minutes a day. Evidence shows
that greater parental support of children's literacy success
makes a significant difference.
(5) One-on-one tutoring is a key component of bringing
students up to reading at grade-level.
(6) Pre-school preparation and family involvement is widely
recognized to improve student performance. Preparing children
to learn, both through parent involvement and through pre-
school preparation, plays a crucial role in preventing
students from falling behind.
Subtitle A--Parents As First Teachers Challenge Grants
SEC. 311. SHORT TITLE.
This subtitle may be cited as the ``Parents as First
Teachers Challenge Grant Act of 1997''.
SEC. 312. FINDING AND PURPOSE.
(a) Finding.--Congress finds that parents are the best
first teachers.
(b) Purpose.--The purpose of this subtitle is to support
effective, proven efforts that provide assistance to parents
who want to help their children become successful readers by
the end of the 3d grade.
SEC. 313. DEFINITIONS.
In this subtitle:
(1) Eligible child.--The term ``eligible child'' means an
individual eligible to attend preschool, kindergarten, or
1st, 2d, or 3d grade.
(2) Secretary.--The term ``Secretary'' means the Secretary
of Education.
SEC. 314. GRANTS AUTHORIZED.
(a) Grants for National or Regional Networks.--The
Secretary is authorized to award at least 2 grants to public
or private agencies or institutions to enable the agencies or
institutions to support national or regional networks that
share information on helping eligible children read.
(b) Grants for Successful Programs or Activities.--The
Secretary is authorized to award at least 2 grants to State
or local government agencies, nonprofit community groups or
organizations, or consortia thereof, to enable such agencies,
groups, organizations, or consortia to expand or replicate
successful programs or activities that helps a parent--
(1) be a good teacher to the parent's eligible child; and
(2) assist the parent's eligible child in attaining reading
skills while assisting the eligible child to learn to read.
SEC. 315. RECIPIENT CRITERIA.
(a) Grants for National or Regional Networks.--In order to
receive a grant under section 312(a), a public or private
agency or institution shall have a proven record of working
with parents of eligible children.
(b) Grants for Successful Programs or Activities.--In order
to receive a grant under section 314(b), an agency, group,
organization, or consortium shall have a proven record of
working with parents to improve their eligible children's
reading.
SEC. 316. APPLICATIONS.
(a) In General.--Each entity desiring a grant under this
subtitle shall submit an application to the Secretary at such
time, in such manner, and accompanied by such information as
the Secretary may require.
(b) Applications for Grants for National or Regional
Networks.--Each application submitted under subsection (a)
for a grant under section 314(a) shall--
(1) demonstrate the likelihood that the proposed program or
activity will have a substantial regional or national impact;
(2) demonstrate the cost-effectiveness of the proposed
program or activity; and
(3) describe how the proposed program or activity will be
coordinated with private sector programs and activities, and
State and local programs and activities that provide support
for parents of eligible children.
(c) Applications for Grants for Successful Programs or
Activities.--Each application submitted under subsection (a)
for a grant under section ____04(b) shall--
(1) describe a program or activity that is capable of
successful expansion or replication;
(2) contain evidence of community support for the proposed
program or activity from the private sector, a school, and
another entity;
(3) contain information demonstrating the cost-
effectiveness of the proposed program or activity; and
(4) provide an assurance that the applicant will coordinate
the proposed program or activity with State and local
programs and activities that provide support for parents of
eligible children.
SEC. 317. AUTHORIZATION OF APPROPRIATIONS.
(a) Appropriations.--There are appropriated to carry out
this subtitle $45,000,000 for fiscal year 1998, $50,000,000
for fiscal year 1999, $60,000,000 for fiscal year 2000,
$70,000,000 for fiscal year 2001, and $75,000,000 for fiscal
year 2002.
(b) Entitlement.--Subject to subsection (a), each entity
receiving a grant under this title for a fiscal year shall be
entitled to payments for such year under the grant.
Subtitle B--Challenging America's Young Readers
SEC. 321. SHORT TITLE.
This subtitle may be cited as the ``Challenging America's
Young Readers Act of 1997''.
SEC. 322. PURPOSE.
The purpose of this subtitle is to raise reading levels by
providing tutoring assistance outside regular school hours to
children eligible to attend preschool, kindergarten, or 1st,
2d, or 3d grade.
SEC. 323. DEFINITIONS.
In this subtitle:
(1) Administrators.--The term ``Administrators'' means the
Secretary of Education and the Chief Executive Officer of the
Corporation for National and Community Service acting
pursuant to the agreement entered into under section 324(c).
(2) Eligible child.--The term ``eligible child'' means an
individual eligible to attend preschool, kindergarten, or
1st, 2d, or 3d grade.
(3) State.--The term ``State'' means each of the several
States of the United States, the District of Columbia, and
the Commonwealth of Puerto Rico.
(4) State educational agency.--The term ``State educational
agency'' has the meaning given the term by section 14101 of
the Elementary and Secondary Education Act of 1965 (20 U.S.C.
8801).
SEC. 324. PROGRAM AUTHORIZED.
(a) Allotment and Reservations.--
(1) Allotment.--From the sum made available under section
330(b) and not reserved under paragraph (5) for a fiscal
year, the Administrators shall make an allotment to
[[Page S303]]
each State educational agency for the fiscal year in an
amount that bears the same relation to the sum as the amount
such State received under part A of title I of the Elementary
and Secondary Education Act of 1965 (20 U.S.C. 6311 et seq.)
for the previous fiscal year bears to the amount all States
received under such part for the previous fiscal year.
(2) Reservations.--
(A) In general.--From the sum made available under section
330(b) for a fiscal year, the Administrators--
(i) shall reserve 10 percent of such sum to carry out local
reading programs under section 326;
(ii) shall reserve not more than 1.5 percent of such sum to
carry out national leadership and evaluation activities under
section 327;
(iii) shall reserve the percentage described in
subparagraph (B) of such sum to make a payment to the
Secretary of the Interior to enable the Secretary of the
Interior to carry out the purpose of this subtitle for Indian
children; and
(iv) shall reserve 0.25 percent of such sum to make
payments to the United States Virgin Islands, Guam, American
Samoa, the Commonwealth of the Northern Mariana Islands, the
Republic of the Marshall Islands, the Federated States of
Micronesia, and the Republic of Palau on the basis of their
respective need for assistance according to such criteria as
the Secretary determines will best carry out the purpose of
this subtitle.
(B) Percentage.--The percentage referred to in subparagraph
(A)(iii) for a fiscal year is the percentage of funds
reserved under section 1121(a)(2) of the Elementary and
Secondary Education Act of 1965 (20 U.S.C. 6331(a)(2)) for
the Secretary of the Interior for such previous year.
(b) Grants.--
(1) In general.--Each State educational agency receiving an
allotment under subsection (a)(1) shall use such allotment to
award grants, on a competitive basis, to organizations in the
State to enable the organizations--
(A) to employ reading specialists to supervise tutoring
programs that teach eligible children to read;
(B) to recruit and train tutors for tutoring programs that
teach eligible children to read; and
(C) to carry out tutoring programs that teach eligible
children to read.
(2) Special rule.--Each tutoring program assisted through a
grant awarded under paragraph (1) shall be conducted before
or after regular school hours, or during the weekend or the
summer.
(c) Community and National Service Funds.--The
Administrators shall use amounts reserved under section
330(a) for a fiscal year to carry out the activities
described in subparagraphs (A) through (C) of subsection
(b)(1) during the periods described in subsection (b)(2) in
accordance with the National and Community Service Act of
1990 (42 U.S.C. 12501).
(d) Joint Administration.--
(1) In general.--The Secretary of Education and the Chief
Executive Officer of the Corporation for National and
Community Service shall administer this subtitle jointly
pursuant to an agreement between the Secretary and the Chief
Executive Officer.
(2) Agreement.--The agreement described in paragraph (1)
shall establish the responsibilities of the Secretary of
Education and the Chief Executive Officer of the Corporation
for National and Community Service for administering this
subtitle. Such agreement shall--
(A) not require more than one application from any one
State educational agency or local applicant;
(B) encourage, but not require, the use of volunteers
assisted through funding made available under section 330(a)
to serve as volunteer recruiters and coordinators; and
(C) include only one application review process.
SEC. 325. APPLICATIONS.
(a) State.--Each State educational agency desiring an
allotment under this subtitle shall submit an application to
the Administrators at such time, in such manner, and
containing such information as the Administrators may
require. Each such application shall--
(1) describe how the State educational agency will award
grants under this subtitle; and
(2) describe how the State educational agency will
encourage use of activities assisted under the National and
Community Service Act of 1990 (42 U.S.C. 12501 et seq.) and
the Domestic Volunteer Service Act of 1973 (42 U.S.C. 4950 et
seq.).
(b) Local.--Each organization desiring a grant under
section 324(b) shall submit an application to the State
educational agency at such time, in such manner, and
accompanied by such information as the State educational
agency may reasonably require. Each such application shall--
(1) describe how the proposed program or activity will be
linked with the curriculum of the appropriate local
educational agency, school, or classroom, and other reading
enhancement activities of the school and the eligible
children;
(2) contain a description of how the applicant will use the
grant funds to provide assistance to economically
disadvantaged communities, and schools, in which eligible
children have the greatest need for reading assistance;
(3) contain an assurance that the proposed program or
activity will focus on providing individualized tutoring in
reading that involves trained and supervised volunteers who
have been approved by the applicant; and
(4) describe the strategies that will be undertaken through
the program or activity to ensure that eligible children will
make progress in reading;
(5) describe how the applicant will evaluate the program or
activity, including measuring progress toward improving the
reading performance of eligible children, and improve the
program or activity if eligible children do not make progress
in improving reading performance; and
(6) demonstrate how the program or activity--
(A) will be coordinated with activities of local school
personnel, and activities assisted under the Head Start Act
(42 U.S.C. 9831 et seq.), Even Start, other provisions of
title I of the Elementary and Secondary Education Act of 1965
(20 U.S.C. 6301 et seq.), and the Individuals with
Disabilities Education Act (20 U.S.C. 1400 et seq.),
particularly with respect to referral of eligible children;
and
(B) will be developed and carried out with strong parent,
community, and private sector involvement.
SEC. 326. LOCAL READING PROGRAMS.
(a) Grants Authorized.--
(1) In general.--From amounts reserved under section
324(a)(2)(A)(i) for a fiscal year, the Administrators shall
award grants to local entities for the planning,
implementation, or expansion of local reading programs that
serve economically disadvantaged communities.
(2) Special rule.--In awarding grants under paragraph (1)
for a fiscal year, the Administrators shall ensure that at
least 1 such grant is awarded to serve an urban economically
disadvantaged community and at least 1 such grant is awarded
to serve a rural economically disadvantaged community.
(b) Application.--Each local entity desiring a grant under
subsection (a) shall submit an application to the
Administrators at such time, in such manner, and accompanied
by such information as the Administrators may require. Each
such application shall include the information and assurances
described in section 325(b) with respect to such local
entity.
SEC. 327. NATIONAL LEADERSHIP AND EVALUATION.
(a) National Leadership.--From a portion of amounts
reserved under section 324(a)(2)(A)(ii) for a fiscal year,
the Administrators may carry out national leadership
activities, including dissemination of information on
effective practices, providing technical assistance
materials, and other activities, to increase the performance
of eligible children in the States.
(b) Evaluation.--
(1) In general.--From a portion of the amounts reserved
under section 324(a)(2)(A)(ii) for a fiscal year, the
Administrators, through a grant, contract, or cooperative
agreement, shall evaluate, and submit reports to Congress
regarding, the effectiveness of programs and activities
assisted under this subtitle.
(2) Report dates.--The reports described in paragraph (1)
shall be submitted to Congress on September 1, 2000, and
every 2 years thereafter.
SEC. 328. ADJUSTMENT OR TERMINATION OF FUNDING.
Notwithstanding any other provision of this subtitle, the
Administrators may decrease or terminate any funding provided
under this subtitle if the Administrators determine that a
recipient of such funding does not--
(1) improve reading performance with respect to eligible
children; or
(2) implement the recipient's strategies to improve reading
performance with respect to eligible children.
SEC. 329. NONDUPLICATION AND NONDISPLACEMENT.
(a) Nonduplication.--Assistance provided under this
subtitle shall be used only for a program or activity that
does not duplicate, and is in addition to, an activity
otherwise available in the locality of such program or
activity.
(b) Nondisplacement.--An employer shall not displace an
employee or position, including partial displacement such as
reduction in hours, wages, or employment benefits, as a
result of the use by such employer of a participant in a
program or activity receiving assistance under this subtitle.
SEC. 330. FUNDING.
(a) Reservation.--From amounts made available to carry out
the National and Community Service Act of 1990 (42 U.S.C.
12501 et seq.) for each of the fiscal years 1998 through
2002, the Chief Executive Officer of the Corporation for
National and Community Service shall make available
$200,000,000 to carry out this subtitle.
(b) Appropriation.--There are appropriated to the Secretary
of Education to carry out this subtitle $200,000,000 for
fiscal year 1998, $250,000,000 for fiscal year 1999,
$300,000,000 for fiscal year 2000, $350,000,000 for fiscal
year 2001, and $350,000,000 for fiscal year 2002.
(c) Entitlement.--Subject to subsections (a) and (b), each
entity receiving an allotment, awarded a grant, or entering
into a contract or cooperative agreement, under this subtitle
for a fiscal year shall be entitled to payments for such year
under the allotment, grant, contract, or cooperative
agreement.
[[Page S304]]
TITLE IV--INVESTING IN TECHNOLOGY FOR THE CLASSROOMS
Subtitle A--Sense of the Senate
SEC. 401. FINDINGS.
Congress finds as follows:
(1) Technology in the schools is a central component of
preparing students for the 21st century.
(2) Equipping schools with technology is no longer a
luxury. It is a necessity. By the year 2000, 60 percent of
all jobs in the Nation will require skills in computer and
network use.
(3) Technology in the classroom improves students' mastery
of basic skills, test scores, writing, and engagement in
school. With these gains come decreases in dropout rates and
decreases in attendance and discipline problems.
(4) Not enough students have access to computers, distance
learning, and telecommunications technologies. A 1995
Government Accounting Report report estimates that 10,000,000
students, and 1 school in every 4 schools, do not have
sufficient computers to meet their needs.
(5) Of the 5,800,000 computers in United States schools,
many are older models that do not have the power to perform
advanced functions such as those involving video and the
Internet.
(6) Only 9 percent of all instructional rooms including
classrooms, laboratories, and library media, have connections
to the Internet.
(7) The Federal Government began a new commitment to
funding education technology by investing an additional
$200,000,000 in subpart 2 of part A of title III of the
Elementary and Secondary Education Act of 1965 ( 20 U.S.C.
6841 et seq.) in fiscal year 1997. Although such investment
is an important investment, it is not sufficient to meet the
technology needs of schools and school children in the 21st
century.
SEC. 402. SENSE OF THE SENATE.
It is the Sense of the Senate that it is in the Nation's
best interest for the Federal Government to invest at least
$1,800,000,000 in additional funding for education technology
programs between fiscal years 1998 and 2002.
Subtitle B--Educational Technology Clearinghouses
SEC. 421. PURPOSE.
It is the purpose of this subtitle to authorize a program
to support regional educational technology clearinghouses
that facilitate the donation of surplus equipment and
technology to schools and libraries from Federal or State
governmental agencies, businesses, and other private
entities.
SEC. 422. AUTHORITY.
(a) In General.--The Secretary of Education shall make
grants to or enter into contracts with regional public or
private nonprofit entities for the purpose of supporting a
system of regional educational technology clearinghouses. In
awarding the grants or contracts, the Secretary shall ensure
that each geographic region of the United States is served by
such an entity.
(b) Duration.--The Secretary shall award grants and
contracts under this subtitle for a period of 5 years.
SEC. 423. REQUIREMENTS.
Each entity receiving a grant or contract under this
subtitle shall--
(1) in cooperation with State educational agencies and
local educational agencies, develop a regional program to
support a clearinghouse that facilitates the transfer of
surplus equipment and technology to schools and libraries
from Federal or State governmental agencies, businesses, and
other private entities;
(2) disseminate information to State educational agencies
and local educational agencies about the availability and
procurement of the equipment and technology through the
clearinghouse;
(3) disseminate information to the public about activities
assisted under this subtitle, including information about the
donations being accepted by the clearinghouse;
(4) have in place a process for ensuring that surplus
equipment and technology is distributed in a fair and
equitable manner, with school districts with the greatest
need for such equipment and technology receiving priority for
donations under this subtitle;
(5) provide technical assistance to a school or library to
ensure that the equipment and technology being donated is
consistent with the short- and long-term educational
technology plans of the school or library, respectively;
(6) use funds under this subtitle to upgrade equipment or
technology only if the entity determines such upgrading meets
the short- and long-term educational plan of the school or
library receiving the equipment or technology; and
(7) ensure that the transfer of equipment and technology
does not violate copyright, patent, or trademark laws.
SEC. 424. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated to carry out this
subtitle $5,000,000 for fiscal year 1998 and such sums as may
be necessary for each of the 4 succeeding fiscal years.
______
By Mr. DASCHLE (for himself, Ms. Mikulski, Mr. Kennedy, Mr.
Breaux, Mr. Dodd, Mrs. Murray, Mr. Inouye, Mr. Johnson, Ms.
Moseley-Braun, Mr. Rockefeller, Mr. Durbin, Mr. Kerry, and Mr.
Glenn):
S. 13. A bill to provide access to health insurance coverage for
uninsured children and pregnant women; to the Committee on Finance.
children's health coverage act of 1997
Mr. BREAUX. Mr. President, I rise today in support of the Children's
Health Coverage Act of 1997, a bill designed to expand health insurance
for an estimated 10 million American children who have no health
insurance. Last year, when Congress passed the Kassebaum/Kennedy bill,
it took a big step towards increasing the availability of private
health insurance coverage for certain children. While the Kassebaum/
Kennedy legislation will increase access to the health insurance market
for many people, there are still too many low-income working families
in this country who are unable to afford coverage even though it may be
more readily available to them.
According to a 1994 GAO report, 14.2 percent of all children are
uninsured, the highest rate in any industrialized country. In Louisiana
alone there are 254,952 children without health insurance. Nine out of
ten of these children live in families with working parents. These
parents go to work every day to earn a living and provide for their
families. Some might say that providing for one's family should include
health insurance but when you've got food to buy and rent to pay,
health insurance to many parents is an unaffordable luxury. Perhaps
even more troubling is that the number of uninsured children is
expected to grow as employers continue to cut back on dependant
coverage, leaving many working parents unable to afford insurance for
their families. While Medicaid has picked up some of these children and
will continue to do so, these expansions won't be enough to completely
offset the loss in private coverage in this country.
Mr. President, an important lesson we have learned in recent years is
that big government mandates won't work. But I believe expanding
coverage of children is a necessary next step to follow up on the
significant progress we made last year. We should build on the momentum
from Kassebaum/Kennedy bill to help low-income working families buy
health insurance they need for their children. Basic primary and
preventive care services that insurance provides are critical to a
child's healthy development, and like all kinds of preventive care,
it's cheaper than treating a child once he or she gets sick. As we all
know, uninsured children are more likely to get care in an emergency
room at later stages in their illness and are more likely to require an
expensive hospital stay.
This bill is a market-based plan that will provide tax credits to
help working families buy the health insurance they need. Our goal is
to stimulate a competitive market for children's health plans which are
relatively inexpensive but have a big economic payoff. I am hopeful
that Democrats and Republicans will be able to work together on this
issue because it's in everyone's interest that our nation's children
have the health care and health insurance they need since they are the
future of this country. For the future of a healthy America, we need
healthy kids now.
Ms. MIKULSKI. Mr. President, I am honored to join the Senate Minority
Leader in cosponsoring the Children's Health Coverage Act of 1997. This
bill will help uninsured working families purchase health insurance for
their children and will build on the success of last year's Kassebaum-
Kennedy health care reform legislation. It makes the health of all
America's children a national priority. It takes the Democratic health
care agenda one more step.
Our country has failed to meet the health care needs of America's
children. The United States has the highest rate of uninsured children
of any industrialized country. In my home State of Maryland, nearly 1
in 5 children is uninsured. That's almost 200,000 kids in Maryland
alone. This is a disgrace for a country as bountiful as ours is. We say
children are our priority. We need to put in the lawbooks the values we
hold in our hearts. That makes good policy and good sense.
These are the children of working families. Their parents may both be
working 40-hour a week jobs. Jobs that put them over the poverty level
but offer no benefits. This problem is pervasive. Nine out of ten
children without insurance live in families with
[[Page S305]]
working parents. Two thirds of uninsured children live in families with
incomes above the poverty line. The problem cuts across class and race.
As I travel through my own State, working parents tell me how they
worry about their children not having health insurance. They are afraid
that they won't be able to take them to the doctor when they get really
sick. With this bill, American parents won't have to fear for their
children. This legislation meets the peace of mind test.
I want to make sure children's health care needs are met
comprehensively and equitably. This bill stands up and challenges what
is wrong with our health care system. It affirms our need to develop
human capital as well as economic capital. It's about getting our
priorities straight and putting families first. I salute the Minority
Leader for moving this important issue forward.
Ms. MOSELEY-BRAUN. Mr. President, I rise today to offer my support as
an original cosponsor of the Children's Health Coverage Act of 1997--S.
13. Vice President Hubert Humphrey may have summed it up best when he
concluded that ``the moral test of government is how that government
treats those who are in the dawn of life, the children; those who are
in the twilight of life, the elderly; and those who are in the shadows
of life--the sick, the needy, and the handicapped.''
Well, Mr. President, the Children's Health Coverage Act is our test
for the 105th Congress and how this Congress will respond to the need
to care for our children, who are in the dawn of their life; 10.5
million children have no health insurance coverage. The GAO conclusion
that children without insurance are less likely to grow up to be
healthy, and productive adults may be the most telling fact. If we know
the effect being uninsured has on our children's ability to contribute
to society, how can we not respond?
The ultimate guarantee of our children's health would be to make
comprehensive health insurance coverage more readily available either
through a private or public source. In the interim however, the
Children's Health Coverage Act will make a number of important steps to
improve the health of our children. First, enhancing health coverage
for pregnant women will make our children healthy on the front-end
through enhanced prenatal care. In 1993, almost 200,000 children were
born to women who received either no prenatal care or prenatal care
after the first trimester of their pregnancy. Good prenatal care can
reduce rates of low-weight births and infant mortality, thus preventing
avoidable disabilities.
Next, the Children's Health Coverage Act will not erode existing
health coverage for children. Children are losing private health
insurance coverage faster than any other group. In many cases, Medicaid
has been the safety-net preventing children from becoming uninsured. S.
13 will stimulate the market for private children's health coverage and
deter employers from dropping their contributions toward the coverage
of their employees.
Finally, the Children's Health Coverage Act makes the next logical
step from the improvements made in the Kennedy-Kassebaum health care
bill, by tackling the issue of insurance affordability. The right to
buy insurance that you cannot afford really is not access at all.
Millions of Americans were given more flexibility by making insurance
more portable and ending ``job lock.'' However, if the ability to pay
your premiums severely restricts the options, have we truly ended ``job
lock.''
Mr. President, caring for our children is critical to the success and
the survival of this nation. However, we must not be content with only
meeting the physiological needs of our children. We must also adopt a
holistic approach to meeting the needs of our children. A significant
number of our children have special health care needs. There are also
many children who have special educational, financial, and social
needs.
During the ``Stand for Children'' rally in June of last year, five
core principles were espoused that are essential to safeguarding our
children. These principles are to give our children a Head start, a
fair start, a safe start, a moral start, and a healthy start. These are
fundamental principles that should govern our nation's agenda towards
children. The Children's Health Coverage Act is a very good step toward
ensuring a healthy start for our children. I hope that my colleagues
can join me in supporting this important 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. 13
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Children's
Health Coverage Act''.
(b) Table of Contents.--The table of contents for this Act
is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
TITLE I--HEALTH INSURANCE COVERAGE FOR ELIGIBLE CHILDREN
Sec. 101. Establishment of program to provide eligible children with
access to health insurance coverage.
Sec. 102. Procedure for obtaining coverage under certified health
plans.
Sec. 103. Subsidy adjustment.
Sec. 104. Limitation on preexisting condition exclusion period and -
prohibition on discrimination.
Sec. 105. Maintenance of effort.
Sec. 106. Oversight by Secretary.
Sec. 107. Rules of construction.
TITLE II--HEALTH INSURANCE COVERAGE FOR PREGNANT WOMEN
Sec. 201. Expanding health insurance coverage for pregnant women.
Sec. 202. Grants for innovative outreach.
TITLE III--CHILDREN'S HEALTH COVERAGE SUBSIDY CREDITS
Sec. 301. Health coverage provided to premium subsidy eligible children
through a tax credit for insurers.
Sec. 302. Health coverage provided to premium subsidy eligible children
through a refundable income tax credit.
SEC. 2. DEFINITIONS.
As used in this Act:
(1) Certified health plan.--The term ``certified health
plan'' means a health plan that--
(A) is not an employer sponsored health plan;
(B) provides family coverage or child only coverage
options; and
(C) is certified by a State under section 101(b)(1).
(2) Eligible child.--The term ``eligible child'' means an
individual who has not attained the age of 19.
(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 (3)) 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).
(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 (42 U.S.C. 300e(a))),
(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) Poverty line.--The term ``poverty line'' means the
income official poverty line (as defined by the Office of
Management and Budget, and revised annually in accordance
with section 673(2) of the Omnibus Budget Reconciliation Act
of 1981) applicable to a family of the size involved.
(6) Premium subsidy eligible child.--The term ``premium
subsidy eligible child'' means any individual who--
(A) is an eligible child who was born after December 31,
1984;
(B) is a citizen or qualified alien (as defined in section
431(b) of the Personal Responsibility and Work Opportunity
Reconciliation Act of 1996 (8 U.S.C. 1641(b));
(C) has a family income determined under section 102(b)
which does not exceed 300 percent of the poverty line or has
a family income within the limits described in section
103(b)(2);
(D) is not eligible for assistance under a program under
title XIX of the Social Security Act or, except as provided
in section 102(e), under a similar State program providing
health insurance or other health care coverage; and
(E)(i) except as provided in section 101(e) or clause (ii),
has not been covered, during the 12-month period ending on
the date on which the individual applies for subsidy-eligible
health coverage under this title, under a health plan offered
by a health insurance issuer (unless such plan was funded
under title
[[Page S306]]
IX of the Social Security Act (42 U.S.C. 1101 et seq.)) and--
(I) such individual does not have access to employer
sponsored health coverage; or
(II) the employer of the individual or family involved
offers employer sponsored health coverage and the employer
contribution for such 12-month period does not exceed--
(aa) in the case of an individual (or family) described in
section 103(a)(2)(A), 80 percent or more of the costs of
enrollment in the plan; or
(bb) in the case of an individual (or family) described in
section 103(a)(2)(B), 50 percent or more of the costs of
enrollment in the plan; or
(ii) is, as of the date of enactment of this Act, covered
under a health plan that is not a group health plan (as
defined in section 2791 of the Public Health Service Act),
and the family of such individual is not eligible to claim a
deduction under section 162(l) of the Internal Revenue Code
of 1986.
(7) Secretary.--The term ``Secretary'' means the Secretary
of Health and Human Services.
(8) Subsidy eligible health coverage.--The term ``subsidy
eligible health coverage'' means health insurance coverage
under--
(A) a certified health plan; or
(B) an employer sponsored health plan providing family
coverage or child-only coverage options;
for which a subsidy is available under this title.
TITLE I--HEALTH INSURANCE COVERAGE FOR ELIGIBLE CHILDREN
SEC. 101. ESTABLISHMENT OF PROGRAM TO PROVIDE ELIGIBLE
CHILDREN WITH ACCESS TO HEALTH INSURANCE
COVERAGE.
(a) Establishment.--The Secretary shall establish a program
under which a premium subsidy eligible child, and the family
of such child, may receive a subsidy to be used to pay a
portion of the premium associated with the enrollment of the
child for subsidy eligible health coverage under a certified
health plan or employer sponsored health plan.
(b) State Responsibilities.--Under the program established
under subsection (a)--
(1) the insurance commissioner of a State may certify a
health plan if the commissioner determines that--
(A) the health plan--
(i) provides family or child-only coverage;
(ii) meets general coverage guidelines that are established
by the Secretary and designed to ensure that the plan
provides comprehensive coverage, including preventive, basic,
and catastrophic benefits that meet the health care needs of
children (either as part of a family plan or a child-only
plan);
(B) the average premium for the enrollment of a child under
such plan is reasonable when taking into consideration the
demographic and health status related factors of the
population for which the plan will be marketed;
(C) each premium subsidy eligible child that is enrolled
under the plan will be assessed the same premium;
(D) the plan provides for guaranteed issue with respect to
premium subsidy eligible children;
(E) complies with the provisions of section 104 regarding
preexisting condition exclusions;
(F) the health insurance issuer involved is participating
in any applicable reinsurance program that has been
established by the State to defray the costs of unevenly
distributed risk among issuers; and
(G) the plan meets any other criteria established by the
State;
(2) the insurance commissioner of the State shall provide
information on the availability of certified health plans and
the availability of subsidies in accordance with this title;
(3) the appropriate State entity (as determined by the
Chief Executive Officer of the State) shall conduct income
verification and reconciliation activities with respect to
eligible children and families desiring to participate in the
program in the State and issue certificates in accordance
with section 102;
(4) the appropriate State entity (as determined under
paragraph (4)) shall be responsible for the collection of
premiums from premium subsidy eligible children and the
forwarding of such premiums to the appropriate certified
health plans;
(5) the State (through its own authority or acting in
conjunction with the Secretary under subsection (f)(3)) shall
ensure that each eligible child in the State has a reasonable
choice of health insurance issuers that offer child-only
coverage consistent with the standards developed by the
Secretary under this title;
(6) the State will establish any other requirements and
procedures necessary to carry out this title within the
State; and
(7) the State shall comply with any other requirements
established by the Secretary.
(c) Participation of Issuers.--
(1) In general.--Any health plan may submit an application
with the appropriate State insurance commissioner for
certification under this section and such plan shall be
certified if it meets the requirements of subsection (b)(1).
Employer-sponsored health plans shall not be required to be
certified under this title.
(2) Requirement for federal contractors.--
(A) In general.--Each health insurance issuer that provides
health coverage under contract with any Federal program and
that offers 1 or more health plans that provide family
coverage options shall submit an application, with the
appropriate State insurance commissioner, for the
certification of 1 or more health plans that provide the
children's only coverage described in subsection (b)(1)(A).
Such an issuer shall apply for the certification of at least
1 health plan that provides child-only coverage, and may
apply for the certification of 1 or more health plans that
provide family coverage if such plans provides coverage for
children as described in subsection (b)(1)(A).
(B) Penalty.--A health insurance issuer shall be ineligible
to provide benefits under a Federal contract described in
subparagraph (A) if--
(i) the issuer fails, in good faith, to submit an
application as required under subparagraph (A);
(ii) the State insurance commissioner fails to certify a
health plan of the issuer as meeting the requirements of this
title; or
(iii) the issuer fails to make any modifications to the
application or to a health plan as requested by the State
insurance commissioner for the certification of a health
plan.
(C) Participation in individual market.--Notwithstanding
subparagraph (A), a health insurance issuer described in such
subparagraph shall not be required to offer coverage in the
individual market (as defined in section 2791(e)(1)) unless
the issuer is otherwise participating in such market. Such an
issuer shall be required to offer coverage to eligible
children under this title through the participation of the
issuer in all group purchasing arrangements operating in the
area served by the issuer, except that with respect to
employer-sponsored health plans, the obligation of an issuer
to offer child-only coverage shall be limited to employers to
which such issuers are otherwise offering coverage.
(3) Expedited procedures.--The State insurance commissioner
of a State shall establish expedited procedures for the
certification of health plans that have been offered in the
insurance market in the State during the 1-year period
preceding the date on which a certification is sought.
(4) Offering of coverage.--A health insurance issuer shall
offer certified health plans to each eligible child residing
in the area served by the issuer regardless of the family
income of such child. Coverage provided under such plans may
vary in accordance with this Act depending on whether the
enrollee is an eligible child or a premium subsidy eligible
child. Such coverage may be offered through insurance agents
or brokers.
(d) Average Coverage Amount.--
(1) Determination.--The Secretary, in consultation with
State insurance commissioners and other experts in the field
of health insurance, shall determine the average coverage
amount with respect to certified health plans. The amount
shall be based on the average costs of comprehensive health
insurance coverage for children as determined using data
derived from existing State initiatives that have been
established to provide health care coverage for uninsured
children and data on the average market rates for health
plans offering coverage reasonably similar to that of the
coverage offered under certified health plans.
(2) Adjustments.--The Secretary shall annually adjust the
average coverage amount determined under paragraph (1) to
ensure that such amount accurately reflects the reasonable
costs associated with the purchase of coverage under a
certified health plan and regional variations in health care
costs.
(3) Application of amount to child portion of plan.--In
establishing and applying the average coverage amount under
paragraph (1), the Secretary shall ensure that the amount
relates solely to the comprehensive coverage applicable to
the premium subsidy eligible child. If coverage of a premium
subsidy eligible child is under a certified family plan, the
average coverage amount shall relate solely to that portion
of the plan that provides the coverage for the eligible
child.
(e) Waiver of Previous Coverage Limitation.--
(1) Establishment of process.--The Secretary shall
establish a process to waive the limitation described in
section 2(6)(D) with respect to an individual if the
Secretary determines that the individual was covered under a
health plan during the period referred to in such section as
a dependent of another individual and that the coverage was
terminated involuntarily or the loss of coverage results from
a change in employment.
(2) Limitation.--The process established under paragraph
(1) shall not permit a waiver with respect to previous
coverage that was terminated by an employer (or with respect
to which the contribution of the employer toward such
coverage was reduced) unless the Secretary determines that
such coverage was terminated because the employer ceased its
operations or because of other circumstances clearly
unrelated to the availability of subsidies under this title.
(f) Provision of Technical Assistance by Secretary.--
(1) Alternative procedures.--The Secretary, at the request
of and in conjunction with the insurance commissioner of a
State, shall assist the State in establishing alternative
rate review and approval procedures that apply to the health
plans seeking certification under this section. Any
procedures established under this paragraph shall be
[[Page S307]]
consistent with the goals and requirements of this title.
(2) Strategies to improve insurance market.--
(A) In general.--The Secretary, at the request of and in
conjunction with a State, shall develop and pursue strategies
to encourage competition, prevent fraudulent practices,
ensure the adequacy of rates to prevent access barriers, and
achieve goals consistent with this title with respect to the
health insurance market in the State. Such strategies may
include the establishment of commercial insurance pooling
arrangements that may be used by small businesses and
integrated with other purchasing pools, the implementation of
competitive bidding mechanisms, and the coordination of
insurance delivery systems with delivery systems under title
XIX of the Social Security Act.
(B) Termination.--The Secretary may require that a State
terminate or revise a strategy implemented by the State under
paragraph (1) if the Secretary determines that the strategy
conflicts with a provision of this title.
(3) Choice of issuers.--The Secretary, at the request of
and in conjunction with a State, shall assist the State in
identifying and implementing strategies to ensure that choice
is provided to eligible children in accordance with
subsection (b)(5). Such strategies may include the strategies
described in paragraph (2)(A).
(g) Procedures to Identify Those Eligible for Medicaid.--In
carrying out the program under this title, the Secretary
shall establish procedures to identify premium subsidy
eligible children whose enrollment in a certified health plan
is subsidized under this title and who subsequently become
eligible for assistance under a State plan under title XIX of
the Social Security Act as a result of disability, the amount
of health care costs, or similar factors. Such procedures,
while ensuring the continuity and coordination of care, shall
ensure that assistance under such title XIX is the primary
payer for children eligible for such assistance.
SEC. 102. PROCEDURE FOR OBTAINING COVERAGE UNDER CERTIFIED
HEALTH PLANS.
(a) Application.--
(1) In general.--To be eligible to receive a subsidy for
the purchase of coverage under a certified health plan under
this title, a family on behalf of a premium subsidy eligible
child shall submit to the State entity designated under
section 101(b)(4) an application that shall contain such
income and employment information as the State determines
necessary to make a determination with respect to the
eligibility of such applicant for a subsidy under this title.
(2) Time for filing.--A family on behalf of a premium
subsidy eligible child may file an application for a subsidy
under this title at any time in accordance with this
subsection.
(3) Use of simple form.--For purposes of this subsection,
the State entity shall use an application that shall be as
simple in form as possible and understandable to the average
individual. The application may require attachment of such
documentation as deemed necessary by the State in order to
ensure eligibility for a subsidy.
(4) Availability of forms.--The State entity shall make an
application form available through health care providers and
participating issuers, public assistance offices, public
libraries, and at other locations (including post offices)
accessible to a broad cross-section of families.
(b) Issuance of Certificate.--
(1) In general.--
(A) Notification of applicant.--If the State entity
described in subsection (a) determines that an applicant is
eligible for a subsidy under this title, the entity shall
notify the applicant of such eligibility and request that the
applicant designate a certified health plan that the
applicant desires to enroll in.
(B) Notification of plan.--Upon a designation under
subparagraph (A), the entity shall forward a certificate of
eligibility on behalf of the applicant to the designated
plan. Such certificate shall contain identifying information
concerning the applicant and the eligible child involved and
the amount of the subsidy for which the applicant is
eligible.
(2) Determination by state.--As elected by a family at the
time of the submission of an application under subsection
(a), the State entity shall make a determination concerning
family income either--
(A) by multiplying by a factor of 4 the income of the
family for the 3-month period immediately preceding the month
in which the application is made, or
(B) based upon estimated income for the entire year in
which the application is submitted.
(3) Term.--A certificate under paragraph (1) shall remain
in effect for the 6-month period beginning on the date of the
issuance of the certificate. To continue to be eligible for a
subsidy, a family must apply to renew the certificate at the
end of each 6-month period.
(c) Enrollment.--Upon receipt of a certificate of
eligibility under subsection (b), a certified health plan
shall ensure that the eligible child involved is
appropriately enrolled and that a copy of the enrollment and
coverage materials are provided to the enrollee. With respect
to the certified health plan involved, the plan shall use the
certificate in accordance with section 103 to compute the
amount of the premiums that are owed by the family involved.
(d) Payment of Premiums.--
(1) In general.--Upon receipt of the appropriate enrollment
materials from a certified health plan under subsection (c),
a premium subsidy eligible child, the family income of which
does not exceed the limit described in section
103(a)(2)(B)(i), shall be responsible for remitting to the
State entity described in subsection (a) the amount of the
subsidy adjusted premium owed under such plan.
(2) Subsidy adjusted premium.--As used in paragraph (1),
the term ``subsidy adjusted premium'' means the total amount
of the premium assessed for the coverage of a premium subsidy
eligible child under a certified health plan less the amount
of the subsidy adjustment for which the child is eligible
under section 103.
(3) Payment of issuer.--A State shall, under section
101(b)(4), establish procedures for the collection of
premiums under this subsection and the payment of such
premiums to the appropriate certified health plans.
(e) Coverage under Certain State Programs.--
(1) Coordination of programs.--The Secretary, in
conjunction with States, shall provide for the coordination
of the program established under this title with State
programs that provide health insurance or other health care
coverage for children. Such coordination may include the use
of subsidies made available under this title to obtain
coverage that supplements any partial coverage provided
through such a State program or other coordinated
arrangement.
(2) Eligibility.--With respect to an eligible child who is
participating in a State program described in paragraph (1),
a State may, notwithstanding section 2(6)(D), determine that
such child is a premium subsidy eligible child.
(3) Adjustment of average coverage amount.--The Secretary
shall adjust the average coverage amount under section 101(d)
with respect to an eligible child who is determined to be a
premium subsidy eligible child under paragraph (2) to reflect
the cost of enrolling the child in any plan providing
supplemental coverage as described in paragraph (1).
SEC. 103. SUBSIDY ADJUSTMENT.
(a) Premium Subsidy Eligible Children.--
(1) Eligibility.--An eligible child who has been determined
by a State entity under section 102(b) to be a premium
subsidy eligible child shall be eligible for a premium
subsidy adjustment in the amount determined under paragraph
(2) to be applied by the certified plan involved when
computing the amount of the premium owed by such child.
(2) Amount.--
(A) Full subsidy.--
(i) In general.--With respect to a family, the family
income of which does not exceed 200 percent of the poverty
line for a family of the size involved, the amount of a
premium subsidy adjustment specified in this paragraph for a
premium subsidy eligible child shall, subject to clause (ii),
be equal to 90 percent of the annual premium for the child
for such year for coverage of the child under a certified
health plan.
(ii) Limitation.--The amount of a subsidy adjustment for
which a premium subsidy eligible child is eligible under
clause (i) may not exceed the average coverage amount for the
child as determined under section 101(d) with respect to the
region in which the plan is offered.
(B) Graduated subsidy.--
(i) In general.--With respect to a family, the family
income of which exceeds 200, but does not exceed 300, percent
of the poverty line for a family of the size involved, the
amount of a premium subsidy adjustment specified in this
paragraph for a premium subsidy eligible child shall be
determined by substituting ``the applicable percentage'' for
``90 percent'' in subparagraph (A).
(ii) Applicable percentage.--For purposes of clause (i),
the term ``applicable percentage'' shall be determined using
the following table:
The applicable
percentage
``If the family income: shall be:
Exceeds 200, but does not exceed 225, percent of poverty....80
Exceeds 225, but does not exceed 250, percent of poverty....60
Exceeds 250, but does not exceed 275, percent of poverty....40
Exceeds 275, but does not exceed 300, percent of poverty....20
Exceeds 300 percent of poverty (subject to subsection (b)(2))10
(b) Other Eligible Children.--
(1) In general.--A premium subsidy eligible child who is
determined by the State to be a child described in paragraph
(2), shall be eligible for a premium subsidy adjustment in
the amount determined under paragraph (3) to be obtained
through a refundable tax credit determined under section 34A
of the Internal Revenue Code of 1986.
(2) Income limitation.--A premium subsidy eligible child
described in this paragraph is a premium subsidy eligible
child the family income of which exceeds 300 percent of the
poverty line for a family of the size involved, but the
adjusted gross income (as defined in section 62 of the
Internal Revenue Code of 1986) of which is less than $75,000.
(3) Amount.--
(A) In general.--A premium subsidy eligible child described
in paragraph (2) shall be
[[Page S308]]
eligible for a premium subsidy adjustment which shall,
subject to subparagraph (B), be equal to 10 percent of the
annual premium for the child for such year for coverage of
the child under a certified health plan.
(B) Limitation.--The amount of a subsidy adjustment for
which a premium subsidy eligible child is eligible under
subparagraph clause (A) may not exceed the average coverage
amount for the child as determined under section 101(d) with
respect to the region in which the plan is offered.
(4) Purchase of coverage by those not eligible for
subsidy.--An eligible child who is not a premium subsidy
eligible child and who enrolls in a certified health plan
shall be responsible for the payment of the entire premium
amount for coverage under the plan. Such certified plan shall
comply with the applicable State insurance requirements and
if such requirements permit, may elect not to comply with the
provisions of subparagraphs (D) (relating to guaranteed
issue) and (E) (relating to preexisting condition exclusion)
of section 101(b)(1).
(c) Determinations of Income.--For purposes of this section
and section 102(b):
(1) In general.--The term ``income'' means adjusted gross
income (as defined in section 62(a) of the Internal Revenue
Code of 1986)--
(A) determined without regard to sections 135, 162(l), 911,
931, and 933 of such Code; and
(B) increased by--
(i) the amount of interest received or accrued which is
exempt from tax, plus
(ii) the amount of social security benefits (described in
section 86(d) of such Code) which is not includible in gross
income under section 86 of such Code.
(2) Family income.--The term ``family income'' means, with
respect to a family, the sum of the income for all members of
the family, not including the income of a dependent child
with respect to which no return is required under the
Internal Revenue Code of 1986.
(d) Prohibition on Remitting Funds.--A health insurance
issuer may not in any manner remit any portion of the premium
that a family is responsible for under this title.
SEC. 104. LIMITATION ON PREEXISTING CONDITION EXCLUSION
PERIOD AND -PROHIBITION ON DISCRIMINATION.
(a) Preexisting Conditions.--
(1) In general.--No preexisting condition exclusion shall
be imposed by a certified health plan or an employer-
sponsored health plan, with respect to the enrollment and
coverage of any premium subsidy eligible child.
(2) Definition.--As used in this subsection, the term
``preexisting condition exclusion'' shall have the meaning
given such term by section 2701(b)(1) of the Public Health
Service Act (as added by section 102 of the Health Insurance
Portability and Accountability Act of 1996).
(b) Prohibition of Discrimination on Basis of Health
Status.--
(1) In eligibility to enroll.--
(A) In general.--Subject to subparagraph (B), a health
insurance issuer may not establish rules for eligibility
(including continued eligibility) of any premium subsidy
eligible child to enroll in a certified health plan or
employer-sponsored health plan based on any of the following
factors in relation to the premium subsidy eligible child:
(i) Health status.
(ii) Medical condition (including both physical and mental
illnesses).
(iii) Claims experience.
(iv) Receipt of health care.
(v) Medical history.
(vi) Genetic information.
(vii) Evidence of insurability (including conditions
arising out of acts of domestic violence).
(viii) Disability.
(B) No application to benefits or exclusions.--Subparagraph
(A) shall not be construed--
(i) to require a certified health plan or employer-
sponsored health plan to provide particular benefits other
than those provided under the terms of the coverage, or
(ii) to prevent such plan from establishing limitations or
restrictions on the amount, level, extent, or nature of the
benefits or coverage for similarly situated children enrolled
in the plan.
(2) In premium contributions.--
(A) In general.--With respect to a certified health plan or
employer-sponsored health plan, a health insurance issuer may
not require that any premium subsidy eligible child (as a
condition of enrollment or continued enrollment under the
certified or employer-sponsored health plan involved) to pay
a premium or contribution that is greater than such premium
or contribution for a similarly situated child enrolled in
the plan on the basis of any factor described in paragraph
(1)(A) in relation to the child.
(B) Construction.--Nothing in subparagraph (A) shall be
construed--
(i) to restrict the amount that an employer may be charged
for coverage under a plan; or
(ii) to prevent a health insurance issuer from establishing
premium discounts or rebates or modifying otherwise
applicable copayments or deductibles in return for adherence
to programs of health promotion and disease prevention.
(c) Employer May Not Discriminate Against Individuals
Eligible for a Subsidy.--
(1) General rule.--An employer that elects to make employer
contributions on behalf of an individual who is an employee
of such employer, or who is a dependent of such employee, for
health insurance coverage of the type described in section
101(b)(1)(A) shall not condition, or vary such contributions
with respect to any such individual by reason of such
individual's or dependent's status as an child eligible for a
premium subsidy under this title.
(2) Elimination of contributions.--An employer shall not be
treated as failing to meet the requirements of paragraph (1)
if the employer ceases to make employer contributions for
health insurance coverage for all its employees.
SEC. 105. MAINTENANCE OF EFFORT.
A State may not modify the eligibility requirements for
children under the State program under title XIX of the
Social Security Act, as in effect on July 1, 1996, in any
manner that would have the effect of reducing the eligibility
of children for coverage under such program.
SEC. 106. OVERSIGHT BY SECRETARY.
In the case of a determination by the Secretary that a
State has failed to carry out or substantially enforce a
provision (or provisions) of this title, the Secretary shall
carry out or enforce such provision (or provisions) with
respect to the coverage of eligible children in such State.
SEC. 107. RULES OF CONSTRUCTION.
Nothing in this title shall be construed--
(1) as establishing premiums for health plans or otherwise
limiting the competitive health insurance market within a
State;
(2) as limiting the ability of a State to establish health
insurance purchasing pools, initiate a competitive bidding
process with respect to certified health plans, or pursue
other innovative strategies aimed at maximizing the potential
of market forces to achieve quality and cost effectiveness;
or
(3) as superseding any provision of State law which--
(A) provides for the application of criteria, in addition
to those described in section 101(b)(1), for the
certification of health plans so long as such criteria do not
directly conflict with the goals of the criteria described in
such section; or
(B) establishes, implements, or continues in effect any
standard or requirement relating solely to health insurance
issuers in connection with certified health plans or the
coverage of eligible children, except to the extent that such
standard or requirement prevents the application of a
requirement of this title.
SEC. 108. MISCELLANEOUS PROVISIONS.
(a) Transition Rule.--With respect to the 12-month period
described in section 2(6)(E), such period shall be reduced as
follows:
(1) For premium subsidy eligible children desiring to
enroll in a certified plan during the first full month after
the date on which this Act becomes effective, the period
shall be 6 months.
(2) For premium subsidy eligible children desiring to
enroll in a certified plan during the second full month after
the date on which this Act becomes effective, the period
shall be 7 months.
(3) For premium subsidy eligible children desiring to
enroll in a certified plan during the third full month after
the date on which this Act becomes effective, the period
shall be 8 months.
(4) For premium subsidy eligible children desiring to
enroll in a certified plan during the fourth full month after
the date on which this Act becomes effective, the period
shall be 9 months.
(5) For premium subsidy eligible children desiring to
enroll in a certified plan during the fifth full month after
the day on which this Act becomes effective, the period shall
be 10 months.
(6) For premium subsidy eligible children desiring to
enroll in a certified plan during the sixth full month after
the day on which this Act becomes effective, the period shall
be 11 months.
TITLE II--HEALTH INSURANCE COVERAGE FOR PREGNANT WOMEN
SEC. 201. EXPANDING HEALTH INSURANCE COVERAGE FOR PREGNANT
WOMEN.
(a) Establishment of Grant Program.--The Secretary shall
establish a program to provide grants to States to enable
such States to assist pregnant women in obtaining appropriate
prenatal, perinatal and postnatal care.
(b) Application.--To be eligible to receive a grant under
this section, a State shall prepare and submit to the
Secretary an application at such time, in such manner, and
containing such information as the Secretary may require.
(c) Amount of Grant.--
(1) In general.--From the amount available for grants under
subsection (e) for a fiscal year, the Secretary shall award a
grant to each State in an amount that is equal to an amount
which bears the same relationship to such amount as the
pregnancy coverage amount of the State as determined under
paragraph (2) bears to the pregnancy coverage amount for all
States.
(2) Pregnancy coverage amount.--For purposes of paragraph
(1), the pregnancy coverage amount of a State shall be equal
to--
(A) the number of estimated uninsured pregnant women in the
State the family income of which does not exceed 300 percent
of the poverty line for a family of the size involved; and
(B) the average per capita cost of providing pregnancy
benefits to such women.
(3) Guidelines.--The Secretary, in consultation with the
National Association of Insurance Commissioners and the
American Academy of Actuaries, shall establish guidelines for
the determination of the amounts
[[Page S309]]
described in subparagraphs (A) and (B) of paragraph (2).
(d) Use of Amounts.--A State shall use amounts received
under a grant provided under this section to assist pregnant
women in obtaining appropriate prenatal, perinatal and
postnatal care as approved by the Secretary.
(e) Authorization of Appropriations.--There is authorized
to be appropriated such sums as may be necessary to carry out
this section.
SEC. 202. GRANTS FOR INNOVATIVE OUTREACH.
(a) Establishment of Grant Program.--The Secretary shall
establish a program to provide categorical grants to States
to assist children and pregnant women in obtaining health
care services and coverage for which they are eligible.
(b) Application.--To be eligible to receive a grant under
this section, a State shall prepare and submit to the
Secretary an application at such time, in such manner, and
containing such information as the Secretary may require.
(c) Amount of Grant.--The Secretary shall determine the
amount of a grant provided under this section.
(d) Use of Amounts.--A State shall use amounts received
under a grant provided under this section to carry out
innovative outreach activities to promote the timely
enrollment of pregnant women and children in health plans or
other programs that provide prenatal care and other
pregnancy-related services or comprehensive care for
children.
(e) Authorization of Appropriations.--There is authorized
to be appropriated such sums as may be necessary to carry out
this section.
TITLE III--CHILDREN'S HEALTH COVERAGE SUBSIDY CREDITS
SEC. 301. HEALTH COVERAGE PROVIDED TO PREMIUM SUBSIDY
ELIGIBLE CHILDREN THROUGH A TAX CREDIT FOR
INSURERS.
(a) In General.--Subpart B of part IV of subchapter A of
chapter 1 of the Internal Revenue Code of 1986 (relating to
other credits) is amended by adding at the end the following:
``SEC. 30B. CHILDREN'S HEALTH COVERAGE SUBSIDY CREDIT FOR
INSURERS.
``(a) Determination of Amount.--There shall be allowed as a
credit against the applicable tax for the taxable year an
amount equal to the eligible premium subsidies provided by a
health insurance issuer for coverage under 1 or more
certified health plans during the taxable year under the
Children's Health Coverage Act.
``(b) Applicable Tax.--For purposes of this section, the
term `applicable tax' means the excess (if any) of--
``(1) the sum of--
``(A) the tax imposed under this chapter (other than the
taxes imposed under the provisions described in subparagraphs
(C) through (O) of section 26(b)(1)), plus
``(B) the tax imposed under chapter 21, over
``(2) the credits allowable under subparts B and D of this
part.
``(c) Eligible Premium Subsidies.--The term ``eligible
premium subsidies' means premium subsidies for premium
subsidy eligible children (as defined in section 2(6) of the
Children's Health Coverage Act.
``(d) Other Definitions.--For purposes of this section, the
terms `health insurance issuer' and `certified health plan'
have the meaning given those terms by section 2 of the
Children's Health Coverage Act.''.
(b) Transfer to Trust Funds.--The Secretary of the Treasury
shall transfer from the general fund to the Old-Age,
Survivors, and Disability Insurance Trust Fund and to the
Hospital Insurance Trust Fund amounts equivalent to the
amount of the reduction in taxes imposed by section 3111 of
the Internal Revenue Code of 1986 by reason of the credit
determined under section 30B (relating to the children's
health coverage subsidy credit for insurers). Any such
transfer shall be made at the same time the reduced taxes
would have been deposited in either such Trust Fund.
(c) Conforming Amendment.--The table of sections for
subpart B of part IV of subchapter A of chapter 1 of the
Internal Revenue Code of 1986 is amended by adding at the end
the following:
``Sec. 30B. Children's health coverage subsidy credit for insurers.''.
(e) Effective Date.--The amendments made by this section
apply to taxable years beginning after December 31, 1997.
SEC. 302. HEALTH COVERAGE PROVIDED TO PREMIUM SUBSIDY
ELIGIBLE CHILDREN THROUGH A REFUNDABLE INCOME
TAX CREDIT.
(a) In General.--Subpart C of part IV of subchapter A of
chapter 1 of the Internal Revenue Code of 1986 (relating to
refundable personal credits) is amended by inserting after
section 34 the following:
``SEC. 34A. CHILDREN'S HEALTH COVERAGE.
``(a) Allowance of Credit.--In the case of a premium
subsidy eligible individual, there shall be allowed as a
credit against the tax imposed by this subtitle for the
taxable year an amount equal to the premium subsidy
determined under section 103(b)(3) of the Children's Health
Coverage Act for such individual for the taxable year.
``(b) Premium Subsidy Eligible Individual.--For purposes of
this section, the term `premium subsidy eligible individual'
means, with respect to any period, an individual who has as a
dependent for the taxable year 1 or more premium subsidy
eligible children described in section 103(b)(2) of the
Children's Health Coverage Act.
``(c) Regulations.--The Secretary shall prescribe such
regulations as may be necessary to carry out the purposes of
this section.''.
(b) Coordination With Deductions for Health Insurance
Expenses.--
(1) Self-employed individuals.--Section 162(l) of the
Internal Revenue Code of 1986 (relating to special rules for
health insurance costs of self-employed individuals) is
amended by adding after paragraph (5) the following:
``(6) Coordination with children's health coverage
credit.--Paragraph (1) shall not apply to any amount taken
into account in computing the amount of the credit allowed
under section 34A.''.
(2) Medical, dental, etc., expenses.--Section 213(e) of
such Code (relating to exclusion of amounts allowed for care
of certain dependents) is amended by inserting ``or section
34A'' after ``section 21''.
(c) Conforming Amendment.--The table of sections for
subpart A of part IV of subchapter A of chapter 1 of the
Internal Revenue Code of 1986 is amended by inserting after
the item relating to section 34 the following:
``Sec. 34A. Children's health coverage.''.
(d) Effective Date.--The amendments made by this section
apply to taxable years beginning after December 31, 1997.
______
By Mr. DASCHLE (for himself, Mrs. Boxer, Mr. Kennedy, Mr.
Bingaman, Ms. Moseley-Braun, Mr. Rockefeller, Mr. Graham, Ms.
Mikulski, Mr. Kerry, Mr. Reid, Mr. Durbin, Mr. Inouye, Mr.
Torricelli, and Mr. Breaux):
S. 14. A bill to provide for retirement savings and security, and for
other purposes; to the Committee on Finance.
retirement security act of 1997
Mr. KENNEDY. Mr. President, today I join with the distinguished
Minority Leader, Senator Daschle, in co-sponsoring legislation
important for the future of working families in this country. One of
this Congress's highest priorities should be pension reform.
The Treasury now spends $66 billion a year in tax subsidies to
encourage pension coverage, but working families are not getting full
value for this money. 56 percent of the workforce is not currently
covered by any private pension plan. The situation is worse for
employees of small businesses. Eighty-five percent of those employed by
firms with fewer than 25 workers have no pension coverage. For low-wage
workers, the situation is worst of all. More than 26 million
employees--80 percent--who earn under $15,000 a year are not covered by
a pension plan. Forty-one million employees who earn less than $30,000
a year do not participate in a retirement plan--60 percent.
Women make up an excessive portion of the working population that is
not covered by a pension plan. Employees covered by union agreements
are nearly twice as likely to have a pension, but women are half as
likely to hold these jobs. More than eight million women who work for
small firms have no access to pension coverage.
Low-wage women are especially hard-hit. Sixty percent of those
earning under $15,000 a year are women. Nearly sixteen million women
who earn less than $15,000 a year are not participating in a pension
plan--80 percent. Twenty-three million women earning less than $30,000
a year don't participate in a retirement plan--nearly 60 percent.
Women are more than twice as likely as men to hold part-time jobs,
with no pension coverage. Women make up more than half the workforce in
industries with the lowest rates of pension coverage--such as the
service and retail industries. In those industries with higher rates of
access to pensions--mining, durable manufacturing, and communications--
women make up just one-fourth of the workforce.
We must change these figures. I am proud to join in sponsoring the
Retirement Security Act that Senator Daschle is introducing today to
deal with these serious problems.
This bill will make real progress in expanding access to pensions for
all working families. It will facilitate retirement savings by millions
of Americans, by enabling workers to ask their employers to set aside
savings from paychecks and deposit the savings directly into retirement
accounts. This ``pension checkoff'' is a simple, practical step to make
the private pension system more accessible to all workers.
The bill will also provide tax incentives for low-wage employees to
set aside money for retirement. Families
[[Page S310]]
on the lower rungs of the economic ladder deserve a secure income when
they retire. This bill will reform the tax laws to make them more
beneficial to low-income workers. No one who works for a living should
have to retire in poverty.
The bill advances other important goals as well. It strengthens the
security of the pension system, so that the benefits families rely on
will be there when they retire. It will stop employers from forcing
employees to invest their retirement contributions in the employer's
stock, against the workers' wishes. It will provide closer monitoring
of pension plan terminations, to prevent companies from raiding
employee pensions.
The bill also promotes pension portability. The checkoff system will
allow employees to continue saving for retirement even if they change
jobs or leave the labor market for a time. Wherever they go, they can
take their pension plan with them. In addition, the bill makes it
easier for employees to roll over their retirement accounts to a new
employer's plan.
The bill will remove the most significant obstacles to pension
coverage for women. It builds on the efforts of Senator Moseley-Braun
and Senator Boxer in the last Congress to improve pension benefits for
surviving spouses. It will also enable spouses to contribute to IRAs.
The pension checkoff system will benefit millions of working women
whose employers do not provide pension plans.
I commend Senator Daschle for the leadership he has shown in
introducing this important bill. At a time when Social Security is
facing tremendous budget pressure, it is essential that the private
pension system be accessible and affordable to every working family. I
look forward to working with colleagues on both sides of the aisle to
pass this necessary 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. 14
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 ``Retirement Security Act of
1997''.
SEC. 2. TABLE OF CONTENTS.
The table of contents for this Act is as follows:
Sec. 1. Short title.
Sec. 2. Table of contents.
TITLE I--PENSION ACCESS AND COVERAGE
Sec. 100. Amendment of 1986 Code.
Subtitle A--Improved Access to Individual Retirement Savings
Chapter 1--Contributions To Individual Retirement Plans Through Payroll
Deductions
Sec. 101. Definitions.
Sec. 102. Establishment of payroll deduction and investment system.
Sec. 103. Contributions to individual retirement plans.
Sec. 104. Investment options.
Sec. 105. Accounting and information.
Sec. 106. Administrative costs.
Sec. 107. Fiduciary responsibilities; liability and penalties; bonding;
investigative authority.
Sec. 108. Selection of contractor.
Chapter 2--Nonrefundable Tax Credit for Contributions to Individual
Retirement Accounts
Sec. 111. Nonrefundable tax credit for contributions to individual
retirement plans.
Chapter 3--Expanded Individual Retirement Accounts to Increase Coverage
and Portability
SUBCHAPTER A--IRA DEDUCTION
Sec. 121. Increase in income limitations.
Sec. 122. Inflation adjustment for deductible amount and income
limitations.
SUBCHAPTER B--DISTRIBUTIONS AND INVESTMENTS
Sec. 131. Distributions from IRAs may be used without additional tax to
purchase first homes, to pay higher education, or to pay
financially devastating medical expenses.
Sec. 132. Contributions must be held at least 5 years in certain cases.
Chapter 4--Periodic Pension Benefits Statements
Sec. 141. Periodic pension benefits statements.
Subtitle B--Improved Fairness in Retirement Plan Benefits
Sec. 151. Amendments to simple retirement accounts.
Sec. 152. Nondiscrimination rules for qualified cash or deferred
arrangements and matching contributions.
Sec. 153. Definition of highly compensated employees.
Subtitle C--Improving Retirement Plan Coverage
Sec. 161. Credit for pension plan start-up costs of small employers.
Sec. 162. Treatment of multiemployer plans under section 415.
Sec. 163. Exemption of mirror plans from section 457 limits.
Sec. 164. Special rules for self-employed individuals.
Sec. 165. Immediate participation in the thrift savings plan for
Federal employees.
Sec. 166. Modification of 10 percent tax for nondeductible
contributions.
Subtitle D--Simplifying Plan Requirements
Sec. 171. Full funding limitation for multiemployer plans.
Sec. 172. Elimination of partial termination rules for multiemployer
plans.
Sec. 173. Modifications to nondiscrimination and minimum participation
rules with respect to governmental plans.
Sec. 174. Elimination of requirement for plan descriptions and the
filing requirement for summary plan descriptions and
descriptions of material modifications to a plan;
technical corrections.
Sec. 175. New technologies in retirement plans.
TITLE II--SECURITY
Sec. 200. Amendment of ERISA.
Subtitle A--General Provisions
Sec. 201. Section 401(k) investment protection.
Sec. 202. Requirement of annual, detailed investment reports applied to
certain 401(k) plans.
Sec. 203. Study on investments in collectibles.
Sec. 204. Qualified employer plans prohibited from making loans through
credit cards and other intermediaries.
Sec. 205. Multiemployer plan benefits guaranteed.
Sec. 206. Prohibited transactions.
Sec. 207. Substantial owner benefits.
Sec. 208. Reversion report.
Sec. 209. Development of additional remedies.
Subtitle B--ERISA Enforcement
Sec. 211. Repeal of limited scope audit.
Sec. 212. Additional requirements for qualified public accountants.
Sec. 213. Clarification of fiduciary penalties.
Sec. 214. Conforming amendments relating to ERISA enforcement.
TITLE III--PORTABILITY
Sec. 301. Faster vesting of employer matching contributions.
Sec. 302. Rationalize the restrictions on distributions from 401(k)
plans.
Sec. 303. Treatment of transfers between defined contribution plans.
Sec. 304. Missing participants.
TITLE IV--TOWARD EQUITY FOR WOMEN
Sec. 401. Individual's participation in plan not treated as
participation by spouse.
Sec. 402. Modifications of joint and survivor annuity requirements.
Sec. 403. Division of pension benefits upon divorce.
Sec. 404. Deferred annuities for surviving spouses of Federal
employees.
Sec. 405. Payment of lump-sum credit for former spouses of Federal
employees.
Sec. 406. Women's pension toll-free phone number.
TITLE V--DATE FOR ADOPTION OF PLAN AMENDMENTS
Sec. 501. Date for adoption of plan amendments.
TITLE I--PENSION ACCESS AND COVERAGE
SEC. 100. AMENDMENT OF 1986 CODE.
Except as otherwise expressly provided, whenever in this
title an amendment or repeal is expressed in terms of an
amendment to, or repeal of, a section or other provision, the
reference shall be considered to be made to a section or
other provision of the Internal Revenue Code of 1986.
Subtitle A--Improved Access to Individual Retirement Savings
CHAPTER 1--CONTRIBUTIONS TO INDIVIDUAL RETIREMENT PLANS THROUGH PAYROLL
DEDUCTIONS
SEC. 101. DEFINITIONS.
For purposes of this chapter:
(1) Contractor.--The term ``contractor'' means the private
entity awarded a contract by the Secretary of Labor under
section 108.
(2) Contribution certificate.--The term ``contribution
certificate'' means a certificate submitted by an eligible
employee to the employee's employer and the contractor
which--
(A) identifies the employee by name, address, and social
security number,
(B) includes a certification by the employee that the
employee is an eligible employee, and
(C) identifies the amount of the contribution to an
individual retirement plan the employee wishes to make for
the taxable year through a payroll deduction, not to exceed
[[Page S311]]
the amount allowed under section 408 of the Internal Revenue
Code of 1986 to an individual retirement plan for such year.
(2) Eligible employee.--
(A) In general.--The term ``eligible employee'' means, with
respect to any taxable year, an employee whose employer does
not sponsor a qualified retirement plan (as defined in
section 4974(c) of the Internal Revenue Code of 1986.
(B) Employee.--The term ``employee'' does not include an
employee as defined in section 401(c)(1) of such Code.
(3) Individual retirement plans.--
(A) In general.--The term ``individual retirement plan''
has the meaning given the term by section 7701(a)(37) of the
Internal Revenue Code of 1986).
(B) Application of rules.--Rules applicable to an
individual retirement plan under the Internal Revenue Code of
1986 are applicable to an individual retirement plan referred
to in this chapter.
SEC. 102. ESTABLISHMENT OF PAYROLL DEDUCTION AND INVESTMENT
SYSTEM.
The contractor shall establish a system under which--
(1) eligible employees, through employer payroll
deductions, may make contributions to individual retirement
plans, and
(2) amounts in the individual retirement plans are invested
as provided in section 104.
SEC. 103. CONTRIBUTIONS TO INDIVIDUAL RETIREMENT PLANS.
(a) In General.--The system established under section 102
shall provide that contributions made to an individual
retirement plan for any taxable year are--
(1) contributions under an employer payroll deduction
system, and
(2) additional contributions which, when added to
contributions under paragraph (1), do not exceed the amount
allowed under section 408 of the Internal Revenue Code of
1986 for the taxable year.
(b) Employer Payroll Deduction Systems.--
(1) In general.--The system established under section 102
shall provide to the maximum extent feasible that
contributions under employer payroll deduction systems are
made in such a manner as provides all employers with a
simple, cost-effective way of making such contributions.
(2) Simplified employee enrollment and participation.--
(A) Establishment.--An eligible employee may establish and
maintain an individual retirement plan simply by--
(i) completing a contribution certificate, and
(ii) submitting such certificate to the eligible employee's
employer and the contractor in the manner provided under
paragraph (3).
(B) Ease of administration.--An eligible employee
establishing and maintaining an individual retirement plan
under subparagraph (A) may change the amount of an employer
payroll deduction, request employer payroll deductions by new
employers to an existing plan, and make changes in elections
made under section 104(d) in the same manner as under
subparagraph (A).
(C) Simplified forms.--
(i) Contribution certificate.--The contractor shall develop
a contribution certificate for purposes of subparagraph (A)--
(I) which is written in a clear and easily understandable
manner, and
(II) the completion of which by an eligible employee will
constitute the establishment of an individual retirement plan
and the request for employer payroll deductions.
(ii) Other forms.--The contractor shall develop such model
forms for purposes of subparagraph (B) as are necessary to
enable the contractor and an employer to easily administer an
individual retirement plan on behalf of an eligible employee.
(iii) Availability.--The contractor shall make available to
all eligible employees and employers the forms developed
under this subparagraph, and shall include with such forms
easy to understand explanatory materials.
(3) Use of certificate.--Each employer upon receipt of a
contribution certificate from an eligible employee shall
deduct the appropriate contribution as determined by such
certificate from the employee's wages in equal amounts during
the remaining payroll periods for the taxable year and shall
remit such amounts to the contractor for investment in the
employee's individual retirement plan.
(4) Failure to remit payroll deductions.--For purposes of
the Internal Revenue Code of 1986, any amount which an
employer fails to remit to the contractor on behalf of an
eligible employee pursuant to a contribution certificate of
such employee shall not be allowed as a deduction to the
employer under such Code.
SEC. 104. INVESTMENT OPTIONS.
(a) In General.--The contractor shall, pursuant to the
system established under section 102, enter into
arrangements, on a competitive basis, with qualified
professional asset managers to provide individuals with the
opportunity to invest sums in an individual retirement plan
in each of the funds described in subsection (b).
(b) Type of Funds.--The funds described in the subsection
are the following:
(1) A government securities investment fund.
(2) A fixed income investment fund.
(3) A common stock index investment fund.
(c) Asset Managers.--
(1) In general.--The contractor may select more than 1
qualified professional asset manager for each type of fund
described in subsection (b).
(2) Asset allocation.--The contractor may place limits on
the amount which may be allocated by the contractor to any
qualified professional asset manager to the extent the
contractor determines necessary to prevent undue impact on
any financial market or undue risk to participants.
(3) Definition.--For purposes of this section, the term
``qualified professional asset manager'' has the meaning
given the term by section 8438(a)(7) of title 5, United
States Code.
(d) Participant Elections.--
(1) In general.--The system established under section 102
shall provide that an individual on whose behalf an
individual retirement plan is established may--
(A) elect the investment funds into which contributions to
the plan are to be invested, and
(B) elect to transfer contributions (and earnings) from one
fund to another.
(2) Method.--Any election shall be made in the manner
provided by the system, except that the contractor shall seek
to ensure elections may be made in a simple, timely manner.
(3) Limitation.--Any election under this subsection shall
be subject to the asset allocation limitation under
subsection (c)(2).
(e) Investment Policies.--The system established under
section 102 shall provide that any investment policies
adopted by the contractor shall provide for--
(1) prudent investments suitable for accumulating funds for
payment of retirement income, and
(2) low administrative costs.
SEC. 105. ACCOUNTING AND INFORMATION.
(a) Establishment of Plans.--
(1) In general.--The system established under section 102
shall provide for the establishment and maintenance of an
individual retirement plan for each individual--
(A) for whom contributions are made to the contractor under
an employer payroll deduction system pursuant to a
contribution certificate, and
(B) who makes any additional contributions allowed under
section 408 of the Internal Revenue Code of 1986 for the
taxable year.
(2) Allocations and reductions to plan.--Such system shall
provide for--
(A) the allocation to each plan of an amount equal to a pro
rata share of the net earnings and net losses from each
investment of sums in such plan, and
(B) a reduction in each such plan for the plan's
appropriate share of the administrative expenses to be paid
out.
(3) Examination of plans.--
(A) In general.--The contractor shall annually engage, on
behalf of all individuals for whom an individual retirement
plan is maintained, an independent qualified public
accountant (within the meaning of section 103(a)(3)(D) of the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1023(a)(3)(D)) who shall conduct an examination of all plans
and other books and records maintained in the administration
of this chapter as the accountant considers necessary to make
the determination under subparagraph (B). The examination
shall be conducted in accordance with generally accepted
auditing standards and shall involve such tests of the plans,
books, and records as the public accountant considers
necessary.
(B) Determination of compliance.--The public accountant
conducting an examination under subparagraph (A) shall
determine whether the plans, books, and records referred to
in such subparagraph have been maintained in conformity with
generally accepted accounting principles. The public
accountant shall transmit to the contractor and the Secretary
of Labor a report on such examination and determination.
(C) Reliance.--In making a determination under subparagraph
(B), a public accountant may rely on the correctness of any
actuarial matter certified by an enrolled actuary if the
public accountant states a reliance in the report to the
contractor.
(b) Additional Information.--
(1) In general.--The system established under section 102
shall provide for the furnishing of information to employees
and employers of the opportunity of establishing individual
retirement plans and of transferring amounts to such plans.
(2) Plan participants.--
(A) In general.--Such system shall provide that each
individual for whom an individual retirement plan is
maintained shall be periodically furnished with--
(i) a statement relating to the individual's plan, and
(ii) a summary description of the investment options under
the plan and a history of the investment performance of such
options during the 5-year period preceding the evaluation.
(B) Plan valuation.--Such system shall also provide that
each individual for whom an individual retirement plan is
established shall be entitled, upon request, to a periodic
valuation of amounts in each fund described in section 104(b)
in order to enable the individual to make an election to
transfer such amounts between funds.
(3) Investment information.--The contractor shall also make
available to employees information on how to make informed
investment decisions and how to achieve retirement
objectives.
(4) Information not investment advice.--Information
provided under this subsection
[[Page S312]]
shall not be treated as investment advice for purposes of any
Federal or State law.
SEC. 106. ADMINISTRATIVE COSTS.
(a) In General.--Except as provided from amounts described
in section 108(c), any expense incurred by the contractor in
carrying out its functions under this chapter shall be paid
first from the earnings of the funds in individual retirement
plans and then from balances in such plans.
(b) Allocation.--Expenses under subsection (a) shall be
allocated to each individual retirement plan in the manner
provided under section 105.
SEC. 107. FIDUCIARY RESPONSIBILITIES; LIABILITY AND
PENALTIES; BONDING; INVESTIGATIVE AUTHORITY.
Except as modified by the Secretary of Labor in regulations
to correspond to the structure and responsibilities of the
contractor, the provisions of sections 8477, 8478, 8478a, and
8479(a) of title 5, United States Code, shall apply to the
contractor in the same manner as such provisions apply to the
Thrift Savings Fund.
SEC. 108. SELECTION OF CONTRACTOR.
(a) Selection.--
(1) In general.--The Secretary of Labor shall contract out,
on a competitive basis, the duties under this chapter to a
private entity.
(2) Measurement of contract performance.--No contract shall
be entered into with any entity under paragraph (1) unless
the Secretary of Labor finds that such entity will perform
its obligations under the contract efficiently and
effectively and will meet such requirements as to financial
responsibility, legal authority, and other matters as the
Secretary finds pertinent. The Secretary of Labor shall
publish in the Federal Register standards and criteria for
the efficient and effective performance of contract
obligations under this chapter (including standards and
criteria for the termination of such contract), and
opportunity shall be provided for public comment prior to
implementation.
(b) Treatment as Trustee.--For purposes of the Internal
Revenue Code of 1986 the contractor shall be treated in the
same manner as a trustee described in section 408(a)(2) of
such Code.
(c) Authorization of Appropriations.--There are authorized
to be appropriated such sums as are necessary for the
Secretary of Labor to design and award the contract described
in subsection (a)(1) and for the contractor to begin
operations under this chapter.
(d) Effective Date of System.--The system established under
section 102 shall take effect on the first day of the sixth
month following the month in which the contract under
subsection (a) is awarded.
CHAPTER 2--NONREFUNDABLE TAX CREDIT FOR CONTRIBUTIONS TO INDIVIDUAL
RETIREMENT ACCOUNTS
SEC. 111. NONREFUNDABLE TAX CREDIT FOR CONTRIBUTIONS TO
INDIVIDUAL RETIREMENT PLANS.
(a) In General.--Subpart A of part IV of subchapter A of
chapter 1 (relating to nonrefundable personal credits) is
amended by inserting after section 25 the following new
section:
``SEC. 25A. RETIREMENT SAVINGS.
``(a) Allowance of Credit.--There shall be allowed as a
credit against the tax imposed by this chapter so much of the
qualified retirement contributions of the taxpayer for the
taxable year as does not exceed the applicable amount of the
adjusted gross income of the taxpayer for such year.
``(b) Applicable Amount.--For purposes of subsection (a),
the applicable amount is determined in accordance with the
following table:
The applicable amount is:e is:
$450.ver $15,000.......................................................
$400.$15,000 but not over $20,000......................................
$350.$20,000 but not over $25,000......................................
$300.$25,000 but not over $30,000......................................
$0.r $30,000...........................................................
``(c) Section not to apply to certain contributions.--This
section shall not apply with respect to--
``(1) an employer contribution to a simplified employee
pension, and
``(2) any amount contributed to a simple retirement account
established under section 408(p).
``(d) Other Limitations and Restrictions.--
``(1) Beneficiary must be under age 70\1/2\.--No credit
shall be allowed under this section with respect to any
qualified retirement contribution for the benefit of an
individual if such individual has attained age 70\1/2\ before
the close of such individual's taxable year for which the
contribution was made.
``(2) Recontributed amounts.--No credit shall be allowed
under this section with respect to a rollover contribution
described in section 402(c), 403(a)(4), 403(b)(8), or
408(d)(3).
``(3) Amounts contributed under endowment contract.--In the
case of an endowment contract described in section 408(b), no
credit shall be allowed under this section for that portion
of the amounts paid under the contract for the taxable year
which is properly allocable, under regulations prescribed by
the Secretary, to the cost of life insurance.
``(4) Denial of credit for amount contributed to inherited
annuities or accounts.--No credit shall be allowed under this
section with respect to any amount paid to an inherited
individual retirement account or individual retirement
annuity (within the meaning of section 408(d)(3)(C)(ii)).
``(5) No double benefit.--No credit shall be allowed under
this section for any taxable year with respect to the amount
of any qualified retirement contribution for the benefit of
an individual if such individual takes a deduction with
respect to such amount under section 219 for such taxable
year.
``(e) Qualified Retirement Contribution.--For purposes of
this section, the term `qualified retirement contribution'
means--
``(1) any amount paid in cash for the taxable year by or on
behalf of an individual to an individual retirement plan for
such individual's benefit, and
``(2) any amount contributed on behalf of any individual to
a plan described in section 501(a)(18).
``(f) Other Definitions and Special Rules.--
``(1) Compensation.--For purposes of this section, the term
`compensation' has the meaning given in section 219(f)(1).
``(2) Married couples must file joint return.--If the
taxpayer is married at the close of the taxable year, the
credit shall be allowed under subsection (a) only if the
taxpayer and the taxpayer's spouse file a joint return for
the taxable year.
``(3) Time when contributions deemed made.--For purposes of
this section, a taxpayer shall be deemed to have made a
contribution to an individual retirement plan on the last day
of the preceding taxable year if the contribution is made on
account of such taxable year and is made not later than the
time prescribed by law for filing the return for such taxable
year (not including extensions thereof).
``(4) Reports.--The Secretary shall prescribe regulations
which prescribe the time and the manner in which reports to
the Secretary and plan participants shall be made by the plan
administrator of a qualified employer or government plan
receiving qualified voluntary employee contributions.
``(5) Employer payments.--For purposes of this title, any
amount paid by an employer to an individual retirement plan
shall be treated as payment of compensation to the employer
(other than a self-employed individual who is an employee
within the meaning of section 401(c)(1)) includible in his
gross income in the taxable year for which the amount was
contributed, whether or not a credit for such payment is
allowable under this section to the employee.
``(g) Cross Reference.--
``For failure to provide required reports, see section 6652(g).''.
(b) Conforming Amendments.--
(1) Section 86(f) is amended by redesignating paragraphs
(2), (3), and (4) as paragraphs (3), (4), and (5),
respectively, and by inserting after paragraph (1) the
following new paragraph:
``(2) section 25A(f)(1) (defining compensation),''.
(2) Clause (i) of section 501(c)(18)(D) is amended by
inserting ``which may be taken into account in computing the
credit allowable under section 25A or'' before ``with
respect''.
(3) Section 6047(c) is amended by inserting ``section 25A
or'' before ``section 219''.
(4) Section 6652(g) is amended--
(A) by inserting ``section 25A(f)(4) or'' before ``section
219(f)(4)'', and
(B) by inserting ``Creditable'' before ``Deductible'' in
the heading thereof.
(5) The table of sections for subpart A of part IV of
subchapter A of chapter 1 is amended by inserting after the
item relating to section 25 the following new item:
``Sec. 25A. Retirement savings.''.
(c) Effective Date.--The amendments made by this section
apply to taxable years beginning after December 31, 1997.
CHAPTER 3--EXPANDED INDIVIDUAL RETIREMENT ACCOUNTS TO INCREASE COVERAGE
AND PORTABILITY
Subchapter A--IRA Deduction
SEC. 121. INCREASE IN INCOME LIMITATIONS.
(a) In General.--Subparagraph (B) of section 219(g)(3)
(defining applicable dollar amount) is amended--
(1) by striking ``$40,000'' in clause (i) and inserting
``$80,000 ($70,000 in the case of taxable years beginning in
1997, 1998, or 1999)'', and
(2) by striking ``$25,000'' in clause (ii) and inserting
``$50,000 ($45,000 in the case of taxable years beginning in
1997, 1998, or 1999)''.
(b) Phaseout of Limitations.--Clause (ii) of section
219(g)(2)(A) (relating to amount of reduction) is amended by
striking ``$10,000'' and inserting ``an amount equal to 10
times the dollar amount applicable for the taxable year under
subsection (b)(1)(A)''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
1996.
SEC. 122. INFLATION ADJUSTMENT FOR DEDUCTIBLE AMOUNT AND
INCOME LIMITATIONS.
(a) In General.--Section 219 (relating to retirement
savings) is amended by redesignating subsection (h) as
subsection (i) and by inserting after subsection (g) the
following new subsection:
``(h) Cost-of-Living Adjustments.--
``(1) Deductible amounts.--In the case of any taxable year
beginning in a calendar year after 1997, the $2,000 amount
under subsection (b)(1)(A) shall be increased by an amount
equal to--
``(A) such dollar amount, multiplied by
[[Page S313]]
``(B) the cost-of-living adjustment determined under
section 1(f)(3) for the calendar year in which the taxable
year begins, determined by substituting `calendar year 1996'
for `calendar year 1992' in subparagraph (B) thereof.
``(2) Applicable dollar amount.--In the case of any taxable
year beginning in a calendar year after 2000, the applicable
dollar amounts under subsection (g)(3)(B) shall be increased
by an amount equal to--
``(A) such dollar amount, multiplied by
``(B) the cost-of-living adjustment determined under
section 1(f)(3) for the calendar year in which the taxable
year begins, determined by substituting `calendar year 1999'
for `calendar year 1992' in subparagraph (B) thereof.
``(3) Rounding rules.--
``(A) Deduction amounts.--If any amount after adjustment
under paragraph (1) is not a multiple of $500, such amount
shall be rounded to the next lowest multiple of $500.
``(B) Applicable dollar amounts.--If any amount after
adjustment under paragraph (2) is not a multiple of $5,000,
such amount shall be rounded to the next lowest multiple of
$5,000.''.
(b) Conforming Amendments.--
(1) Section 408(a)(1) is amended by striking ``in excess of
$2,000 on behalf of any individual'' and inserting ``on
behalf of any individual in excess of the amount in effect
for such taxable year under section 219(b)(1)(A)''.
(2) Section 408(b)(2)(B) is amended by striking ``$2,000''
and inserting ``the dollar amount in effect under section
219(b)(1)(A)''.
(3) Section 408(j) is amended by striking ``$2,000''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
1996.
Subchapter B--Distributions and Investments
SEC. 131. DISTRIBUTIONS FROM IRAS MAY BE USED WITHOUT
ADDITIONAL TAX TO PURCHASE FIRST HOMES, TO PAY
HIGHER EDUCATION, OR TO PAY FINANCIALLY
DEVASTATING MEDICAL EXPENSES.
(a) In General.--Paragraph (2) of section 72(t) (relating
to exceptions to 10-percent additional tax on early
distributions from qualified retirement plans) is amended by
adding at the end the following new subparagraph:
``(E) Distributions from certain plans for first home
purchases or educational expenses.--Distributions to an
individual from an individual retirement plan--
``(i) which are qualified first-time homebuyer
distributions (as defined in paragraph (7)); or
``(ii) to the extent such distributions do not exceed the
qualified higher education expenses (as defined in paragraph
(8)) of the taxpayer for the taxable year.''.
(b) Financially Devastating Medical Expenses.--
(1) Certain lineal descendants and ancestors treated as
dependents.--Subparagraph (B) of section 72(t)(2) (relating
to subsection not to apply to certain distributions) is
amended by striking ``medical care'' and all that follows and
inserting ``medical care determined--
``(i) without regard to whether the employee itemizes
deductions for such taxable year, and
``(ii) in the case of an individual retirement plan, by
treating such employee's dependents as including all
children, grandchildren, and ancestors of the employee or
such employee's spouse.''.
(2) Conforming amendment.--Subparagraph (B) of section
72(t)(2) is amended by striking ``or (D)'' and inserting ``,
(D), or (E)''.
(c) Definitions.--Section 72(t) is amended by adding at the
end the following new paragraphs:
``(7) Qualified first-time homebuyer distributions.--For
purposes of paragraph (2)(E)(i)--
``(A) In general.--The term `qualified first-time homebuyer
distribution' means any payment or distribution received by
an individual to the extent such payment or distribution is
used by the individual before the close of the 60th day after
the day on which such payment or distribution is received to
pay qualified acquisition costs with respect to a principal
residence of a first-time homebuyer who is such individual or
the spouse, child (as defined in section 151(c)(3)), or
grandchild of such individual.
``(B) Qualified acquisition costs.--For purposes of this
paragraph, the term `qualified acquisition costs' means the
costs of acquiring, constructing, or reconstructing a
residence. Such term includes any usual or reasonable
settlement, financing, or other closing costs.
``(C) First-time homebuyer; other definitions.--For
purposes of this paragraph--
``(i) First-time homebuyer.--The term `first-time
homebuyer' means any individual if--
``(I) such individual (and if married, such individual's
spouse) had no present ownership interest in a principal
residence during the 3-year period ending on the date of
acquisition of the principal residence to which this
paragraph applies, and
``(II) subsection (h) or (k) of section 1034 did not
suspend the running of any period of time specified in
section 1034 with respect to such individual on the day
before the date the distribution is applied pursuant to
subparagraph (A).
In the case of an individual described in section
143(i)(1)(C) for any year, an ownership interest shall not
include any interest under a contract of deed described in
such section. An individual who loses an ownership interest
in a principal residence incident to a divorce or legal
separation is deemed for purposes of this subparagraph to
have had no ownership interest in such principal residence
within the period referred to in subclause (II).
``(ii) Principal residence.--The term `principal residence'
has the same meaning as when used in section 1034.
``(iii) Date of acquisition.--The term `date of
acquisition' means the date--
``(I) on which a binding contract to acquire the principal
residence to which subparagraph (A) applies is entered into,
or
``(II) on which construction or reconstruction of such a
principal residence is commenced.
``(D) Special rule where delay in acquisition.--Any portion
of any distribution from any individual retirement plan which
fails to meet the requirements of subparagraph (A) solely by
reason of a delay or cancellation of the purchase or
construction of the residence may be contributed to an
individual retirement plan as provided in section
408(d)(3)(A)(i) (determined by substituting `120 days' for
`60 days' in such section), except that--
``(i) section 408(d)(3)(B) shall not be applied to such
portion, and
``(ii) such portion shall not be taken into account in
determining whether section 408(d)(3)(B) applies to any other
amount.
``(8) Qualified higher education expenses.--For purposes of
paragraph (2)(E)(ii)--
``(A) In general.--The term `qualified higher education
expenses' means tuition and fees required for the enrollment
or attendance of--
``(i) the taxpayer,
``(ii) the taxpayer's spouse,
``(iii) a dependent of the taxpayer with respect to whom
the taxpayer is allowed a deduction under section 151, or
``(iv) the taxpayer's child (as defined in section
151(c)(3)) or grandchild,
as an eligible student at an institution of higher education.
``(B) Exceptions.--The term `qualified higher education
expenses' does not include--
``(i) expenses with respect to any course or other
education involving sports, games, or hobbies, unless such
expenses--
``(I) are part of a degree program, or
``(II) are deductible under this chapter without regard to
this section; or
``(ii) any student activity fees, athletic fees, insurance
expenses, or other expenses unrelated to a student's academic
course of instruction.
``(C) Coordination with savings bond provisions.--The
amount of qualified higher education expenses for any taxable
year shall be reduced by any amount excludable from gross
income under section 135.
``(D) Eligible student.--For purposes of subparagraph (A),
the term `eligible student' means a student who--
``(i) meets the requirements of section 484(a)(1) of the
Higher Education Act of 1965 (20 U.S.C. 1091(a)(1)), as in
effect on the date of the enactment of this section, and
``(ii)(I) is carrying at least one-half the normal full-
time work load for the course of study the student is
pursuing, as determined by the institution of higher
education, or
``(II) is enrolled in a course which enables the student to
improve the student's job skills or to acquire new job
skills.
``(E) Institution of higher education.--The term
`institution of higher education' means an institution
which--
``(i) is described in section 481 of the Higher Education
Act of 1965 (20 U.S.C. 1088), as in effect on the date of the
enactment of this section, and
``(ii) is eligible to participate in programs under title
IV of such Act.''.
(d) Effective Date.--The amendments made by this section
shall apply to payments and distributions after December 31,
1996.
SEC. 132. CONTRIBUTIONS MUST BE HELD AT LEAST 5 YEARS IN
CERTAIN CASES.
(a) In General.--Section 72(t), as amended by section
131(c), is amended by adding at the end the following new
paragraph:
``(9) Certain contributions must be held 5 years.--
``(A) In general.--Paragraph (2)(A)(i) shall not apply to
any amount distributed out of an individual retirement plan
(other than a special individual retirement account) which is
allocable to contributions made to the plan during the 5-year
period ending on the date of such distribution (and earnings
on such contributions).
``(B) Ordering rule.--For purposes of this paragraph--
``(i) First-in, first-out rule.--Distributions shall be
treated as having been made--
``(I) first from the earliest contribution (and earnings
allocable thereto) remaining in the account at the time of
the distribution, and
``(II) then from other contributions (and earnings
allocable thereto) in the order in which made.
``(ii) Allocation of earnings.--Earnings shall be allocated
to contributions in such manner as the Secretary may
prescribe.
``(iii) Aggregations of contributions.--Except as provided
by the Secretary, for purposes of this subparagraph--
``(I) all contributions made during the same taxable year
may be treated as 1 contribution, and
[[Page S314]]
``(II) all contributions made before the first day of the
5-year period ending on the day before any distribution may
be treated as 1 contribution.
``(C) Special rule for rollovers.--
``(i) Pension plans.--Subparagraph (A) shall not apply to
distributions out of an individual retirement plan which are
allocable to rollover contributions to which section 402(c),
403(a)(4), or 403(b)(8) applied.
``(ii) Contribution period.--For purposes of subparagraph
(A), amounts shall be treated as having been held by a plan
during any period such contributions were held (or are
treated as held under this clause) by any individual
retirement plan from which transferred.''.
(b) Effective Date.--The amendment made by this section
shall apply to contributions (and earnings allocable thereto)
which are made after December 31, 1996.
CHAPTER 4--PERIODIC PENSION BENEFITS STATEMENTS
SEC. 141. PERIODIC PENSION BENEFITS STATEMENTS.
(a) In General.--Subsection (a) of section 105 of the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1025) is amended by striking ``shall furnish to any plan
participant or beneficiary who so requests in writing,'' and
inserting ``shall furnish at least once every 3 years, in the
case of a defined benefit plan, and annually, in the case of
a defined contribution plan, to each plan participant, and
shall furnish to any plan participant or beneficiary who so
requests,''.
(b) Rule for Multiemployer Plans.--Subsection (d) of
section 105 of the Employee Retirement Income Security Act of
1974 (29 U.S.C. 1025) is amended to read as follows:
``(d) Each administrator of a plan to which more than 1
unaffiliated employer is required to contribute shall furnish
to any plan participant or beneficiary who so requests in
writing, a statement described in subsection (a).''.
(c) Effective Date.--The amendments made by this section
shall apply to plan years beginning after the earlier of--
(1) the date of issuance by the Secretary of Labor of
regulations providing guidance for simplifying defined
benefit plan calculations with respect to the information
required under section 105 of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1025), or
(2) December 31, 1997.
Subtitle B--Improved Fairness in Retirement Plan Benefits
SEC. 151. AMENDMENTS TO SIMPLE RETIREMENT ACCOUNTS.
(a) Minimum Contribution Requirement.--
(1) In general.--Paragraph (2) of section 408(p) (defining
qualified salary reduction arrangement) is amended--
(A) by striking clauses (iii) and (iv) of subparagraph (A)
and inserting the following new clauses:
``(iii) the employer is required to make a matching
contribution to the simple retirement account for any year in
an amount equal to--
``(I) so much of the amount the employee elects under
clause (i)(I) as does not exceed 3 percent of compensation
for the year, and
``(II) a uniform percentage (which is at least 50 percent
but not more than 100 percent) of the amount the employee
elects under clause (i)(I) to the extent that such amount
exceeds 3 percent but does not exceed 5 percent of the
employee's compensation,
``(iv) the employer is required to make nonelective
contributions of 1 percent of compensation for each employee
eligible to participate in the arrangement who has at least
$5,000 of compensation from the employer for the year, and
``(v) no contributions may be made other than contributions
described in clause (i), (iii), or (iv).'', and
(B) by striking subparagraph (B) and inserting the
following new subparagraph:
``(B) Contribution rules.--
``(i) Employer may elect 3-percent nonelective
contribution.--An employer shall be treated as meeting the
requirements of clauses (iii) and (iv) of subparagraph (A)
for any year if, in lieu of the contributions described in
such clauses, the employer elects to make nonelective
contributions of 3 percent of compensation for each employee
who is eligible to participate in the arrangement and who has
at least $5,000 of compensation from the employer for the
year. If an employer makes an election under this clause for
any year, the employer shall notify employees of such
election within a reasonable period of time before the 60-day
period for such year under paragraph (5)(C).
``(ii) Discretionary contributions.--A plan shall not be
treated as failing to meet the requirements of subparagraph
(A)(v) merely because, pursuant to the terms of the plan, an
employer makes nonelective contributions under subparagraph
(A)(iv) or clause (i) of this subparagraph in excess of 1
percent or 3 percent of compensation, respectively, but only
if all such contributions bear a uniform relationship to the
compensation of each eligible employee and do not exceed 5
percent of compensation for any eligible employee.
``(iii) Compensation limitation.--The compensation taken
into account under this paragraph for any year shall not
exceed the limitation in effect for such year under section
401(a)(17).''.
(2) Matching contributions.--Subparagraph (B) of section
401(k)(11) (relating to adoption of simple plan to meet
nondiscrimination tests) is amended--
(A) by striking subclauses (II) and (III) of clause (i) and
inserting the following new subclauses:
``(II) the employer is required to make a matching
contribution to the trust for any year in an amount equal
to--
``(aa) so much of the amount the employee elects under
subclause (I) as does not exceed 3 percent of compensation
for the year, and
``(bb) a uniform percentage (which is at least 50 percent
but not more than 100 percent) of the amount the employee
elects under subclause (I) to the extent that such amount
exceeds 3 percent but does not exceed 5 percent of the
employee's compensation,
``(III) the employer is required to make nonelective
contributions of 1 percent of compensation for each employee
eligible to participate in the arrangement who has at least
$5,000 of compensation from the employer for the year, and
``(IV) no other contributions may be made other than
contributions described in subclause (I), (II), or (III).'',
and
(B) by striking clause (ii) and inserting the following new
clause:
``(ii) Contribution rules.--
``(I) Employer may elect 3-percent nonelective
contribution.--An employer shall be treated as meeting the
requirements of subclauses (II) and (III) of clause (i) for
any year if, in lieu of the contributions described in such
subclauses, the employer elects to make nonelective
contributions of 3 percent of compensation for each employee
who is eligible to participate in the arrangement and who has
at least $5,000 of compensation from the employer for the
year. If an employer makes an election under this subclause
for any year, the employer shall notify employees of such
election within a reasonable period of time before the 60th
day before the beginning of such year.
``(II) Discretionary contributions.--A plan shall not be
treated as failing to meet the requirements of clause (i)(IV)
merely because, pursuant to the terms of the plan, an
employer makes nonelective contributions under clause
(i)(III) or subclause (I) of this clause in excess of 1
percent or 3 percent of compensation, respectively, but only
if all such contributions bear a uniform relationship to the
compensation of each eligible employee and do not exceed 5
percent of compensation for any eligible employee.''.
(b) Fiduciary Duties.--Section 404 of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1104) is
amended--
(1) by striking ``(1)'' after ``(c)'' in subsection (c),
(2) by striking paragraph (2) in subsection (c), and
(3) by redesignating subsection (d) as subsection (e) and
by inserting after subsection (c) the following new
subsection:
``(d)(1) In the case of a simple retirement account which
meets the requirements of section 408(p) of the Internal
Revenue Code of 1986, no plan sponsor who is otherwise a
fiduciary shall be liable under this part for any loss, or by
reason of any breach, which results from--
``(A) the designation of the trustee or issuer of such
account, or
``(B) the manner in which the assets in the account are
invested,
after the earliest of the dates described in paragraph (2).
``(2) The dates described in this paragraph are as follows:
``(A) The date on which an affirmative election with
respect to the initial investment of any contribution is made
by the individual for whose benefit the account is
maintained.
``(B) The date on which there is a rollover of the assets
of the account to any other simple retirement account or
individual retirement plan.
``(C) The date which is 1 year after the account is
established.
``(3) This subsection shall not apply to the plan sponsor
of a simple retirement account unless the plan participants
are notified in writing (either separately or as part of the
notice under section 408(l)(2)(C)) that such contributions
may be transferred without cost or penalty to another
individual account or annuity.''.
(c) Option To Suspend Contributions.--Section 408(p)
(relating to simple retirement accounts) is amended by adding
at the end the following new paragraph:
``(8) Suspension of plan.--Except as provided by the
Secretary, a plan shall not be treated as failing to meet the
requirements of this subsection if, under the plan, the
employer may suspend all elective, matching, and nonelective
contributions under the plan after notifying employees
eligible to participate in the arrangement of such suspension
in writing at least 30 days in advance. Such suspension shall
apply to contributions with respect to compensation earned
after the effective date of the suspension. Only 1 suspension
under this paragraph may take effect during any year.''.
(d) Conforming Amendments.--Section 408(p)(2)(C), as so
added, is amended--
(1) by striking clause (ii),
(2) by striking ``Definitions'' in the heading and
inserting ``Eligible employer'',
(3) by striking ``(i) Eligible employer.--'', and
(4) by redesignating subclauses (I) and (II) as clauses (i)
and (ii), respectively.
(e) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this
[[Page S315]]
section shall apply to taxable years beginning after December
31, 1997.
(2) Delayed effective date for plans established in 1997.--
In the case of plans established in 1997 under section 408(p)
of the Internal Revenue Code of 1986, as in effect on January
1, 1997, the amendments made by this section shall apply to
taxable years beginning after December 31, 2002.
SEC. 152. NONDISCRIMINATION RULES FOR QUALIFIED CASH OR
DEFERRED ARRANGEMENTS AND MATCHING
CONTRIBUTIONS.
(a) Alternative Methods of Satisfying Section 401(k)
Nondiscrimination Tests.--Subparagraph (B) of section
401(k)(12) (relating to alternative methods of meeting
nondiscrimination requirements) is amended to read as
follows:
``(B) Nonelective and matching contributions.--
``(i) In general.--The requirements of this subparagraph
are met if the requirements of clauses (ii) and (iii) are
met.
``(ii) Nonelective contributions.--The requirements of this
clause are met if, under the arrangement, the employer is
required, without regard to whether the employee makes an
elective contribution or employee contribution, to make a
contribution to a defined contribution plan on behalf of each
employee who is not a highly compensated employee and who is
eligible to participate in the arrangement in an amount equal
to at least 1 percent of the employee's compensation.
``(iii) Matching contributions.--The requirements of this
clause are met if, under the arrangement, the employer makes
matching contributions on behalf of each employee who is not
a highly compensated employee in an amount equal to--
``(I) 100 percent of the elective contributions of the
employee to the extent such elective contributions do not
exceed 3 percent of the employee's compensation, and
``(II) 50 percent of the elective contributions of the
employee to the extent that such elective contributions
exceed 3 percent but do not exceed 5 percent of the
employee's compensation.
``(iv) Rate for highly compensated employees.--The
requirements of clause (iii) are not met if, under the
arrangement, the rate of matching contribution with respect
to any rate of elective contribution of a highly compensated
employee is greater than that with respect to an employee who
is not a highly compensated employee. For purposes of this
clause, to the extent provided in regulations, the last
sentences of paragraph (3)(A) and subsection (m)(2)(B) shall
not apply.
``(v) Alternative plan designs.--If the rate of matching
contribution with respect to any rate of elective
contribution is not equal to the percentage required under
clause (iii), an arrangement shall not be treated as failing
to meet the requirements of clause (iii) if--
``(I) the rate of an employer's matching contribution does
not increase as an employee's rate of elective contribution
increase, and
``(II) the aggregate amount of matching contributions at
such rate of elective contribution is at least equal to the
aggregate amount of matching contributions which would be
made if matching contributions were made on the basis of the
percentages described in clause (iii).''.
(b) Contributions Part of Qualified Cash or Deferred
Arrangement.--Subparagraph (E)(ii) of section 401(k)(12), as
so added, is amended to read as follows:
``(ii) Social security and similar contributions not taken
into account.--Except as provided in regulations, an
arrangement shall not be treated as meeting the requirements
of subparagraph (B) or (C) unless such requirements are met
without regard to subsection (l), and, for purposes of
subsection (l), and determining whether contributions
provided under a plan satisfy subsection (a)(4) on the basis
of equivalent benefits, employer contributions under
subparagraph (B) or (C) shall not be taken into account.''.
(c) Alternative Methods of Satisfying Section 401(m)
Nondiscrimination Tests.--Section 401(m)(11) (relating to
alternative method of satisfying tests) is amended--
(1) by striking ``subparagraph (B)'' in subparagraph
(A)(iii) and inserting ``subparagraphs (B) and (C)'',
(2) by adding at the end of subparagraph (B) the following
new flush sentence:
``To the extent provided in regulations, the last sentences
of paragraph (2)(B) and subsection (k)(3)(A) shall not apply
for purposes of clause (iii).'', and
(3) by adding at the end the following new subparagraph:
``(C) Test must be met separately.--If this paragraph
applies to any matching contributions, such contributions
shall not be taken into account in determining whether
employee contributions satisfy the requirements of this
subsection.''.
(d) Special Rule for Determining Average Deferral
Percentage for First Plan Year, Etc.--Subparagraph (E) of
section 401(k)(3) is amended to read as follows:
``(E) For purposes of this paragraph, in the case of the
first plan year of any plan, the amount taken into account as
the actual deferral percentage of nonhighly compensated
employees for the preceding plan year shall be--
``(i) 3 percent, or
``(ii) the actual deferral percentage of nonhighly
compensated employees determined for such first plan year in
the case of--
``(I) an employer who elects to have this clause apply, or
``(II) except to the extent provided by the Secretary, a
successor plan.''.
(e) Effective Date.--The amendments made by this section
shall take effect as if included in the amendments made by
section 1433 of the Small Business Job Protection Act of
1996.
SEC. 153. DEFINITION OF HIGHLY COMPENSATED EMPLOYEES.
(a) In General.--Subparagraph (B) of section 414(q)(1)
(defining highly compensated employee) is amended to read as
follows:
``(B) for the preceding year had compensation from the
employer in excess of $80,000.''.
(b) Conforming Amendments.--
(1)(A) Subsection (q) of section 414 is amended by striking
paragraphs (3), (5), and (7) and by redesignating paragraphs
(4), (6), and (8) as paragraphs (3) through (5),
respectively.
(B) Sections 129(d)(8)(B), 401(a)(5)(D)(ii), 408(k)(2)(C),
and 416(i)(1)(D) are each amended by striking ``section
414(q)(4)'' and inserting ``section 414(q)(3)''.
(C) Section 416(i)(1)(A) is amended by striking ``section
414(q)(5)'' and inserting ``section 414(r)(9)''.
(2)(A) Section 414(r) is amended by adding at the end the
following new paragraph:
``(9) Excluded employees.--For purposes of paragraph
(2)(A), the following employees shall be excluded:
``(A) Employees who have not completed 6 months of service.
``(B) Employees who normally work less than 17\1/2\ hours
per week.
``(C) Employees who normally work not more than 6 months
during any year.
``(D) Employees who have not attained the age of 21.
``(E) Except to the extent provided in regulations,
employees who are included in a unit of employees covered by
an agreement which the Secretary of Labor finds to be a
collective bargaining agreement between employee
representatives and the employer.''.
(B) Subparagraph (A) of section 414(r)(2) is amended by
striking ``subsection (q)(5)'' and inserting ``paragraph
(9)''.
(c) Effective Date.--The amendments made by this section
shall take effect as if included in the amendments made by
section 1431 of the Small Business Job Protection Act of
1996.
Subtitle C--Improving Retirement Plan Coverage
SEC. 161. CREDIT FOR PENSION PLAN START-UP COSTS OF SMALL
EMPLOYERS.
(a) Allowance of Credit.--Section 38(b) (defining current
year business credit) is amended by striking ``plus'' at the
end of paragraph (11), by striking the period at the end of
paragraph (12) and inserting ``, plus'', and by adding at the
end the following new paragraph:
``(13) the small employer pension plan start-up cost
credit.''.
(b) Small Employer Pension Plan Start-Up Cost Credit.--
Subpart D of part IV of subchapter A of chapter 1 (relating
to business related credits) is amended by adding at the end
the following new section:
``SEC. 45D. SMALL EMPLOYER PENSION PLAN START-UP COST CREDIT.
``(a) Amount of Credit.--For purposes of section 38--
``(1) In general.--The small employer pension plan start-up
cost credit for any taxable year is an amount equal to the
qualified start-up costs of an eligible employer in
establishing a qualified pension plan or qualified employer
payroll deduction system.
``(2) Aggregate limitation.--The amount of the credit under
paragraph (1) for any taxable year shall not exceed $500,
reduced by the aggregate amount determined under this section
for all preceding taxable years of the taxpayer.
``(b) Eligible Employer.--For purposes of this section, the
term `eligible employer' means an employer which--
``(1) had an average daily number of employees during the
preceding taxable year not in excess of 50, and
``(2) did not make any contributions on behalf of any
employee to a qualified pension plan during the 2 taxable
years immediately preceding the taxable year.
``(c) Other Definitions.--For purposes of this section--
``(1) Qualified start-up costs.--The term `qualified start-
up costs' means any ordinary and necessary expenses of an
eligible employer which--
``(A) are paid or incurred in connection with the
establishment of a qualified pension plan or a qualified
employer payroll deduction system, and
``(B) are of a nonrecurring nature.
``(2) Qualified pension plan.--The term `qualified pension
plan' means--
``(A) a plan described in section 401(a) which includes a
trust exempt from tax under section 501(a),
``(B) a simplified employee pension (as defined in section
408(k)), or
``(C) a simple retirement account (as defined in section
408(p)).
``(3) Qualified employer payroll deduction system.--The
term `qualified employer payroll deduction system' means a
system described in section 103 of the Retirement Security
Act of 1997.
``(d) Special Rules.--For purposes of this section--
``(1) Aggregation rules.--All persons treated as a single
employer under subsection (a) or (b) of section 52 or
subsection (n) or (o) of section 414 shall be treated as one
person.
[[Page S316]]
``(2) Disallowance of deduction.--No deduction shall be
allowable under this chapter for any qualified start-up costs
for which a credit is allowable under subsection (a).''.
(c) Conforming Amendments.--
(1) Section 39(d) is amended by adding at the end the
following new paragraph:
``(8) No carryback of pension credit.--No portion of the
unused business credit for any taxable year which is
attributable to the small employer pension plan start-up cost
credit determined under section 45D may be carried back to a
taxable year ending before the date of the enactment of
section 45D.''.
(2) The table of sections for subpart D of part IV of
subchapter A of chapter 1 is amended by adding at the end the
following new item:
``Sec. 45D. Small employer pension plan start-up cost credit.''.
(d) Effective Date.--The amendments made by this section
shall apply to costs incurred after the date of the enactment
of this Act in taxable years ending after such date.
SEC. 162. TREATMENT OF MULTIEMPLOYER PLANS UNDER SECTION 415.
(a) Compensation Limit.--Paragraph (11) of section 415(b)
(relating to limitation for defined benefit plans) is amended
to read as follows:
``(11) Special limitation rule for governmental and
multiemployer plans.--In the case of a governmental plan (as
defined in section 414(d)) or a multiemployer plan (as
defined in section 414(f)), subparagraph (B) of paragraph (1)
shall not apply.''.
(b) Treatment of Certain Excess Benefit Plans.--
(1) Application of section 457.--Paragraph (14) of section
457(e) (relating to other definitions and special rules) is
amended to read as follows:
``(14) Treatment of excess benefit arrangements.--
``(A) In general.--Subsections (b)(2) and (c)(1) shall not
apply to any excess benefit arrangement and benefits provided
under such an arrangement shall not be taken into account in
determining whether any other plan is an eligible deferred
compensation plan.
``(B) Excess benefit arrangement defined.--For purposes of
this section, the term `excess benefit arrangement' means a
plan which is maintained by an eligible employer solely for
purposes of providing benefits for certain employees in
excess of the limits on contributions and benefits imposed by
section 415. Such term includes a qualified governmental
excess benefit arrangement (as defined in section
415(m)(3)).''.
(2) Conforming amendment.--Subparagraph (E) of section
457(f)(2) (relating to tax treatment of participants where
plan or arrangement of employer is not eligible) is amended
to read as follows:
``(E) an excess benefit arrangement (as defined in
subsection (e)(14)(B)).''.
(c) Exemption for Survivor and Disability Benefits.--
Subparagraph (I) of section 415(b)(2) (relating to limitation
for defined benefit plans) is amended--
(1) by inserting ``or a multiemployer plan (as defined in
section 414(f))'' after ``section 414(d))'' in clause (i),
(2) by inserting ``or multiemployer plan'' after
``governmental plan'' in clause (ii), and
(3) by inserting ``and multiemployer'' after
``governmental'' in the heading.
(d) Effective Date.--The amendments made by this section
shall take effect as if included in the amendments made by
section 1444 of the Small Business Job Protection Act of
1996.
SEC. 163. EXEMPTION OF MIRROR PLANS FROM SECTION 457 LIMITS.
(a) In General.--Subsection (e) of section 457 (relating to
deferred compensation plans of State and local governments
and tax-exempt organizations), as amended by section
162(b)(1), is amended by adding at the end the following new
paragraph:
``(15) Exemption for mirror plans.--
``(A) In general.--Amounts of compensation deferred under a
mirror plan shall not be taken into account in applying this
section to amounts of compensation deferred under any other
deferred compensation plan.
``(B) Mirror plan.--The term `mirror plan' means a plan,
program, or arrangement maintained solely for the purpose of
providing retirement benefits for employees in excess of the
limitations imposed by section 401(a)(17) or section 415, or
both.''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31,
1996.
SEC. 164. SPECIAL RULES FOR SELF-EMPLOYED INDIVIDUALS.
(a) Contributions by Self-Employed Individuals Treated as
Matching Contributions.--Section 414 (relating to definitions
and special rules) is amended by adding at the end the
following new subsection:
``(v) Contributions by Self-Employed Individuals Treated as
Matching Contributions.--For purposes of this title, matching
contributions (as defined in section 401(m)(4)(A)) made on
behalf of a self-employed individual shall not be treated as
elective deferrals (within the meaning of section 402(g)(3))
or as made pursuant to an election by the self-employed
individual.''.
(b) Effective Date.--The amendment made by this section
shall apply to years beginning after December 31, 1996.
SEC. 165. IMMEDIATE PARTICIPATION IN THE THRIFT SAVINGS PLAN
FOR FEDERAL EMPLOYEES.
(a) Elimination of Certain Waiting Periods for Purposes of
Employee Contributions.--Paragraph (4) of section 8432(b) of
title 5, United States Code, is amended to read as follows:
``(4) The Executive Director shall prescribe such
regulations as may be necessary to carry out the following:
``(A) Notwithstanding subparagraph (A) of paragraph (2), an
employee or Member described in such subparagraph shall be
afforded a reasonable opportunity to first make an election
under this subsection beginning on the date of commencing
service or, if that is not administratively feasible,
beginning on the earliest date thereafter that such an
election becomes administratively feasible, as determined by
the Executive Director.
``(B) An employee or Member described in subparagraph (B)
of paragraph (2) shall be afforded a reasonable opportunity
to first make an election under this subsection (based on the
appointment or election described in such subparagraph)
beginning on the date of commencing service pursuant to such
appointment or election or, if that is not administratively
feasible, beginning on the earliest date thereafter that such
an election becomes administratively feasible, as determined
by the Executive Director.
``(C) Notwithstanding the preceding provisions of this
paragraph, contributions under paragraphs (1) and (2) of
subsection (c) shall not be payable with respect to any pay
period before the earliest pay period for which such
contributions would otherwise be allowable under this
subsection if this paragraph had not been enacted.
``(D) Sections 8351(a)(2), 8440a(a)(2), 8440b(a)(2),
8440c(a)(2), and 8440d(a)(2) shall be applied in a manner
consistent with the purposes of subparagraphs (A) and (B), to
the extent those subparagraphs can be applied with respect
thereto.
``(E) Nothing in this paragraph shall affect paragraph
(3).''.
(b) Technical and Conforming Amendments.--
(1) Section 8432(a) of title 5, United States Code, is
amended--
(A) in the first sentence by striking ``(b)(1)'' and
inserting ``(b)''; and
(B) by amending the second sentence to read as follows:
``Contributions under this subsection pursuant to such an
election shall, with respect to each pay period for which
such election remains in effect, be made in accordance with a
program of regular contributions provided in regulations
prescribed by the Executive Director.''.
(2) Section 8432(b)(1)(B) of such title is amended by
inserting ``(or any election allowable by virtue of paragraph
(4))'' after ``subparagraph (A)''.
(3) Section 8432(b)(3) of such title is amended by striking
``Notwithstanding paragraph (2)(A), an'' and inserting
``An''.
(4) Section 8432(i)(1)(B)(ii) of such title is amended by
striking ``either elected to terminate individual
contributions to the Thrift Savings Fund within 2 months
before commencing military service or''.
(5) Section 8439(a)(1) of such title is amended by
inserting ``who makes contributions or'' after ``for each
individual'' and by striking ``section 8432(c)(1)'' and
inserting ``section 8432''.
(6) Section 8439(c)(2) of such title is amended by adding
at the end the following: ``Nothing in this paragraph shall
be considered to limit the dissemination of information only
to the times required under the preceding sentence.''.
(7) Sections 8440a(a)(2) and 8440d(a)(2) of such title are
amended by striking all after ``subject to'' and inserting
``subject to this chapter.''.
(c) Effective Date.--This section shall take effect 6
months after the date of the enactment of this Act or such
earlier date as the Executive Director may by regulation
prescribe.
SEC. 166. MODIFICATION OF 10 PERCENT TAX FOR NONDEDUCTIBLE
CONTRIBUTIONS.
(a) In General.--Subparagraph (B) of section 4972(c)(6)
(relating to exceptions) is amended to read as follows:
``(B) contributions to 1 or more defined contribution plans
which are not deductible when contributed solely because of
section 404(a)(7), in an amount not in excess of the greater
of--
``(i) the amount of contributions not in excess of 6
percent of compensation (within the meaning of section
404(a)) paid or accrued (during the taxable year for which
the contributions were made) to beneficiaries under the
plans, or
``(ii) the amount of contributions described in section
401(m)(4)(A) or 402(g)(3)(A).''.
(b) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
1996.
Subtitle D--Simplifying Plan Requirements
SEC. 171. FULL FUNDING LIMITATION FOR MULTIEMPLOYER PLANS.
(a) Amendments to Code.--
(1) Full-funding limitation.--Section 412(c)(7)(C)
(relating to full-funding limitation) is amended--
(A) by inserting ``or in the case of a multiemployer
plan,'' after ``paragraph (6)(B),'', and
(B) by inserting ``and multiemployer plans'' after
``paragraph (6)(b)'' in the heading thereof.
(2) Valuation.--Section 412(c)(9) (relating to annual
valuation) is amended--
[[Page S317]]
(A) by inserting ``(3 years in the case of a multiemployer
plan)'' after ``year'', and
(B) by striking ``Annual valuation'' in the heading and
inserting ``Valuation''.
(b) Amendments to ERISA.--
(1) Full-funding limitation.--Section 302(c)(7)(C) of the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1082(c)(7)(C)) is amended--
(A) by inserting ``or in the case of a multiemployer
plan,'' after ``paragraph (6)(B),'', and
(B) by inserting ``and multiemployer plans'' after
``paragraph (6)(b)'' in the heading thereof.
(2) Valuation.--Section 302(c)(9) of such Act (29 U.S.C.
1082(c)(9)) is amended--
(A) by inserting ``(3 years in the case of a multiemployer
plan)'' after ``year'', and
(B) by striking ``Annual valuation'' in the heading and
inserting ``Valuation''.
(c) Effective Date.--The amendments made by this section
shall apply to plan years beginning after December 31, 1996.
SEC. 172. ELIMINATION OF PARTIAL TERMINATION RULES FOR
MULTIEMPLOYER PLANS.
(a) Partial Termination Rules for Multiemployer Plans.--
Section 411(d)(3) (relating to termination or partial
termination; discontinuance of contributions) is amended by
adding at the end the following new sentence: ``This
paragraph shall not apply in the case of a partial
termination of a multiemployer plan.''.
(b) Effective Date.--The amendment made by this section
shall apply to partial terminations beginning after December
31, 1996.
SEC. 173. MODIFICATIONS TO NONDISCRIMINATION AND MINIMUM
PARTICIPATION RULES WITH RESPECT TO
GOVERNMENTAL PLANS.
(a) General Nondiscrimination and Participation Rules.--
(1) Nondiscrimination requirements.--Paragraph (5) of
section 401(a) (relating to qualified pension, profit-
sharing, and stock bonus plans) is amended by adding at the
end the following new subparagraph:
``(F) Governmental plans.--Paragraphs (3) and (4) shall not
apply to a governmental plan (within the meaning of section
414(d)).''.
(2) Additional participation requirements.--Subparagraph
(H) of section 401(a)(26) is amended to read as follows:
``(H) Exception for governmental plans.--This paragraph
shall not apply to a governmental plan (within the meaning of
section 414(d)).''.
(3) Minimum participation standards.--Paragraph (2) of
section 410(c) is amended to read as follows:
``(2) A plan described in paragraph (1) shall be treated as
meeting the requirements of this section for purposes of
section 401(a), except that in the case of a plan described
in subparagraph (B), (C), or (D) of paragraph (1), this
paragraph shall only apply if such plan meets the
requirements of section 401(a)(3) (as in effect on September
1, 1974).''.
(b) Participation Standards for Qualified Cash or Deferred
Arrangements.--Paragraph (3) of section 401(k) is amended by
adding at the end the following new subparagraph:
``(E)(i) The requirements of subparagraph (A)(i) and (C)
shall not apply to a governmental plan (within the meaning of
section 414(d)).
``(ii) The requirements of subsection (m)(2) (without
regard to subsection (a)(4)) shall apply to any matching
contribution of a governmental plan (as so defined).''.
(c) Nondiscrimination Rules for Section 403(b) Plans.--
Paragraph (12) of section 403(b) is amended by adding at the
end the following new subparagraph:
``(C) Governmental plans.--For purposes of paragraph
(1)(D), the requirements of subparagraph (A)(i) shall not
apply to a governmental plan (within the meaning of section
414(d)).''.
(d) Effective Date.--
(1) In general.--The amendments made by this section shall
apply to taxable years beginning on or after the date of the
enactment of this Act.
(2) Treatment for years beginning before date of
enactment.--A governmental plan (within the meaning of
section 414(d) of the Internal Revenue Code of 1986) shall be
treated as satisfying the requirements of sections 401(a)(3),
401(a)(4), 401(a)(26), 401(k), 401(m), 403 (b)(1)(D) and
(b)(12), and 410 of such Code for all taxable years beginning
before the date of the enactment of this Act.
SEC. 174. ELIMINATION OF REQUIREMENT FOR PLAN DESCRIPTIONS
AND THE FILING REQUIREMENT FOR SUMMARY PLAN
DESCRIPTIONS AND DESCRIPTIONS OF MATERIAL
MODIFICATIONS TO A PLAN; TECHNICAL CORRECTIONS.
(a) Filing Requirements.--Section 101(b) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1021(b)) is
amended by striking paragraphs (1), (2), and (3) and by
redesignating paragraphs (4) and (5) as paragraphs (1) and
(2), respectively.
(b) Plan Description.--
(1) In general.--Section 102(a) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1022(a)) is amended--
(A) by striking paragraph (2), and
(B) by striking ``(a)(1)'' and inserting ``(a)''.
(2) Conforming amendments.--
(A) Section 102(b) of such Act (29 U.S.C. 1022(b)) is
amended by striking ``The plan description and summary plan
description shall contain'' and inserting ``The summary plan
description shall contain''.
(B) The heading for section 102 of such Act is amended by
striking ``plan description and''.
(c) Furnishing of Reports.--
(1) In general.--Section 104(a)(1) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1024(a)(1))
is amended to read as follows:
``Sec. 104. (a)(1) The administrator of any employee
benefit plan subject to this part shall file with the
Secretary the annual report for a plan year within 210 days
after the close of such year (or within such time as may be
required by regulations promulgated by the Secretary in order
to reduce duplicative filing). The Secretary shall make
copies of such annual reports available for inspection in the
public document room of the Department of Labor.''.
(2) Secretary may request documents.--
(A) In general.--Section 104(a) of such Act (29 U.S.C.
1024(a)) is amended by adding at the end the following new
paragraph:
``(6) The administrator of any employee benefit plan
subject to this part shall furnish to the Secretary, upon
request, any documents relating to the employee benefit plan,
including but not limited to, the latest summary plan
description (including any summaries of plan changes not
contained in the summary plan description), and the
bargaining agreement, trust agreement, contract, or other
instrument under which the plan is established or
operated.''.
(B) Penalty.--Section 502(c) of such Act (29 U.S.C.
1132(c)) is amended by redesignating paragraph (6) as
paragraph (7) and by inserting after paragraph (5) the
following new paragraph:
``(6) If, within 30 days of a request by the Secretary to a
plan administrator for documents under section 104(a)(6), the
plan administrator fails to furnish the material requested to
the Secretary, the Secretary may assess a civil penalty
against the plan administrator of up to $100 a day from the
date of such failure (but in no event in excess of $1,000 per
request). No penalty shall be imposed under this paragraph
for any failure resulting from matters reasonably beyond the
control of the plan administrator.''.
(d) Conforming Amendments.--
(1) Section 104(b)(1) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1024(b)(1)) is amended by
striking ``section 102(a)(1)'' each place it appears and
inserting ``section 102(a)''.
(2) Section 104(b)(2) of such Act (29 U.S.C. 1024(b)(2)) is
amended by striking ``the plan description and'' and
inserting ``the latest updated summary plan description
and''.
(3) Section 104(b)(4) of such Act (29 U.S.C. 1024(b)(4)) is
amended by striking ``plan description''.
(4) Section 106(a) of such Act (29 U.S.C. 1026(a)) is
amended by striking ``descriptions,''.
(5) Section 107 of such Act (29 U.S.C. 1027) is amended by
striking ``description or''.
(6) Paragraph (2)(B) of section 108 of such Act (29 U.S.C.
1028) is amended to read as follows: ``(B) after publishing
or filing the annual reports,''.
(7) Section 502(a)(6) of such Act (29 U.S.C. 1132(a)(6)) is
amended by striking ``or (5)'' and inserting ``(5), or (6)''.
(e) Technical Correction.--Section 1144(c) of the Social
Security Act (42 U.S.C. 1320b-14(c)) is amended by
redesignating paragraph (9) as paragraph (8).
SEC. 175. NEW TECHNOLOGIES IN RETIREMENT PLANS.
The Secretary of the Treasury and the Secretary of Labor
shall expand their efforts to examine existing guidance
regarding notice, recordkeeping, and operational requirements
for retirement plans, in order to permit the use of new
technologies by plan sponsors and administrators in ways
which maintain the protection of the rights of participants
and beneficiaries.
TITLE II--SECURITY
SEC. 200. AMENDMENT OF ERISA.
Except as otherwise expressly provided, whenever in this
title an amendment or repeal is expressed in terms of an
amendment to, or repeal of, a section or other provision, the
reference shall be considered to be made to a section or
other provision of the Employee Retirement Income Security
Act of 1974.
Subtitle A--General Provisions
SEC. 201. SECTION 401(k) INVESTMENT PROTECTION.
(a) Limitations on Investment in Employer Securities and
Employer Real Property by Cash or Deferred Arrangements.--
Paragraph (3) of section 407(d) (29 U.S.C. 1107(d)) is
amended by adding at the end the following new subparagraph:
``(D) The term `eligible individual account plan' does not
include that portion of an individual account plan that
consists of elective deferrals (as defined in section
402(g)(3) of the Internal Revenue Code of 1986) pursuant to a
qualified cash or deferred arrangement as defined in section
401(k) of the Internal Revenue Code of 1986 (and earnings
thereon), if such elective deferrals (or earnings thereon)
are required to be invested in qualifying employer securities
or qualifying employer real property or both pursuant to the
documents and instruments governing the plan or at the
direction of a person other than the participant (or the
participant's beneficiary) on whose behalf such elective
deferrals are made to the plan. For the purposes of
subsection (a), such portion shall be
[[Page S318]]
treated as a separate plan. This subparagraph shall not apply
to an individual account plan if the fair market value of the
assets of all individual account plans maintained by the
employer equals not more than 10 percent of the fair market
value of the assets of all pension plans maintained by the
employer.''.
(b) Effective Date.--
(1) In general.--The amendments made by this section shall
take effect on the date of the enactment of this Act.
(2) Transition rule for plans holding excess securities or
property.--
(A) In general.--In the case of a plan which on the date of
the enactment of this Act, has holdings of employer
securities and employer real property (as defined in section
407(d) of the Employee Retirement Income Security Act of 1974
(29 U.S.C. 1107(d)) in excess of the amount specified in such
section 407, the amendment made by this section applies to
any acquisition of such securities and property on or after
such date, but does not apply to the specific holdings which
constitute such excess during the period of such excess.
(B) Special rule for certain acquisitions.--Employer
securities and employer real property acquired pursuant to a
binding written contract to acquire such securities and real
property entered into and in effect on the date of the
enactment of this Act, shall be treated as acquired
immediately before such date.
SEC. 202. REQUIREMENT OF ANNUAL, DETAILED INVESTMENT REPORTS
APPLIED TO CERTAIN 401(k) PLANS.
(a) In General.--Section 104(b)(3) (29 U.S.C. 1024(b)(3))
is amended--
(1) by inserting ``(A)'' after ``(3)''; and
(2) by adding at the end the following new subparagraph:
``(B)(i) If a plan includes a qualified cash or deferred
arrangement (as defined in section 401(k)(2) of the Internal
Revenue Code of 1986) and is maintained by an employer with
less than 100 participants, the administrators shall furnish
to each participant and to each beneficiary receiving
benefits under the plan an annual investment report detailing
such information as the Secretary by regulation shall
require.
``(ii) Clause (i) shall not apply with respect to any
participant described in section 404(c).''.
(b) Regulations.--
(1) In general.--The Secretary of Labor, in prescribing
regulations required under section 104(b)(3)(B)(i) of the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1023(b)(3)(B)(i)), as added by subsection (a), shall consider
including in the information required in an annual investment
report the following:
(A) Total plan assets and liabilities as of the beginning
and ending of the plan year.
(B) Plan income and expenses and contributions made and
benefits paid for the plan year.
(C) Any transaction between the plan and the employer, any
fiduciary, or any 10-percent owner during the plan year,
including the acquisition of any employer security or
employer real property.
(D) Any noncash contributions made to or purchases of
nonpublicly traded securities made by the plan during the
plan year without an appraisal by an independent third party.
In determining the types of information to be included in the
annual investment report presented to participants and
beneficiaries, the Secretary of Labor shall take into account
the purposes of the diversification protection provided to
such participants and beneficiaries by section 407(d)(3)(D)
of the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1107(d)(3)(D)), as added by section 201(a).
(2) Electronic transfer.--The Secretary of Labor in
prescribing such regulations shall also make provision for
the electronic transfer of the required annual investment
report by a plan administrator to plan participants and
beneficiaries.
(c) Effective Date.--The amendment made by subsection (a)
shall apply to plan years beginning after the date of the
enactment of this Act.
SEC. 203. STUDY ON INVESTMENTS IN COLLECTIBLES.
(a) Study.--The Secretary of Labor, in consultation with
the Secretary of the Treasury, shall study the extent to
which pension plans invest in collectibles and whether such
investments present a risk to the pension security of the
participants and beneficiaries of such plans.
(b) Report.--Not later than 12 months after the date of the
enactment of this Act, the Secretary of Labor shall submit a
report to the Congress containing the findings of the study
described in subsection (a) and any recommendations for
legislative action.
SEC. 204. QUALIFIED EMPLOYER PLANS PROHIBITED FROM MAKING
LOANS THROUGH CREDIT CARDS AND OTHER
INTERMEDIARIES.
(a) In General.--Subsection (a) of section 401 of the
Internal Revenue Code of 1986 is amended by adding at the end
the following new paragraph:
``(35) Prohibition of loans through credit cards and other
intermediaries.--A trust shall not constitute a qualified
trust under this section if the plan makes any loan to any
beneficiary under the plan through the use of any credit card
or any other intermediary.''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to plan years beginning after the date of the
enactment of this Act.
SEC. 205. MULTIEMPLOYER PLAN BENEFITS GUARANTEED.
(a) In General.--Section 4022A(c) (29 U.S.C. 1322a(c)) is
amended--
(1) by striking ``$5'' each place it appears in paragraph
(1) and inserting ``$11'',
(2) by striking ``$15'' in paragraph (1) and inserting
``$33'', and
(3) by striking paragraphs (2), (5), and (6) and by
redesignating paragraphs (3) and (4) as paragraphs (2) and
(3), respectively.
(b) Effective Date.--The amendments made by this section
shall apply to any multiemployer plan that has not received
financial assistance (within the meaning of section 4261 of
the Employee Retirement Income Security Act of 1974) within
the 1-year period ending on the date of the enactment of this
Act.
SEC. 206. PROHIBITED TRANSACTIONS.
(a) In General.--Section 502(i) (29 U.S.C. 1132(i)) is
amended by striking ``5 percent'' and inserting ``10
percent''.
(b) Effective Date.--The amendments made by this section
shall apply to prohibited transactions occurring after the
date of the enactment of this Act.
SEC. 207. SUBSTANTIAL OWNER BENEFITS.
(a) Modification of Phase-in of Guarantee.--Subparagraphs
(B) and (C) of section 4022(b)(5) (29 U.S.C. 1322(b)(5)) are
amended to read as follows:
``(B) For purposes of this title, the term `majority owner'
has the same meaning as substantial owner under subparagraph
(A), except that subparagraph (A) shall be applied by
substituting `50 percent or more' for `more than 10 percent'
each place it appears.
``(C) In the case of a participant who is a majority owner,
the amount of benefits guaranteed under this section shall
not exceed the product of--
``(i) a fraction (not to exceed 1) the numerator of which
is the number of years from the later of the effective date
or the adoption date of the plan to the termination date, and
the denominator of which is 30, and
``(ii) the amount of the majority owner's monthly benefits
guaranteed under subsection (a) (as limited by paragraph (3)
of this subsection).''.
(b) Modification of Allocation of Assets.--
(1) Section 4044(a)(4)(B) (29 U.S.C. 1344(a)(4)(B)) is
amended by striking ``section 4022(b)(5)'' and inserting
``section 4022(b)(5)(C)''.
(2) Section 4044(b) (29 U.S.C. 1344(b)) is amended--
(A) by striking ``(5)'' in paragraph (2) and inserting
``(4), (5),'', and
(B) by redesignating paragraphs (3) through (6) as
paragraphs (4) through (7), respectively, and by inserting
after paragraph (2) the following new paragraph:
``(3) If assets available for allocation under paragraph
(4) of subsection (a) are insufficient to satisfy in full the
benefits of all individuals who are described in that
paragraph, the assets shall be allocated first to benefits
described in subparagraph (A) of that paragraph. Any
remaining assets shall then be allocated to subparagraph (B).
If assets allocated to subparagraph (B) are insufficient to
satisfy in full the benefits in that subparagraph, the assets
shall be allocated pro rata among individuals on the basis of
the present value (as of the termination date) of their
respective benefits described in that subparagraph.''.
(c) Effective Date.--The amendments made by this section
shall apply to plan terminations--
(1) under section 4041(c) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1341(c)) with respect to
which notices of intent to terminate are provided under
section 4041(a)(2) of such Act (29 U.S.C. 1341(a)(2)) on or
after the date of the enactment of this Act, or
(2) under section 4042 of such Act (29 U.S.C. 1342) with
respect to which proceedings are instituted by the
corporation on or after such date.
SEC. 208. REVERSION REPORT.
(a) In General.--Section 4008 (29 U.S.C. 1308) is amended
by adding at the end the following new subsection:
``(b) Reversion Report.--As soon as practicable after the
close of each fiscal year, the Secretary of Labor (acting in
the Secretary's capacity as chairman of the corporation's
board) shall transmit to the President and the Congress a
report providing information on plans from which residual
assets were distributed to employers pursuant to section
4044(d).''.
(b) Conforming Amendment.--Section 4008 (29 U.S.C. 1308) is
amended by striking ``Sec. 4008.'' and inserting ``Sec. 4008.
(a) Annual Report.--''.
(c) Effective Date.--The amendments made by this section
shall apply to fiscal years beginning after September 30,
1996.
SEC. 209. DEVELOPMENT OF ADDITIONAL REMEDIES.
(a) Findings.--The Congress finds that--
(1) the provisions of this Act, like many of those proposed
by the President and recently signed into law, are designed
to expand retirement savings;
(2) this goal can be achieved in part by simplifying the
pension system and reducing administrative costs of
maintaining pension plans for all employers;
(3) such simplification can benefit not only the
implementation and ongoing administration of pension plans
but also the correction
[[Page S319]]
of problems that arise in the operation of such plans;
(4) the Secretary of the Treasury has commendably already
acted to develop programs intended to facilitate such
corrections; and
(5) efficient correction serves participants and
beneficiaries not only by fulfilling the law's requirements
regarding pension plans but also by directing funds into
plans rather than toward correction efforts and by
encouraging employers to continue to sponsor support for such
plans.
(b) Sense of Congress.--It is the sense of the Congress
that the Secretary of the Treasury should--
(1) review existing correction mechanisms to determine
whether modifications might facilitate additional utilization
by sponsors, improve voluntary compliance, and hasten the
correction of pension plans,
(2) consider whether additional means of addressing
nonegregious violations should be explored,
(3) make whatever legislative recommendations, if any,
appear necessary to fulfill these goals, and
(4) remain cognizant that the Congress, as well as the
Secretary, considers the continuing security of retirement
savings for workers, retirees, and beneficiaries of
fundamental importance.
Subtitle B--ERISA Enforcement
SEC. 211. REPEAL OF LIMITED SCOPE AUDIT.
(a) In General.--Section 103(a)(3)(C) (29 U.S.C.
1023(a)(3)(C)) is amended by adding at the end the following:
``(ii) If an accountant is offering an opinion under this
section in the case of an employee pension benefit plan, the
accountant shall, to the extent consistent with generally
accepted auditing standards, rely on the work of any
independent public accountant of any bank or similar
institution or insurance carrier that holds assets or
processes transactions of the employee pension benefit plan
provided that such bank, institution, or insurance carrier is
regulated, supervised, and subject to periodic examination by
a State or Federal agency.''.
(b) Conforming Amendments.--
(1) Section 103(a)(3)(A) of such Act (29 U.S.C.
1023(a)(3)(A)) is amended by striking ``subparagraph (C)''
and inserting ``subparagraph (C)(i)''.
(2) Section 103(a)(3)(C) of such Act (29 U.S.C.
1023(a)(3)(C)) is amended by striking ``(C) The'' and
inserting ``(C)(i) In the case of an employee benefit plan
other than an employee pension benefit plan, the''.
(c) Effective Date.--The amendments made by this section
shall apply with respect to opinions required under section
103(a)(3)(A) of the Employee Retirement Income Security Act
of 1974 for plan years beginning on or after January 1 of the
calendar year following the date of the enactment of this
Act.
SEC. 212. ADDITIONAL REQUIREMENTS FOR QUALIFIED PUBLIC
ACCOUNTANTS.
(a) In General.--Section 103(a)(3)(D) (29 U.S.C.
1023(a)(3)(D)) is amended--
(1) by inserting ``(i)'' after ``(D)'';
(2) by inserting ``, with respect to any engagement of an
accountant under subparagraph (A)'' after ``means'';
(3) by redesignating clauses (i), (ii), and (iii) as
subclauses (I), (II), and (III), respectively;
(4) by striking the period at the end of subclause (III)
(as so redesignated) and inserting a comma;
(5) by adding after subclause (III) (as so redesignated),
and flush with clause (i), the following:
``but only if such person meets the requirements of clauses
(ii) and (iii) with respect to such engagement.''; and
(6) by adding at the end the following new clauses:
``(ii) A person meets the requirements of this clause with
respect to an engagement of such person as an accountant
under subparagraph (A) if such person--
``(I) has in operation an appropriate internal quality
control system;
``(II) has undergone a qualified external quality control
review of the person's accounting and auditing practices,
including such practices relevant to employee benefit plans
(if any), during the 3-year period immediately preceding such
engagement; and
``(III) has completed, within the 2-year period immediately
preceding such engagement, at least 80 hours of continuing
education or training which contributes to the accountant's
professional proficiency and which meets such requirements as
may be prescribed by the Secretary in regulations.
The Secretary shall issue the regulations under subclause
(III) not later than December 31, 1998.
``(iii) A person meets the requirements of this clause with
respect to an engagement of such person as an accountant
under subparagraph (A) if such person meets such additional
requirements and qualifications of regulations which the
Secretary deems necessary to ensure the quality of plan
audits.
``(iv) For purposes of clause (ii)(II), an external quality
control review shall be treated as qualified with respect to
a person referred to in clause (ii) if--
``(I) such review is performed in accordance with the
requirements of external quality control review programs of
recognized auditing standard-setting bodies, as determined in
regulations of the Secretary, and
``(II) in the case of any such person who has, during the
peer review period, conducted one or more previous audits of
employee benefit plans, such review includes the review of an
appropriate number (determined as provided in such
regulations, but in no case less than one) of plan audits in
relation to the scale of such person's auditing practice.
The Secretary shall issue the regulations under subclause (I)
not later than December 31, 1998.''.
(b) Effective Dates.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply with respect to
plan years beginning on or after the date which is 3 years
after the date of the enactment of this Act.
(2) Restrictions on conducting examinations.--Clause (iii)
of section 103(a)(3)(D) of the Employee Retirement Income
Security Act of 1974 (as added by subsection (a)(6)) shall
take effect on the date of the enactment of this Act.
SEC. 213. CLARIFICATION OF FIDUCIARY PENALTIES.
(a) Modification of Prohibition of Assignment or
Alienation.--
(1) In general.--Section 206(d) (29 U.S.C. 1056(d)) is
amended by adding at the end the following new paragraphs:
``(4) Paragraph (1) shall not apply to any offset of a
participant's accrued benefit in an employee pension benefit
plan against an amount that the participant is ordered or
required to pay to the plan if--
``(A) the order or requirement to pay arises--
``(i) under a judgment of conviction for a crime involving
such plan,
``(ii) under a civil judgment (including a consent order or
decree) entered by a court in an action brought in connection
with a violation (or alleged violation) of part 4 of this
subtitle, or
``(iii) pursuant to a settlement agreement between the
Secretary and the participant, or a settlement agreement
between the Pension Benefit Guaranty Corporation and the
participant, in connection with a violation (or alleged
violation) of part 4 of this subtitle by a fiduciary or any
other person,
``(B) the judgment, order, decree, or settlement agreement
expressly provides for the offset of all or part of the
amount ordered or required to be paid to the plan against the
participant's accrued benefit in the plan, and
``(C) if the participant has a spouse at the time at which
the offset is to be made--
``(i) such spouse has consented in writing to such offset
and such consent is witnessed by a notary public or
representative of the plan,
``(ii) such spouse is ordered or required in such judgment,
order, decree, or settlement to pay an amount to the plan in
connection with a violation of part 4 of this title, or
``(iii) in such judgment, order, decree, or settlement,
such spouse retains the right to receive the value of the
survivor annuity under a qualified joint and survivor annuity
provided pursuant to section 205(a)(1) and under a qualified
preretirement survivor annuity provided pursuant to section
205(a)(2), determined in accordance with paragraph (5).
``(5)(A) The value of the survivor annuity described in
paragraph (4)(C)(iii) shall be determined as if--
``(i) the participant terminated employment on the date of
the offset,
``(ii) there was no offset,
``(iii) the plan permitted retirement only on or after
normal retirement age,
``(iv) the plan provided only the minimum-required
qualified joint and survivor annuity, and
``(v) the amount of the qualified preretirement survivor
annuity under the plan is equal to the amount of the survivor
annuity payable under the minimum-required qualified joint
and survivor annuity.
``(B) For purposes of this paragraph, the term `minimum-
required qualified joint and survivor annuity' means the
qualified joint and survivor annuity which is the actuarial
equivalent of a single annuity for the life of the
participant and under which the survivor annuity is 50
percent of the amount of the annuity which is payable during
the joint lives of the participant and the spouse.''.
(2) Effective date.--The amendment made by this subsection
shall apply to judgments, orders, and decrees issued, and
settlement agreements entered into, on or after the date of
the enactment of this Act.
(b) Civil Penalties for Breach of Fiduciary
Responsibility.--
(1) Imposition and amount of penalty made discretionary.--
Section 502(l)(1) (29 U.S.C. 1132(l)(1)) is amended--
(A) by striking ``shall'' and inserting ``may'', and
(B) by striking ``equal to'' and inserting ``not greater
than''.
(2) Applicable recovery amount.--Section 502(l)(2) (29
U.S.C. 1132(l)(2)) is amended to read as follows:
``(2) For purposes of paragraph (1), the term `applicable
recovery amount' means any amount which is recovered from (or
on behalf of) any fiduciary or other person with respect to a
breach or violation described in paragraph (1) on or after
the 30th day following receipt by such fiduciary or other
person of written notice from the Secretary of the violation,
whether paid voluntarily or by order of a court in a judicial
proceeding instituted by the Secretary under subsection
(a)(2) or (a)(5). The Secretary may, in the Secretary's sole
discretion, extend the 30-day period described in the
preceding sentence.''.
(3) Other rules.--Section 502(l) (29 U.S.C. 1132(l)) is
amended by adding at the end the following new paragraphs:
``(5) A person shall be jointly and severally liable for
the penalty described in paragraph
[[Page S320]]
(1) to the same extent that such person is jointly and
severally liable for the applicable recovery amount on which
the penalty is based.
``(6) No penalty shall be assessed under this subsection
unless the person against whom the penalty is assessed is
given notice and opportunity for a hearing with respect to
the violation and applicable recovery amount.''.
(4) Effective dates.--
(A) In general.--The amendments made by this subsection
shall apply to any breach of fiduciary responsibility or
other violation of part 4 of subtitle B of title I of the
Employee Retirement Income Security Act of 1974 occurring on
or after the date of the enactment of this Act.
(B) Transition rule.--In applying the amendment made by
paragraph (2) (relating to applicable recovery amount), a
breach or other violation occurring before the date of the
enactment of this Act which continues after the 180th day
after such date (and which may have been discontinued at any
time during its existence) shall be treated as having
occurred after such date of enactment.
SEC. 214. CONFORMING AMENDMENTS RELATING TO ERISA
ENFORCEMENT.
(a) Special Rule for Certain Judgments and Settlements.--
Section 401(a)(13)of the Internal Revenue Code of 1986
(relating to assignment and alienation) is amended by adding
at the end the following new subparagraphs:
``(C) Special rule for certain judgments and settlements.--
Subparagraph (A) shall not apply to any offset of a
participant's accrued benefit in a plan against an amount
that the participant is ordered or required to pay to the
plan if--
``(i) the order or requirement to pay arises--
``(I) under a judgment of conviction for a crime involving
such plan,
``(II) under a civil judgment (including a consent order or
decree) entered by a court in an action brought in connection
with a violation (or alleged violation) of part 4 of subtitle
B of title I of the Employee Retirement Income Security Act
of 1974, or
``(III) pursuant to a settlement agreement between the
Secretary of Labor and the participant, or a settlement
agreement between the Pension Benefit Guaranty Corporation
and the participant, in connection with a violation (or
alleged violation) of part 4 of subtitle B of title I of such
Act,
``(ii) the judgment, order, decree, or settlement agreement
expressly provides for the offset of all or part of the
amount ordered or required to be paid to the plan against the
participant's accrued benefit in the plan, and
``(iii) if the participant has a spouse at the time at
which the offset is to be made--
``(I) such spouse has consented in writing to such offset
and such consent is witnessed by a notary public or
representative of the plan,
``(II) such spouse is ordered or required to pay in such
judgment, order, decree, or settlement an amount to the plan
in connection with a violation of part 4 of this title, or
``(III) in such judgment, order, decree, or settlement,
such spouse retains the right to receive the value of the
survivor annuity under a qualified joint and survivor annuity
provided pursuant to paragraph (11)(A)(i) and under a
qualified preretirement survivor annuity provided pursuant to
paragraph (11)(A)(ii), determined in accordance with
subparagraph (D).
``(D) Determination of value of survivor annuity in
connection with offset.--The value of the survivor annuity
described in subparagraph (C)(iii)(III) shall be determined
as if--
``(i) the participant terminated employment on the date of
the offset,
``(ii) there was no offset,
``(iii) the plan permitted retirement only on or after
normal retirement age,
``(iv) the plan provided only the minimum-required
qualified joint and survivor annuity, and
``(v) the amount of the qualified preretirement survivor
annuity under the plan is equal to the amount of the survivor
annuity payable under the minimum-required qualified joint
and survivor annuity.
For purposes of this subparagraph, the term `minimum-required
qualified joint and survivor annuity' means the qualified
joint and survivor annuity which is the actuarial equivalent
of a single annuity for the life of the participant and under
which the survivor annuity is 50 percent of the amount of the
annuity which is payable during the joint lives of the
participant and the spouse.
``(E) Waiver of certain distribution requirements.--With
respect to the requirements of subsections (a) and (k) of
section 401, section 403(b), and section 409(d), a plan shall
not be treated as failing to meet such requirements solely by
reason of an offset under subparagraph (C).''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to judgments, orders, and decrees issued, and
settlement agreements entered into, on or after the date of
the enactment of this Act.
TITLE III--PORTABILITY
SEC. 301. FASTER VESTING OF EMPLOYER MATCHING CONTRIBUTIONS.
(a) In General.--Paragraph (2) of section 203(a) of the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1053(a)) is amended--
(1) by striking ``or (B)'' and inserting ``(B), and, if
applicable, (C)'',
(2) by striking ``3'', ``4'', ``5'', ``6'', and ``7'' in
the table in subparagraph (B) and inserting ``1'', ``2'',
``3'', ``4'', and ``5'', respectively, and
(3) by adding at the end the following new subparagraph:
``(C) 401(k) plans.--A plan satisfies the requirements of
this subparagraph if--
``(i) the plan includes a qualified cash or deferred
arrangement (as defined in section 401(k)(2)) of the Internal
Revenue Code of 1986, and
``(ii) an employee who has completed at least 3 years of
service has a nonforfeitable right to 100 percent of the
employee's accrued benefit derived from employer matching
contributions (as defined in section 401(m)(4)(A) of such
Code).
For purposes of this subparagraph, matching contributions
shall be taken into account regardless of whether the
matching contributions are made to the same plan as the
contributions made under section 401(k) of such Code, and
matching contributions to any plan shall be taken into
account if such matching contributions are made with respect
to after-tax employee contributions includible in gross
income and if the employer's limit on matching contributions
with respect to such includible employee contributions is
coordinated with the employer's limit on matching
contributions with respect to contributions under such
section.''.
(b) Conforming Amendments.--Paragraph (2) of section 411(a)
of the Internal Revenue Code of 1986 (relating to employer
contributions) is amended--
(1) by striking ``or (B)'' and inserting ``(B), and, if
applicable, (C)'',
(2) by striking ``3'', ``4'', ``5'', ``6'', and ``7'' in
the table in subparagraph (B) and inserting ``1'', ``2'',
``3'', ``4'', and ``5'', respectively,
(3) by striking ``3 to 7'' and inserting ``1 to 5'', and
(4) by adding at the end the following new subparagraph:
``(C) 401(k) plans.--A plan satisfies the requirements of
this subparagraph if--
``(i) the plan includes a qualified cash or deferred
arrangement (as defined in section 401(k)(2)), and
``(ii) an employee who has completed at least 3 years of
service has a nonforfeitable right to 100 percent of the
employee's accrued benefit derived from employer matching
contributions (as defined in section 401(m)(4)(A)).
For purposes of this subparagraph, matching contributions
shall be taken into account regardless of whether the
matching contributions are made to the same plan as the
contributions made under section 401(k), and matching
contributions to any plan shall be taken into account if such
matching contributions are made with respect to after-tax
employee contributions and if the employer's limit on
matching contributions with respect to such after-tax
employee contributions is coordinated with the employer's
limit on matching contributions with respect to contributions
under such section.''.
(c) Effective Date.--
(1) In general.--Except as provided in paragraphs (2) and
(3), the amendments made by this section shall apply to plan
years beginning after December 31, 1997.
(2) Application to current employees.--The amendments made
by this section shall not apply to any employee who does not
have at least 1 hour of service in any plan year beginning
after December 31, 1997.
(3) Collective bargaining agreements.--In the case of a
plan maintained pursuant to 1 or more collective bargaining
agreements between employee representatives and 1 or more
employers ratified by the date of the enactment of this Act,
the amendments made by this section shall not apply to
employees covered by any such agreement in plan years
beginning before the earlier of--
(A) the later of--
(i) the date on which the last of such collective
bargaining agreements terminates (determined without regard
to any extension thereof on or after such date of enactment),
or
(ii) January 1, 1998, or
(B) January 1, 2002.
SEC. 302. RATIONALIZE THE RESTRICTIONS ON DISTRIBUTIONS FROM
401(k) PLANS.
(a) In General.--Section 401(k)(2)(B)(i)(I) of the Internal
Revenue Code of 1986 (relating to qualified cash or deferred
arrangements) is amended by striking ``separation from
service'' and inserting ``severance from employment''.
(b) Business Sale Requirements Deleted.--
(1) In general.--Section 401(k)(2)(B)(i)(II) of the
Internal Revenue Code of 1986 (relating to qualified cash or
deferred arrangements) is amended by striking ``an event''
and inserting ``a plan termination''.
(2) Conforming amendments.--Section 401(k)(10) of such Code
is amended--
(A) by striking subparagraph (A) and inserting the
following:
``(A) In general.--A plan termination is described in this
paragraph if the termination of the plan is without
establishment or maintenance of another defined contribution
plan (other than an employee stock ownership plan as defined
in section 4975(e)(7)).'',
(B) by striking subparagraph (C), and
(C) by striking ``or disposition of assets or subsidiary''
in the heading.
(c) Effective Date.--The amendments made by this section
shall apply to distributions after December 31, 1997.
[[Page S321]]
SEC. 303. TREATMENT OF TRANSFERS BETWEEN DEFINED CONTRIBUTION
PLANS.
(a) In General.--Section 411(d)(6) of the Internal Revenue
Code of 1986 (relating to accrued benefit not to be decreased
by amendment) is amended by adding at the end the following
new subparagraph:
``(D) Plan transfers.--A defined contribution plan (in this
subparagraph referred to as the `transferee plan') shall not
be treated as failing to meet the requirements of this
paragraph merely because the transferee plan does not provide
some or all of the forms of distribution previously available
under another defined contribution plan (in this subparagraph
referred to as the `transferor plan') to the extent that--
``(i) the forms of distribution previously available under
the transferor plan applied to the account of a participant
or beneficiary under the transferor plan that was transferred
from the transferor plan to the transferee plan pursuant to a
direct transfer rather than pursuant to a distribution from
the transferor plan,
``(ii) the terms of both the transferor plan and the
transferee plan authorize the transfer described in clause
(i),
``(iii) the transfer described in clause (i) was made
pursuant to a voluntary election by the participant or
beneficiary whose account was transferred to the transferee
plan,
``(iv) the election described in clause (iii) was made
after the participant or beneficiary received a notice
describing the consequences of making the election,
``(v) if the transferor plan provides for an annuity as the
normal form of distribution under the plan in accordance with
section 417, the transfer is made with the consent of the
participant's spouse (if any), and such consent meets
requirements similar to the requirements imposed by section
417(a)2), and
``(vi) the transferee plan allows the participant or
beneficiary described in clause (iii) to receive any
distribution to which the participant or beneficiary is
entitled under transferee plan in the form of a single sum
distribution.''.
(b) Conforming Amendment.--Section 204(g)of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1054(g)) is
amended by adding at the end the following new paragraph:
``(4) A defined contribution plan (in this paragraph
referred to as the `transferee plan') shall not be treated as
failing to meet the requirements of this subsection merely
because the transferee plan does not provide some or all of
the forms of distribution previously available under another
defined contribution plan (in this paragraph referred to as
the `transferor plan') to the extent that--
``(A) the forms of distribution previously available under
the transferor plan applied to the account of a participant
or beneficiary under the transferor plan that was transferred
from the transferor plan to the transferee plan pursuant to a
direct transfer rather than pursuant to a distribution from
the transferor plan,
``(B) the terms of both the transferor plan and the
transferee plan authorize the transfer described in
subparagraph (A),
``(C) the transfer described in subparagraph (A) was made
pursuant to a voluntary election by the participant or
beneficiary whose account was transferred to the transferee
plan,
``(D) the election described in subparagraph (C) was made
after the participant or beneficiary received a notice
describing the consequences of making the election,
``(E) if the transferor plan provides for an annuity as the
normal form of distribution under the plan in accordance with
section 205, the transfer is made with the consent of the
participant's spouse (if any), and such consent meets
requirements similar to the requirements imposed by section
205(c)2), and
``(F) the transferee plan allows the participant or
beneficiary described in subparagraph (C) to receive any
distribution to which the participant or beneficiary is
entitled under transferee plan in the form of a single sum
distribution.''.
(b) Effective Date.--The amendments made by this section
shall apply to transfers after December 31, 1997.
SEC. 304. MISSING PARTICIPANTS.
(a) In General.--Section 4050 of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1350) is amended by
redesignating subsection (c) as subsection (e) and by
inserting after subsection (b) the following new subsections:
``(c) Multiemployer Plans.--The corporation shall prescribe
rules similar to the rules in subsection (a) for
multiemployer plans covered by this title that terminate
under section 4041A.
``(d) Plans Not Otherwise Subject to Title.--
``(1) Transfer to corporation.--The plan administrator of a
plan described in paragraph (4) may elect to transfer a
missing participant's benefits to the corporation upon
termination of the plan.
``(2) Information to the corporation.--To the extent
provided in regulations, the plan administrator of a plan
described in paragraph (4) shall, upon termination of the
plan, provide the corporation information with respect to
benefits of a missing participant if the plan transfers such
benefits--
``(A) to the corporation, or
``(B) to an entity other than the corporation or a plan
described in paragraph (4)(B)(ii).
``(3) Payment by the corporation.--If benefits of a missing
participant were transferred to the corporation under
paragraph (1), the corporation shall, upon location of the
participant or beneficiary, pay to the participant or
beneficiary the amount transferred (or the appropriate
survivor benefit) either--
``(A) in a single sum (plus interest), or
``(B) in such other form as is specified in regulations of
the corporation.
``(4) Plans described.--A plan is described in this
paragraph if--
``(A) the plan is a pension plan (within the meaning of
section 3(2))--
``(i) to which the provisions of this section do not apply
(without regard to this subsection), and
``(ii) which is not a plan described in paragraphs (2)
through (11) of section 4021(b), and
``(B) at the time the assets are to be distributed upon
termination, the plan--
``(i) has missing participants, and
``(ii) has not provided for the transfer of assets to pay
the benefits of all missing participants to another pension
plan (within the meaning of section 3(2)).
``(5) Certain provisions not to apply.--Subsections (a)(1)
and (a)(3) shall not apply to a plan described in paragraph
(4).''.
(b) Conforming Amendments.--
(1) Section 206(f) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1056(f)) is amended--
(A) by striking ``title IV'' and inserting ``section
4050'', and
(B) by striking ``the plan shall provide that''.
(2) Section 401(a)(34) (relating to benefits of missing
participants on plan termination) is amended by striking
``title IV'' and inserting ``section 4050''.
(c) Effective Date.--The amendments made by this section
shall apply to distributions made after final regulations
implementing subsections (c) and (d) of section 4050 of the
Employee Retirement Income Security Act of 1974 (as added by
subsection (a)), respectively, are prescribed.
TITLE IV--TOWARD EQUITY FOR WOMEN
SEC. 401. INDIVIDUAL'S PARTICIPATION IN PLAN NOT TREATED AS
PARTICIPATION BY SPOUSE.
(a) In General.--Paragraph (1) of section 219(g) of the
Internal Revenue Code of 1986 (relating to limitation on
deduction for active participants in certain pension plans)
is amended by striking ``or the individual's spouse''.
(b) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
1996.
SEC. 402. MODIFICATIONS OF JOINT AND SURVIVOR ANNUITY
REQUIREMENTS.
(a) Amendments to ERISA.--
(1) Amount of annuity.--
(A) In general.--Paragraph (1) of section 205(a) of the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1055(a)) is amended by inserting ``or, at the election of the
participant, shall be provided in the form of a qualified
joint and \2/3\ survivor annuity'' after ``survivor
annuity,''.
(B) Definition.--Subsection (d) of section 205 of such Act
(29 U.S.C. 1055) is amended--
(i) by redesignating paragraphs (1) and (2) as
subparagraphs (A) and (B), respectively,
(ii) by inserting ``(1)'' after ``(d)'', and
(iii) by adding at the end the following new paragraph:
``(2) For purposes of this section, the term ``qualified
joint and \2/3\ survivor annuity'' means an annuity--
``(A) for the participant while both the participant and
the spouse are alive with a survivor annuity for the life of
surviving individual (either the participant or the spouse)
equal to 67 percent of the amount of the annuity which is
payable to the participant while both the participant and the
spouse are alive,
``(B) which is the actuarial equivalent of a single annuity
for the life of the participant, and
``(C) which, for all other purposes of this Act, is treated
as a qualified joint and survivor annuity.''.
(2) Illustration requirement.--Clause (i) of section
205(c)(3)(A) of such Act (29 U.S.C. 1055(c)(3)(A)) is amended
to read as follows:
``(i) the terms and conditions of each qualified joint and
survivor annuity and qualified joint and \2/3\ survivor
annuity offered, accompanied by an illustration of the
benefits under each such annuity for the particular
participant and spouse and an acknowledgement form to be
signed by the participant and the spouse that they have read
and considered the illustration before any form of retirement
benefit is chosen,''.
(b) Amendments to Internal Revenue Code.--
(1) Amount of annuity.--
(A) In general.--Clause (i) of section 401(a)(11)(A) of the
Internal Revenue Code of 1986 (relating to requirement of
joint and survivor annuity and preretirement survivor
annuity) is amended by inserting ``or, at the election of the
participant, shall be provided in the form of a qualified
joint and \2/3\ survivor annuity'' after ``survivor
annuity,''.
(B) Definition.--Section 417 of such Code (relating to
definitions and special rules for purposes of minimum
survivor annuity requirements) is amended by redesignating
subsection (f) as subsection (g) and by inserting after
subsection (e) the following new subsection:
``(f) Definition of Qualified Joint and \2/3\ Survivor
Annuity.--For purposes of this section and section
401(a)(11), the term
[[Page S322]]
``qualified joint and \2/3\ survivor annuity'' means an
annuity--
``(1) for the participant while both the participant and
the spouse are alive with a survivor annuity for the life of
surviving individual (either the participant or the spouse)
equal to 67 percent of the amount of the annuity which is
payable to the participant while both the participant and the
spouse are alive,
``(2) which is the actuarial equivalent of a single annuity
for the life of the participant, and
``(3) which, for all other purposes of this title, is
treated as a qualified joint and survivor annuity.''.
(2) Illustration requirement.--Clause (i) of section
417(a)(3)(A) of such Code (relating to explanation of joint
and survivor annuity) is amended to read as follows:
``(i) the terms and conditions of each qualified joint and
survivor annuity and qualified joint and \2/3\ survivor
annuity offered, accompanied by an illustration of the
benefits under each such annuity for the particular
participant and spouse and an acknowledgement form to be
signed by the participant and the spouse that they have read
and considered the illustration before any form of retirement
benefit is chosen,''.
(c) Effective Date.--The amendments made by this section
shall apply to plan years beginning after December 31, 1996.
SEC. 403. DIVISION OF PENSION BENEFITS UPON DIVORCE.
(a) Amendments to the Internal Revenue Code of 1986.--
Subsection (p)(1) of section 414 of the Internal Revenue Code
of 1986 is amended by adding the following new subparagraph:
``(C) Deemed domestic relations order upon divorce.--
``(i) In general.--A divorce decree issued with respect to
the participant and the former spouse pursuant to a State
domestic relations law (including an annulment or other order
of marital dissolution) shall, upon delivery to a plan along
with the information required by paragraph (2)(A), be deemed
by the plan to be a domestic relations order that specifies
that 50 percent of the marital share of the participant's
accrued benefit is to be provided to such former spouse,
unless the divorce decree states that pension benefits were
considered by the parties and no division is intended.
``(ii) Marital share.--The marital share shall be the
accrued benefit of the participant under the plan as of the
date of the divorce (to the extent such accrued benefit is
vested at the date of the divorce or any later date)
multiplied by a fraction, the numerator of which is the
period of participation by the participant under the plan
starting with the date of marriage and ending with the date
of divorce, and the denominator of which is the total period
of participation by the participant under the plan.
``(iii) Interpretation as qualified domestic relations
order.--Each plan shall establish reasonable rules for
determining how any such deemed domestic relations order is
to be interpreted under the plan so as to constitute a
qualified domestic relations order that satisfies paragraphs
(2) through (4) (and a copy of such rules shall be provided
to such former spouse promptly after delivery of the divorce
decree). Such rules--
``(I) may delay the effect of such an order until the
earlier of the date the participant is fully vested or has
terminated employment,
``(II) may allow the former spouse to be paid out
immediately,
``(III) shall permit the former spouse to be paid not later
than the earliest retirement age under the plan,
``(IV) may require the submitter of the divorce decree to
present a marriage certificate or other evidence of the
marriage date to assist in benefit calculations,
``(V) may require that a divorce decree be presented on the
date which is not later than 2 years after the date of the
issuance of the decree, and
``(VI) may conform to the rules applicable to qualified
domestic relations orders regarding form or type of benefit.
``(iv) Application.--This subparagraph shall not apply to
the extent that a qualified domestic relations order issued
in connection with such divorce provides otherwise.''.
(b) Amendments to the Employee Retirement Income Security
Act of 1974.--Subsection (d)(2)(B) of section 206 of the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1056) is amended by adding the following new subclause (iii):
``(iii) Deemed domestic relations order upon divorce.--
``(I) In general.--A divorce decree issued with respect to
the participant and the former spouse pursuant to a State
domestic relations law (including an annulment or other order
of marital dissolution) shall, upon delivery to a plan along
with the information required by subparagraph (C)(i), be
deemed by the plan to be a domestic relations order that
specifies that 50 percent of the marital share of the
participant's accrued benefit is to be provided to such
former spouse.
``(II) Marital share.--The marital share shall be the
accrued benefit of the participant under the plan as of the
date of the divorce (to the extent such accrued benefit is
vested at the date of the divorce or any later date)
multiplied by a fraction, the numerator of which is the
period of participation by the participant under the plan
starting with the date of marriage and ending with the date
of divorce, and the denominator of which is the total period
of participation by the participant under the plan.
``(III) Interpretation as qualified domestic relations
order.--Each plan shall establish reasonable rules for
determining how any such deemed domestic relations order is
to be interpreted under the plan so as to constitute a
qualified domestic relations order that satisfies
subparagraphs (C) through (E) (and a copy of such rules shall
be provided to such former spouse promptly after delivery of
the divorce decree). Such rules (aa) may delay the effect of
such an order until the earlier of the date the participant
is fully vested or has terminated employment, (bb) may allow
the former spouse to be paid out immediately, and (cc) shall
permit the spouse to be paid not later than the earliest
retirement age under the plan.
``(IV) Application.--This subclause shall not apply to the
extent that a qualified domestic relations order issued in
connection with such divorce provides otherwise.''.
(c) Effective Date.--The amendments made by this section
shall be effective for divorce decrees issued after December
31, 1999.
SEC. 404. DEFERRED ANNUITIES FOR SURVIVING SPOUSES OF FEDERAL
EMPLOYEES.
(a) In General.--Section 8341 of title 5, United States
Code, is amended--
(1) in subsection (h)(1), by striking ``section 8338(b) of
this title'' and inserting ``section 8338(b), and a former
spouse of a deceased former employee who separated from the
service with title to a deferred annuity under section 8338
(if they were married to one another prior to the date of
separation),''; and
(2) by adding at the end the following:
``(j)(1) If a former employee dies after having separated
from the service with title to a deferred annuity under
section 8338 but before having established a valid claim for
annuity, and is survived by a spouse to whom married on the
date of separation, the surviving spouse may elect to
receive--
``(A) an annuity, commencing on what would have been the
former employee's 62d birthday, equal to 55 percent of the
former employee's deferred annuity;
``(B) an annuity, commencing on the day after the date of
death of the former employee, such that, to the extent
practicable, the present value of the future payments of the
annuity would be actuarially equivalent to the present value
of the future payments under subparagraph (A) as of the day
after the former employee's death; or
``(C) the lump-sum credit, if the surviving spouse is the
individual who would be entitled to the lump-sum credit and
if such surviving spouse files application therefor.
``(2) An annuity under this subsection and the right
thereto terminate on the last day of the month before the
surviving spouse remarries before becoming 55 years of age,
or dies.''.
(b) Corresponding Amendment for FERS.--Section 8445(a) of
title 5, United States Code, is amended--
(1) by striking ``(or of a former employee or'' and
inserting ``(or of a former''; and
(2) by striking ``annuity)'' and inserting ``annuity, or of
a former employee who dies after having separated from the
service with title to a deferred annuity under section 8413
but before having established a valid claim for annuity (if
such former spouse was married to such former employee prior
to the date of separation))''.
(c) Effective Date.--The amendments made by this section
shall apply with respect to surviving spouses and former
spouses (whose marriage, in the case of the amendments made
by subsection (a), terminated after May 6, 1985) of former
employees who die after the date of the enactment of this
Act.
SEC. 405. PAYMENT OF LUMP-SUM CREDIT FOR FORMER SPOUSES OF
FEDERAL EMPLOYEES.
(a) In General.--Title 5, United States Code, is amended--
(1) in section 8342(c), by striking ``Lump-sum'' and
inserting ``Except as provided in section 8345(j), lump-
sum'';
(2) in section 8345(j)--
(A) in paragraph (1), by inserting after ``that
individual'' the following: ``, or be made under section
8342(d) through (f) to an individual entitled under section
8342(c),''; and
(B) by adding at the end the following:
``(4) Any payment under this subsection to a person bars
recovery by any other person.'';
(3) in section 8424(d), by striking ``Lump-sum'' and
inserting ``Except as provided in section 8467(a), lump-
sum''; and
(4) in section 8467--
(A) in subsection (a), by inserting after ``that
individual'' the following: ``, or be made under section
8424(e) through (g) to an individual entitled under section
8424(d),''; and
(B) by adding at the end the following:
``(d) Any payment under this section to a person bars
recovery by any other person.''.
(b) Effective Date.--The amendments made by this section
shall apply with respect to any death occurring after the
90th day after the date of the enactment of this Act.
SEC. 406. WOMEN'S PENSION TOLL-FREE PHONE NUMBER.
(a) In General.--The Secretary of Labor shall contract with
an independent organization to create a women's pension toll-
free telephone number and contact to serve as--
(1) a resource for women on pension questions and issues;
(2) a source for referrals to appropriate agencies; and
[[Page S323]]
(3) a source for printed information.
(b) Authorization of Appropriations.--There are authorized
to be appropriated $500,000 for each of the fiscal years
1997, 1998, 1999, and 2000.
TITLE V--DATE FOR ADOPTION OF PLAN AMENDMENTS
SEC. 501. DATE FOR ADOPTION OF PLAN AMENDMENTS.
(a) In General.--Except as otherwise provided in this Act,
if any amendment made by this Act requires an amendment to
any plan, such plan amendment shall not be required to be
made before the last day of the first plan year beginning on
or after January 1, 1998, if--
(1) during the period after such amendment takes effect and
before the last day of such first plan year, the plan is
operated in accordance with the requirements of such
amendment, and
(2) such plan amendment applies retroactively to such
period.
A plan shall not be treated as failing to provide definitely
determinable benefits or contributions, or to be operated in
accordance with the provisions of the plan, merely because it
operates in accordance with this subsection.
(b) Governmental Plans.--In the case of a governmental plan
(as defined in section 414(d) of the Internal Revenue Code of
1986), subsection (a) shall be applied by substituting for
``January 1, 1998'' the later of--
(1) January 1, 1999, or
(2) the date which is 90 days after the opening of the
first legislative session beginning after January 1, 1999, of
the governing body with authority to amend the plan, but only
if such governing body does not meet continuously.
(c) Special Rule for Collectively Bargained Plans.--
Nothwithstanding any other provision of this Act, in the case
of a plan maintained pursuant to 1 or more collective
bargaining agreements between employee representatives and 1
or more employers ratified on or before the date of the
enactment of this Act, any amendment made by this Act which
requires an amendment to such plan shall not be required to
be made before the last day of the first plan year beginning
on or after the earlier of--
(1) the later of--
(A) January 1, 1998, or
(B) the date on which the last of such collective
bargaining agreements terminates (determined without regard
to any extension thereof after the date of the enactment of
this Act), or
(2) January 1, 1999.
______
By Mr. DASCHLE (for himself, Mr. Biden, Mr. Leahy, Mr. Kohl, Mr.
Breaux, Mr. Ford, Ms. Mikulski, Mr. Dodd, Mr. Durbin, Mr.
Kerry, Mr. Levin, Ms. Landrieu, Mr. Torricelli, Ms. Moseley-
Braun, Mr. Glenn, and Mr. Rockefeller):
S. 15. A bill to control youth violence, crime, and drug abuse, and
for other purposes; to the Committee on the Judiciary.
the YOUTH VIOLENCE, CRIME AND DRUG ABUSE CONTROL ACT of 1997
Mr. BIDEN. Mr. President, today I rise to introduce--along with
Senator Daschle, Senator Leahy, and many other Senators--legislation
which will be a key cornerstone of the Senate Democrats anti-crime,
anti-drug focus for the new Congress.
Our thrust is clear and straight-forward:
We must continue the successes of the 1994 Biden crime law.
And, at the same time, we must take up the new challenge of
confronting crime and drug abuse among our youth with a commonsense
strategy balancing tough sanctions, certain punishment and protecting
literally millions of kids from the criminals and drug pushers who can
target any kid from any family whose parents are at work when the
school day ends.
We must continue the success of the 1994 crime law.
While I give the credit first and foremost to the police officers on
our Nation's streets, the verdict from the FBI's national crime
statistics is that since the 1994 crime law, violent crime is down and
down significantly:
1996 is projected to have the lowest murder toll since 1988--and a
murder rate that is lowest since 1971;
1996 is projected to have the lowest violent crime total since 1990;
and
the murder rate for wives, ex-wives and girlfriends at the hands of
their ``intimates'' fell to an 18-year low in 1994--and is lower still
in 1995.
This is a record of success which should convince the Senate to
extend the 1994 crime law.
Adding 25,000 more police by extending the 100,000 cops program for
two more years.
Extending the Violence Against Women Act funding to shelter 400,000
more battered women and their children and continuing to help States
arrest and prosecute batterers. Providing an additional $5 billion to
build up to 80,000 more prison cells for violent criminals--we also
propose to give States greater flexibility with these dollars to speed
the prosecution of violent criminals and increase the use of drug
testing. Provide $1 billion to extend such proven law enforcement
programs as the Byrne anti-drug grants to State and local law
enforcement. And, extend the crime law trust fund to fund all these
initiatives from the cost-savings from downsizing the Federal
Government--without increasing the Federal budget deficit.
The bottom line--this bill calls on the full Senate to continue the
successes of the 1994 Biden crime law.
But, this legislation does not stop there. In the face of rising teen
drug abuse and rising youth violence--despite some recent hopeful
news--we must undertake a comprehensive effort to target these
problems. This legislation offers just such a comprehensive effort:
First, we propose to reform the juvenile justice system to crack down
on violent youth by:
Making some key changes to Federal law that respond to legitimate
concerns which create the pressure to take the unwise step of
prosecuting kids in our overburdened adult courts. Specifically,
providing greater access to juveniles records and raising the mandatory
release age for juveniles from 21 to 26--so juveniles will face up to
11 years in prison even if they are prosecuted as juveniles.
Providing $1 billion to help States build prisons for violent
juveniles as well as additional prosecutors and other improvements to
State juvenile justice systems (including certain, graduated punishment
for first-time and minor juvenile offenders).
Creating special juvenile ``gun'' courts where juvenile gun offenders
are tried and sentenced on an expedited basis.
These are essential to controlling juvenile crime because, as every
mother knows, immediate and certain punishment is the key to
disciplining kids.
Second, we must target one of the primary sources of youth violence--
street gangs.
We propose aggressive steps to:
Target gang paraphernalia by boosting the penalties for criminals who
arm themselves with bullet-proof body armor and deadly accurate laser-
sighting devices. And, as Senator Leahy has identified, we must make
some commonsense reforms to speed law enforcement access to the numeric
pagers so often used by youth gang criminals.
Create a new crime of interstate franchise spread of street gangs--a
step which better targets Federal law enforcement resources than simply
federalizing ever more State crimes and encroaching upon the State's
traditional handling of juvenile crime.
Cracking down on street gangs also means that we should increase the
penalties for witness intimidation, a favored tactic of criminal street
gangs. This is a proposal outlined by the President just this weekend.
Third, we must redouble our efforts to treat and prevent youth drug
abuse.
For the past several months, you have heard me modify one of the key
arguments of the President's 1992 campaign by stating--``it's drugs,
stupid, it's drugs.''
This statement is--unfortunately--necessary in the face of rising
drug abuse among our children. While drug abuse among adults is holding
steady, all the surveys tell us that more and more children are falling
prey to drugs.
We propose a multi-prong response, because drugs need to be fought
not only in our communities, but also in our scientific laboratories
where important breakthroughs are being made into medicines to treat
drug addiction--we propose additional funding for the Federal
Medications Development Program and to provide incentives to the
private sector to develop new medicines to treat heroin and cocaine
addiction.
We must also expand drug courts to cover 50,000 children--a vast
improvement on the no drug testing, no treatment, and no threat of
punishment system which typifies too many juvenile courts today.
As I proposed last year, we must tighten controls on the club drug--
ketamine--that is popular with too many children today.
[[Page S324]]
Funding drug treatment for 600,000 drug-addicted children is also
key--particularly as our Nation stands on the edge of a baby-boomerang
wave that will mean more teenagers--and more teen addicts.
Reauthorizing the drug director's office as well as the Safe & Drug-
Free Schools Program which is the core of Federal drug prevention
efforts are two other necessary steps.
In addition, and in response to the recent passage of so-called
medical marijuana initiatives, we seek a measure which should be
supported even by their proponents--a simple study to determine if drug
abuse among children rises in these two States.
Fourth, we call for a renewed effort to prevent youth violence.
No where has the crime policy debate been subject to more distortions
and misunderstandings than on a goal all of us should share--let's
prevent kids from getting involved in crime, violence and drugs in the
first place.
To get past all the misunderstanding, we propose to call upon the
prestigious, non-partisan National Academy of Sciences to answer the
questions--can we prevent youth crime? And, if so, how do we do so in
the most efficient way possible?
Let me repeat a challenge I offered last week--I will live by the
results of this study, if those who oppose prevention efforts will as
well. If the national academy says we can't figure out this task, so be
it, I will not seek appropriations for any funds we authorize through
this legislation. But, if the national academy of sciences says that we
can, I challenge all to support full funding for these crime prevention
efforts.
But, in the meantime, it seems to me that we do know at least one
thing about preventing youth crime and drug abuse--my mom summarized
what we know in the simple phrase used by mothers everywhere: ``Idle
hands are the devil's workshop.''
This refers to the commonsense notion that if we can just get kids
off the streets and into supervised programs during the after school
hours when kids are likely to be the victims of gangs and criminals or
the customers of drug pushers--if we can just do that simply thing,
with boys and girls clubs or many other proven efforts, we can make
important in-roads against drug abuse and crime among children.
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. 15
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Youth
Violence, Crime, and Drug Abuse Control Act of 1997''.
(b) Table of Contents.--The table of contents for this Act
is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
TITLE I--CRIME CONTROL
Subtitle A--More Police Officers on the Beat
Sec. 101. More police officers on the beat.
Sec. 102. Grants for equipment, technology, and support systems.
Sec. 103. National community police telecommunications.
Sec. 104. Technical amendment.
Subtitle B--Violent Offender Incarceration and Truth-in-Sentencing
Grants
Sec. 121. Formula allocations.
Sec. 122. Extension of violent offender incarceration and truth-in-
sentencing grants.
Subtitle C--Domestic Violence
Sec. 131. Extension of Violence Against Women Act.
Sec. 132. Rural domestic violence and child abuse enforcement
assistance.
Subtitle D--Assistance to Local Law Enforcement
Sec. 141. Extension of law enforcement family support funding.
Sec. 142. Extension of rural drug enforcement and training funding.
Sec. 143. Extension of DNA identification grants funding.
Sec. 144. Extension of Byrne grant funding.
Sec. 145. Extension of technical automation grant funding.
Sec. 146. Extension of grants for State court prosecutors.
TITLE II--YOUTH VIOLENCE CONTROL
Subtitle A--Federal Juvenile Prosecutions
Sec. 201. Increased detention, mandatory restitution, and additional
sentencing options for youth offenders.
Sec. 202. Access to records.
Sec. 203. Reinstituting dismissed cases.
Subtitle B--Assistance to States for Prosecuting and Punishing Youth
Offenders
Sec. 214. Juvenile and violent offender incarceration grants.
Sec. 215. Certain punishment and graduated sanctions for youth
offenders.
Subtitle C--Juvenile Gun Courts
Sec. 221. Definitions.
Sec. 222. Grant program.
Sec. 223. Applications.
Sec. 224. Grant awards.
Sec. 225. Use of grant amounts.
Sec. 226. Grant limitations.
Sec. 227. Federal share.
Sec. 228. Report and evaluation.
Sec. 229. Authorization of appropriations.
Subtitle D--Gang Violence Reduction
Part 1--Enhanced Penalties for Gang-Related Activities
Sec. 241. Gang franchising.
Sec. 242. Gang franchising as RICO predicate.
Sec. 243. Increase in offense level for participation in crime as gang
member.
Sec. 244. Increasing the penalty for using physical force to tamper
with witnesses, victims, or informants.
Sec. 245. Possession of firearms in relation to counts of violence or
drug trafficking crimes.
Sec. 246. Increased penalty for transferring a firearm to a minor for
use in a crime.
Sec. 247. Elimination of statute of limitations for murder.
Sec. 248. Extension of statute of limitations for violent and drug
trafficking crimes.
Part 2--Gang Paraphernalia
Sec. 251. Enhancing law enforcement access to clone numeric pagers.
Sec. 252. Prohibitions relating to body armor.
Sec. 253. Prohibitions relating to laser sighting devices.
Subtitle E--Rights of Victims in State Juvenile Courts
Sec. 261. State guidelines.
TITLE III--PREVENTION AND TREATMENT OF YOUTH DRUG ABUSE AND ADDICTION
Subtitle A--Protecting Youth From Dangerous Drugs
Sec. 301. Rescheduling of ``club'' drugs.
Subtitle B--Development of Medicines for the Treatment of Drug
Addiction
Part 1--Pharmacotherapy Research
Sec. 321. Reauthorization for medication development program.
Part 2--Patent Protections for Pharmacotherapies
Sec. 331. Recommendation for investigation of drugs.
Sec. 332. Designation of drugs.
Sec. 333. Protection for drugs.
Sec. 334. Open protocols for investigations of drugs.
Part 3--Encouraging Private Sector Development of Pharmacotherapies
Sec. 341. Development, manufacture, and procurement of drugs for the
treatment of addiction to illegal drugs.
Subtitle C--Prevention and Treatment Programs
Part 1--Comprehensive Drug Education
Sec. 351. Extension of safe and drug-free schools and communities
program.
Part 2--Drug Courts
Sec. 361. Reauthorization of drug courts program.
Sec. 362. Juvenile drug courts.
Part 3--Drug Treatment
Sec. 371. Drug treatment for juveniles.
Subtitle D--National Drug Control Policy
Sec. 381. Reauthorization of Office of National Drug Control Policy.
Sec. 382. Study on effects of California and Arizona drug initiatives.
Subtitle E--Penalty Enhancements
Sec. 391. Increased penalties for using Federal property to grow or
manufacture controlled substances.
Sec. 392. Technical correction to ensure compliance of Federal
sentencing guidelines with Federal law.
TITLE IV--PROTECTING YOUTH FROM VIOLENT CRIME
Subtitle A--Grants for Youth Organizations
Sec. 401. Grant program.
Sec. 402. Grants to national organizations.
Sec. 403. Grants to States.
Sec. 404. Allocation; grant limitation.
Sec. 405. Report and evaluation.
Sec. 406. Authorization of appropriations.
Subtitle B--``Say No to Drugs'' Community Centers Act of 1997
Sec. 421. Short title; definitions.
Sec. 422. Grant requirements.
Sec. 423. Authorization of appropriations.
Subtitle C--Missing Children
Sec. 431. Amendments to the Missing Children's Assistance Act.
TITLE V--IMPROVING YOUTH CRIME AND DRUG PREVENTION
Subtitle A--Comprehensive Study of Federal Prevention Efforts
Sec. 501. Study by national academy of science.
[[Page S325]]
Subtitle B--Evaluation Mandate for Authorized Programs
Sec. 522. Evaluation of crime prevention programs.
Sec. 523. Evaluation and research criteria.
Sec. 524. Compliance with evaluation mandate.
Sec. 525. Reservation of amounts for evaluation and research.
Subtitle C--Elimination of Ineffective Programs
Sec. 531. Sense of Senate regarding funding for programs determined to
be ineffective.
TITLE VI--EXTENSION OF VIOLENT CRIME REDUCTION TRUST FUND
Sec. 601. Extension of violent crime reduction trust fund.
SEC. 2. DEFINITIONS.
In this Act--
(1) the term ``Attorney General'' means the Attorney
General of the United States;
(2) the term ``Indian tribe'' means a tribe, band, pueblo,
nation, or other organized group or community of Indians,
including an Alaska Native village (as defined in or
established under the Alaska Native Claims Settlement Act (43
U.S.C. 1601 et seq.)), that is recognized as eligible for the
special programs and services provided by the United States
to Indians because of their status as Indians;
(3) the term ``juvenile'' has the meaning given that term
under applicable State law;
(4) the term ``State'' means any State of the United
States, the District of Columbia, the Commonwealth of Puerto
Rico, the Virgin Islands, American Samoa, Guam, and the
Northern Mariana Islands;
(5) the term ``unit of local government'' means any city,
county, township, borough, parish, or other entity exercising
governmental power under State law;
(6) the term ``Violent Crime Reduction Trust Fund'' means
the fund established under title XXXI of the Violent Crime
Control and Law Enforcement Act of 1994 (42 U.S.C. 14211 et
seq.); and
(7) the term ``youth'' means a person who is not younger
than 5 and not older than 18 years of age.
TITLE I--CRIME CONTROL
Subtitle A--More Police Officers on the Beat
SEC. 101. MORE POLICE OFFICERS ON THE BEAT.
Section 1001(a)(11)(A) of title I of the Omnibus Crime
Control and Safe Streets Act of 1968 (42 U.S.C.
3793(a)(11)(A)) is amended--
(1) in clause (v), by striking ``and'' at the end;
(2) in clause (vi), by striking the period at the end and
inserting a semicolon; and
(3) by adding at the end the following:
``(vii) $1,240,000,000 for fiscal year 2001; and
``(viii) $1,240,000,000 for fiscal year 2002.''.
SEC. 102. GRANTS FOR EQUIPMENT, TECHNOLOGY, AND SUPPORT
SYSTEMS.
Section 1701(b)(2)(A) of title I of the Omnibus Crime
Control and Safe Streets Act of 1968 (42 U.S.C. 3796dd) is
amended to read as follows:
``(A) may not exceed 20 percent of the funds available for
grants pursuant to this subsection in any fiscal year.''.
SEC. 103. NATIONAL COMMUNITY POLICE TELECOMMUNICATIONS.
Part Q of title I of the Omnibus Crime Control and Safe
Streets Act of 1968 (42 U.S.C. 3796dd et seq.) is amended by
adding at the end the following:
``SEC. 1710. NATIONAL POLICE TELECOMMUNICATIONS.
``(a) Findings.--Congress finds that--
``(1) police departments and sheriffs confirm that the 911
system is overloaded and that a large percentage of those
calls are nonemergency calls;
``(2) many communities have seen increases in their 911
call volumes of between 40 percent and 50 percent annually;
``(3) police officers are forced to spend too much time
responding to nonemergency situations, which eliminates time
for proactive community policing; and
``(4) efforts to limit the use of 911 by using general
telephone numbers and educating the public to reference a
general number in the telephone book have been ineffective.
``(b) Purpose.--The purposes of this section are--
``(1) to encourage the Federal Communications Commission to
reserve the 311 nonemergency number on a national basis for
use by public safety agencies in responding to nonemergency
police telephone calls; and
``(2) to establish a Federal assistance program to assist
States and localities in establishing 311 nonemergency
systems and to educate citizens in the use of 911 and 311.
``(c) Authority To Make 311 Nonemergency Grants.--The
Attorney General, acting through the Director of the Office
of Community Oriented Policing Services, may make grants to
States, units of local governments, Indian tribal
governments, other public and private entities, and
multijurisdictional or regional consortia, to encourage the
use of and to implement 311 nonemergency telecommunication
systems for public safety.
``(d) General Regulatory Authority.--The Attorney General
may promulgate regulations and guidelines to carry out this
section.
``(e) Authorization of Appropriations.--There are
authorized to be appropriated from the Violent Crime
Reduction Trust Fund to carry out this section--
``(1) such sums as may be necessary for each of the fiscal
years 1998 through 2000; and
``(2) $10,000,000 in each of the fiscal years 2001 and
2002.''.
SEC. 104. TECHNICAL AMENDMENT.
Section 1001(a)(11)(B) of title I of the Omnibus Crime
Control and Safe Streets Act of 1968 (42 U.S.C. 3793) is
amended by striking ``150,000'' each place it appears and
inserting ``100,000''.
Subtitle B--Violent Offender Incarceration and Truth-in-Sentencing
Grants
SEC. 121. FORMULA ALLOCATIONS.
Section 20106 of the Violent Crime Control and Law
Enforcement Act of 1994 (42 U.S.C. 13706) is amended--
(1) in subsection (a)(1), by striking subparagraph (B) and
inserting the following:
``(B) Formula allocation.--The amount remaining after
application of subparagraph (A) shall be allocated as
follows:
``(i) 0.75 percent shall be allocated to each State that
meets the requirements of section 20103(b), except that the
United States Virgin Islands, American Samoa, Guam, and the
Commonwealth of the Northern Mariana Islands, if eligible
under section 20103(b), shall each be allocated 0.05 percent.
``(ii) The amount remaining after application of clause (i)
shall be allocated to each State that meets the requirements
of section 20103(b), in the ratio that the number of part 1
violent crimes reported by such State to the Federal Bureau
of Investigation for the 3 years preceding the year in which
the determination is made, bears to the average annual number
of part 1 violent crimes reported by all States that meet the
requirements of section 20103(b) to the Federal Bureau of
Investigation for the 3 years preceding the year in which the
determination is made.''; and
(2) by striking subsection (b) and inserting the following:
``(b) Allocation of Truth-in-Sentencing Grants Under
Section 20104.--The amounts available for grants under
section 20104 shall be allocated as follows:
``(1) Formula allocation.--0.75 percent shall be allocated
to each State that meets the requirements of section 20104,
except that the United States Virgin Islands, American Samoa,
Guam, and the Commonwealth of the Northern Mariana Islands,
if eligible under section 20104, shall each be allocated 0.05
percent.
``(2) Additional allocation.--The amount remaining after
application of paragraph (1) shall be allocated to each State
that meets the requirements of section 20104, in the ratio
that the number of part 1 violent crimes reported by such
State to the Federal Bureau of Investigation for the 3 years
preceding the year in which the determination is made, bears
to the average annual number of part 1 violent crimes
reported by all States that meet the requirements of section
20103(b) to the Federal Bureau of Investigation for the 3
years preceding the year in which the determination is
made.''.
SEC. 122. EXTENSION OF VIOLENT OFFENDER INCARCERATION AND
TRUTH-IN-SENTENCING GRANTS.
(a) Violent Offender Incarceration Grants.--Section
20108(a) of the Violent Crime Control and Law Enforcement Act
of 1994 (42 U.S.C. 13708(a)) is amended--
(1) in paragraph (1)--
(A) in subparagraph (D), by striking ``and'' at the end;
(B) in subparagraph (E), by striking the period at the end
and inserting a semicolon; and
(C) by adding at the end the following:
``(F) $2,750,000,000 for fiscal year 2001; and
``(G) $2,750,000,000 for fiscal year 2002.''; and
(2) in paragraph (2)(A), by striking ``fiscal year,'' and
all that follows before the period and inserting the
following: ``fiscal year distribute 45 percent for
incarceration grants under section 20103, 45 percent for
incentive grants under section 20104, and 10 percent for
violent juvenile offender incarceration grants under section
214 of the Youth Violence, Crime, and Drug Abuse Control Act
of 1997.''.
(b) Truth in Sentencing Grants.--Section 20102(a) of the
Violent Crime Control and Law Enforcement Act of 1994 (42
U.S.C. 13702(a)) is amended--
(1) in paragraph (2), by striking ``and'' at the end;
(2) in paragraph (3), by striking the period at the end and
inserting ``; and''; and
(3) by adding at the end the following:
``(4) for hiring professional staff to supervise violent
offenders following release from custody and officers of the
court to speed the prosecution of violent offenders.''.
Subtitle C--Domestic Violence
SEC. 131. EXTENSION OF VIOLENCE AGAINST WOMEN ACT.
(a) Grants To Combat Violent Crimes Against Women.--Section
1001(a)(18) of title I of the Omnibus Crime Control and Safe
Streets Act of 1968 (42 U.S.C. 3793(a)(18)) is amended--
(1) in subparagraph (E), by striking ``and'' at the end;
(2) in subparagraph (F), by inserting ``and'' at the end;
and
(3) by adding at the end the following:
``(G) $174,000,000 for fiscal year 2001; and
``(H) $174,000,000 for fiscal year 2002.''.
(b) Education and Prevention Grants To Reduce Sexual
Assaults Against Women.--
(1) In general.--Section 40151 of Public Law 103-322 (108
Stat. 1920) is amended by striking ``Health and Human
Services'' and inserting ``Health Service''.
(2) Amendment.--Section 1910A(c) of the Public Health
Service Act is amended--
(A) in paragraph (4), by striking ``and'' at the end; and
[[Page S326]]
(B) by adding at the end the following:
``(6) $45,000,000 for fiscal year 2001; and
``(7) $45,000,000 for fiscal year 2002.''.
(c) Grant for National Domestic Violence Hotline.--Section
316(f) of the Family Violence Prevention and Services Act (42
U.S.C. 10401) is amended--
(1) in subparagraph (E), by striking ``and'' at the end;
(2) in subparagraph (F), by adding ``and'' at the end; and
(3) by adding at the end the following:
``(G) $500,000 for fiscal year 2001; and
``(H) $500,000 for fiscal year 2002.''.
(d) Grants for Battered Women's Shelters.--Section 310(a)
of the Family Violence Prevention and Services Act (42 U.S.C.
10409(a)) is amended--
(1) in paragraph (4), by striking ``and'' at the end;
(2) in paragraph (5), by adding ``and'' at the end; and
(3) by adding at the end the following:
``(6) $72,500,000 for fiscal year 2001; and
``(7) $72,500,000 for fiscal year 2002.''.
(e) Victims of Child Abuse Programs.--Section 218(a) of the
Victims of Child Abuse Act of 1990 (42 U.S.C. 13014(a)) is
amended--
(1) in paragraph (4), by striking ``and'' at the end;
(2) in paragraph (5), by adding ``and'' at the end; and
(3) by adding at the end the following:
``(6) $10,000,000 for fiscal year 2001; and
``(7) $10,000,000 for fiscal year 2002.''.
SEC. 132. RURAL DOMESTIC VIOLENCE AND CHILD ABUSE ENFORCEMENT
ASSISTANCE.
Section 1501(b) of title I of the Omnibus Crime Control and
Safe Streets Act of 1968 (42 U.S.C. 3796bb(b)) is amended by
striking ``through fiscal year 1997'' and inserting ``or a
State that has a population density of more than 60 percent
(as defined by the Bureau of the Census of the Department of
Commerce)''.
Subtitle D--Assistance to Local Law Enforcement
SEC. 141. EXTENSION OF LAW ENFORCEMENT FAMILY SUPPORT
FUNDING.
Section 1001(a)(21) of title I of the Omnibus Crime Control
and Safe Streets Act of 1968 (42 U.S.C. 3793(a)(21)) is
amended--
(1) by redesignating paragraphs (1) through (5) as
subparagraphs (A) through (E), respectively;
(2) in subparagraph (D), as redesignated, by striking
``and'' at the end;
(3) in subparagraph (E), as redesignated, by striking the
period at the end and inserting a semicolon; and
(4) by adding at the end the following:
``(F) $7,500,000 for fiscal year 2001; and
``(G) $7,500,000 for fiscal year 2002.''.
SEC. 142. EXTENSION OF RURAL DRUG ENFORCEMENT AND TRAINING
FUNDING.
(a) Omnibus Crime Control and Safe Streets Act of 1968.--
Section 1001(a)(9) of title I of the Omnibus Crime Control
and Safe Streets Act of 1968 (42 U.S.C. 3793(a)(9)) is
amended--
(1) in subparagraph (D), by striking ``and'' at the end;
(2) in subparagraph (E), by striking the period at the end
and inserting a semicolon; and
(3) by adding at the end the following:
``(F) $66,000,000 for fiscal year 2001; and
``(G) $66,000,000 for fiscal year 2002.''.
(b) Violent Crime Control and Law Enforcement Act of
1994.--Section 18103(b) of the Violent Crime Control and Law
Enforcement Act of 1994 (42 U.S.C. 14082(b)) is amended--
(1) in paragraph (4), by striking ``and'' at the end;
(2) in paragraph (5), by striking the period at the end and
inserting a semicolon; and
(3) by adding at the end the following:
``(6) $1,000,000 for fiscal year 2001; and
``(7) $1,000,000 for fiscal year 2002.''.
SEC. 143. EXTENSION OF DNA IDENTIFICATION GRANTS FUNDING.
Section 1001(a) of title I of the Omnibus Crime Control and
Safe Streets Act of 1968 (42 U.S.C. 3793(a)) is amended--
(1) by redesignating paragraphs (16) through (22) as
paragraphs (12) through (17), respectively; and
(2) in paragraph (17), as redesignated--
(A) by redesignating paragraphs (1) through (5) as
subparagraphs (A) through (E), respectively;
(B) in subparagraph (D), as redesignated, by striking
``and'' at the end;
(C) in subparagraph (E), as redesignated, by striking the
period at the end and inserting a semicolon; and
(D) by adding at the end the following:
``(F) $17,500,000 for fiscal year 2001; and
``(G) $17,500,000 for fiscal year 2002.''.
SEC. 144. EXTENSION OF BYRNE GRANT FUNDING.
Section 210101 of the Violent Crime Control and Law
Enforcement Act of 1994 (Public Law 103-322; 108 Stat. 2061)
is amended--
(1) by striking ``through 2000'' and inserting ``through
2002'';
(2) in paragraph (5), by striking ``and'' at the end;
(3) in paragraph (6), by striking the period at the end and
inserting a semicolon; and
(4) by adding at the end the following:
``(7) $200,000,000 for fiscal year 2001; and
``(8) $200,000,000 for fiscal year 2002.''.
SEC. 145. EXTENSION OF TECHNICAL AUTOMATION GRANT FUNDING.
Section 210501(c) of the Violent Crime Control and Law
Enforcement Act of 1994 (42 U.S.C. 14151(c)) is amended--
(1) in paragraph (1)--
(A) in subparagraph (D), by striking ``and'' at the end;
(B) in subparagraph (E), by striking the period at the end
and inserting a semicolon; and
(C) by adding at the end the following:
``(F) for fiscal year 2001, $24,000,000; and
``(G) for fiscal year 2002, $24,000,000;''; and
(2) in paragraph (2)--
(A) in subparagraph (D), by striking ``and'' at the end;
(B) in subparagraph (E), by striking the period at the end
and inserting a semicolon; and
(C) by adding at the end the following:
``(F) for fiscal year 2001, $6,000,000; and
``(G) for fiscal year 2002, $6,000,000; and''.
SEC. 146. EXTENSION OF GRANTS FOR STATE COURT PROSECUTORS.
Section 21602 of the Violent Crime Control and Law
Enforcement Act of 1994 (42 U.S.C. 14161) is amended--
(1) in subsection (a)--
(A) by striking ``other criminal justice participants'' and
inserting ``other criminal justice participants, in both the
adult and juvenile systems,'';
(B) by striking ``this Act'' and all that follows before
the period at the end of the section and inserting ``this
Act, the Youth Violence, Crime, and Drug Abuse Control Act of
1997, and amendments thereto'';
(2) by redesignating subsection (d) as subsection (e);
(3) by inserting after subsection (c) the following:
``(d) Not less than 20 percent of the total amount
appropriated to carry out this subtitle in each of the fiscal
years 2001 and 2002 shall be made available for providing
increased resources to State juvenile courts systems,
juvenile prosecutors, juvenile public defenders, and other
juvenile court system participants.'';
(4) in subsection (e)--
(A) in paragraph (4), by striking ``and'' at the end;
(B) in paragraph (5), by striking the comma at the end and
inserting a semicolon; and
(C) by inserting immediately after paragraph (5) the
following:
``(6) $250,000,000 for fiscal year 2001; and
``(7) $250,000,000 for fiscal year 2002,''.
TITLE II--YOUTH VIOLENCE CONTROL
Subtitle A--Federal Juvenile Prosecutions
SEC. 201. INCREASED DETENTION, MANDATORY RESTITUTION, AND
ADDITIONAL SENTENCING OPTIONS FOR YOUTH
OFFENDERS.
Section 5037 of title 18, United States Code, is amended to
read as follows:
``Sec. 5037. Dispositional hearing
``(a) In General.--
``(1) Hearing.--In a proceeding under section 5032(a), if
the court finds a juvenile to be a juvenile delinquent, the
court shall hold a hearing concerning the appropriate
disposition of the juvenile not later than 20 court days
after the finding of juvenile delinquency unless the court
has ordered further study pursuant to subsection (e).
``(2) Report.--A predisposition report shall be prepared by
the probation officer who shall promptly provide a copy to
the juvenile, the attorney for the juvenile, and the attorney
for the government.
``(3) Victim impact information.--Victim impact information
shall be included in the report, and victims, or in
appropriate cases their official representatives, shall be
provided the opportunity to make a statement to the court in
person or present any information in relation to the
disposition.
``(4) Order of restitution.--After the dispositional
hearing, and after considering any pertinent policy
statements promulgated by the Sentencing Commission pursuant
to 994, of title 28, the court shall enter an order of
restitution pursuant to section 3556, and may suspend the
findings of juvenile delinquency, place the juvenile on
probation, commit the juvenile to official detention
(including the possibility of a term of supervised release),
and impose any fine that would be authorized if the juvenile
had been tried and convicted as an adult.
``(5) Release or detention.--With respect to release or
detention pending an appeal or a petition for a writ of
certiorari after disposition, the court shall proceed
pursuant to the provisions of chapter 207.
``(b) Term of Probation.--The term for which probation may
be ordered for a juvenile found to be a juvenile delinquent
may not extend beyond the maximum term that would be
authorized by section 3561(c) if the juvenile had been tried
and convicted as an adult. Sections 3563, 3564, and 3565 are
applicable to an order placing a juvenile on probation.
``(c) Term of Official Detention.--
``(1) Maximum term.--The term for which official detention
may be ordered for a juvenile found to be a juvenile
delinquent may not extend beyond the lesser of--
``(A) the maximum term of imprisonment that would be
authorized if the juvenile had been tried and convicted as an
adult;
``(B) 10 years; or
``(C) the date on which the juvenile achieves the age of
26.
``(2) Applicability of other provisions.--Section 3624
shall apply to an order placing a juvenile in detention.
``(d) Term of Supervised Release.--The term for which
supervised release may be ordered for a juvenile found to be
a juvenile delinquent may not extend beyond 5 years.
Subsections (c) through (i) of section 3583 shall apply to an
order placing a juvenile on supervised release.
[[Page S327]]
``(e) Custody of Attorney General.--
``(1) In general.--If the court desires more detailed
information concerning a juvenile alleged to have committed
an act of juvenile delinquency or a juvenile adjudicated
delinquent, it may commit the juvenile, after notice and
hearing at which the juvenile is represented by an attorney,
to the custody of the Attorney General for observation and
study by an appropriate agency or entity.
``(2) Outpatient basis.--Any observation and study pursuant
to a commission under paragraph (1) shall be conducted on an
outpatient basis, unless the court determines that inpatient
observation and study are necessary to obtain the desired
information, except that in the case of an alleged juvenile
delinquent, inpatient study may be ordered with the consent
of the juvenile and the attorney for the juvenile.
``(3) Contents of study.--The agency or entity conducting
an observation or study under this subsection shall make a
complete study of the alleged or adjudicated delinquent to
ascertain the personal traits, capabilities, background, any
prior delinquency or criminal experience, any mental or
physical defect, and any other relevant factors pertaining to
the juvenile.
``(4) Submission of results.--The Attorney General shall
submit to the court and the attorneys for the juvenile and
the government the results of the study not later than 30
days after the commitment of the juvenile, unless the court
grants additional time.
``(5) Exclusion of time.--Any time spent in custody under
this subsection shall be excluded for purposes of section
5036.
``(f) Conviction as Adult.--With respect to any juvenile
prosecuted and convicted as an adult under section 5032(c),
the court may, pursuant to guidelines promulgated by the
United States Sentencing Commission under section 994 of
title 28, determine to treat the conviction as an
adjudication of delinquency and impose any disposition
authorized under this section. The United States Sentencing
Commission shall promulgate such guidelines as soon as
practicable and not later than 1 year after the date of
enactment of this Act.''.
SEC. 202. ACCESS TO RECORDS.
Section 5038 of title 18, United States Code, is amended--
(1) in subsection (a)--
(A) by striking the language preceding the colon and
inserting the following:
``Throughout and upon completion of the juvenile
delinquency proceeding, the court records of the original
proceeding shall be safeguarded from disclosure to
unauthorized persons. The records shall be released to the
extent necessary to meet the following circumstances''; and
(B) in subsection (a), by striking paragraph (6) and
inserting the following:
``(6) inquiries from any victim of such juvenile
delinquency, or in appropriate cases with the attorney for
the victim, or, if the victim is deceased, from the immediate
family of such victim in order to apprise such person of the
status or disposition of the proceeding;'';
(2) by striking subsections (d) and (f) and redesignating
subsection (e) as subsection (d); and
(3) by adding at the end the following:
``(e) Records and Information.--If a juvenile has been
adjudicated delinquent for an act that, if committed by an
adult, would be a felony or for a violation of section
922(x)--
``(1) the juvenile shall be fingerprinted and photographed,
and the fingerprints and photograph shall be sent to the
Federal Bureau of Investigation;
``(2) the court shall transmit to the Federal Bureau of
Investigation the information concerning the adjudication,
including name, date of adjudication, court, offenses, and
sentence, along with the notation that the matter was a
juvenile adjudication; and
``(3) access to the fingerprints, photograph, and other
records and information relating to a juvenile described in
this subsection, shall be restricted as prescribed by
subsection (a).''.
SEC. 203. REINSTITUTING DISMISSED CASES.
Section 5036 of title 18, United States Code, is amended by
striking the last sentence and inserting the following: ``In
determining whether an information should be dismissed with
or without prejudice, the court shall consider the
seriousness of the offense, the facts and circumstances of
the case that led to the dismissal, and the impact of a
reprosecution on the administration of justice.''.
Subtitle B--Assistance to States for Prosecuting and Punishing Youth
Offenders
SEC. 214. JUVENILE AND VIOLENT OFFENDER INCARCERATION GRANTS.
(a) Grants for Violent and Chronic Juvenile Facilities.--
(1) Definitions.--In this subsection--
(A) the term ``colocated facility'' means the location of
adult and juvenile facilities on the same property consistent
with regulations issued by the Attorney General to ensure
that adults and juveniles are substantially segregated;
(B) the term ``substantially segregated'' means--
(i) complete sight and sound separation in residential
confinement;
(ii) use of shared direct care and management staff,
properly trained and certified by the State to interact with
juvenile offenders, if the staff does not interact with adult
and juvenile offenders during the same shift; and
(iii) incidental contact during transportation to court
proceedings and other activities in accordance with
regulations issued by the Attorney General to ensure
reasonable efforts are made to segregate adults and
juveniles;
(C) the term ``violent juvenile offender'' means a person
under the age of majority pursuant to State law that has been
adjudicated delinquent or convicted in adult court of a
violent felony as defined in section 924(e)(2)(B) of title
18, United States Code; and
(D) the term ``qualifying State'' means a State that has
submitted, or a State in which an eligible unit of local
government has submitted, a grant application that meets the
requirements of paragraphs (3) and (5).
(2) Authority.--
(A) In general.--The Attorney General may make grants in
accordance with this subsection to States, units of local
government, or any combination thereof, to assist them in
planning, establishing, and operating secure facilities,
staff-secure facilities, detention centers, and other
correctional programs for violent juvenile offenders.
(B) Use of amounts.--Grants under this subsection may be
used--
(i) for colocated facilities for adult prisoners and
violent juvenile offenders; and
(ii) only for the construction or operation of facilities
in which violent juvenile offenders are substantially
segregated from nonviolent juvenile offenders.
(3) Applications.--
(A) In general.--The chief executive officer of a State or
unit of local government that seeks to receive a grant under
this subsection shall submit to the Attorney General an
application, in such form and in such manner as the Attorney
General may prescribe.
(B) Contents.--Each application submitted under
subparagraph (A) shall provide written assurances that each
facility or program funded with a grant under this
subsection--
(i) will provide appropriate educational and vocational
training, a program of substance abuse testing, and substance
abuse treatment for appropriate juvenile offenders; and
(ii) will afford juvenile offenders intensive post-release
supervision and services.
(4) Minimum Amount.--
(A) In general.--Except as provided in subparagraph (B),
each qualifying State, together with units of local
government within the State, shall be allocated for each
fiscal year not less than 1.0 percent of the total amount
made available in each fiscal year for grants under this
subsection.
(B) Exception.--The United States Virgin Islands, American
Samoa, Guam, and the Northern Mariana Islands shall each be
allocated 0.2 percent of the total amount made available in
each fiscal year for grants under this subsection.
(5) Performance evaluation.--
(A) Evaluation components.--
(i) In general.--Each facility or program funded under this
subsection shall contain an evaluation component developed
pursuant to guidelines established by the Attorney General.
(ii) Outcome measures.--The evaluations required by this
subsection shall include outcome measures that can be used to
determine the effectiveness of the funded programs, including
the effectiveness of such programs in comparison with other
correctional programs or dispositions in reducing the
incidence of recidivism, and other outcome measures.
(B) Periodic review and reports.--
(i) Review.--The Attorney General shall review the
performance of each grant recipient under this subsection.
(ii) Reports.--The Attorney General may require a grant
recipient to submit to the Office of Justice Programs,
Corrections Programs Office the results of the evaluations
required under subparagraph (A) and such other data and
information as are reasonably necessary to carry out the
responsibilities of the Attorney General under this
subsection.
(6) Technical assistance and training.--The Attorney
General shall provide technical assistance and training to
grant recipients under this subsection to achieve the
purposes of this subsection.
(b) Juvenile Facilities on Tribal Lands.--
(1) Reservation of funds.--Of amounts made available to
carry out section 214 of this Act under section
20108(a)(2)(A) of the Violent Crime Control and Law
Enforcement Act of 1994, the Attorney General shall reserve,
to carry out this subsection, 0.75 percent for each of the
fiscal years 1998 through 2002.
(2) Grants to indian tribes.--Of amounts reserved under
paragraph (1), the Attorney General may make grants to Indian
tribes or to regional groups of Indian tribes for the purpose
of constructing secure facilities, staff-secure facilities,
detention centers, and other correctional programs for
incarceration of juvenile offenders subject to tribal
jurisdiction.
(3) Applications.--To be eligible to receive a grant under
this section, an Indian tribe shall submit to the Attorney
General an application in such form and containing such
information as the Attorney General may by regulation
require.
(4) Regional groups.--Individual Indian tribes from a
geographic region may apply for grants under paragraph (2)
jointly for the purpose of building regional facilities.
[[Page S328]]
(c) Report on Accountability and Performance Measures in
Juvenile Corrections Programs.--
(1) In general.--Not later than 6 months after the date of
enactment of this Act, the Attorney General shall, after
consultation with the National Institute of Justice and other
appropriate governmental and nongovernmental organizations,
submit to Congress a report regarding the possible use of
performance-based criteria in evaluating and improving the
effectiveness of juvenile corrections facilities and
programs.
(2) Contents.--The report required under this subsection
shall include an analysis of--
(A) the range of performance-based measures that might be
utilized as evaluation criteria, including measures of
recidivism among juveniles who have been incarcerated in
facilities or have participated in correctional programs;
(B) the feasibility of linking Federal juvenile corrections
funding to the satisfaction of performance-based criteria by
grantees (including the use of a Federal matching mechanism
under which the share of Federal funding would vary in
relation to the performance of a program or facility);
(C) whether, and to what extent, the data necessary for the
Attorney General to utilize performance-based criteria in the
Attorney General's administration of juvenile corrections
programs are collected and reported nationally; and
(D) the estimated cost and feasibility of establishing
minimal, uniform data collection and reporting standards
nationwide that would allow for the use of performance-based
criteria in evaluating juvenile corrections programs and
facilities and administering Federal juvenile corrections
funds.
SEC. 215. CERTAIN PUNISHMENT AND GRADUATED SANCTIONS FOR
YOUTH OFFENDERS.
(a) Findings and Purposes.--
(1) Findings.--Congress finds that--
(A) youth violence constitutes a growing threat to the
national welfare requiring immediate and comprehensive action
by the Federal Government to reduce and prevent youth
violence;
(B) the behavior of youth who become violent offenders
often follow a progression, beginning with aggressive
behavior in school, truancy, and vandalism, leading to
property crimes and then serious violent offenses;
(C) the juvenile justice systems in most States are ill-
equipped to provide meaningful sanctions to minor, nonviolent
offenders because most of their resources are dedicated to
dealing with more serious offenders;
(D) in most States, some youth commit multiple, nonviolent
offenses without facing any significant criminal sanction;
(E) the failure to provide meaningful criminal sanctions
for first time, nonviolent offenders sends the false message
to youth that they can engage in antisocial behavior without
suffering any negative consequences and that society is
unwilling or unable to restrain that behavior;
(F) studies demonstrate that interventions during the early
stages of a criminal career can halt the progression to more
serious, violent behavior; and
(G) juvenile courts need access to a range of sentencing
options so that at least some level of sanction is imposed on
all youth offenders, including status offenders, and the
severity of the sanctions increase along with the seriousness
of the offense.
(2) Purposes.--The purposes of this section are to provide
assistance to State and local juvenile courts to expand the
range of sentencing options for first time, nonviolent
offenders and to provide a selection of graduated sanctions
for more serious offenses.
(b) Definitions.--In this section--
(1) the term ``first time offender'' means a juvenile
against whom formal charges have not previously been filed in
any Federal or State judicial proceeding;
(2) the term ``nonviolent offender'' means a juvenile who
is charged with an offense that does not involve the use of
force against the person of another; and
(3) the term ``status offender'' means a juvenile who is
charged with an offense that would not be criminal if
committed by an adult (other than an offense that constitutes
a violation of a valid court order or a violation of section
922(x) of title 18, United States Code (or similar State
law)).
(c) Grant Authorization.--
(1) In general.--The Attorney General may make grants in
accordance with this section to States, State courts, local
courts, units of local government, and Indian tribes, for the
purposes of--
(A) providing juvenile courts with a range of sentencing
options such that first time juvenile offenders, including
status offenders such as truants, vandals, and juveniles in
violation of State or local curfew laws, face at least some
level of punishment as a result of their initial contact with
the juvenile justice system; and
(B) increasing the sentencing options available to juvenile
court judges so that juvenile offenders receive increasingly
severe sanctions--
(i) as the seriousness of their unlawful conduct increases;
and
(ii) for each additional offense.
(c) Applications.--
(1) Eligibility.--In order to be eligible to receive a
grant under this section, the chief executive of a State,
unit of local government, or Indian tribe, or the chief judge
of a local court, shall submit an application to the Attorney
General in such form and containing such information as the
Attorney General may reasonably require.
(2) Requirements.--Each application submitted in accordance
with paragraph (1) shall include--
(A) a request for a grant to be used for the purposes
described in this section;
(B) a description of the communities to be served by the
grant, including the extent of youth crime and violence in
those communities;
(C) written assurances that Federal funds received under
this subtitle will be used to supplement, not supplant, non-
Federal funds that would otherwise be available for
activities funded under this subsection;
(D) a comprehensive plan described in paragraph (3) (in
this section referred to as the ``comprehensive plan''); and
(E) any additional information in such form and containing
such information as the Attorney General may reasonably
require.
(3) Implementation plan.--For purposes of paragraph (2), a
comprehensive plan shall include--
(A) an action plan outlining the manner in which the
applicant will achieve the purposes described in subsection
(c)(1);
(B) a description of any resources available in the
jurisdiction of the applicant to implement the action plan
described in subparagraph (A);
(C) an estimate of the costs of full implementation of the
plan; and
(D) a plan for evaluating the impact of the grant on the
jurisdiction's juvenile justice system.
(e) Grant Awards.--
(1) Considerations.--In awarding grants under this section,
the Attorney General shall consider--
(A) the ability of the applicant to provide the stated
services;
(B) the level of youth crime, violence, and drug use in the
community; and
(C) to the extent practicable, achievement of an equitable
geographic distribution of the grant awards.
(2) Allocations.--
(A) In general.--The Attorney General shall allot not less
than 0.75 percent of the total amount made available to carry
out this section in each fiscal year to applicants in each
State from which applicants have applied for grants under
this section.
(B) Indian tribes.--The Attorney General shall allocate not
less than 0.75 percent of the total amount made available to
carry out this section in each fiscal year to Indian tribes.
(f) Use of Grant Amounts.--
(1) In general.--Each grant made under this section shall
be used to establish programs that--
(A) expand the number of judges, prosecutors, and public
defenders for the purpose of imposing sanctions on first time
juvenile offenders and status offenders;
(B) provide expanded sentencing options, such as
restitution, community service, drug testing and treatment,
mandatory job training, curfews, house arrest, mandatory work
projects, and boot camps, for status offenders and nonviolent
offenders;
(C) increase staffing for probation officers to supervise
status offenders and nonviolent offenders to ensure that
sanctions are enforced;
(D) provide aftercare and supervision for status and
nonviolent offenders, such as drug education and drug
treatment, vocational training, job placement, and family
counseling;
(E) encourage private sector employees to provide training
and work opportunities for status offenders and nonviolent
offenders; and
(F) provide services and interventions for status and
nonviolent offenders designed, in tandem with criminal
sanctions, to reduce the likelihood of further criminal
behavior.
(2) Prohibition on use of amounts.--
(A) Definitions.--In this paragraph--
(i) the term ``alien'' has the same meaning as in section
101(a) of the Immigration and Nationality Act (8 U.S.C.
1101(a)); and
(ii) the terms ``secure detention facility'' and ``secure
correctional facility'' have the same meanings as in section
103 of the Juvenile Justice and Delinquency Prevention Act of
1974 (42 U.S.C. 5603).
(B) Prohibition.--No amounts made available under this
subtitle may be used for any program that permits the
placement of status offenders, alien juveniles in custody, or
nonoffender juveniles (such as dependent or neglected
children) in secure detention facilities or secure
correctional facilities.
(g) Grant Limitations.--Not more than 3 percent of the
amounts made available to the Attorney General or a grant
recipient under this section may be used for administrative
purposes.
(h) Federal Share.--
(1) In general.--Subject to paragraphs (2) and (3), the
Federal share of a grant made under this subtitle may not
exceed 90 percent of the total estimated costs of the program
described in the comprehensive plan submitted under
subsection (d)(3) for the fiscal year for which the program
receives assistance under this section.
(2) Waiver.--The Attorney General may waive, in whole or in
part, the requirements of paragraph (1).
(3) In-kind contributions.--For purposes of paragraph (1),
in-kind contributions may constitute any portion of the non-
Federal share of a grant under this section.
(i) Report and Evaluation.--
(1) Report to the attorney general.--Not later than October
1, 1998, and October 1 of each year thereafter, each grant
recipient
[[Page S329]]
under this section shall submit to the Attorney General a
report that describes, for the year to which the report
relates, any progress achieved in carrying out the
comprehensive plan of the grant recipient.
(2) Evaluation and report to congress.--Not later than
March 1, 1999, and March 1 of each year thereafter, the
Attorney General shall submit to the Congress an evaluation
and report that contains a detailed statement regarding grant
awards, activities of grant recipients, a compilation of
statistical information submitted by grant recipients under
this section, and an evaluation of programs established by
grant recipients under this section.
(3) Criteria.--In assessing the effectiveness of the
programs established and operated by grant recipients
pursuant to this section, the Attorney General shall
consider--
(A) a comparison between the number of first time offenders
who received a sanction for criminal behavior in the
jurisdiction of the grant recipient before and after
initiation of the program;
(B) changes in the recidivism rate for first time offenders
in the jurisdiction of the grant recipient;
(C) a comparison of the recidivism rates and the
seriousness of future offenses of first time offenders in the
jurisdiction of the grant recipient that receive a sanction
and those who do not;
(D) changes in truancy rates of the public schools in the
jurisdiction of the grant recipient; and
(E) changes in the arrest rates for vandalism and other
property crimes in the jurisdiction of the grant recipient.
(4) Documents and information.--Each grant recipient under
this section shall provide the Attorney General with all
documents and information that the Attorney General
determines to be necessary to conduct an evaluation of the
effectiveness of programs funded under this section.
(j) Authorization of Appropriations.--There are authorized
to be appropriated to carry out this section from the Violent
Crime Reduction Trust Fund--
(1) such sums as may be necessary for each of the fiscal
years 1998 and 1999; and
(2) $175,000,000 for each of the fiscal years 2000 and
2001.
Subtitle C--Juvenile Gun Courts
SEC. 221. DEFINITIONS.
In this subtitle--
(1) the term ``firearm'' has the same meaning as in section
921 of title 18, United States Code;
(2) the term ``firearm offender'' means any individual
charged with an offense involving the illegal possession,
use, transfer, or threatened use of a firearm; and
(3) the term ``local court'' means any section or division
of a State or municipal juvenile court system; and
(4) the term ``juvenile gun court'' means a specialized
division within a State or local juvenile court system, or a
specialized docket within a State or local court that
considers exclusively cases involving juvenile firearm
offenders.
SEC. 222. GRANT PROGRAM.
The Attorney General may provide grants in accordance with
this subtitle to States, State courts, local courts, units of
local government, and Indian tribes for court-based juvenile
justice programs that target juvenile firearm offenders
through the establishment of juvenile gun courts.
SEC. 223. APPLICATIONS.
(a) Eligibility.--In order to be eligible to receive a
grant under this subtitle, the chief executive of a State,
unit of local government, or Indian tribe, or the chief judge
of a local court, shall submit an application to the Attorney
General in such form and containing such information as the
Attorney General may reasonably require.
(b) Requirements.--Each application submitted in accordance
with subsection (a) shall include--
(1) a request for a grant to be used for the purposes
described in this subtitle;
(2) a description of the communities to be served by the
grant, including the extent of juvenile crime, juvenile
violence, and juvenile firearm use and possession in such
communities;
(3) written assurances that Federal funds received under
this subtitle will be used to supplement, not supplant, non-
Federal funds that would otherwise be available for
activities funded under this subsection;
(4) a comprehensive plan described in subsection (c)
(hereafter in this subtitle referred to as the
``comprehensive plan''); and
(5) any additional information in such form and containing
such information as the Attorney General may reasonably
require.
(c) Comprehensive Plan.--For purposes of subsection (b), a
comprehensive plan is described in this subsection it
includes--
(1) a description of the juvenile crime and violence
problems in the jurisdiction of the applicant, including gang
crime and juvenile firearm use and possession;
(2) an action plan outlining the manner in which the
applicant would use the grant amounts in accordance with this
subtitle;
(3) a description of any resources available in the
jurisdiction of the applicant to implement the action plan
described in paragraph (2); and
(4) a description of the plan of the applicant for
evaluating the performance of the juvenile gun court.
SEC. 224. GRANT AWARDS.
(a) Considerations.--In awarding grants under this
subtitle, the Attorney General shall consider--
(1) the ability of the applicant to provide the stated
services;
(2) the level of juvenile crime, violence, and drug use in
the community; and
(3) to the extent practicable, achievement of an equitable
geographic distribution of the grant awards.
(b) Diversity.--The Attorney General shall allot not less
than 0.75 percent of the total amount made available each
fiscal year to carry out this subtitle to applicants in each
State from which applicants have applied for grants under
this subtitle.
(c) Indian Tribes.--The Attorney General shall allocate
0.75 percent of amounts made available under this subtitle
for grants to Indian tribes.
SEC. 225. USE OF GRANT AMOUNTS.
Each grant made under this subtitle shall be used--
(1) to establish juvenile gun courts for adjudication of
juvenile firearm offenders;
(2) to grant prosecutorial discretion to try, in a gun
court, cases involving the illegal possession, use, transfer,
or threatened use of a firearm by a juvenile;
(3) to require prosecutors to transfer such cases to the
gun court calendar not later than 30 days after arraignment;
(4) to require that gun court trials commence not later
than 60 days after transfer to the gun court;
(5) to facilitate innovative and individualized sentencing
(such as incarceration, house arrest, victim impact classes,
electronic monitoring, restitution, and gang prevention
programs);
(6) to provide services in furtherance of paragraph (5);
(7) to limit grounds for continuances and grant
continuances only for the shortest practicable time;
(8) to ensure that any term of probation or supervised
release imposed on a firearm offender in a juvenile gun
court, in addition to, or in lieu of, a term of
incarceration, shall include a prohibition on firearm
possession during such probation or supervised release and
that violation of that prohibition shall result in, to the
maximum extent permitted under State law, a term of
incarceration; and
(9) to allow transfer of a case or an offender out of the
gun court by agreement of the parties, subject to court
approval.
SEC. 226. GRANT LIMITATIONS.
Not more than 5 percent of the amounts made available to
the Attorney General or a grant recipient under this subtitle
may be used for administrative purposes.
SEC. 227. FEDERAL SHARE.
(a) In General.--Subject to subsections (b) and (c), the
Federal share of a grant made under this subtitle may not
exceed 90 percent of the total cost of the program or
programs of the grant recipient that are funded by that grant
for the fiscal year for which the program receives assistance
under this subtitle.
(b) Waiver.--The Attorney General may waive, in whole or in
part, the requirements of subsection (a).
(c) In-Kind Contributions.--For purposes of subsection (a),
in-kind contributions may constitute any portion of the non-
Federal share of a grant under this subtitle.
(d) Continued Availability of Grant Amounts.--Any amount
provided to a grant recipient under this subtitle shall
remain available until expended.
SEC. 228. REPORT AND EVALUATION.
(a) Report to the Attorney General.--Not later than March
1, 1998, and March 1 of each year thereafter, each grant
recipient under this subtitle shall submit to the Attorney
General a report that describes, for the year to which the
report relates, any progress achieved in carrying out the
comprehensive plan of the grant recipient.
(b) Evaluation and Report to Congress.--Not later than
October 1, 1998, and October 1 of each year thereafter, the
Attorney General shall submit to the Congress an evaluation
and report that contains a detailed statement regarding grant
awards, activities of grant recipients, a compilation of
statistical information submitted by grant recipients under
this subtitle, and an evaluation of programs established by
grant recipients under this subtitle.
(c) Criteria.--In assessing the effectiveness of the
programs established and operated by grant recipients
pursuant to this subtitle, the Attorney General shall
consider--
(1) the number of juveniles tried in gun court sessions in
the jurisdiction of the grant recipient;
(2) a comparison of the amount of time between the filing
of charges and ultimate disposition in gun court and nongun
court cases;
(3) the recidivism rates of juvenile offenders tried in gun
court sessions in the jurisdiction of the grant recipient in
comparison to those tried outside of drug courts;
(4) changes in the amount of gun-related and gang-related
crime in the jurisdiction of the grant recipient; and
(5) the quantity of firearms and ammunition recovered in
gun court cases in the jurisdiction of the grant recipient.
(d) Documents and Information.--Each grant recipient under
this subtitle shall provide the Attorney General with all
documents and information that the Attorney General
determines to be necessary to conduct an evaluation of the
effectiveness of programs funded under this subtitle.
[[Page S330]]
SEC. 229. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated to carry out this
subtitle from the Violent Crime Reduction Trust Fund--
(1) such sums as may be necessary for each of the fiscal
years 1998, 1999, and 2000;
(2) $50,000,000 for fiscal year 2001; and
(3) $50,000,000 for fiscal year 2002.
Subtitle D--Gang Violence Reduction
PART 1--ENHANCED PENALTIES FOR GANG-RELATED ACTIVITIES
SEC. 241. GANG FRANCHISING.
(a) In General.--Chapter 26 of title 18, United States
Code, is amended by adding at the end the following:
``SEC. 522. INTERSTATE FRANCHISING OF CRIMINAL STREET GANGS.
``(a) Prohibited Act.--Whoever travels in interstate or
foreign commerce, or causes another to do so, to recruit,
solicit, induce, command, or cause to create, or attempt to
create a franchise of a criminal street gang shall be
punished in accordance with subsection (c).
``(b) Definitions.--
``(1) Criminal street gang.--The term `criminal street
gang' has the meaning given that term in section 521 of title
18, United States Code.
``(2) Franchise.--The term `franchise' means an organized
group of individuals related by name, moniker, or other
identifier, that engages in coordinated violent crime or drug
trafficking activities in interstate or foreign commerce with
a criminal street gang in another State.
``(c) Penalties.--A person who violates subsection (a)
shall be imprisoned for not more than 10 years, fined under
this title, or both.
``(d) Sentencing Enhancement.--Pursuant to its authority
under section 994(p) of title 28, United States Code, the
United States Sentencing Commission shall amend the Federal
sentencing guidelines to provide an appropriate enhancement
for the recruitment of minors in furtherance of the creation
of a criminal street gang franchise.''.
(b) Conforming Amendment.--The chapter analysis for chapter
26 of title 18, United States Code, is amended by adding at
the end the following:
``522. Interstate franchising of criminal street gangs.''.
SEC. 242. GANG FRANCHISING AS A RICO PREDICATE.
Section 1961(1) of title 18, United States Code, is
amended--
(1) by striking ``or'' before ``(F)''; and
(2) by inserting ``, or (G) an offense under section 522 of
this title'' before the semicolon at the end.
SEC. 243. INCREASE IN OFFENSE LEVEL FOR PARTICIPATION IN
CRIME AS GANG MEMBER.
(a) Definition of Criminal Street Gang.--In this section,
the term ``criminal street gang'' has the same meaning as in
section 521(a) of title 18, United States Code.
(b) Sentencing Enhancement.--Pursuant to its authority
under section 994(p) of title 28, United States Code, the
United States Sentencing Commission shall amend the Federal
sentencing guidelines to provide an appropriate enhancement
with respect to any offense committed in connection with, or
in furtherance of, the activities of a criminal street gang
if the defendant is a member of the criminal street gang at
the time of the offense.
(c) Consistency.--In carrying out this section, the United
States Sentencing Commission shall--
(1) ensure that there is reasonable consistency with other
Federal sentencing guidelines; and
(2) avoid duplicative punishment for substantially the same
offense.
SEC. 244. INCREASING THE PENALTY FOR USING PHYSICAL FORCE TO
TAMPER WITH WITNESSES, VICTIMS, OR INFORMANTS.
Section 1512 of title 18, United States Code, is amended--
(1) in subsection (a)--
(A) in paragraph (1), by striking ``as provided in
paragraph (2)'' and inserting ``as provided in paragraph
(3)'';
(B) by redesignating paragraph (2) as paragraph (3);
(C) by inserting after paragraph (1) the following:
``(2) Whoever uses physical force or the threat of physical
force, or attempts to do so, with intent to--
``(A) influence, delay, or prevent the testimony of any
person in an official proceeding;
``(B) cause or induce any person to--
``(i) withhold testimony, or withhold a record, document,
or other object, from an official proceeding;
``(ii) alter, destroy, mutilate, or conceal an object with
intent to impair the object's integrity or availability for
use in an official proceeding;
``(iii) evade legal process summoning that person to appear
as a witness, or to produce a record, document, or other
object, in an official proceeding; and
``(iv) be absent from an official proceeding to which such
person has been summoned by legal process; or
``(C) hinder, delay, or prevent the communication to a law
enforcement officer or judge of the United States of
information relating to the commission or possible commission
of a Federal offense or a violation of conditions of
probation, parole, or release pending judicial proceedings;
shall be punished as provided in paragraph (3).''; and
(D) in paragraph (3)(B), as redesignated, by striking ``in
the case of'' and all that follows before the period and
inserting ``an attempt to murder, the use of physical force,
the threat of physical force, or an attempt to do so,
imprisonment for not more than 20 years''; and
(2) in subsection (b), by striking ``or physical force''.
SEC. 245. POSSESSION OF FIREARMS IN RELATION TO COUNTS OF
VIOLENCE OR DRUG TRAFFICKING CRIMES.
(a) In General.--Sections 924(c)(1) and 929(a)(1) of title
18, United States Code, are each amended--
(1) by striking ``in relation to'' and inserting ``in close
proximity to''; and
(2) by striking ``uses or carries'' and inserting
``possesses''.
(b) Amendment of Federal Sentencing Guidelines.--
(1) Definitions.--In this subsection, the terms ``crime of
violence'' and ``drug trafficking crime'' have the same
meanings as in section 924(c) of title 18, United States
Code.
(2) Sentencing enhancement.--Pursuant to its authority
under section 994(p) of title 28, United States Code, the
United States Sentencing Commission shall amend the Federal
sentencing guidelines to provide an appropriate sentence
enhancement with respect to any defendant who discharges a
firearm during or in close proximity to any crime of violence
or any drug trafficking crime.
(3) Consistency.--In carrying out this subsection, the
United States Sentencing Commission shall--
(A) ensure that there is reasonable consistency with other
Federal sentencing guidelines; and
(B) avoid duplicative punishment for substantially the same
offense.
SEC. 246. INCREASED PENALTY FOR TRANSFERRING A FIREARM TO A
MINOR FOR USE IN A CRIME.
Section 924(h) of title 18, United States Code, is amended
by inserting ``except if the transferee is a person who is
less than 18 years of age, not more than 15 years,'' before
``fined in accordance with this title, or both''.
SEC. 247. ELIMINATION OF STATUTE OF LIMITATIONS FOR MURDER.
(a) In General.--Section 3281 of title 18, United States
Code, is amended to read as follows:
``Sec. 3281. Capital offenses and Class A felonies involving
murder
``An indictment for any offense punishable by death or an
indictment or information for a Class A felony involving
murder (as defined in section 1111 or as defined under
applicable State law in the case of an offense under section
1963(a) involving racketeering activity described in section
1961(1)) may be found at any time without limitation.''.
(b) Applicability.--The amendment made by subsection (a)
applies to any offense for which the applicable statute of
limitations had not run as of the date of enactment of this
Act.
SEC. 248. EXTENSION OF STATUTE OF LIMITATIONS FOR VIOLENT AND
DRUG TRAFFICKING CRIMES.
(a) In General.--Chapter 213 of title 18, United States
Code, is amended by adding at the end the following:
``Sec. 3295. Class A violent and drug trafficking offenses
``Except as provided in section 3281, no person shall be
prosecuted, tried, or punished for a Class A felony that is a
crime of violence or a drug trafficking crime (as that term
is defined in section 924(c)) unless the indictment is
returned or the information is filed within 10 years after
the commission of the offense.''.
(b) Applicability.--The amendment made by subsection (a)
applies to any offense for which the applicable statute of
limitations had not run as of the date of enactment of this
Act.
(c) Conforming Amendments.--The chapter analysis for
chapter 213 of title 18, United States Code, is amended--
(1) in the item relating to section 3281, by inserting
``and Class A felonies involving murder'' before the period;
and
(2) by adding at the end the following:
``3295. Class A violent and drug trafficking offenses.''.
PART 2--GANG PARAPHERNALIA
SEC. 251. ENHANCING LAW ENFORCEMENT ACCESS TO CLONE NUMERIC
PAGERS.
(a) Amendment to Chapter 206.--Chapter 206 of title 18,
United States Code, is amended--
(1) in the chapter heading, by striking ``and Trap and
Trace Devices'' and inserting: ``Trap and Trace Devices, and
Clone Numeric Pagers'';
(2) in the chapter analysis--
(A) by striking ``and trap and trace device'' each place
that term appears and inserting ``trap and trace device, and
clone pager''; and
(B) by striking ``or a trap and trace device'' each place
that term appears and inserting ``, a trap and trace device,
or a clone pager'';
(3) in section 3121--
(A) in the section heading, by striking ``AND TRAP AND
TRACE DEVICE'' and inserting ``, TRAP AND TRACE DEVICE, AND
CLONE PAGER''; and
(B) by striking ``or a trap and trace device'' each place
that term appears and inserting ``, a trap and trace device,
or a clone pager'';
[[Page S331]]
(4) in section 3122--
(A) in the section heading, by striking ``OR A TRAP AND
TRACE DEVICE'' and inserting ``, A TRAP AND TRACE DEVICE, OR
A CLONE PAGER''; and
(B) by striking ``or a trap and trace device'' each place
that term appears and inserting ``, a trap and trace device,
or a clone pager'';
(5) in section 3123--
(A) in the section heading, by striking ``OR A TRAP AND
TRACE DEVICE'' and inserting ``, A TRAP AND TRACE DEVICE, OR
A CLONE PAGER'';
(B) by striking subsection (a) and inserting the following:
``(a) In General.--Upon an application made under section
3122 of this title, the court shall enter an ex parte order
authorizing the installation and use of a pen register or a
trap and trace device within the jurisdiction of the court,
or of a clone pager the service provider for which is within
the jurisdiction of the court, if the court finds, upon a
showing by certification of the attorney for the Government
or the State law enforcement or investigative officer, that
the information likely to be obtained by such installation
and use is relevant to an ongoing criminal investigation.'';
(C) in subsection (b)--
(i) in paragraph (1)--
(I) in subparagraph (A), by inserting before the semicolon
the following: ``, or in the case of a clone pager, the
identity, if known, of the person to whom is leased, or who
is the subscriber of the paging device communications to
which will be intercepted by the clone pager''; and
(II) in subparagraph (C), by inserting before the semicolon
the following: ``, or in the case of a clone pager, the
number of the paging device to which the clone pager is
identically programmed''; and
(ii) in paragraph (2), by striking ``or trap and trace
device'' and inserting ``trap and trace device, or a clone
pager''; and
(D) in subsection (c), by striking ``or trap and trace
device'' and inserting ``trap and trace device, or a clone
pager''; and
(E) in subsection (d)--
(i) in the subsection heading, by striking ``or Trap and
Trace Device'' and inserting ``, Trap and Trace Device, or
Clone Pager''; and
(ii) in paragraph (2), by inserting ``or the paging device,
communications to which will be intercepted by the clone
pager,'' after ``attached,'';
(6) in section 3124--
(A) in the section heading, by striking ``OR A TRAP AND
TRACE DEVICE'' and inserting ``, A TRAP AND TRACE DEVICE, OR
A CLONE PAGER'';
(B) by redesignating subsections (c) through (f) as
subsections (d) through (g), respectively; and
(C) by inserting after subsection (b) the following:
``(c) Clone Pager.--Upon the request of an attorney for the
Government or an officer of a law enforcement agency
authorized to acquire and use a clone pager under this
chapter, a Federal court may order, in accordance with
section 3123(b)(2), a provider of a paging service or other
person to furnish to such investigative or law enforcement
officer, all information, facilities, and technical
assistance necessary to accomplish the operation and use of a
clone pager unobtrusively and with a minimum of interference
with the services that the person so ordered by the court
accords the party with respect to whom the programming and
use is to take place.'';
(7) in section 3125--
(A) in the section heading, by striking ``AND TRAP AND
TRACE DEVICE'' and inserting ``, TRAP AND TRACE DEVICE, AND
CLONE PAGER''; and
(B) in subsection (a)--
(i) by striking ``or trap and trace device'' and inserting
``, a trap and trace device, or a clone pager'';
(ii) by striking the quotation marks at the end; and
(iii) by striking ``or trap and trace device'' each place
that term appears and inserting ``, trap and trace device, or
clone pager'';
(8) in section 3126--
(A) in the section heading, by striking ``AND TRAP AND
TRACE DEVICES'' and inserting ``, TRAP AND TRACE DEVICES, AND
CLONE PAGERS''; and
(B) by inserting ``or clone pagers'' after ``devices''; and
(9) in section 3127--
(A) by redesignating paragraphs (5) and (6) as paragraphs
(6) and (7), respectively; and
(B) by inserting after paragraph (4) the following:
``(5) the term `clone pager' means a numeric display device
that receives transmissions intended for another numeric
display paging device.''.
(c) Conforming Amendments.--
(1) Section 2511(2)(H) of title 18, United States Code, is
amended by striking clause (i) and inserting the following:
``(i) to use a pen register, a trap and trace device, or a
clone pager (as those terms are defined for the purposes of
chapter 206 (relating to pen registers, trap and trace
devices, and clone pagers) of this title); or''.
(2) Section 2510(12) of title 18, United States Code, is
amended--
(A) in subparagraph (B), by striking ``or'' at the end; and
(B) by inserting after subparagraph (C) the following: ``or
``(D) any transmission made through a clone pager (as
defined in section 3127(5) of this title).''.
SEC. 252. PROHIBITIONS RELATING TO BODY ARMOR.
(a) Definitions.--In this section--
(1) the term ``body armor'' means any product sold or
offered for sale as personal protective body covering
intended to protect against gunfire, regardless of whether
the product is to be worn alone or is sold as a complement to
another product or garment; and
(2) the term ``law enforcement officer'' means any officer,
agent, or employee of the United States, a State, or a
political subdivision of a State, authorized by law or by a
government agency to engage in or supervise the prevention,
detection, investigation, or prosecution of any violation of
criminal law.
(b) Sentencing Enhancement.--Pursuant to its authority
under section 994(p) of title 28, United States Code, the
United States Sentencing Commission shall amend the Federal
sentencing guidelines to provide an appropriate sentencing
enhancement for any offense in which the defendant used body
armor.
(c) Consistency.--In carrying out this section, the United
States Sentencing Commission shall--
(1) ensure that there is reasonable consistency with other
Federal sentencing guidelines; and
(2) avoid duplicative punishment for substantially the same
offense.
(d) Applicability.--No Federal sentencing guideline
amendment made under this section shall apply if the Federal
crime in which the body armor is used constitutes a violation
of, attempted violation of, or conspiracy to violate the
civil rights of a person by a law enforcement officer acting
under color of the authority of such law enforcement officer.
SEC. 253. PROHIBITIONS RELATING TO LASER SIGHTING DEVICES.
(a) Definitions.--In this section--
(1) the term ``firearm'' has the same meaning as in section
921 of title 18, United States Code; and
(2) the term ``laser-sighting device'' includes any device
designed to be attached to a firearm that uses technology,
such as laser sighting, red-dot-sighting, night sighting,
telescopic sighting, or other similarly effective technology,
in order to enhance target acquisition.
(b) Sentencing Enhancement.--Pursuant to its authority
under section 994(p) of title 28, United States Code, the
United States Sentencing Commission shall amend the Federal
sentencing guidelines to provide an appropriate sentencing
enhancement for any offense in which the defendant--
(1) possessed a firearm equipped with a laser-sighting
device; or
(2) possessed a firearm and the defendant (or another
person at the scene of the crime who was aiding in the
commission of the crime) possessed a laser-sighting device
(capable of being readily attached to the firearm).
(c) Consistency.--In carrying out this section, the United
States Sentencing Commission shall--
(1) ensure that there is reasonable consistency with other
Federal sentencing guidelines; and
(2) avoid duplicative punishment for substantially the same
offense.
Subtitle E--Rights of Victims in State Juvenile Courts
SEC. 261. STATE GUIDELINES.
(a) In General.--
(1) State guidelines.--The Attorney General shall establish
guidelines for State programs to require--
(A) prior to disposition of adjudicated juvenile
delinquents, that victims, or in appropriate cases their
official representatives, shall be provided the opportunity
to make a statement to the court in person or to present any
information in relation to the disposition;
(B) that victims of the juvenile adjudicated delinquent be
given notice of the disposition; and
(C) that restitution to victims may be ordered as part of
the disposition of adjudicated juvenile delinquents.
(2) Definition of victim.--In this section, the term
``victim'' means any individual against whom a crime of
violence has been committed that has as an element the use,
attempted use, or threatened use of physical force against
the person or property of another or by its nature involves a
substantial risk that physical force against the person or
property of another may be used in the course of committing
the offense.
(b) No Cause of Action Created.--Nothing in this section
shall be construed to create a cause of action against any
State or any agency or employee thereof.
(c) Compliance.--
(1) Compliance.--Not later than 3 years after the date of
enactment of this Act, each State shall implement this
section, except that the Attorney General may grant an
additional 2 years to a State if the Attorney General
determines that the State is making good faith efforts to
implement this section.
(2) Ineligibility for amounts.--
(A) In general.--Beginning on the expiration of the period
described in paragraph (1) (or such extended period as the
Attorney General may provide with respect to a State under
that paragraph), during each fiscal year that any State fails
to comply with this section, that State shall receive--
[[Page S332]]
(i) not more than 90 percent of the amount that the State
would otherwise receive under subtitle C of this title; and
(ii) not more than 90 percent of the amount that the State
would otherwise receive under section 362 of title III.
(B) Reallocation of amounts.--In each fiscal year, any
amounts that are not allocated to States described in
subparagraph (A) shall be allocated to otherwise eligible
States that are in compliance with this section on a pro rata
basis.
TITLE III--PREVENTION AND TREATMENT OF YOUTH DRUG ABUSE AND ADDICTION
Subtitle A--Protecting Youth From Dangerous Drugs
SEC. 301. RESCHEDULING OF ``CLUB'' DRUGS.
Notwithstanding section 201 or subsection (a) or (b) of
section 202 of the Controlled Substances Act (21 U.S.C. 811,
812(a), 812(b)) respecting the scheduling of controlled
substances, the Attorney General shall, by order add ketamine
hydrochloride to schedule III of such Act.
Subtitle B--Development of Medicines for the Treatment of Drug
Addiction
PART 1--PHARMACO- THERAPY RESEARCH
SEC. 321. REAUTHORIZATION FOR MEDICATION DEVELOPMENT PROGRAM.
Section 464P(e) of the Public Health Service Act (42 U.S.C.
285o-4(e)) is amended to read:
``(e) Authorization of Appropriations.--There is authorized
to be appropriated to carry out this section such sums as may
be necessary for each of the fiscal years 1998 through 2002
of which the following amount may be appropriated from the
Violent Crime Reduction Trust Fund:
``(1) $100,000,000 for fiscal year 2001; and
``(2) $100,000,000 for fiscal year 2002.''.
PART 2--PATENT PROTECTIONS FOR PHARMACOTHERAPIES
SEC. 331. RECOMMENDATION FOR INVESTIGATION OF DRUGS.
Section 525(a) of the Federal Food, Drug, and Cosmetic Act
(21 U.S.C. 360aa(a)) is amended--
(1) by striking ``States'' each place it appears and
inserting ``States, or for treatment of an addiction to
illegal drugs''; and
(2) by striking ``such disease or condition'' each place it
appears and inserting ``such disease, condition, or treatment
of such addiction''.
SEC. 332. DESIGNATION OF DRUGS.
Section 526(a) of the Federal, Food, Drug, and Cosmetic Act
(21 U.S.C. 360bb(a)) is amended--
(1) in paragraph (1)--
(A) by inserting before the period in the first sentence
the following: ``or for treatment of an addiction to illegal
drugs'';
(B) in the third sentence, by striking ``rare disease or
condition'' and inserting ``rare disease or condition, or for
treatment of an addiction to illegal drugs,''; and
(C) by striking ``such disease or condition'' each place it
appears and inserting ``such disease, condition, or treatment
of such addiction''; and
(2) in paragraph (2)--
(A) by striking ``(2) For'' and inserting ``(2)(A) For'';
(B) by striking ``(A) affects'' and inserting ``(i)
affects'';
(C) by striking ``(B) affects'' and inserting ``(ii)
affects''; and
(D) by adding at the end the following:
``(B) Treatment of an addiction to illegal drugs.--The term
`treatment of an addiction to illegal drugs' means any
pharmacological agent or medication that--
``(i) reduces the craving for an illegal drug for an
individual who--
``(I) habitually uses the illegal drug in a manner that
endangers the public health, safety, or welfare; or
``(II) is so addicted to the use of the illegal drug that
the individual is not able to control the addiction through
the exercise of self-control;
``(ii) blocks the behavioral and physiological effects of
an illegal drug for an individual described in clause (i);
``(iii) safely serves as a replacement therapy for the
treatment of drug abuse for an individual described in clause
(i);
``(iv) moderates or eliminates the process of withdrawal
for an individual described in clause (i);
``(v) blocks or reverses the toxic effect of an illegal
drug on an individual described in clause (i); or
``(vi) prevents, where possible, the initiation of drug
abuse in individuals at high risk.
``(C) Illegal drug.--The term `illegal drug' means a
controlled substance identified under schedules I, II, III,
IV, and V in section 202(c) of the Controlled Substance Act
(21 U.S.C. 812(c)).''.
SEC. 333. PROTECTION FOR DRUGS.
Section 527 of the Federal Food, Drug, and Cosmetic Act (21
U.S.C. 360cc) is amended--
(1) by striking ``rare disease or condition'' each place it
appears and inserting ``rare disease or condition or for
treatment of an addiction to illegal drugs'';
(2) by striking ``such disease or condition'' each place it
appears and inserting ``such disease, condition, or treatment
of the addiction''; and
(3) in subsection (b)(1), by striking ``the disease or
condition'' and inserting ``the disease, condition, or
addiction''.
SEC. 334. OPEN PROTOCOLS FOR INVESTIGATIONS OF DRUGS.
Section 528 of the Federal Food, Drug, and Cosmetic Act (21
U.S.C. 360dd) is amended--
(1) by striking ``rare disease or condition'' and inserting
``rare disease or condition or for treatment of an addiction
to illegal drugs''; and
(2) by striking ``the disease or condition'' each place it
appears and inserting ``the disease, condition, or
addiction''.
PART 3--ENCOURAGING PRIVATE SECTOR DEVELOPMENT OF PHARMACOTHERAPIES
SEC. 341. DEVELOPMENT, MANUFACTURE, AND PROCUREMENT OF DRUGS
FOR THE TREATMENT OF ADDICTION TO ILLEGAL
DRUGS.
Chapter V of the Federal Food, Drug, and Cosmetic Act (21
U.S.C. 351 et seq.) is amended by adding at the end the
following:
``Subchapter D--Drugs for Cocaine and Heroin Addictions
``SEC. 551. CRITERIA FOR AN ACCEPTABLE DRUG TREATMENT FOR
COCAINE AND HEROIN ADDICTIONS.
``(a) In General.--Subject to subsections (b) and (c), the
Secretary shall, through the Institute of Medicine of the
National Academy of Sciences, establish criteria for an
acceptable drug for the treatment of an addiction to cocaine
and for an acceptable drug for the treatment of an addiction
to heroin. The criteria shall be used by the Secretary in
making a contract, or entering to a licensing agreement,
under section 552.
``(b) Requirements.--The criteria established under
subsection (a) for a drug shall include requirements--
``(1) that the application to use the drug for the
treatment of addiction to cocaine or heroin was filed and
approved by the Secretary under this Act after the date of
enactment of this section;
``(2) that a performance based test on the drug--
``(A) has been conducted through the use of a randomly
selected test group that received the drug as a treatment and
a randomly selected control group that received a placebo;
and
``(B) has compared the long term differences in the
addiction levels of control group participants and test group
participants;
``(3) that the performance based test conducted under
paragraph (2) demonstrates that the drug is effective through
evidence that--
``(A) a significant number of the participants in the test
who have an addiction to cocaine or heroin are willing to
take the drug for the addiction;
``(B) a significant number of the participants in the test
who have an addiction to cocaine or heroin and who were
provided the drug for the addiction during the test are
willing to continue taking the drug as long as necessary for
the treatment of the addiction; and
``(C) a significant number of the participants in the test
who were provided the drug for the period of time required
for the treatment of the addiction refrained from the use of
cocaine or heroin for a period of 3 years after the date of
the initial administration of the drug on the participants;
and
``(4) that the drug shall have a reasonable cost of
production.
``(c) Review and Publication of Criteria.--The criteria
established under subsection (a) shall, prior to the
publication and application of such criteria, be submitted
for review to the Committee on the Judiciary and the
Committee on Economic and Educational Opportunities of the
House of Representatives, and the Committee on the Judiciary
and the Committee on Labor and Human Resources of the Senate.
Not later than 90 days after notifying each of the
committees, the Secretary shall publish the criteria in the
Federal Register.
``SEC. 552. PURCHASE OF PATENT RIGHTS FOR DRUG DEVELOPMENT.
``(a) Application.--
``(1) In general.--The patent owner of a drug to treat an
addiction to cocaine or heroin, may submit an application to
the Secretary--
``(A) to enter into a contract with the Secretary to sell
to the Secretary the patent rights of the owner relating to
the drug; or
``(B) in the case in which the drug is approved by the
Secretary for more than 1 indication, to enter into an
exclusive licensing agreement with the Secretary for the
manufacture and distribution of the drug to treat an
addiction to cocaine or heroin.
``(2) Requirements.--An application described in paragraph
(1) shall be submitted at such time and in such manner, and
accompanied by such information, as the Secretary may
require.
``(b) Contract and Licensing Agreement.--
``(1) Requirements.--The Secretary may enter into a
contract or a licensing agreement with a patent owner who has
submitted an application in accordance with (a) if the drug
covered under the contract or licensing agreement meets the
criteria established by the Secretary under section 551(a).
``(2) Special rule.--The Secretary may enter into--
``(A) not more than 1 contract or exclusive licensing
agreement relating to a drug for the treatment of an
addiction to cocaine; and
``(B) not more than 1 contract or licensing agreement
relating to a drug for the treatment of an addiction to
heroin.
``(3) Coverage.--A contract or licensing agreement
described in subparagraph (A) or
[[Page S333]]
(B) of paragraph (2) shall cover not more than 1 drug.
``(4) Purchase amount.--Subject to amounts provided in
advance in appropriations Acts--
``(A) the amount to be paid to a patent owner who has
entered into a contract or licensing agreement under this
subsection relating to a drug to treat an addiction to
cocaine shall not exceed $100,000,000; and
``(B) the amount to be paid to a patent owner who has
entered into a contract or licensing agreement under this
subsection relating to a drug to treat an addiction to heroin
shall not exceed $50,000,000.
``(c) Transfer of Rights Under Contracts and Licensing
Agreement.--
``(1) Contracts.--A contract under subsection (b)(1) to
purchase the patent rights relating to a drug to treat
cocaine or heroin addiction shall transfer to the Secretary--
``(A) the exclusive right to make, use, or sell the
patented drug within the United States for the term of the
patent;
``(B) any foreign patent rights held by the patent owner;
``(C) any patent rights relating to the process of
manufacturing the drug; and
``(D) any trade secret or confidential business information
relating to the development of the drug, process for
manufacturing the drug, and therapeutic effects of the drug.
``(2) Licensing agreements.--A licensing agreement under
subsection (b)(1) to purchase an exclusive license relating
to manufacture and distribution of a drug to treat an
addiction to cocaine or heroin shall transfer to the
Secretary--
``(A) the exclusive right to make, use, or sell the
patented drug for the purpose of treating an addiction to
cocaine or heroin within the United States for the term of
the patent;
``(B) the right to use any patented processes relating to
manufacturing the drug; and
``(C) any trade secret or confidential business information
relating to the development of the drug, process for
manufacturing the drug, and therapeutic effects of the drug
relating to use of the drug to treat an addiction to cocaine
or heroin.
``SEC. 553. PLAN FOR MANUFACTURE AND DEVELOPMENT.
``(a) In General.--Not later than 90 days after the date on
which the Secretary purchases the patent rights of a patent
owner, or enters into a licensing agreement with a patent
owner, relating to a drug under section 551, the Secretary
shall develop a plan for the manufacture and distribution of
the drug.
``(b) Plan Requirements.--The plan shall set forth--
``(1) procedures for the Secretary to enter into licensing
agreements with private entities for the manufacture and the
distribution of the drug;
``(2) procedures for making the drug available to nonprofit
entities and private entities to use in the treatment of a
cocaine or heroin addiction;
``(3) a system to establish the sale price for the drug;
and
``(4) policies and procedures with respect to the use of
Federal funds by State and local governments or nonprofit
entities to purchase the drug from the Secretary.
``(c) Applicability of Procurement and Licensing Laws.--The
procurement and licensing laws of the United States shall be
applicable to procurements and licenses covered under the
plan described in subsection (a).
``(d) Review of Plan.--
``(1) In general.--Upon completion of the plan under
subsection (a), the Secretary shall notify the Committee on
the Judiciary and the Committee on Economic and Educational
Opportunities of the House of Representatives, and the
Committee on the Judiciary and the Committee on Labor and
Human Resources of the Senate, of the development of the plan
and publish the plan in the Federal Register. The Secretary
shall provide an opportunity for public comment on the plan
for a period of not more than 30 days after the date of the
publication of the plan in the Federal Register.
``(2) Final plan.--Not later than 60 days after the date of
the expiration of the comment period described in paragraph
(1), the Secretary shall publish in the Federal Register a
final plan. The implementation of the plan shall begin on the
date of the final publication of the plan.
``(e) Construction.--The development, publication, or
implementation of the plan, or any other agency action with
respect to the plan, shall not be considered agency action
subject to judicial review.
``(f) Regulations.--The Secretary may promulgate
regulations to carry out this section.
``SEC. 554. AUTHORIZATION OF APPROPRIATIONS.
``There is authorized to be appropriated to carry out this
subchapter, such sums as may be necessary in each of the
fiscal years 1998 through 2000.''.
Subtitle C--Prevention and Treatment Programs
PART 1--COMPREHENSIVE DRUG EDUCATION
SEC. 351. EXTENSION OF SAFE AND DRUG-FREE SCHOOLS AND
COMMUNITIES PROGRAM.
Title IV of the Elementary and Secondary Education Act (20
U.S.C. 7104) is amended to read as follows:
``TITLE IV--AUTHORIZATIONS
``SEC. 4001. AUTHORIZATION OF APPROPRIATIONS.
``There is authorized to be appropriated for State grants
under subpart 1 and national programs under subpart 2,
$655,000,000 for fiscal years 1998 through 2000, and
$955,000,000 for fiscal years 2001 through 2002, of which the
following amounts may be appropriated from the Violent Crime
Reduction Trust Fund:
``(1) $300,000,000 for fiscal year 2001; and
``(2) $300,000,000 for fiscal year 2002.''.
PART 2--DRUG COURTS
SEC. 361. REAUTHORIZATION OF DRUG COURTS PROGRAM.
Section 1001(a)(20) of title I of the Omnibus Crime Control
and Safe Streets Act of 1968 (42 U.S.C. 3793(a)(20)) is
amended--
(1) in subparagraph (E), by striking ``and'' at the end;
(2) in subparagraph (F), by striking the period at the end
and inserting a semicolon; and
(3) by adding at the end the following:
``(G) $400,000,000 for fiscal year 2001; and
``(H) $400,000,000 for fiscal year 2002.''.
SEC. 362. JUVENILE DRUG COURTS.
Title I of the Omnibus Crime Control and Safe Streets Act
of 1968 (42 U.S.C. 3711 et seq.) is amended--
(1) by redesignating part Y as part Z;
(2) by redesignating section 2501 as 2601; and
(3) by inserting after part X the following:
``PART Y--JUVENILE DRUG COURTS
``SEC. 2501. GRANT AUTHORITY.
``(a) Appropriate Drug Court Programs.--The Attorney
General may make grants to States, State courts, local
courts, units of local government, and Indian tribes to
establish programs that--
``(1) involve continuous early judicial supervision over
juvenile offenders, other than violent juvenile offenders
with substance abuse, or substance abuse-related problems;
and
``(2) integrate administration of other sanctions and
services, including--
``(A) mandatory periodic testing for the use of controlled
substances or other addictive substances during any period of
supervised release or probation for each participant;
``(B) substance abuse treatment for each participant;
``(C) diversion, probation, or other supervised release
involving the possibility of prosecution, confinement, or
incarceration based on noncompliance with program
requirements or failure to show satisfactory progress;
``(D) programmatic, offender management, and aftercare
services such as relapse prevention, health care, education,
vocational training, job placement, housing placement, and
child care or other family support service for each
participant who requires such services;
``(E) payment by the offender of treatment costs, to the
extent practicable, such as costs for urinalysis or
counseling; or
``(F) payment by the offender of restitution, to the extent
practicable, to either a victim of the offense at issue or to
a restitution or similar victim support fund.
``(b) Continued Availability of Grant Funds.--Amounts made
available under this part shall remain available until
expended.
``SEC. 2502. PROHIBITION OF PARTICIPATION BY VIOLENT
OFFENDERS.
``The Attorney General shall issue regulations and
guidelines to ensure that the programs authorized in this
part do not permit participation by violent offenders.
``SEC. 2503. DEFINITION.
``In this part, the term `violent offender' means an
individual charged with an offense during the course of
which--
``(1) the individual carried, possessed, or used a firearm
or dangerous weapon;
``(2) the death of or serious bodily injury of another
person occurred as a direct result of the commission of such
offense; or
``(3) the individual used force against the person of
another.
``SEC. 2504. ADMINISTRATION.
``(a) Regulatory Authority.--the Attorney General shall
issue any regulations and guidelines necessary to carry out
this part.
``(b) Applications.--In addition to any other requirements
that may be specified by the Attorney General, an application
for a grant under this part shall--
``(1) include a long term strategy and detailed
implementation plan;
``(2) explain the inability of the applicant to fund the
program adequately without Federal assistance;
``(3) certify that the Federal support provided will be
used to supplement, and not supplant, State, tribal, or local
sources of funding that would otherwise be available;
``(4) identify related governmental or community
initiatives that complement or will be coordinated with the
proposal;
``(5) certify that there has been appropriate consultation
with all affected agencies and that there will be appropriate
coordination with all affected agencies in the implementation
of the program;
``(6) certify that participating offenders will be
supervised by one or more designated judges with
responsibility for the drug court program;
``(7) specify plans for obtaining necessary support and
continuing the proposed program following the conclusion of
Federal support; and
``(8) describe the methodology that will be used in
evaluating the program.
[[Page S334]]
``SEC. 2505. APPLICATIONS.
``To request funds under this part, the chief executive or
the chief justice of a State, or the chief executive or chief
judge of a unit of local government or Indian tribe shall
submit an application to the Attorney General in such form
and containing such information as the Attorney General may
reasonably require.
``SEC. 2506. FEDERAL SHARE.
``(a) In General.--The Federal share of a grant made under
this part may not exceed 75 percent of the total costs of the
program described in the application submitted under section
2505 for the fiscal year for which the program receives
assistance under this part.
``(b) Waiver.--The Attorney General may waive, in whole or
in part, the requirement of a matching contribution under
subsection (a).
``(c) In-Kind Contributions.--In-kind contributions may
constitute a portion of the non-Federal share of a grant
under this part.
``SEC. 2507. DISTRIBUTION OF FUNDS.
``(a) Geographical Distribution.--The Attorney General
shall ensure that, to the extent practicable, an equitable
geographic distribution of grant awards is made.
``(b) Indian Tribes.--The Attorney General shall allocate
0.75 percent of amounts made available under this subtitle
for grants to Indian tribes.
``SEC. 2508. REPORT.
``A State, Indian tribe, or unit of local government that
receives funds under this part during a fiscal year shall
submit to the Attorney General, in March of the year
following receipt of a grant under this part, a report
regarding the effectiveness of programs established pursuant
to this part.
``SEC. 2509. TECHNICAL ASSISTANCE, TRAINING, AND EVALUATION.
``(a) Technical Assistance and Training.--The Attorney
General may provide technical assistance and training in
furtherance of the purposes of this part.
``(b) Evaluations.--In addition to any evaluation
requirements that may be prescribed for grantees, the
Attorney General may carry out or make arrangements for
evaluations of programs that receive support under this part.
``(c) Administration.--The technical assistance, training,
and evaluations authorized by this section may be carried out
directly by the Attorney General, in collaboration with the
Secretary of Health and Human Services, or through grants,
contracts, or other cooperative arrangements with other
entities.
``SEC. 2510. UNAWARDED FUNDS.
``The Attorney General may reallocate any grant funds that
are not awarded for juvenile drug courts under this part for
use for other juvenile delinquency and crime prevention
initiatives.
``SEC. 2511. AUTHORIZATION OF APPROPRIATIONS.
``There are authorized to be appropriated to carry out this
part from the Violent Crime Reduction Trust Fund--
``(1) such sums as may be necessary for each of the fiscal
years 1998, 1999, and 2000;
``(2) $50,000,000 for fiscal year 2001; and
``(3) $50,000,000 for fiscal year 2002.''.
PART 3--DRUG TREATMENT
SEC. 371. DRUG TREATMENT FOR JUVENILES.
Title V of the Public Health Service Act (42 U.S.C. 290aa
et seq.) is amended by adding at the end the following:
``PART G--RESIDENTIAL TREATMENT PROGRAMS FOR JUVENILES
``SEC. 575. RESIDENTIAL TREATMENT PROGRAMS FOR JUVENILES.
``(a) In General.--The Director of the Center for Substance
Abuse Treatment shall award grants to, or enter into
cooperative agreements or contracts, with public and
nonprofit private entities for the purpose of providing
treatment to juveniles for substance abuse through programs
in which, during the course of receiving such treatment the
juveniles reside in facilities made available by the
programs.
``(b) Availability of Services for Each Participant.--A
funding agreement for an award under subsection (a) for an
applicant is that, in the program operated pursuant to such
subsection--
``(1) treatment services will be available through the
applicant, either directly or through agreements with other
public or nonprofit private entities; and
``(2) the services will be made available to each person
admitted to the program.
``(c) Individualized Plan of Services.--A funding agreement
for an award under subsection (a) for an applicant is that--
``(1) in providing authorized services for an eligible
person pursuant to such subsection, the applicant will, in
consultation with the juvenile and, if appropriate the parent
or guardian of the juvenile, prepare an individualized plan
for the provision to the juvenile or young adult of the
services; and
``(2) treatment services under the plan will include--
``(A) individual, group, and family counseling, as
appropriate, regarding substance abuse; and
``(B) followup services to assist the juvenile or young
adult in preventing a relapse into such abuse.
``(d) Eligible Supplemental Services.--Grants under
subsection (a) may be used to provide an eligible juvenile,
the following services:
``(1) Hospital referrals.--Referrals for necessary hospital
services.
``(2) HIV and aids counseling.--Counseling on the human
immunodeficiency virus and on acquired immune deficiency
syndrome.
``(3) Domestic violence and sexual abuse counseling.--
Counseling on domestic violence and sexual abuse.
``(4) Preparation for reentry into society.--Planning for
and counseling to assist reentry into society, both before
and after discharge, including referrals to any public or
nonprofit private entities in the community involved that
provide services appropriate for the juvenile.
``(e) Minimum Qualifications for Receipt of Award.--
``(1) Certification by relevant state agency.--With respect
to the principal agency of a State or Indian tribe that
administers programs relating to substance abuse, the
Director may award a grant to, or enter into a cooperative
agreement or contract with, an applicant only if the agency
or Indian tribe has certified to the Director that--
``(A) the applicant has the capacity to carry out a program
described in subsection (a);
``(B) the plans of the applicant for such a program are
consistent with the policies of such agency regarding the
treatment of substance abuse; and
``(C) the applicant, or any entity through which the
applicant will provide authorized services, meets all
applicable State licensure or certification requirements
regarding the provision of the services involved.
``(2) Status as medicaid provider.--
``(A) In general.--Subject to subparagraphs (B) and (C),
the Director may make a grant, or enter into a cooperative
agreement or contract, under subsection (a) only if, in the
case of any authorized service that is available pursuant to
the State plan approved under title XIX of the Social
Security Act (42 U.S.C. 1396 et seq.) for the State
involved--
``(i) the applicant for the grant, cooperative agreement,
or contract will provide the service directly, and the
applicant has entered into a participation agreement under
the State plan and is qualified to receive payments under
such plan; or
``(ii) the applicant will enter into an agreement with a
public or nonprofit private entity under which the entity
will provide the service, and the entity has entered into
such a participation agreement plan and is qualified to
receive such payments.
``(B) Services.--
``(i) In general.--In the case of an entity making an
agreement pursuant to subparagraph (A)(ii) regarding the
provision of services, the requirement established in such
subparagraph regarding a participation agreement shall be
waived by the Director if the entity does not, in providing
health care services, impose a charge or accept reimbursement
available from any third party payor, including reimbursement
under any insurance policy or under any Federal or State
health benefits plan.
``(ii) Voluntary donations.--A determination by the
Director of whether an entity referred to in clause (i) meets
the criteria for a waiver under such clause shall be made
without regard to whether the entity accepts voluntary
donations regarding the provision of services to the public.
``(C) Mental diseases.--
``(i) In general.--With respect to any authorized service
that is available pursuant to the State plan described in
subparagraph (A), the requirements established in such
subparagraph shall not apply to the provision of any such
service by an institution for mental diseases to an
individual who has attained 21 years of age and who has not
attained 65 years of age.
``(ii) Definition of institution for mental diseases.--In
this subparagraph, the term `institution for mental diseases'
has the same meaning as in section 1905(i) of the Social
Security Act (42 U.S.C. 1396d(i)).
``(f) Requirements for Matching Funds.--
``(1) In general.--With respect to the costs of the program
to be carried out by an applicant pursuant to subsection (a),
a funding agreement for an award under such subsection is
that the applicant will make available (directly or through
donations from public or private entities) non-Federal
contributions toward such costs in an amount that--
``(A) for the first fiscal year for which the applicant
receives payments under an award under such subsection, is
not less than $1 for each $9 of Federal funds provided in the
award;
``(B) for any second such fiscal year, is not less than $1
for each $9 of Federal funds provided in the award; and
``(C) for any subsequent such fiscal year, is not less than
$1 for each $3 of Federal funds provided in the award.
``(2) Determination of amount contributed.--Non-Federal
contributions required in paragraph (1) may be in cash or in
kind, fairly evaluated, including plant, equipment, or
services. Amounts provided by the Federal Government, or
services assisted or subsidized to any significant extent by
the Federal Government, may not be included in determining
the amount of such non-Federal contributions.
``(g) Outreach.--A funding agreement for an award under
subsection (a) for an applicant is that the applicant will
provide outreach services in the community involved to
identify juveniles who are engaging in substance abuse and to
encourage the juveniles to undergo treatment for such abuse.
[[Page S335]]
``(h) Accessibility of Program.--A funding agreement for an
award under subsection (a) for an applicant is that the
program operated pursuant to such subsection will be operated
at a location that is accessible to low income juveniles.
``(i) Continuing Education.--A funding agreement for an
award under subsection (a) is that the applicant involved
will provide for continuing education in treatment services
for the individuals who will provide treatment in the program
to be operated by the applicant pursuant to such subsection.
``(j) Imposition of Charges.--A funding agreement for an
award under subsection (a) for an applicant is that, if a
charge is imposed for the provision of authorized services to
or on behalf of an eligible juvenile, such charge--
``(1) will be made according to a schedule of charges that
is made available to the public;
``(2) will be adjusted to reflect the economic condition of
the juvenile involved; and
``(3) will not be imposed on any such juvenile whose family
has an income of less than 185 percent of the official
poverty line, as established by the Director of the Office
for Management and Budget and revised by the Secretary in
accordance with section 673(2) of the Omnibus Budget
Reconciliation Act of 1981 (42 U.S.C. 9902(2)).
``(k) Reports to Director.--A funding agreement for an
award under subsection (a) is that the applicant involved
will submit to the Director a report--
``(1) describing the utilization and costs of services
provided under the award;
``(2) specifying the number of juveniles served, and the
type and costs of services provided; and
``(3) providing such other information as the Director
determines to be appropriate.
``(l) Requirement of Application.--The Director may make an
award under subsection (a) only if an application for the
award is submitted to the Director containing such
agreements, and the application is in such form, is made in
such manner, and contains such other agreements and such
assurances and information as the Director determines to be
necessary to carry out this section.
``(m) Equitable Allocation of Awards.--In making awards
under subsection (a), the Director shall ensure that the
awards are equitably allocated among the principal geographic
regions of the United States, as well as among Indian tribes,
subject to the availability of qualified applicants for the
awards.
``(n) Duration of Award.--
``(1) In general.--The period during which payments are
made to an entity from an award under this section may not
exceed 5 years.
``(2) Approval of director.--The provision of payments
described in paragraph (1) shall be subject to--
``(A) annual approval by the Director of the payments; and
``(B) the availability of appropriations for the fiscal
year at issue to make the payments.
``(3) No limitation.--This subsection may not be construed
to establish a limitation on the number of awards that may be
made to an entity under this section.
``(o) Evaluations; Dissemination of Findings.--The Director
shall, directly or through contract, provide for the conduct
of evaluations of programs carried out pursuant to subsection
(a). The Director shall disseminate to the States the
findings made as a result of the evaluations.
``(p) Reports to Congress.--
``(1) Initial report.--Not later than October 1, 1998, the
Director shall submit to the Committee on the Judiciary of
the House of Representatives, and to the Committee on the
Judiciary of the Senate, a report describing programs carried
out pursuant to this section.
``(2) Periodic reports.--
``(A) In general.--Not less than biennially after the date
described in paragraph (1), the Director shall prepare a
report describing programs carried out pursuant to this
section during the preceding 2-year period, and shall submit
the report to the Administrator for inclusion in the biennial
report under section 501(k).
``(B) Summary.--Each report under this subsection shall
include a summary of any evaluations conducted under
subsection (m) during the period with respect to which the
report is prepared.
``(q) Definitions.--In this section:
``(1) Authorized services.--The term `authorized services'
means treatment services and supplemental services.
``(2) Juvenile.--The term `juvenile' means anyone 18 years
of age or younger at the time that of admission to a program
operated pursuant to subsection (a).
``(3) Eligible juvenile.--The term `eligible juvenile'
means a juvenile who has been admitted to a program operated
pursuant to subsection (a).
``(4) Funding agreement under subsection (a).--The term
`funding agreement under subsection (a)', with respect to an
award under subsection (a), means that the Director may make
the award only if the applicant makes the agreement involved.
``(5) Treatment services.--The term `treatment services'
means treatment for substance abuse, including the counseling
and services described in subsection (c)(2).
``(6) Supplemental services.--The term `supplemental
services' means the services described in subsection (d).
``(r) Authorization of Appropriations.--
``(1) In general.--For the purpose of carrying out this
section and section 576 there is authorized to be
appropriated such sums as may be necessary for fiscal years
1998, 1999, and 2000. There is authorized to be appropriated
from the Violent Crime Reduction Trust Fund $300,000,000 in
each of the fiscal years 2001 and 2002.
``(2) Transfer.--For the purpose described in paragraph
(1), in addition to the amounts authorized in such paragraph
to be appropriated for a fiscal year, there is authorized to
be appropriated for the fiscal year from the special
forfeiture fund of the Director of the Office of National
Drug Control Policy such sums as may be necessary.
``(3) Rule of construction.--The amounts authorized in this
subsection to be appropriated are in addition to any other
amounts that are authorized to be appropriated and are
available for the purpose described in paragraph (1).
``SEC. 576. OUTPATIENT TREATMENT PROGRAMS FOR JUVENILES.
``(a) Grants.--The Secretary of Health and Human Services,
acting through the Director of the Center for Substance Abuse
Treatment, shall make grants to establish projects for the
outpatient treatment of substance abuse among juveniles.
``(b) Prevention.--Entities receiving grants under this
section shall engage in activities to prevent substance abuse
among juveniles.
``(c) Evaluation.--The Secretary of Health and Human
Services shall evaluate projects carried out under subsection
(a) and shall disseminate to appropriate public and private
entities information on effective projects.''.
Subtitle D--National Drug Control Policy
SEC. 381. REAUTHORIZATION OF OFFICE OF NATIONAL DRUG CONTROL
POLICY.
(a) Reauthorization.--Section 1009 of the National
Narcotics Leadership Act of 1988 (21 U.S.C. 1506) is amended
by striking ``1997'' and inserting ``2002''.
(b) Authorization of Appropriations.--Section 1011 of the
National Narcotics Leadership Act of 1988 (21 U.S.C. 1508) is
amended by striking ``8'' and inserting ``13''.
SEC. 382. STUDY ON EFFECTS OF CALIFORNIA AND ARIZONA DRUG
INITIATIVES.
(a) Definition.--In this section, the term ``controlled
substance'' has the same meaning as in section 102 of the
Controlled Substances Act (21 U.S.C. 802).
(b) Study.--The Director of National Drug Control Policy,
in consultation with the Attorney General and the Secretary
of Health and Human Services, shall conduct a study on the
effect of the 1996 voter referenda in California and Arizona
concerning the medicinal use of marijuana and other
controlled substances, respectively, on--
(1) marijuana usage in Arizona and California;
(2) usage of other controlled substances in Arizona and
California;
(3) perceptions of youth of the dangerousness of marijuana
and other controlled substances in Arizona and California;
(4) emergency room admissions for drug abuse in Arizona and
California;
(5) seizures of controlled substances in Arizona and
California;
(6) arrest rates for use of controlled substances in
Arizona and California;
(7) arrest rates for trafficking of controlled substances
in Arizona and California;
(8) conviction rates in cases concerning use of controlled
substances in Arizona and California; and
(9) conviction rates in jury trials concerning use of
controlled substances in Arizona and California.
(c) Report.--Not later than January 1, 1998, the Director
of National Drug Policy, in consultation with the Attorney
General and the Secretary of Health and Human Services,
shall--
(1) issue a report on the results of the study under
subsection (b); and
(2) submit a copy of the report to the Committees on the
Judiciary of the House of Representatives and the Senate.
(d) Authorizations.--There are authorized to be
appropriated to carry out this section such sums as may be
necessary for each of the fiscal years 1998 and 1999.
Subtitle E--Penalty Enhancements
SEC. 391. INCREASED PENALTIES FOR USING FEDERAL PROPERTY TO
GROW OR MANUFACTURE CONTROLLED SUBSTANCES.
(a) In General.--Section 401(b)(5) of the Controlled
Substances Act (21 U.S.C. 841(b)(5)) is amended to read as
follows:
``(5) Offenses on federal property.--Any person who
violates subsection (a) by cultivating or manufacturing a
controlled substance on any property in whole or in part
owned by or leased to the United States or any department or
agency thereof shall be subject to twice the maximum
punishment otherwise authorized for the offense.''.
(b) Sentencing Enhancement.--Pursuant to its authority
under section 994(p) of title 28, United States Code, the
United States Sentencing Commission shall amend the Federal
sentencing guidelines to provide an appropriate enhancement
to ensure that violations of section 401(b)(5) of the
Controlled Substances Act are punished substantially more
severely than violations that do not occur on Federal
property.
(c) Consistency.--In carrying out this subsection, the
United States Sentencing Commission shall--
[[Page S336]]
(1) ensure that there is reasonable consistency with other
Federal sentencing guidelines; and
(2) avoid duplicative punishment for substantially the same
offense.
SEC. 392. TECHNICAL CORRECTION TO ENSURE COMPLIANCE OF
FEDERAL SENTENCING GUIDELINES WITH FEDERAL LAW.
Section 994(a) of title 28, United States Code, is amended
by striking ``consistent with all pertinent provisions of
this title and title 18, United States Code,'' and inserting
``consistent with all pertinent provisions of Federal law''.
TITLE IV--PROTECTING YOUTH FROM VIOLENT CRIME
Subtitle A--Grants for Youth Organizations
SEC. 401. GRANT PROGRAM.
The Attorney General may make grants to States, Indian
tribes, and national nonprofit organizations in crime prone
areas, such as Boys and Girls Clubs, Police Athletic Leagues,
4-H Clubs, D.A.R.E. America, and Kids 'N Kops programs, for
the purpose of--
(1) providing constructive activities to youth during after
school hours, weekends, and school vacations to prevent the
criminal victimization of program participants;
(2) providing supervised activities in safe environments to
youth in crime prone areas;
(3) providing antidrug education to prevent drug abuse
among youth;
(4) supporting police officer training and salaries and
educational materials to expand D.A.R.E. America's middle
school campaign; or
(5) providing constructive activities to youth in a safe
environment through parks and other public recreation areas.
SEC. 402. GRANTS TO NATIONAL ORGANIZATIONS.
(a) Applications.--
(1) Eligibility.--In order to be eligible to receive a
grant under this section, the chief operating officer of a
national community-based organization shall submit an
application to the Attorney General in such form and
containing such information as the Attorney General may
reasonably require.
(2) Application requirements.--Each application submitted
in accordance with paragraph (1) shall include--
(A) a request for a grant to be used for the purposes
described in this subtitle;
(B) a description of the communities to be served by the
grant, including the nature of juvenile crime, violence, and
drug use in the communities;
(C) written assurances that Federal funds received under
this subtitle will be used to supplement and not supplant,
non-Federal funds that would otherwise be available for
activities funded under this subtitle;
(D) written assurances that all activities will be
supervised by an appropriate number of responsible adults;
(E) a plan for assuring that program activities will take
place in a secure environment that is free of crime and
drugs; and
(F) any additional statistical or financial information
that the Attorney General may reasonably require.
(b) Grant Awards.--In awarding grants under this section,
the Attorney General shall consider--
(1) the ability of the applicant to provide the stated
services;
(2) the history and establishment of the applicant in
providing youth activities on a nationwide basis; and
(3) the extent to which the organizations shall achieve an
equitable geographic distribution of the grant awards.
SEC. 403. GRANTS TO STATES.
(a) Applications.--
(1) In general.--The Attorney General may make grants under
this section to States for distribution to units of local
government and community-based organizations for the purposes
set forth in section 401.
(2) Grants.--To request a grant under this section, the
chief executive of a State shall submit an application to the
Attorney General in such form and containing such information
as the Attorney General may reasonably require.
(3) Application requirements.--Each application submitted
in accordance with paragraph (2) shall include--
(A) a request for a grant to be used for the purposes
described in this subtitle;
(B) a description of the communities to be served by the
grant, including the nature of juvenile crime, violence, and
drug use in the community;
(C) written assurances that Federal funds received under
this subtitle will be used to supplement and not supplant,
non-Federal funds that would otherwise be available for
activities funded under this subtitle;
(D) written assurances that all activities will be
supervised by an appropriate number of responsible adults;
and
(E) a plan for assuring that program activities will take
place in a secure environment that is free of crime and
drugs.
(b) Grant Awards.--In awarding grants under this section,
the State shall consider--
(1) the ability of the applicant to provide the stated
services;
(2) the history and establishment of the applicant in the
community to be served;
(3) the level of juvenile crime, violence, and drug use in
the community;
(4) the extent to which structured extracurricular
activities for youth are otherwise unavailable in the
community;
(5) the need in the community for secure environments for
youth to avoid criminal victimization and exposure to crime
and illegal drugs;
(6) to the extent practicable, achievement of an equitable
geographic distribution of the grant awards; and
(7) whether the applicant has an established record of
providing extracurricular activities that are generally not
otherwise available to youth in the community.
(c) Allocation.--
(1) State allocations.--The Attorney General shall allot
not less than 0.75 percent of the total amount made available
each fiscal year to carry out this section to each State that
has applied for a grant under this section.
(2) Indian tribes.--The Attorney General shall allot not
less than 0.75 percent of the total amount made available
each fiscal year to carry out this section to Indian tribes,
in accordance with the criteria set forth in subsections (a)
and (b).
(3) Remaining amounts.--Of the amount remaining after the
allocations under paragraphs (1) and (2), the Attorney
General shall allocate to each State an amount that bears the
same ratio to the total amount of remaining funds as the
population of the State bears to the total population of all
States.
SEC. 404. ALLOCATION; GRANT LIMITATION.
(a) Allocation.--Of amounts made available to carry out
this subtitle--
(1) 20 percent shall be for grants to national
organizations under section 402; and
(2) 80 percent shall be for grants to States under section
403.
(b) Grant Limitation.--Not more than 3 percent of the funds
made available to the Attorney General or a grant recipient
under this subtitle may be used for administrative purposes.
SEC. 405. REPORT AND EVALUATION.
(a) Report to the Attorney General.--Not later than October
1, 1998, and October 1 of each year thereafter, each grant
recipient under this subtitle shall submit to the Attorney
General a report that describes, for the year to which the
report relates--
(1) the activities provided;
(2) the number of youth participating;
(3) the extent to which the grant enabled the provision of
activities to youth that would not otherwise be available;
and
(4) any other information that the Attorney General
requires for evaluating the effectiveness of the program.
(b) Evaluation and Report to Congress.--Not later than
March 1, 1999, and March 1 of each year thereafter, the
Attorney General shall submit to the Congress an evaluation
and report that contains a detailed statement regarding grant
awards, activities of grant recipients, a compilation of
statistical information submitted by grant recipients under
this subtitle, and an evaluation of programs established by
grant recipients under this subtitle.
(c) Criteria.--In assessing the effectiveness of the
programs established and operated by grant recipients
pursuant to this subtitle, the Attorney General shall
consider--
(1) the number of youth served by the grant recipient;
(2) the percentage of youth participating in the program
charged with acts of delinquency or crime compared to youth
in the community at large;
(3) the percentage of youth participating in the program
that uses drugs compared to youth in the community at large;
(4) the percentage of youth participating in the program
that are victimized by acts of crime or delinquency compared
to youth in the community at large; and
(5) the truancy rates of youth participating in the program
compared to youth in the community at large.
(d) Documents and Information.--Each grant recipient under
this subtitle shall provide the Attorney General with all
documents and information that the Attorney General
determines to be necessary to conduct an evaluation of the
effectiveness of programs funded under this subtitle.
SEC. 406. AUTHORIZATION OF APPROPRIATIONS.
(a) In General.--There are authorized to be appropriated to
carry out this subtitle from the Violent Crime Reduction
Trust Fund--
(1) such sums as may be necessary for each of the fiscal
years 1998 through 2000;
(2) for fiscal year 2001, $125,000,000; and
(3) for fiscal year 2002, $125,000,000.
(b) Continued Availability.--Amounts made available under
this subtitle shall remain available until expended.
Subtitle B--``Say No to Drugs'' Community Centers Act of 1997
SEC. 421. SHORT TITLE; DEFINITIONS.
(a) Short Title.--This subtitle may be cited as the ``Say
No to Drugs Community Centers Act of 1997''.
(b) Definitions.--For purposes of this subtitle--
(1) the term ``community-based organization'' means a
private, locally initiated organization that--
(A) is a nonprofit organization, as that term is defined in
section 103(23) of the Juvenile Justice and Delinquency
Prevention Act of 1974 (42 U.S.C. 5603(23)); and
(B) involves the participation, as appropriate, of members
of the community and community institutions, including--
(i) business and civic leaders actively involved in
providing employment and business development opportunities
in the community;
(ii) educators;
[[Page S337]]
(iii) religious organizations (which shall not provide any
sectarian instruction or sectarian worship in connection with
program activities funded under this subtitle);
(iv) law enforcement agencies; and
(v) other interested parties;
(2) the term ``eligible community'' means a community--
(A) identified by an eligible recipient for assistance
under this subtitle; and
(B) an area that meets such criteria as the Attorney
General may, by regulation, establish, including criteria
relating to poverty, juvenile delinquency, and crime;
(3) the term ``eligible recipient'' means a community-based
organization or public school that has--
(A) been approved for eligibility by the Attorney General,
upon application submitted to the Attorney General in
accordance with section 412(b); and
(B) demonstrated that the projects and activities it seeks
to support in an eligible community involve the
participation, when feasible and appropriate, of--
(i) parents, family members, and other members of the
eligible community;
(ii) civic and religious organizations serving the eligible
community;
(iii) school officials and teachers employed at schools
located in the eligible community;
(iv) public housing resident organizations in the eligible
community; and
(v) public and private nonprofit organizations and
organizations serving youth that provide education, child
protective services, or other human services to low income,
at-risk youth and their families;
(4) the term ``poverty line'' means the income official
poverty line (as defined by the Office of Management and
Budget, and revised annually in accordance with section
673(2) of the Community Services Block Grant Act (42 U.S.C.
9902(2)) applicable to a family of the size involved; and
(5) the term ``public school'' means a public elementary
school, as defined in section 1201(i) of the Higher Education
Act of 1965 (20 U.S.C. 1141(i)), and a public secondary
school, as defined in section 1201(d) of that Act (42 U.S.C.
1141(d)).
SEC. 422. GRANT REQUIREMENTS.
(a) In General.--The Attorney General may make grants to
eligible recipients, which grants may be used to provide to
youth living in eligible communities during after school
hours or summer vacations, the following services:
(1) Rigorous drug prevention education.
(2) Drug counseling and treatment.
(3) Academic tutoring and mentoring.
(4) Activities promoting interaction between youth and law
enforcement officials.
(5) Vaccinations and other basic preventive health care.
(6) Sexual abstinence education.
(7) Other activities and instruction to reduce youth
violence and substance abuse.
(b) Location and Use of Amounts.--An eligible recipient
that receives a grant under this subtitle--
(1) shall ensure that the stated program is carried out--
(A) when appropriate, in the facilities of a public school
during nonschool hours; or
(B) in another appropriate local facility that is--
(i) in a location easily accessible to youth in the
community; and
(ii) in compliance with all applicable State and local
ordinances;
(2) shall use the grant amounts to provide to youth in the
eligible community services and activities that include
extracurricular and academic programs that are offered--
(A) after school and on weekends and holidays, during the
school year; and
(B) as daily full day programs (to the extent available
resources permit) or as part day programs, during the summer
months;
(3) shall use not more than 5 percent of the amounts to pay
for the administrative costs of the program;
(4) shall not use such amounts to provide sectarian worship
or sectarian instruction; and
(5) may not use the amounts for the general operating costs
of public schools.
(c) Applications.--
(1) In general.--Each application to become an eligible
recipient shall be submitted to the Attorney General at such
time, in such manner, and accompanied by such information, as
the Attorney General may reasonably require.
(2) Contents of application.--Each application submitted
pursuant to paragraph (1) shall--
(A) describe the activities and services to be provided
through the program for which the grant is sought;
(B) contain a comprehensive plan for the program that is
designed to achieve identifiable goals for youth in the
eligible community;
(C) describe in detail the drug education and drug
prevention programs that will be implemented;
(D) specify measurable goals and outcomes for the program
that will include--
(i) reducing the percentage of youth in the eligible
community that enter the juvenile justice system or become
addicted to drugs;
(ii) increasing the graduation rates, school attendance,
and academic success of youth in the eligible community; and
(iii) improving the skills of program participants;
(E) contain an assurance that the applicant will use grant
amounts received under this subtitle to provide youth in the
eligible community with activities and services consistent
with subsection (g);
(F) demonstrate the manner in which the applicant will make
use of the resources, expertise, and commitment of private
entities in carrying out the program for which the grant is
sought;
(G) include an estimate of the number of youth in the
eligible community expected to be served under the program;
(H) include a description of charitable private resources,
and all other resources, that will be made available to
achieve the goals of the program;
(I) contain an assurance that the applicant will comply
with any evaluation under section 522, any research effort
authorized under Federal law, and any investigation by the
Attorney General;
(J) contain an assurance that the applicant will prepare
and submit to the Attorney General an annual report regarding
any program conducted under this subtitle;
(K) contain an assurance that the program for which the
grant is sought will, to the maximum extent practicable,
incorporate services that are provided solely through non-
Federal private or nonprofit sources; and
(L) contain an assurance that the applicant will maintain
separate accounting records for the program for which the
grant is sought.
(3) Priority.--In determining eligibility under this
section, the Attorney General shall give priority to
applicants that submit applications that demonstrate the
greatest local support for the programs they seek to support.
(d) Payments; Federal Share; Non-Federal Share.--
(1) Payments.--The Attorney General shall, subject to the
availability of appropriations, provide to each eligible
recipient the Federal share of the costs of developing and
carrying out programs described in this section.
(2) Federal share.--The Federal share of the cost of a
program under this subtitle shall be not more than--
(A) 75 percent of the total cost of the program for each of
the first 2 years of the duration of a grant;
(B) 70 percent of the total cost of the program for the
third year of the duration of a grant; and
(C) 60 percent of the total cost of the program for each
year thereafter.
(3) Non-federal share.--
(A) In general.--The non-Federal share of the cost of a
program under this subtitle may be in cash or in kind, fairly
evaluated, including plant, equipment, and services. Federal
funds made available for the activity of any agency of an
Indian tribal government or the Bureau of Indian Affairs on
any Indian lands may be used to provide the non-Federal share
of the costs of programs or projects funded under this
subtitle.
(B) Special rule.--Not less than 15 percent of the non-
Federal share of the costs of a program under this subtitle
shall be provided from private or nonprofit sources.
(e) Program Authority.--
(1) In general.--
(A) Allocations for states and indian tribes.--
(i) In general.--In any fiscal year in which the total
amount made available to carry out this subtitle is equal to
not less than $20,000,000, from the amount made available to
carry out this subtitle, the Attorney General shall allocate
not less than 0.75 percent for grants under subparagraph (B)
to eligible recipients in each State.
(ii) Indian tribes.--The Attorney General shall allocate
0.75 percent of amounts made available under this subtitle
for grants to Indian tribes.
(B) Grants to community-based organizations and public
schools from allocations.--For each fiscal year described in
subparagraph (A), the Attorney General may award grants from
the appropriate State or Indian tribe allocation determined
under subparagraph (A) on a competitive basis to eligible
recipients to pay for the Federal share of assisting eligible
communities to develop and carry out programs in accordance
with this subtitle.
(C) Reallocation.--If, at the end of a fiscal year
described in subparagraph (A), the Attorney General
determines that amounts allocated for a particular State or
Indian tribe under subparagraph (B) remain unobligated, the
Attorney General shall use such amounts to award grants to
eligible recipients in another State or Indian tribe to pay
for the Federal share of assisting eligible communities to
develop and carry out programs in accordance with this
subtitle. In awarding such grants, the Attorney General shall
consider the need to maintain geographic diversity among
eligible recipients.
(D) Availability of amounts.--Amounts made available under
this paragraph shall remain available until expended.
(2) Other fiscal years.--In any fiscal year in which the
amount made available to carry out this subtitle is equal to
or less than $20,000,000, the Attorney General may award
grants on a competitive basis to eligible recipients to pay
for the Federal share of assisting eligible communities to
develop and carry out programs in accordance with this
subtitle.
(3) Administrative costs.--The Attorney General may use not
more than 3 percent of the amounts made available to carry
out this subtitle in any fiscal year for administrative
costs, including training and technical assistance.
[[Page S338]]
SEC. 423. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated to carry out this
subtitle from the Violent Crime Reduction Trust Fund--
(1) for fiscal year 2001, $125,000,000; and
(2) for fiscal year 2002, $125,000,000.
Subtitle C--Missing Children
SEC. 431. AMENDMENTS TO THE MISSING CHILDREN'S ASSISTANCE
ACT.
(a) Duties and Functions of the Administrator.--Section 404
of the Missing Children's Assistance Act (42 U.S.C. 5773) is
amended--
(1) by redesignating subsection (c) as subsection (d); and
(2) in subsection (b)--
(A) by striking ``(b) The Administrator'' and all that
follows through ``shall--'' and inserting the following:
``(b) Toll-Free Hotline and National Resource Center.--The
Administrator shall make grants to or enter into contracts
with the National Center for Missing and Exploited Children,
for purposes of--'';
(B) in paragraph (1)--
(i) in subparagraph (A), by striking ``establish and
operate'' and inserting ``providing''; and
(ii) in subparagraph (B), by adding ``and'' at the end;
(C) in paragraph (2)--
(i) by striking ``establish and operate'' and inserting
``operating'';
(ii) in subparagraph (A), by inserting ``foreign
governments,'' after ``State and local governments''; and
(iii) in subparagraph (D)--
(I) by inserting ``foreign governments,'' after ``State and
local governments''; and
(II) by striking ``; and'' at the end and inserting a
period;
(D) in paragraph (3), by striking ``(3) periodically'' and
inserting the following:
``(c) National Incidence Studies.--The Administrator,
either by making grants to or entering into contracts with
public agencies or nonprofit private agencies, shall--
``(1) periodically''; and
(E) by redesignating paragraph (4) as paragraph (2).
(b) Grants.--Section 405(a) of the Missing Children's
Assistance Act (42 U.S.C. 5775(a)) is amended by inserting
``the National Center for Missing and Exploited Children and
with'' before ``public agencies''.
TITLE V--IMPROVING YOUTH CRIME AND DRUG PREVENTION
Subtitle A--Comprehensive Study of Federal Prevention Efforts
SEC. 501. STUDY BY NATIONAL ACADEMY OF SCIENCE.
(a) In General.--The Attorney General shall enter into a
contract with a public or nonprofit private entity, subject
to subsection (b), for the purpose of conducting a study or
studies--
(1) to evaluate the effectiveness of federally funded
programs for preventing youth violence and youth substance
abuse;
(2) to evaluate the effectiveness of federally funded grant
programs for preventing criminal victimization of juveniles;
(3) to identify specific Federal programs and programs that
receive Federal funds that contribute to reductions in youth
violence, youth substance abuse, and risk factors among youth
that lead to violent behavior and substance abuse;
(4) to identify specific programs that have not achieved
their intended results; and
(5) to make specific recommendations on programs that--
(A) should receive continued or increased funding because
of their proven success; or
(B) should have their funding terminated or reduced because
of their lack of effectiveness.
(b) National Academy of Sciences.--The Attorney General
shall request the National Academy of Sciences to enter into
the contract under subsection (a) to conduct the study or
studies described in subsection (a). If the Academy declines
to conduct the study, the Attorney General shall carry out
such subsection through other public or nonprofit private
entities.
(c) Assistance.--In conducting the study under subsection
(a) the contracting party may obtain analytic assistance,
data, and other relevant materials from the Department of
Justice and any other appropriate Federal agency.
(d) Reporting Requirements.--
(1) In general.--Not later than January 1, 2000, the
Attorney General shall submit a report describing the
findings made as a result of the study required by subsection
(a) to the Committee on the Judiciary and the Committee on
Economic and Educational Opportunity of the House of
Representatives and the Committee on the Judiciary and the
Committee on Labor and Human Resources of the Senate.
(2) Contents.--The report required by this subsection shall
contain specific recommendations concerning funding levels
for the programs evaluated. Reports on the effectiveness of
such programs and recommendations on funding shall be
provided to the appropriate subcommittees of the Committee on
Appropriations of the House of Representatives and the
Committee on Appropriations of the Senate.
(e) Funding.--There are authorized to be appropriated to
carry out the study under subsection (a) $1,000,000,000.
Subtitle B--Evaluation Mandate for Authorized Programs
SEC. 522. EVALUATION OF CRIME PREVENTION PROGRAMS.
The Attorney General, with respect to the programs in
titles II, III, and IV of this Act shall provide, directly or
through grants and contracts, for the comprehensive and
thorough evaluation of the effectiveness of each program
established by this Act and the amendments made by this Act.
SEC. 523. EVALUATION AND RESEARCH CRITERIA.
(a) Independent Evaluations and Research.--Evaluations and
research studies conducted pursuant to this subtitle shall be
independent in nature, and shall employ rigorous and
scientifically recognized standards and methodologies.
(b) Content of Evaluations.--Evaluations conducted pursuant
to this title may include comparison between youth
participating in the programs and the community at large of
rates of--
(1) delinquency, youth crime, youth gang activity, youth
substance abuse, and other high risk factors;
(2) risk factors in young people that contribute to
juvenile violence, including academic failure, excessive
school absenteeism, and dropping out of school;
(3) risk factors in the community, schools, and family
environments that contribute to youth violence; and
(4) criminal victimizations of youth.
SEC. 524. COMPLIANCE WITH EVALUATION MANDATE.
The Attorney General may require the recipients of Federal
assistance for programs under this Act to collect, maintain,
and report information considered to be relevant to any
evaluation conducted pursuant to section 502, and to conduct
and participate in specified evaluation and assessment
activities and functions.
SEC. 525. RESERVATION OF AMOUNTS FOR EVALUATION AND RESEARCH.
(a) In General.--The Attorney General, with respect to
titles II, III, and IV shall reserve not less than 2 percent,
and not more than 4 percent, of the amounts made available
pursuant to such titles and the amendments made by such
titles in each fiscal year to carry out the evaluation and
research required by this title.
(b) Assistance to Grantees and Evaluated Programs.--To
facilitate the conduct and defray the costs of crime
prevention program evaluation and research, the Attorney
General shall use amounts reserved under this section to
provide compliance assistance to grantees under this Act who
are selected to participate in evaluations pursuant to
section 522.
Subtitle C--Elimination of Ineffective Programs
SEC. 531. SENSE OF SENATE REGARDING FUNDING FOR
PROGRAMS DETERMINED TO BE INEFFECTIVE.
It is the sense of the Senate that programs identified in
the study performed pursuant to section 501 as being
ineffective in addressing juvenile crime and substance abuse
should not receive Federal funding in any fiscal year
following the issuance of such study.
TITLE VI--EXTENSION OF VIOLENT CRIME REDUCTION TRUST FUND
SEC. 601. EXTENSION OF VIOLENT CRIME REDUCTION TRUST FUND.
(a) Violent Crime Control and Law Enforcement Act of
1994.--Section 310001(b) of the Violent Crime Control and Law
Enforcement Act of 1994 (42 U.S.C. 14211(b)) is amended--
(1) in paragraph (5), by striking ``and'' at the end;
(2) in paragraph (6), by striking the period at the end and
inserting a semicolon; and
(3) by adding at the end the following:
``(7) for fiscal year 2001, $6,500,000,000; and
``(8) for fiscal year 2002, $6,500,000,000.''.
(b) Balanced Budget and Emergency Deficit Control Act of
1985.--Section 251A(b) of the Balanced Budget and Emergency
Deficit Control Act of 1985 (2 U.S.C. 901a(b)) is amended--
(1) by striking all after ``$4,904,000,000.''; and
(2) by adding at the end the following:
``(E) For fiscal year 1999, $5,639,000,000.
``(F) For fiscal year 2000, $6,225,000,000.
``(G) For fiscal year 2001, $6,225,000,000.
``(H) For fiscal year 2002, $6,225,000,000.''.
(c) Reduction in Discretionary Spending Limits.--Beginning
on the date of enactment of this Act, the discretionary
spending limits set forth in section 601(a)(1) of the
Congressional Budget Act of 1974 (2 U.S.C. 665(a)(2) (as
adjusted in conformance with section 251 of the Balanced
Budget and Emergency Deficit Control Act of 1985, and in the
Senate, with section 301 of House Concurrent Resolution 178
(104th Congress)) for fiscal years 2001 through 2002 are
reduced as follows:
(1) For fiscal year 2001, for the discretionary category:
$6,500,000,000 in new budget authority and $6,225,000,000 in
outlays.
(2) For fiscal year 2002, for the discretionary category:
$6,500,000,000 in new budget authority and $6,225,000,000 in
outlays.
Mr. LEAHY. Mr. President, I am pleased to join with Senator Daschle
and other Democratic Senators in introducing S. 15, the Youth Violence,
Crime and Drug Abuse Control Act.
Unfortunately, we need to look no further than today's headlines to
see how badly we need this legislation. Over the past week, the
chilling story has unfolded about Darryl Hall, a 12-year-old boy
violently abducted on his way home from school in our Nation's Capital
and then found dead and frozen
[[Page S339]]
with a gunshot to the back of his head. Three youths have been
arrested, and the police suspect this heinous crime was the work of a
gang. We must put a stop to the brutality of children killing children.
We all want to protect the children of this country from becoming
victims of crime, from joining gangs, and from becoming drug addicts.
This is not a partisan issue. Gang members do not ask their new
recruits whether they are Republican or Democrat. Criminals do not ask
before they strike whether their victim is Republican or Democrat. We
in Congress need to make every effort to work together to get a handle
on this problem.
The Democratic crime initiative we are introducing today builds on
and continues the proven elements of the 1994 crime bill and takes the
next steps to confront the problems of youth crime, drug abuse and gang
violence. Our bill targets youthful offenders for certain punishment
when they commit violent acts and offers helpful treatment when they
need it. Although the number of juveniles arrested for violent crimes
dipped in 1995, these numbers remain at unacceptable levels: sixty-four
percent more juveniles were arrested for violent crimes in 1995 than in
1987.
Concern about the spread of gangs--the violence, the drug dealing and
other criminal activity that gangs leave in their wake--has spread from
our large cities to rural American towns. Indeed, one of the major
factors responsible for the increases in juvenile crime over the past
decade is the growth of criminal street gangs across this country.
Although places such as Los Angeles or New York City first spring to
mind when the word ``gang'' is mentioned, gangs are spreading across
State boundaries and are problems today in many rural areas, as well as
in urban centers.
In my days as a prosecutor, gangs were unheard of in Vermont.
Unfortunately, this is no longer the case. Just last month, the Vermont
Corrections Commissioner reported significant increases in gang
activity occurring in Vermont's prisons. There are also reports that
franchises of the ``los solidos'' gang have set up shop in Rutland, and
the ``la familia'' gang has moved into St. Johnsbury.
Gangs violate the law, corrupt our youth, and disturb the tranquility
of our streets. They are a problem we all now face, and they are a
driving force in the crime wave which this Congress and the Federal
Government must address, in partnership with our States and communities
and with law enforcement authorities at all levels.
What do we propose to do about it? First, we hope to work
constructively with our colleagues from the other side of the aisle to
deal with the problems of gangs and youth violence. We were able to do
that in 1994. Senator Biden, who was then chairman of the Senate
Judiciary Committee, worked tirelessly to ensure passage of the 1994
crime law. The Democratic youth violence bill we introduce today has
been crafted under the leadership of Senator Daschle and reflects the
contributions of Senators Biden, Kohl, Feinstein, Kennedy, and others.
This Democratic leadership bill builds on the successes of the 1994
crime law, which is putting 100,000 cops on our Nation's streets and
increased prevention and intervention efforts to keep children safe
from crime and drugs. Specifically, our bill will:
Expand the community oriented policing [cops] program to put 25,000
more cops on the beat;
Continue the Violence Against Women Act by providing $600 million to
prosecute batterers, shelter 400,000 battered women and their children
and continue the national domestic violence hotline; and
Provide $5 billion to build prisons so that States requiring serious
violent offenders to serve at least 85 percent of their sentences will
be better able to house criminals.
The Democratic crime bill also looks to the future with new laws and
programs to crack down on violent youth and gang violence. These
measures target the use of ``gang paraphernalia'', the spread of gang
``franchises'', the intimidation of witnesses, and reform of the
juvenile justice system, with more protection for the victims of
juvenile crime.
Specifically, our bill would increase the penalties for illegally
using ``gang paraphernalia'' such as body armor and laser sighting
devices. Police officers use kevlar vests to protect their lives and
hence our public safety. When criminals use kevlar vests, they do so to
ensure their escape and enjoy the fruits of their crime. Under this
bill, they would get more time when they are caught using such body
armor in the commission of a crime.
The bill also makes it easier for law enforcement to use clone
beepers to investigate gang activity. Beepers are how gang members and
drug dealers keep in touch with each other. One tool law enforcement
uses to investigate these criminals is a ``clone beeper'', which
displays the same numbers displayed on the beepers of targeted
criminals. This bill will permit law enforcement to get a clone beeper
with the same kind of court order they already use to get information
on the numbers dialed to or from a telephone. This is not to be
confused with wiretap order to eavesdrop on what people say; clone
beepers only give information on the numbers displayed on the beeper.
The bill will speed up the process for law enforcement to get ``clone
beepers.''
Our bill would double the penalty for using physical violence or
threatening physical violence against witnesses, victims or informants.
Nothing undermines our system of justice more than scaring people away
from providing information that helps the police, prosecutors, judges
and juries from finding the truth.
The bill would create a new federal crime for expanding gangs across
State borders and increase penalties for using firearms to commit drug
trafficking crimes and crimes of violence.
We also propose several needed changes in the juvenile justice system
to respond to the need to crack down on violent youth with the full
force of the law. This means increasing the incarceration periods for
juvenile offenders so that they may be incarcerated until the age of 26
instead of mandatory release at the age of 21, streamlining procedures
for prosecuting violent juveniles as adults, and building more prisons
to incarcerate juvenile offenders. In addition, our bill creates new
juvenile gun and drug courts to speed prosecution and sentencing for
drug abuse and weapons violations.
The bill also improves the rights of victims of violent juvenile
crime. Whether the perpetrator of a violent crime is an adult or a
juvenile, the victim should have the opportunity to speak to the
sentencing judge and be entitled to restitution.
Drugs have had a devastating affect on our society. It is clear that
no solution to the juvenile crime problem will work if it does not
address the role that drug abuse and drug trafficking play in creating
unsafe environments for our children. For this reason, the Democratic
crime bill includes measures to prevent and treat youth drug addiction.
These measures include:
Providing $200 million investment in research and development of
medicines to treat heroin and cocaine addiction; and
Extending the drug courts program to force more than 500,000 adult
and juvenile drug offenders to engage in a rigorous drug testing and
drug treatment--or face certain imprisonment.
We also protect children from becoming the victims of crime, with
programs that would keep children like Darryl Hall in safer
environments. These measures include:
Extending the Safe and Drug Free Schools Program; and
Creating after-school ``safe havens'' where children are protected
from drugs, gangs and crime in supervised and productive environments.
In Vermont, we have a very successful program called ``Kids 'N Kops''
that brings school-age children and our law enforcement officers
together in a fun and constructive way. Last spring, the attorney
general attended an annual event in Vermont celebrating this program
and urged that the program be replicated elsewhere in the country. This
bill would help make that a reality.
Youth crime has many causes, and no one bill can solve them all. But
that should not paralyze us from taking sensible steps, in partnership
with states and communities of all sizes and in all regions of the
Nation, to begin turning the tables on youth crime and
[[Page S340]]
drug abuse. This bill proposes a balanced approach combining strong,
targeted law enforcement measures with the prevention efforts that law
enforcement officers on the front lines tell us are necessary to make a
dent in the problem.
In the final stages, the 1994 crime bill was passed over vigorous
partisan obstacles and objections, and crime bills often spark some of
our most partisan debates. But this time, we truly have the opportunity
to pass a bipartisan bill with the active support of a president who is
making youth crime prevention a priority in his second term and who
supports the thrust of what we are proposing in this package. We have
come forward with balanced, common-sense solutions to youth crime. We
should debate and refine this bill as we go along, but these are not
suggestions that should divide us along party lines.
We look forward to working with the administration, our Republican
colleagues and the Department of Justice--which has demonstrated its
ability to move effectively in implementing anti-crime initiatives--in
bringing these proposals to Congress' front burner for debate and
prompt action.
Mr. BREAUX. Mr. President, I am pleased to be an original cosponsor
of this Democratic leadership bill--the youth violence, crime, and drug
abuse bill.
Crime ranks among the highest concerns of all Americans, no matter
what their race or social background. Louisiana is no exception. In a
recent poll, 86 percent of Louisianians said crime is a serious
problem, ranking it as the No. 1 problem in our State. The city of New
Orleans is experiencing a murder rate that is eight times higher than
the national average. People want us and their local governments and
State governments to do something about this problem.
The Federal Bureau of Investigation recently released statistics
showing that serious and violent crime dropped nationwide in the first
half of last year. It is good news, certainly, that violent crime in
this country has gone down; but the bad news is that juvenile crime is
on the increase. Youth crimes, particularly homicides perpetrated with
guns, have skyrocketed. The average cost of incarcerating a juvenile
for just 1 year is somewhere between $23,000 and $64,000. I strongly
support this Democratic legislation because it focuses directly on
juveniles, punishes violent youthful offenders, and provides more
access to treatment and prevention programs.
We must continue the success of the COPS Program and put 25,000 more
cops on the beat. We must create a new Federal crime targeting the
interstate franchising spread of criminal street gangs and other
changes aimed at gang violence, such as increasing the penalties for
witness intimidation. We must extend the drug court program to force
some 500,000 drug offenders to engage in rigorous drug testing and
treatment, or face imprisonment and, finally, we must continue to
provide funds to arrest and prosecute batterers and shelter 400,000
battered women. Mr. President, this bill includes all of these
provisions, and I would urge my colleagues to support it.
For the sake of generations to come, it is time that we attack crime
with a renewed vigor. Today's juvenile criminal becomes tomorrow's
adult criminal. We must pass this legislation.
______
By Mr. DASCHLE (for himself, Mr. Harkin, Mr. Johnson, Mr. Dorgan,
Mr. Conrad, Mr. Kerrey, Mr. Baucus, Mr. Bingaman, Mr. Kohl, Mr.
Feingold, Mr. Leahy, and Mr. Wellstone):
S. 16. A bill to ensure the continued viability of livestock
producers and the livestock industry in the United States, to assure
foreign countries do not deny market access to United States meat and
meat products, and for other purposes; to the Committee on Agriculture,
Nutrition, and Forestry.
the cattle industry improvement act of 1997
Mr. DASCHLE. Mr. President, I am 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. 16
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Cattle
Industry Improvement Act of 1997''.
(b) Table of Contents.--The table of contents of this Act
is as follows:
Sec. 1. Short title; table of contents.
TITLE I--CATTLE INDUSTRY IMPROVEMENT
Sec. 101. Prohibition on noncompetitive practices.
Sec. 102. Domestic market reporting.
Sec. 103. Import reporting.
Sec. 104. Protection of livestock producers against retaliation by
packers.
Sec. 105. Review of Federal agriculture credit policies.
Sec. 106. Streamlining and consolidating the United States food
inspection system.
Sec. 107. Labeling system for meat and meat food products produced in
the United States.
Sec. 108. Sense of Senate on interstate shipment of State-inspected
meat, poultry, and eggs.
Sec. 109. Exchange of cattle production data with Canada.
TITLE II--MARKET ACCESS FOR UNITED STATES MEAT PRODUCTS
Sec. 201. Short title.
Subtitle A--Identification of Countries
Sec. 211. Findings; purposes.
Sec. 212. Identification of countries that deny market access.
Sec. 213. Investigations.
Sec. 214. Authorized actions by United States Trade Representative.
Subtitle B--Review of Third Country Meat Directive
Sec. 221. Findings.
Sec. 223. Definitions.
Sec. 224. Requirement for determination by United States Trade
Representative.
Sec. 225. Request for dispute settlement.
Sec. 226. Review of certain meat facilities.
TITLE I--CATTLE INDUSTRY IMPROVEMENT
SEC. 101. PROHIBITION ON NONCOMPETITIVE PRACTICES.
Section 202 of the Packers and Stockyards Act, 1921 (7
U.S.C. 192), is amended--
(1) in subsection (g), by striking the period at the end
and inserting ``; or''; and
(2) by adding at the end the following:
``(h) Engage in any practice or device that the Secretary
by regulation, after consultation with producers of cattle,
lamb, and hogs, and other persons in the cattle, lamb, and
hog industries, determines is a detrimental noncompetitive
practice or device relating to the price or a term of sale
for the procurement of livestock or the sale of meat or other
byproduct of slaughter.''.
SEC. 102. DOMESTIC MARKET REPORTING.
(a) Persons in Slaughter Business.--Section 203(g) of the
Agricultural Marketing Act of 1946 (7 U.S.C. 1622(g)) is
amended--
(1) by striking ``(g) To'' and inserting the following:
``(g) Collection and Dissemination of Marketing
Information.--
``(1) In general.--To''; and
(2) by adding at the end the following:
``(2) Domestic Market Reporting.--
``(A) Mandatory reporting.--Each person engaged in the
business of slaughtering a quantity of livestock determined
by the Secretary shall report to the Secretary in such manner
as the Secretary shall require, as soon as practicable but
not later than 24 hours after a transaction takes place, such
information relating to prices and the terms of sale for the
procurement of livestock and the sale of meat food products
and livestock products as the Secretary determines is
necessary to carry out this subsection.
``(B) Noncompliance.--Whoever knowingly fails or refuses to
provide to the Secretary information required to be reported
by subparagraph (A) shall be fined under title 18, United
States Code, or imprisoned for not more than 5 years, or
both.
``(C) Voluntary reporting.--The Secretary shall encourage
voluntary reporting by any person engaged in the business of
slaughtering livestock who is not subject to subparagraph
(A).
``(D) Availability of information.--The Secretary shall
make information received under this subsection available to
the public only in the aggregate and shall ensure the
confidentiality of persons providing the information.
``(E) Termination of authority.--The authority provided by
this paragraph shall terminate on the date that is 1 year
after the date of enactment of this paragraph, except that
the Secretary may extend the authority beyond that date if
the Secretary determines the extension is necessary or
appropriate.''.
(b) Elimination of Outmoded Reports.--The Secretary of
Agriculture, after consultation with producers and other
affected parties, shall periodically--
(1) eliminate obsolete reports; and
(2) streamline the collection and reporting of data related
to livestock and meat and livestock products, using modern
data communications technology, to provide information to the
public on as close to a real-time basis as practicable.
(c) Definition of ``Captive Supply''.--For the purpose of
regulations issued by the Secretary of Agriculture relating
to reporting under the Agricultural Marketing Act of 1946 (7
U.S.C. 1621 et seq.) and the Packers and
[[Page S341]]
Stockyards Act, 1921 (7 U.S.C. 181 et seq.), the term
``captive supply'' means livestock obligated to a packer in
any form of transaction in which more than 7 days elapses
from the date of obligation to the date of delivery of the
livestock.
SEC. 103. IMPORT REPORTING.
(a) In General.--The Secretary of Agriculture and the
Secretary of Commerce shall, using modern data communications
technology to provide the information to the public on as
close to a real-time basis as practicable, jointly make
available to the public aggregate price and quantity
information on imported meat food products, livestock
products, and livestock (as the terms are defined in section
2 of the Packers and Stockyards Act, 1921 (7 U.S.C. 182)).
(b) First Report.--The Secretaries shall release to the
public the first report under subsection (a) not later than
60 days after the date of enactment of this Act.
SEC. 104. PROTECTION OF LIVESTOCK PRODUCERS AGAINST
RETALIATION BY PACKERS.
(a) Retaliation Prohibited.--Section 202(b) of the Packers
and Stockyards Act, 1921 (7 U.S.C. 192(b)), is amended--
(1) by striking ``or subject'' and inserting ``subject'';
and
(2) by inserting before the semicolon at the end the
following: ``, or retaliate against any livestock producer on
account of any statement made by the producer (whether made
to the Secretary or a law enforcement agency or in a public
forum) regarding an action of any packer''.
(b) Special Requirements Regarding Allegations of
Retaliation.--Section 203 of the Packers and Stockyards Act,
1921 (7 U.S.C. 193), is amended by adding at the end the
following:
``(e) Special Procedures Regarding Allegations of
Retaliation.--
``(1) Consideration by special panel.--The President shall
appoint a special panel consisting of 3 members to receive
and initially consider a complaint submitted by any person
that alleges prohibited packer retaliation under section
202(b) directed against a livestock producer.
``(2) Complaint; hearing.--If the panel has reason to
believe from the complaint or resulting investigation that a
packer has violated or is violating the retaliation
prohibition under section 202(b), the panel shall notify the
Secretary who shall cause a complaint to be issued against
the packer, and a hearing conducted, under subsection (a).
``(3) Evidentiary standard.--In the case of a complaint
regarding retaliation prohibited under section 202(b), the
Secretary shall find that the packer involved has violated or
is violating section 202(b) if the finding is supported by a
preponderance of the evidence.''.
(c) Damages for Producers Suffering Retaliation.--Section
203 of the Packers and Stockyards Act, 1921 (7 U.S.C. 193)
(as amended by subsection (b)), is amended by adding at the
end the following:
``(f) Damages for Producers Suffering Retaliation.--
``(1) In general.--If a packer violates the retaliation
prohibition under section 202(b), the packer shall be liable
to the livestock producer injured by the retaliation for not
more than 3 times the amount of damages sustained as a result
of the violation.
``(2) Enforcement.--The liability may be enforced either by
complaint to the Secretary, as provided in subsection (e), or
by suit in any court of competent jurisdiction.
``(3) Other remedies.--This subsection shall not abridge or
alter a remedy existing at common law or by statute. The
remedy provided by this subsection shall be in addition to
any other remedy.''.
SEC. 105. REVIEW OF FEDERAL AGRICULTURE CREDIT POLICIES.
The Secretary of Agriculture, in consultation with the
Secretary of the Treasury, the Chairman of the Board of
Governors of the Federal Reserve System, and the Chairman of
the Board of the Farm Credit Administration, shall establish
an interagency working group to study--
(1) the extent to which Federal lending practices and
policies have contributed, or are contributing, to market
concentration in the livestock and dairy sectors of the
national economy; and
(2) whether Federal policies regarding the financial system
of the United States adequately take account of the weather
and price volatility risks inherent in livestock and dairy
enterprises.
SEC. 106. STREAMLINING AND CONSOLIDATING THE UNITED STATES
FOOD INSPECTION SYSTEM.
(a) Preparation.--In consultation with the Secretary of
Agriculture, the Secretary of Health and Human Services, and
all other interested parties, the President shall prepare a
plan to consolidate the United States food inspection system
that ensures the best use of available resources to improve
the consistency, coordination, and effectiveness of the
United States food inspection system, taking into account
food safety risks.
(b) Submission.--Not later than 1 year after the date of
enactment of this Act, the President shall submit to Congress
the plan prepared under subsection (a).
SEC. 107. LABELING SYSTEM FOR MEAT AND MEAT FOOD PRODUCTS
PRODUCED IN THE UNITED STATES.
(a) Labeling.--Section 7 of the Federal Meat Inspection Act
(21 U.S.C. 607) is amended by adding at the end the
following:
``(g) Labeling of Meat of United States Origin.--
``(1) In general.--The Secretary shall develop a system for
the labeling of carcasses, parts of carcasses, and meat
produced in the United States from livestock raised in the
United States, and meat food products produced in the United
States from the carcasses, parts of carcasses, and meat, to
indicate the United States origin of the carcasses, parts of
carcasses, meat, and meat food products.
``(2) Assistance.--The Secretary shall provide technical
and financial assistance to establishments subject to
inspection under this title to implement the labeling system.
``(3) Authorization of appropriations.--There are
authorized to be appropriated such sums as are necessary to
carry out this subsection.''.
SEC. 108. SENSE OF SENATE ON INTERSTATE SHIPMENT OF STATE-
INSPECTED MEAT, POULTRY, AND EGGS.
It is the sense of the Senate that--
(1) not later than 90 days after the date of enactment of
this Act, the Secretary of Agriculture should convene a
public meeting of State inspection officials and all other
interested parties to determine whether the interstate
shipment of State-inspected meat, poultry, and egg products
should be permitted; and
(2) the meeting should be structured to ensure that all
parties are given an opportunity to present their views on
the subject described in paragraph (1).
SEC. 109. EXCHANGE OF CATTLE PRODUCTION DATA WITH CANADA.
The Secretary of Agriculture shall seek immediate
consultation with the Minister of Agriculture of Canada to
provide for a regular monthly exchange of cattle production
data, including cattle on feed, cattle slaughtered, and
cattle and beef shipped to the United States.
TITLE II--MARKET ACCESS FOR UNITED STATES MEAT PRODUCTS
SEC. 201. SHORT TITLE.
This title may be cited as the ``Meat Products Market
Access Act of 1997''.
Subtitle A--Identification of Countries
SEC. 211. FINDINGS; PURPOSES.
(a) Findings.--Congress makes the following findings:
(1) The export of meat and meat products is of vital
importance to the economy of the United States.
(2) In 1995, agriculture was the largest positive
contributor to the United States merchandise trade balance
with a trade surplus of $25,800,000,000.
(3) The growth of exports of United States meat and meat
products should continue to be an important factor in
improving the United States merchandise trade balance.
(4) Increasing exports of meat and meat products will
increase farm income in the United States, thereby protecting
family farms and contributing to the economic well-being of
rural communities in the United States.
(5) Although the United States efficiently produces high-
quality meat and meat products, United States producers
cannot realize their full export potential because many
foreign countries deny fair and equitable market access to
United States agricultural products.
(6) The Foreign Agricultural Service estimates that United
States agricultural exports are reduced by $4,700,000,000
annually due to unjustifiable imposition of sanitary and
phytosanitary measures that deny or limit market access to
United States products.
(7) The denial of fair and equitable market access for
United States meat and meat products impedes the ability of
United States farmers to export their products, thereby
harming the economic interests of the United States.
(b) Purposes.--The purposes of this subtitle are--
(1) to reduce or eliminate foreign unfair trade practices
and to remove constraints on fair and open trade in meat and
meat products;
(2) to ensure fair and equitable market access for exports
of United States meat and meat products; and
(3) to promote free and fair trade in meat and meat
products.
SEC. 212. IDENTIFICATION OF COUNTRIES THAT DENY MARKET
ACCESS.
(a) Identification Required.--Chapter 8 of title I of the
Trade Act of 1974 is amended by adding at the end the
following:
``SEC. 183. IDENTIFICATION OF COUNTRIES THAT DENY MARKET
ACCESS FOR MEAT AND MEAT PRODUCTS.
``(a) In General.--Not later than the date that is 30 days
after the date on which the annual report is required to be
submitted to Congressional committees under section 181(b),
the United States Trade Representative (hereafter in this
section referred to as the `Trade Representative') shall
identify--
``(1) those foreign countries that--
``(A) deny fair and equitable market access to United
States meat and meat products, or
``(B) apply standards for the importation of meat and meat
products from the United States that are not related to
public health concerns or cannot be substantiated by reliable
analytical methods; and
``(2) those foreign countries identified under paragraph
(1) that are determined by the Trade Representative to be
priority foreign countries.
``(b) Special Rules for Identifications.--
``(1) Criteria.--In identifying priority foreign countries
under subsection (a)(2), the
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Trade Representative shall only identify those foreign
countries--
``(A) that engage in or have the most onerous or egregious
acts, policies, or practices that deny fair and equitable
market access to United States meat and meat products,
``(B) whose acts, policies, or practices described in
subparagraph (A) have the greatest adverse impact (actual or
potential) on the relevant United States products, and
``(C) that are not--
``(i) entering into good faith negotiations, or
``(ii) making significant progress in bilateral or
multilateral negotiations,
to provide fair and equitable market access to United States
meat and meat products.
``(2) Consultation and consideration requirements.--In
identifying priority foreign countries under subsection
(a)(2), the Trade Representative shall--
``(A) consult with the Secretary of Agriculture and other
appropriate officers of the Federal Government, and
``(B) take into account information from such sources as
may be available to the Trade Representative and such
information as may be submitted to the Trade Representative
by interested persons, including information contained in
reports submitted under section 181(b) and petitions
submitted under section 302.
``(3) Factual basis requirement.--The Trade Representative
may identify a foreign country under subsection (a)(1) only
if the Trade Representative finds that there is a factual
basis for the denial of fair and equitable market access as a
result of the violation of international law or agreement, or
the existence of barriers, referred to in subsection (d)(3).
``(4) Consideration of historical factors.--In identifying
foreign countries under paragraphs (1) and (2) of subsection
(a), the Trade Representative shall take into account--
``(A) the history of meat and meat products trade relations
with the foreign country, including any previous
identification under subsection (a)(2), and
``(B) the history of efforts of the United States, and the
response of the foreign country, to achieve fair and
equitable market access for United States meat and meat
products.
``(c) Revocations and Additional Identifications.--
``(1) Authority to act at any time.--If information
available to the Trade Representative indicates that such
action is appropriate, the Trade Representative may at any
time--
``(A) revoke the identification of any foreign country as a
priority foreign country under this section, or
``(B) identify any foreign country as a priority foreign
country under this section.
``(2) Revocation reports.--The Trade Representative shall
include in the semiannual report submitted to the Congress
under section 309(3) a detailed explanation of the reasons
for the revocation under paragraph (1) of the identification
of any foreign country as a priority foreign country under
this section.
``(d) Fair and Equitable Market Access.--For purposes of
this section, a foreign country denies fair and equitable
market access if the foreign country effectively denies
access to a market for a product through the use of laws,
procedures, practices, or regulations which--
``(1) violate provisions of international law or
international agreements to which both the United States and
the foreign country are parties, or
``(2) constitute discriminatory nontariff trade barriers.
``(e) Publication.--The Trade Representative shall publish
in the Federal Register a list of foreign countries
identified under subsection (a) and shall make such revisions
to the list as may be required by reason of the action under
subsection (c).
``(f) Annual Report.--The Trade Representative shall, not
later than the date by which countries are identified under
subsection (a), transmit to the Committee on Ways and Means
and the Committee on Agriculture of the House of
Representatives and the Committee on Finance and the
Committee on Agriculture, Nutrition, and Forestry of the
Senate, a report on the actions taken under this section
during the 12 months preceding such report, and the reasons
for such actions, including a description of progress made in
achieving fair and equitable market access for United States
meat and meat products.''.
(b) Clerical Amendment.--The table of contents for the
Trade Act of 1974 is amended by inserting after the item
relating to section 182 the following:
``Sec. 183. Identification of countries that deny market access for
meat and meat products.''.
SEC. 213. INVESTIGATIONS.
(a) Investigation Required.--Subparagraph (A) of section
302(b)(2) of the Trade Act of 1974 (19 U.S.C. 2412(b)(2)) is
amended by inserting ``or 183(a)(2)'' after ``section
182(a)(2)'' in the matter preceding clause (i).
(b) Conforming Amendment.--Subparagraph (D) of section
302(b)(2) of such Act is amended by inserting ``concerning
intellectual property rights that is'' after ``any
investigation''.
SEC. 214. AUTHORIZED ACTIONS BY UNITED STATES TRADE
REPRESENTATIVE.
Section 301(c)(1) of the Trade Act of 1974 (19 U.S.C.
2411(c)(1)) is amended--
(1) by striking ``or'' at the end of subparagraph (C);
(2) by striking the period at the end of subparagraph
(D)(iii)(II) and inserting ``; or''; and
(3) by adding at the end the following:
``(E) with respect to an investigation of a country
identified under section 183(a)(1), to request that the
Secretary of Agriculture (who, upon receipt of such a
request, shall) direct the Food Safety and Inspection Service
of the Department of Agriculture to review certifications for
the facilities of such country that export meat and other
agricultural products to the United States.''.
Subtitle B--Review of Third Country Meat Directive
SEC. 221. FINDINGS.
Congress makes the following findings:
(1) The European Union's Third Country Meat Directive has
been used to decertify more than 400 United States facilities
exporting beef and pork products to the European Union even
though United States health inspection procedures are
equivalent to those provided for in the Third Country Meat
Directive.
(2) An effect of the decertifications is to prohibit the
importation of United States beef and pork products into the
European Union.
(3) As a result of the decertifications, the highly
competitive United States pork industry loses as much as
$60,000,000 each year from trade with European Union
countries.
(4) In July 1987 and November 1990, at the request of
affected United States industries, the United States
initiated investigations under section 301 of the Trade Act
of 1974 into the European Union's administration of the Third
Country Meat Directive and sought resolution of the meat and
pork trade problems through the dispute settlement process
established under the General Agreement on Tariffs and Trade.
(5) The United States Trade Representative preliminarily
concluded on October 10, 1992, that the European Union's
administration of the Third Country Meat Directive created a
burden on and restricted United States commerce.
(6) Bilateral talks, initiated as a result of that finding,
resulted in an Exchange of Letters in which the United States
and the European Union concluded that the meat inspection
systems of the United States and the European Union provided
``equivalent safeguards against public health risks'' and
agreed to take steps to resolve remaining differences
regarding meat inspection.
(7) Even though the United States terminated the section
301 investigation as a result of the Exchange of Letters, the
United States determined that the practices under
investigation would have been actionable if an acceptable
agreement had not been reached.
(8) United States meat and pork producers have displayed
consistent interest in exporting products to the European
Union and have undertaken substantial investment to take the
steps specified by the Exchange of Letters.
(9) The European Union has failed to acknowledge changes in
plant safety and inspection procedures undertaken in the
United States specifically at the European Union's request
and has not fulfilled its obligation to inspect and relist
United States producers who have taken the steps specified by
the Exchange of Letters.
(10) The actions of the European Union in conducting United
States plant inspections places the European Union in
violation of commitments made in the Exchange of Letters.
(11) The European Union, in addition to being a party to
the Exchange of Letters, is a signatory to GATT 1994 and to
the Agreement on the Application of Sanitary and
Phytosanitary Measures, which requires that meat and pork
inspection procedures under Department of Agriculture
regulations be treated as equivalent to inspection procedures
required by the European Union under the Third Country Meat
Directive.
(12) Whenever a foreign country is not satisfactorily
implementing an international trade measure or agreement, the
United States Trade Representative is required under section
306(b)(1) of the Trade Act of 1974 (19 U.S.C. 2416(b)(1)) to
determine the actions to be taken under section 301(a) of
such Act.
SEC. 223. DEFINITIONS.
For purposes of this subtitle:
(1) Exchange of letters.--The term ``Exchange of Letters''
means the exchange of letters concerning the application of
the Community Third Country Directive, signed in May 1991 and
November 1992, which constitute the agreement between the
United States and the European Economic Community regarding
the Third Country Meat Directive.
(2) GATT 1994.--The term ``GATT 1994'' means the General
Agreement on Tariffs and Trade annexed to the WTO Agreement.
(3) Third country meat directive; Community third country
directive.--The terms ``Third Country Meat Directive'' and
``Community Third Country Directive'' mean the European
Union's Council Directive 72/462/EEC relating to inspection
and certification of slaughter and processing plants that
export meat and pork products to the European Union.
(4) WTO agreement.--The term ``WTO Agreement'' means the
Agreement establishing the World Trade Organization entered
into on April 15, 1994.
[[Page S343]]
SEC. 224. REQUIREMENT FOR DETERMINATION BY UNITED STATES
TRADE REPRESENTATIVE.
Not later than 30 days after the date of enactment of this
Act, the United States Trade Representative shall determine,
for purposes of section 306(b)(1) of the Trade Act of 1974,
whether the European Union has failed to implement
satisfactorily its obligations under the Exchange of Letters,
the Agreement on the Application of Sanitary and
Phytosanitary Measures, or any other Agreement.
SEC. 225. REQUEST FOR DISPUTE SETTLEMENT.
If the United States Trade Representative determines under
section 224 that the European Union has failed to implement
satisfactorily its obligations under the Exchange of Letters,
the Agreement on the Application of Sanitary and
Phytosanitary Measures, or any other agreement, the United
States Trade Representative shall promptly request
proceedings on the matter under the formal dispute settlement
procedures applicable to the agreement.
SEC. 226. REVIEW OF CERTAIN MEAT FACILITIES.
(a) Review by Food Safety and Inspection Service.--If the
United States Trade Representative determines pursuant to
section 224 that the European Union has failed to implement
satisfactorily its obligations under the Exchange of Letters,
the Agreement on the Application of Sanitary and
Phytosanitary Measures, or any other Agreement, the United
States Trade Representative shall request the Secretary of
Agriculture (who, upon receipt of the request, shall) direct
the Food Safety and Inspection Service of the Department of
Agriculture to review certifications for European Union
facilities that import meat and other agricultural products
into the United States.
(b) Relationship to USTR Authority.--The review authorized
under subsection (a) is in addition to the authority of the
United States Trade Representative to take actions described
in section 301(c)(1) of the Trade Act of 1974 (19 U.S.C.
2411(c)(1)).
______
By Mr. DASCHLE (for himself, Mr. Breaux, Mr. Kennedy, Mr. Dodd,
Ms. Mikulski, Mr. Dorgan, Mr. Johnson, Mr. Rockefeller, Mr.
Kerry, Ms. Moseley-Braun, Mr. Reid, and Mr. Lautenberg):
S. 17. A bill to consolidate certain Federal job training programs by
developing a system of vouchers to provide to dislocated workers and
economically disadvantaged adults the opportunity to choose the type of
job training that most closely meets the needs of such workers and
adults, by establishing a one-stop career center system to provide high
quality job training and employment-related services, and for other
purposes; to the Committee on Labor and Human Resources.
the working americans opportunity act
Mr. DASCHLE. 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. 17
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Working
Americans Opportunity Act''.
(b) Table of Contents.--The table of contents for this Act
is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Findings and purposes.
Sec. 3. Definitions.
TITLE I--JOB TRAINING VOUCHERS
Sec. 101. Establishment.
Sec. 102. Individual choice.
Sec. 103. Eligibility.
Sec. 104. Obtaining a voucher.
Sec. 105. Oversight and accountability.
Sec. 106. Eligibility requirements for job training providers.
Sec. 107. Evaluation of voucher system.
Sec. 108. Apportionment of funds.
TITLE II--CONSOLIDATION OF FEDERAL JOB TRAINING PROGRAMS
Sec. 201. Consolidation of programs.
TITLE III--EMPLOYMENT-RELATED INFORMATION AND SERVICES THROUGH ONE-STOP
CAREER CENTERS
Sec. 301. One-stop career centers.
Sec. 302. Access to information.
Sec. 303. Direct loans to United States workers.
TITLE IV--REPORTS AND PLANS
Sec. 401. Consolidation and streamlining.
Sec. 402. Report relating to income support.
TITLE V--GENERAL PROVISIONS
Sec. 501. Authorization of appropriations.
Sec. 502. Effective date.
SEC. 2. FINDINGS AND PURPOSES.
(a) Findings.--Congress finds that--
(1) increasing international competition, technological
advances, and structural changes in the economy of the United
States present new challenges to private firms and public
policymakers in creating a skilled workforce with the ability
to adapt to change and progress;
(2) a substantial number of workers in the United States
lose jobs due to the constantly changing world and national
economies rather than cyclical downturns, with more than
2,000,000 full-time workers permanently displaced annually
due to plant closures, production cutbacks, and layoffs;
(3) the current response of the Federal Government to
dislocation and structural employment is a patchwork of
categorical programs, with varying eligibility requirements
and different sets of services and benefits;
(4) the lack of coherence among existing Federal job
training programs creates administrative and regulatory
obstacles that hamper the efforts of individuals who are
seeking new jobs or reemployment;
(5) enacted in 1944, the Servicemen's Readjustment Act of
1944, (commonly known as the ``G.I. Bill of Rights''), helped
millions of World War II veterans and, later, Korean and
Vietnam War veterans, finance college educations and assisted
in building the middle class of the United States;
(6) restructuring the current job training system, with
respect to dislocated and disadvantaged workers, in a manner
that is conceptually similar to the G.I. Bill of Rights will
help millions of workers in the United States to become more
competitive in today's dynamic world economy, in which most
of the workers--
(A) can expect to move to new jobs a number of times,
voluntarily or by layoff; and
(B) must upgrade their skills continuously;
(7) success in this ever-changing environment depends, in
part, on an individual's effective management of the
individual's career based on personal choice and reliable
information;
(8) there is insufficient job market information and
assistance regarding access to job training opportunities
that lead to good employment opportunities;
(9) only a small fraction of individuals eligible for
current Federal job training are now served, and by removing
obstacles and layers of administrative costs, more funds will
be made available to individuals to enable such individuals
to receive the job training of their choice; and
(10) while the Federal Government proceeds to create a new
marketplace for job training, the Federal Government must
also maintain a commitment to providing intensive services to
assist individuals who are economically disadvantaged adults.
(b) Purposes.--The purposes of this Act are to--
(1) enhance the choices available to dislocated workers,
and economically disadvantaged adults, who want to upgrade
their work skills and learn new skills to compete in a
changing economy;
(2) enable individuals to make choices that are best for
the careers of such individuals;
(3) consolidate job training programs and provide a simple
voucher system that relies on individual choice and provides
high quality job market information;
(4) allow an individual to tailor job training and
education to the personal needs of such individual so that
such individual may remain in long-term employment yet have
the means to be flexible when necessary; and
(5) create a system that provides timely and reliable
information to individuals to use to assist such individuals
in making the best choices with respect to the use of
vouchers for job training.
SEC. 3. DEFINITIONS.
As used in this Act:
(1) Community-based organization.--The term ``community-
based organization'' means a private nonprofit organization
that--
(A) is representative of a community or a significant
segment of a community; and
(B) provides job training and employment-related services.
(2) Dislocated worker.--
(A) In general.--The term ``dislocated worker'' means an
individual who--
(i) has been terminated or laid off, or has received a
notice of termination or layoff, from employment, is eligible
for or has exhausted entitlement to unemployment
compensation, and is unlikely to return to a previous
industry or occupation;
(ii) has been terminated or laid off, or has received a
notice of termination or layoff, from employment as a result
of any permanent closure of, or any substantial layoff at, a
plant, facility, or enterprise;
(iii) has been unemployed long-term and has limited
opportunities for employment or reemployment in the same or a
similar occupation in the area in which such individual
resides, including an older individual who may have
substantial barriers to employment by reason of age;
(iv) was self-employed (including a farmer, a rancher, and
a fisher) and is unemployed as a result of general economic
conditions in the community in which such individual resides
or because of a natural disaster, subject to regulations
prescribed by the Secretary; or
(v) is an employee of the Department of Defense or of a
private defense contractor who has been terminated or laid
off, or has received a notice of termination or layoff, from
employment as a result of the closure or realignment of a
military installation, or a reduction in defense spending as
determined by the Secretary of Defense.
(B) Special rule for self-employed individuals.--The
Secretary of Labor shall establish categories of self-
employed individuals and of economic conditions and natural
disasters to which subparagraph (A)(iv) applies.
[[Page S344]]
(C) Special rule for displaced homemakers.--The term
``dislocated worker'' shall, for the purpose of applying
provisions related to job training and employment-related
services under titles I and III within a State, include a
displaced homemaker (as defined by the Secretary of Labor in
regulation), if the State determines that such definition of
the term is appropriate and will not adversely affect the
delivery of services to other dislocated workers in the
State.
(3) Economically disadvantaged adult.--The term
``economically disadvantaged adult'' means an individual who
is age 18 or older and who had received an income, or is a
member of a family that had received a total family income,
for the 6-month period prior to application for the activity
involved (exclusive of unemployment compensation, child
support payments, and welfare payments) that, in relation to
family size, does not exceed the higher of--
(A) the poverty line (as defined by the Office of
Management and Budget, and revised annually in accordance
with section 673(2) of the Community Services Block Grant Act
(42 U.S.C. 9902(2)), for an equivalent period; or
(B) 70 percent of the lower living standard income level,
for an equivalent period.
(4) Job training provider.--The term ``job training
provider'' means a public agency, private nonprofit
organization, or private for-profit entity that delivers job
training.
(5) Service delivery area.--The term ``service delivery
area'' means an area established under section 101 of the Job
Training Partnership Act (29 U.S.C. 1511).
(6) State.--The term ``State'', used to refer to a
jurisdiction, means any of the several States of the United
States, the District of Columbia, the Commonwealth of Puerto
Rico, the United States Virgin Islands, Guam, American Samoa,
the Commonwealth of the Northern Mariana Islands, the
Republic of the Marshall Islands, the Federated States of
Micronesia, and the Republic of Palau.
(7) Workforce development entity.--The term ``workforce
development entity'' means a private industry council as
described in section 102 of the Job Training Partnership Act
(29 U.S.C. 1512), or such successor entity as may be
established by Federal statutory law specifically to serve as
such entity.
TITLE I--JOB TRAINING VOUCHERS
SEC. 101. ESTABLISHMENT.
The Secretary of Labor shall, pursuant to the requirements
of this title, establish a job training system that provides
vouchers to individuals for the purpose of enabling the
individuals to obtain job training.
SEC. 102. INDIVIDUAL CHOICE.
(a) In General.--Upon notification of approval of an
application submitted under section 104, an individual may
receive a voucher for a 2-year period, beginning on the date
on which the application is approved.
(b) Use of Vouchers for Job Training.--
(1) In general.--An individual who is a recipient of a
voucher under subsection (a) may use such voucher to pay for
job training obtained from a job training provider that meets
the requirements of section 106.
(2) Authorized job training.--The job training described in
paragraph (1) may include training through--
(A) associate degree and nondegree programs at--
(i) two- and four-year colleges;
(ii) vocational and technical education schools;
(iii) private for-profit and not-for-profit training
organizations;
(iv) public agencies and schools; and
(v) community-based organizations;
(B) employer work-based training programs; and
(C) in the case of individuals who are economically
disadvantaged adults, preemployment training programs.
SEC. 103. ELIGIBILITY.
An individual shall be eligible to receive a voucher under
this title if such individual is--
(1) a dislocated worker; or
(2) an economically disadvantaged adult.
SEC. 104. OBTAINING A VOUCHER.
(a) Application.--An individual who desires to receive a
voucher under this title shall submit an application to the
State at such time, in such manner, and accompanied by such
information as the State may reasonably require.
(b) Assistance to Applicants.--
(1) One-stop career centers.--Each one-stop career center
established under section 301 shall--
(A) provide applications for vouchers under this title to
interested individuals, assist such individuals in completing
such applications, and collect completed applications for
determination of eligibility;
(B) provide performance-based information to the applicants
relating to job training providers eligible to receive
payment by vouchers in accordance with section 106;
(C) provide information to the applicants on--
(i) the local economy and availability of employment;
(ii) profiles of local industries; and
(iii) details of local labor market demand; and
(D) carry out such other duties relating to the voucher
system as may be specified in regulations issued by the
Secretary of Labor.
(2) Conflict of interest standards.--The Secretary of Labor
shall issue regulations establishing procedures to ensure
that a one-stop career center that is operated by an entity
that is concurrently an eligible job training provider under
the voucher system provides information to the applicants
relating to the other eligible job training providers in the
service delivery area in an objective and equitable manner.
SEC. 105. OVERSIGHT AND ACCOUNTABILITY.
(a) In General.--Not later than 6 months after the date of
enactment of this Act, the Secretary of Labor shall issue
regulations that--
(1) specify the--
(A) voucher application requirements;
(B) form of the vouchers;
(C) use of the vouchers;
(D) method of redemption of the vouchers;
(E) most expeditious and effective process of distribution
(consistent with the findings and purposes of this Act) of
the vouchers to eligible individuals; and
(F) the arrangements necessary to phase in the voucher
system in each State in a timely manner;
(2) specify the duties and responsibilities of job training
providers under a voucher system under this title;
(3) specify the Federal and State responsibilities in
oversight of job training providers, including the
enforcement responsibilities and the determination of
administrative costs with respect to the voucher system under
this title; and
(4) specify the manner in which economically disadvantaged
adults will receive adequate counseling and support services
necessary to take full advantage of voucher assistance under
this title.
(b) Public Comment.--In issuing regulations under
subsection (a), the Secretary of Labor shall provide an
opportunity for comment from the public, including the
business community, labor organizations, and community-based
organizations.
SEC. 106. ELIGIBILITY REQUIREMENTS FOR JOB TRAINING
PROVIDERS.
(a) Eligibility Requirements.--A job training provider
shall be eligible to receive payment by vouchers under this
title if such provider--
(1) is--
(A) eligible to participate in programs under title IV of
the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.); or
(B) determined to be eligible under the procedure described
in subsection (b); and
(2) provides the performance-based information required
pursuant to subsection (c).
(b) Alternative Eligibility Procedure.--
(1) In general.--The State shall establish an alternative
eligibility procedure for job training providers desiring to
receive payment by vouchers under this title, but that are
not eligible to participate in programs under title IV of the
Higher Education Act of 1965.
(2) Procedure requirements.--In establishing the procedure
described in paragraph (1), the State shall establish minimum
acceptable levels of performance for job training providers
based on factors and guidelines developed by the Secretary of
Labor in consultation with the Secretary of Education. Such
factors shall be comparable in rigor and scope to the
provisions of part H of title IV of the Higher Education Act
of 1965 (20 U.S.C. 1099a et seq.) that are used to determine
the eligibility of an institution of higher education to
participate in programs under such title and are appropriate
to the type of job training provider seeking eligibility
under this subsection and the nature of the job training to
be provided.
(3) Limitation.--Notwithstanding paragraph (1), if the
participation of an institution of higher education in any of
the programs under title IV of the Higher Education Act of
1965 is terminated, such institution shall not be eligible to
receive funds under this title for a period of 2 years
beginning on the date of such termination.
(c) Performance-Based Information.--
(1) Contents.--The Secretary of Labor shall identify
performance-based information that is to be submitted by job
training providers desiring to receive payment by vouchers
under this title. Such information may include information
relating to--
(A) the percentage of students completing the programs
conducted by a job training provider;
(B) the rates of licensure of graduates of the programs
conducted by such job training provider;
(C) the percentage of graduates of the programs conducted
by such job training provider that meet industry-specific
skill standards;
(D) the rates of placement and retention in employment, and
earnings of, the graduates of the programs conducted by such
job training provider;
(E) the percentage of graduates of the programs conducted
by such job training provider who obtained employment in an
occupation related to such programs conducted by such
provider; and
(F) the warranties or guarantees provided by such job
training provider relating to the skill levels or employment
to be attained by graduates of the programs conducted by such
provider.
(2) Additions.--The State may, pursuant to the approval of
the Secretary of Labor, prescribe additional performance-
based information that shall be submitted by job training
providers pursuant to this subsection.
(d) Administration.--
(1) State agency.--The Governor shall designate a State
agency to collect, verify, and
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disseminate the performance-based information submitted
pursuant to subsection (c).
(2) Application.--A job training provider desiring to be
eligible to receive funds under this title shall submit the
information required under subsection (c) to the State agency
designated under paragraph (1) at such time and in such form
as such State agency may require.
(3) List of eligible providers.--The State agency
designated under paragraph (1) shall compile a list of
eligible job training providers, accompanied by the
performance-based information submitted, and disseminate such
list and information to the one-stop career centers
established under section 301, and other appropriate entities
within the State.
(4) Accuracy of information.--
(A) In general.--If the State agency determines that a job
training provider submitted inaccurate performance-based
information under this subsection, such provider shall be
disqualified from receiving funds under this title for a
period of 2 years beginning on the date of such
determination, unless such provider can demonstrate, to the
satisfaction of the State agency designated pursuant to
paragraph (1), that the information was provided in good
faith.
(B) Appeal.--The State shall establish a procedure for a
job training provider to appeal a determination by a State
agency that results in a disqualification under subparagraph
(A). Such procedure shall provide an opportunity for a
hearing and include appropriate time limits to ensure prompt
resolution of the appeal.
(5) Assistance in developing information.--The State agency
designated under paragraph (1) may provide technical
assistance to a job training provider in developing the
performance-based information required under subsection (c).
Such assistance may include facilitating the utilization of
State administrative records, such as unemployment
compensation wage records, and conducting other appropriate
coordination activities.
(6) Consultation.--The Secretary of Labor shall consult
with the Secretary of Education regarding the eligibility of
institutions of higher education to participate in programs
under this title.
SEC. 107. EVALUATION OF VOUCHER SYSTEM.
The Secretary of Labor shall annually--
(1) monitor the effectiveness of the voucher system;
(2) evaluate the benefit of such system to voucher
recipients under this title and the taxpayer; and
(3) submit information obtained from such evaluation to the
appropriate committees of Congress.
SEC. 108. APPORTIONMENT OF FUNDS.
(a) In General.--The Secretary of Labor shall, without in
any way reducing the commitment of, or the level of effort
by, the Federal Government to improve the job training,
employment, and earnings of all workers and jobseekers
(particularly in hard-to-serve communities), apportion sums
appropriated under section 501 to each State for each fiscal
year in accordance with subsections (b) and (c), to enable
States and service delivery areas in the States to carry out
this title and title III.
(b) Allocation by Category.--
(1) Funding for dislocated workers.--From the sums
appropriated pursuant to section 501 for each fiscal year,
the Secretary of Labor shall determine the portion of the
sums to be made available for providing job training and
employment-related services for dislocated workers under this
title and title III, which shall be not less than the total
amount made available to the States for such purpose for
fiscal year 1997. The Secretary shall apportion such portion
among the States, based on consideration of factors described
in subsection (c), as appropriate.
(2) Funding for economically disadvantaged adults.--From
the sums appropriated pursuant to section 501 for each fiscal
year, the Secretary of Labor shall determine the portion of
the sums to be made available for providing job training and
employment-related services for economically disadvantaged
adults under this title and title III. The Secretary shall
apportion such total amount among the States, based on
consideration of factors described in subsection (c), as
appropriate.
(c) Consideration of Factors for Apportionment to States.--
The apportionment of the portions described in subsection (b)
by the Secretary to each State shall be based on the
following factors:
(1) The relative number of unemployed individuals who
reside in each State as compared to the total number of
unemployed individuals in all the States.
(2) The relative excess number of unemployed individuals
who reside in each State as compared to the total excess
number of unemployed individuals in all the States.
(3) The relative number of individuals who have been
unemployed for 15 weeks or more and who reside in each State
as compared to the total number of such individuals in all
the States.
(4) The relative number of economically disadvantaged
adults who reside in each State as compared to the total
number of such adults in all the States.
(d) State Reserve.--
(1) Dislocated worker funds.--From the amount apportioned
to each State from the portion described in subsection
(b)(1), the State may reserve to carry out State activities,
including rapid response assistance (as described in section
314(b) of the Job Training Partnership Act, as in existence
on the date of enactment of this Act (29 U.S.C. 1661c(b)))
and State administration, an amount that is not greater than
the proportion of funds reserved for State activities under
title III of the Job Training Partnership Act, as in
existence on such date (29 U.S.C. 1651 et seq.) for fiscal
year 1997.
(2) Economically disadvantaged adults.--From the amount
apportioned to each State from the portion described in
subsection (b)(2), the State may reserve to carry out State
activities, including State administration, an amount that is
not greater than the proportion of funds reserved for State
activities under part A of title II of the Job Training
Partnership Act, as in existence on the date of enactment of
this Act (29 U.S.C. 1601 et seq.) for fiscal year 1997.
(e) Consideration of Factors for Apportionment to Service
Delivery Areas.--The apportionment of amounts received by
each State under subsection (c), and not reserved under
subsection (d), to service delivery areas within such State
shall be based on the following factors:
(1) The relative number of unemployed individuals who
reside in each service delivery area within the State as
compared to the total number of unemployed individuals in all
such service delivery areas.
(2) The relative excess number of unemployed individuals
who reside in each service delivery area within the State as
compared to the total excess number of unemployed individuals
in all such service delivery areas.
(3) The relative number of individuals who have been
unemployed for 15 weeks or more and who reside in each
service delivery area within the State as compared to the
total number of such individuals in all such service delivery
areas.
(4) The relative number of economically disadvantaged
adults who reside in each service delivery area within the
State as compared to the total number of such adults in all
such service delivery areas.
(f) Funds for Vouchers.--Not less than 75 percent of funds
apportioned to a service delivery area under subsection (e)
and used for job training under this Act by the service
delivery area shall be made available in the form of vouchers
to individuals in such area who are eligible under section
103.
(g) Definition.--For purposes of this section, the term
``excess number of unemployed individuals'' means the number
that represents unemployed individuals in excess of 4.5
percent of the civilian labor force in a State or service
delivery area, as appropriate.
TITLE II--CONSOLIDATION OF FEDERAL JOB TRAINING PROGRAMS
SEC. 201. CONSOLIDATION OF PROGRAMS.
(a) Sense of Congress.--It is the sense of Congress that
the consolidation and streamlining of Federal job training
programs should be accomplished without in any way reducing
the commitment of, or the level of effort provided by, the
Federal Government to improve the job training, employment,
and earnings of all workers and jobseekers (particularly in
hard-to-serve communities).
(b) Repeals of Federal Job Training Programs.--The
following provisions are repealed:
(1) Section 6(d)(4) of the Food Stamp Act of 1977 (7 U.S.C.
2015(d)(4)).
(2) Section 106(b)(7) of the Job Training Partnership Act
(29 U.S.C. 1516(b)(7)).
(3) Section 123 of such Act (29 U.S.C. 1533).
(4) Section 204(d) of such Act (29 U.S.C. 1604(d)).
(5) Part A of title II of such Act (29 U.S.C. 1601 et
seq.).
(6) Section 302(c) of such Act (29 U.S.C. 1652(c)).
(7) Part A of title III of such Act (29 U.S.C. 1661 et
seq.).
(8) Section 325 of such Act (29 U.S.C. 1662d).
(9) Section 325A of such Act (29 U.S.C. 1662d-1).
(10) Section 326 of such Act (29 U.S.C. 1662e).
(11) Sections 301 through 303 of such Act (29 U.S.C. 1651
et seq.).
(12) The Displaced Homemakers Self-Sufficiency Assistance
Act (29 U.S.C. 2301 et seq.).
(13) Subtitle C of title VII of the Stewart B. McKinney
Homeless Assistance Act (42 U.S.C. 11441 et seq.).
(14) Subchapter I of chapter 421 of title 49, United States
Code.
(15) Title II of Public Law 95-250 (92 Stat. 172).
TITLE III--EMPLOYMENT-RELATED INFORMATION AND SERVICES THROUGH ONE-STOP
CAREER CENTERS
SEC. 301. ONE-STOP CAREER CENTERS.
(a) Establishment.--Each service delivery area receiving
funds under this Act shall develop and implement a network of
one-stop career centers for the area to provide access for
jobseekers, workers, and businesses to a comprehensive array
of high quality job training described in section 102(b)(2)
and employment-related services (including provision of
information) described in subsections (f) and (g).
(b) Procedures.--Each workforce development entity for a
service delivery area, in conjunction with the appropriate
local chief elected official for the area, shall negotiate
with the State a method for establishing one-stop career
centers (including designating one-stop career center
operators) for the area, consistent with criteria established
by the Secretary of Labor.
(c) Eligible Entities.--Each entity within the service
delivery area that provides the
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services specified in subsection (f) or (g) shall be eligible
to be designated as a one-stop career center operator.
(d) Performance Standards.--The Secretary of Labor shall
establish a performance standard system for assessing the
performance of each one-stop career center operator.
(e) Period of Selection.--Each one-stop career center
operator shall be designated for 2-year period. Every 2
years, the workforce development entity for a service
delivery area shall reevaluate the designation of one-stop
career center operators for the area, based on performance
under the standards established under subsection (d).
(f) Employment-Related Services to Individuals.--Each one-
stop career center for a service delivery area may make
available--
(1) outreach to make individuals aware of, and encourage
the use of, services available from workforce development
programs operating in the service delivery area;
(2) intake and orientation to the information and services
available through the one-stop career center;
(3) assistance in filing initial claims for unemployment
compensation;
(4) initial assessments (including appropriate testing) of
the skill levels and service needs of individuals, including
basic skills, occupational skills, work experience,
employability, interest, aptitude, and supportive service
needs;
(5) job search assistance, including resume and interview
preparation and workshops;
(6) information relating to the supply, demand, price, and
quality of job training available in each service delivery
area in the State involved, including performance-based
information provided pursuant to section 106(c);
(7) job market information, including--
(A) data on the local economy and availability of
employment;
(B) profiles of local industries;
(C) details of local labor market demand; and
(D) local demographic and socioeconomic characteristics;
(8) referral to appropriate job training and employment
services, and to other services described in this subsection,
in the service delivery area;
(9) supportive services, including child care;
(10) job development; and
(11) counseling.
(g) Employment-Related Services to Employers.--Each one-
stop career center for a service delivery area may provide to
employers, at the request of the employers--
(1) information relating to supply, demand, price, and
quality of job training available in each service delivery
area in the State;
(2) customized screening and referral of individuals for
employment;
(3) customized assessment of skills of the workers of the
employer;
(4) an analysis of the skill needs of the employer; and
(5) other specialized employment and training services.
SEC. 302. ACCESS TO INFORMATION.
(a) Findings.--Congress finds that accurate, timely, and
relevant data regarding employment, job training, job skills,
and job training opportunities are useful for individuals
making choices about the careers of such individuals.
(b) Authority.--The Secretary of Labor is authorized to
make arrangements to develop and provide through one-stop
career centers and other appropriate mechanisms relevant job
market information to interested individuals, including
voucher recipients under title I, jobseekers, employers, and
workers.
SEC. 303. DIRECT LOANS TO UNITED STATES WORKERS.
(a) Findings.--Congress finds that the William D. Ford
Federal Direct Loan Program authorized by part D of title IV
of the Higher Education Act of 1965 (20 U.S.C. 1087a et
seq.), is a valuable financing tool for United States workers
who desire to take advantage of training and education
programs, consistent with the goals of such workers, to learn
new skills for careers that may bring higher salaries and
improved quality of life.
(b) Awareness.--The Department of Education shall endeavor
to make known the value and availability of direct loans
through the William D. Ford Federal Direct Loan Program
authorized by part D of title IV of the Higher Education Act
of 1965 through cooperative arrangements with one-stop career
centers, training and educational training programs, State
agencies, and other Federal agencies.
TITLE IV--REPORTS AND PLANS
SEC. 401. CONSOLIDATION AND STREAMLINING.
(a) Report on Consolidating Noncovered Federal Job Training
Programs.--Not later than January 1, 1998, and each year
thereafter, the Secretary of Labor shall prepare and submit
to Congress a report that describes how additional Federal
job training programs not covered by this Act can be
consolidated into a more integrated and accountable workforce
development system that better meets the needs of jobseekers,
workers, and business.
(b) Plan on Use of Common Definitions, Measures, Standards,
and Cycles.--Not later than 180 days after the date of
enactment of this Act, the Secretary of Labor shall develop a
plan that, wherever practicable, requires the Federal job
training programs to use common definitions, common outcome
measures, common eligibility standards, and common funding
cycles in order to make such training programs more
accessible.
SEC. 402. REPORT RELATING TO INCOME SUPPORT.
(a) Sense of Congress.--It is the sense of Congress that--
(1) many dislocated workers and economically disadvantaged
adults are unable to enroll in long-term job training because
such workers and adults lack income support after
unemployment compensation is exhausted;
(2) evidence suggests that long-term job training is among
the most effective adjustment service in assisting dislocated
workers and economically disadvantaged adults to obtain
employment and enhance wages; and
(3) there is a need to identify options relating to how
income support may be provided to enable dislocated workers
and economically disadvantaged adults to participate in long-
term job training.
(b) Report.--Not later than 120 days after the date of
enactment of this Act, the Secretary of Labor shall prepare
and submit to Congress a report that--
(1) examines the need for income support to enable
dislocated workers and economically disadvantaged adults to
participate in long-term job training;
(2) identifies options relating to how such income support
may be provided to such workers and adults; and
(3) contains such recommendations as the Secretary of Labor
determines are appropriate.
TITLE V--GENERAL PROVISIONS
SEC. 501. AUTHORIZATION OF APPROPRIATIONS.
(a) In General.--There are authorized to be appropriated to
carry out titles I and III such sums as may be necessary for
each of fiscal years 1998 through 2002.
(b) Program Year.--Appropriations for any fiscal year for
activities carried out under this Act shall be available for
obligation only on the basis of a program year. The program
year shall begin on July 1 in the fiscal year for which the
appropriation is made.
SEC. 502. EFFECTIVE DATE.
This Act shall take effect on July 1, 1998.
______
By Mr. LAUTENBERG (for himself, Mr. Baucus, Mr. Reid, Mr.
Moynihan, Mr. Graham, Mrs. Boxer, Mr. Wyden, Mr. Levin, Mr.
Torricelli, Mr. Breaux, and Mr. Kennedy):
S. 18. A bill to assist the States and local governments in assessing
and remediating brownfield sites and encouraging environmental cleanup
programs, and for other purposes; to the Committee on Environmental and
Public Works.
the brownfields and environmental cleanup act of 1997
Mr. LAUTENBERG. Madam President, today along with Senators Daschle,
Baucus, Moynihan, Graham, Harry Reid, Boxer, Wyden, Levin, Torricelli,
Sarbanes, and Breaux, I am introducing the Brownfields and
Environmental Cleanup Act of 1997. This legislation is designed to
foster the cleanup of potentially thousands of toxic waste sites across
this country, and just as importantly this bill is about jobs, about
revenue, and economic opportunity, because it will help turn abandoned
industrial sites into engines of economic development.
Madam President, I have been interested for a long time now in the
issue of these abandoned, underutilized and contaminated industrial
sites, commonly known as brownfields. Our Nation's great industrial
tradition was the lifeblood of our Nation's economy. But this
industrial tradition also entailed tremendous environmental costs.
Sites were contaminated, and then when the manufacturers, the companies
left, the legacy remained behind. Today, decaying industrial plants
define the skyline and contaminate the land in many of our urban areas.
Their rusting frames, like aging skyscrapers, are a silent reminder of
those manufacturers that left, taking inner-city jobs and often inner-
city hope with them.
Yet, Madam President, in these foul fields may lie the seeds of urban
revitalization, and I continue to feel as I did when I introduced
similar legislation in 1993 and 1996, that a brownfields cleanup
program can spur significant economic development and create jobs. This
type of cleanup initiative makes good environmental sense and good
business sense. To appreciate, one need only look at a few of the
brownfields success stories from across the States. Now, these are
sites again that do not qualify as a Superfund site because they are
not toxic enough, but they lie there and they contaminate not only the
aesthetics of the area but also the opportunity for jobs and for
business investment.
A pilot project in Cleveland resulted in $3.2 million in private
investment, a
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$1 million increase on the local tax base, and more than 170 new jobs.
In Elizabeth, NJ, a former municipal landfill will be turned by the
fall of 1998 into a major mall with 5,000 employees.
Madam President, the potential for job creation across the country is
enormous, and every revitalized brownfields may represent for someone a
field of dreams, especially to an unemployed urban worker.
While fostering jobs, brownfield cleanup also means that dangerous
contaminants are removed from our environment, and the scars of decades
of neglected industrial waste which disfigure our cities and suburbs
and even rural areas may be finally allowed to heal. The Superfund
Program provides Federal authority to assist in cleaning up abandoned
waste sites that pose the most serious threats. However, there are in
this country of ours 100,000 of these brownfield sites that do not fall
under Superfund because of lower levels of contamination.
What do we do? We can't just watch them keep these communities from
revitalizing themselves. The risks posed by many of these sites may be
relatively low and others even nonexistent, because brownfields are
abandoned or underutilized industrial or commercial sites where
expansion or redevelopment is complicated by real or even perceived,
not really factually established, environmental contamination. But
their full economic use is being stymied because there is no ready
mechanism for getting them evaluated or, if necessary, cleaned up, even
when the owner of the property is ready, willing and eager to do so.
In addition, prospective purchasers and developers are reluctant to
get involved in transactions with these properties because of their
concern, however minimal, they might potentially create enormous
environmental liability.
The challenge is to turn these abandoned properties into thriving
businesses that can generate needed jobs and act as a catalyst for
economic development.
My legislation would provide financial assistance in the form of
grants to local and State governments to inventory and evaluate
brownfields sites. This would enable interested parties to know what
would be 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. These funds would
be loaned to current owners, prospective purchasers and municipalities
to facilitate voluntary cleanup actions where traditional lending
mechanisms are just not available. The minimum seed money involved in
the program would leverage substantial economic payoffs, as well as
turning lands which may be of negative worth into assets for the
future.
The bill also would limit the potential liability of innocent buyers
of these properties, and it would set a standard to gauge when parties
couldn't have reasonably known that the property was contaminated. So
there is no hidden liability in there. There is no sudden surprise for
someone who conscientiously and innocently made an investment, and
suddenly they find they are liable for far, far more than their initial
investment.
Madam President, cleaning up brownfields will mean a safer
environment and more jobs for places that badly need them. It will also
send a message to those who want to invest in our urban areas that they
don't have to leave the inner city in search of open space. They can
build right there in our downtowns, the places that already have the
services, the infrastructure and the people to do the job.
There has been bipartisan interest, Madam President, in addressing
brownfields, both in the Senate and in the other body on the other side
of the Capitol. I am hopeful we can move this legislation forward in a
cooperative way with support of Members on both sides of the aisle.
I ask unanimous consent that a copy of the bill, a section-by-section
analysis and a letter of endorsement from the Regional Planning
Association, the country's oldest planning organization, be printed in
the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
S. 18
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the
``Brownfields and Environmental Cleanup Act of 1997''.
(b) Table of Contents.--The table of contents of this Act
is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Findings and purposes.
TITLE I--BROWNFIELD REMEDIATION AND ENVIRONMENTAL CLEANUP
Sec. 101. Definitions.
Sec. 102. Inventory and assessment grant program.
Sec. 103. Grants for revolving loan programs.
Sec. 104. Economic redevelopment grants.
Sec. 105. Reports.
Sec. 106. Limitations on use of funds.
Sec. 107. Effect on other laws.
Sec. 108. Regulations.
Sec. 109. Authorizations of appropriations.
TITLE II--PROSPECTIVE PURCHASERS
Sec. 201. Limitations on liability for response costs for prospective
purchasers.
TITLE III--INNOCENT LANDOWNERS
Sec. 301. Innocent landowners.
SEC. 2. FINDINGS AND PURPOSES.
(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
because of uncertainties regarding liability or potential
cleanup costs of innocent landowners and prospective
purchasers under Federal law;
(6) the abandonment or underutilization of brownfield 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 brownfield 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 States and political subdivisions of States,
local community development organizations, and current owners
and prospective purchasers of brownfield sites is required to
accomplish timely response actions and the redevelopment or
reuse of brownfield sites;
(9) there is a need to provide financial incentives and
assistance to inventory and assess certain brownfield sites
and facilitate the cleanup of the sites so that the sites may
be redeveloped for beneficial uses; and
(10) there is a need for a program to--
(A) encourage cleanups of brownfield sites; and
(B) facilitate the establishment and enhancement of
programs by States and local governments to foster cleanups
of brownfield sites through capitalization of loan programs.
(b) Purposes.--The purposes of this Act are to create new
business and employment opportunities through the economic
redevelopment of brownfield sites that generally do not pose
a serious threat to human health or the environment and to
stimulate the assessment and cleanup of brownfield sites by--
(1) encouraging States and local governments to provide for
the assessment and cleanup of brownfield 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 brownfield sites;
(3) directing the Administrator of the Environmental
Protection Agency to establish programs that provide
financial assistance to--
(A) facilitate site assessments of certain brownfield
sites;
(B) encourage cleanup of appropriate brownfield sites
through capitalization of loan programs; and
(C) encourage workforce development in areas adversely
affected by contaminated properties; and
[[Page S348]]
(4) reducing transaction costs and paperwork, and
preventing needless duplication of effort and delay at all
levels of government.
TITLE I--BROWNFIELD REMEDIATION AND ENVIRONMENTAL CLEANUP
SEC. 101. DEFINITIONS.
In this title:
(1) Administrator.--The term ``Administrator'' means the
Administrator of the Environmental Protection Agency.
(2) Brownfield site.--The term ``brownfield site'' means a
facility that has or is suspected of having environmental
contamination that--
(A) could prevent the timely use, development, reuse, or
redevelopment of the facility; and
(B) is relatively limited in scope or severity and can be
comprehensively assessed and readily analyzed.
(3) Contaminant.--The term ``contaminant'' includes any
hazardous substance (as defined in section 101 of the
Comprehensive Environmental Response, Compensation, and
Liability Act of 1980 (42 U.S.C. 9601)).
(4) Disposal.--The term ``disposal'' has the meaning given
the term in section 1004 of the Solid Waste Disposal Act (42
U.S.C. 6903).
(5) Environment.--The term ``environment'' has the meaning
given the term in section 101 of the Comprehensive
Environmental Response, Compensation, and Liability Act of
1980 (42 U.S.C. 9601).
(6) 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.
(7) Facility.--The term ``facility'' has the meaning given
the term in section 101 of the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980 (42 U.S.C.
9601).
(8) Grant.--The term ``grant'' includes a cooperative
agreement.
(9) Ground water.--The term ``ground water'' has the
meaning given the term in section 101 of the Comprehensive
Environmental Response, Compensation, and Liability Act of
1980 (42 U.S.C. 9601).
(10) Indian tribe.--The term ``Indian tribe'' has the
meaning given the term in section 101 of the Comprehensive
Environmental Response, Compensation, and Liability Act of
1980 (42 U.S.C. 9601).
(11) Local government.--The term ``local government'' has
the meaning given 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 an Indian tribe.
(12) Natural resources.--The term ``natural resources'' has
the meaning given the term in section 101 of the
Comprehensive Environmental Response, Compensation, and
Liability Act of 1980 (42 U.S.C. 9601).
(13) Owner.--The term ``owner'' has the meaning given the
term in section 101 of the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980 (42 U.S.C.
9601).
(14) Person.--The term ``person'' has the meaning given the
term in section 101 of the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980 (42 U.S.C.
9601).
(15) Prospective purchaser.--The term ``prospective
purchaser'' means a prospective purchaser of a brownfield
site.
(16) Release.--The term ``release'' has the meaning given
the term in section 101 of the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980 (42 U.S.C.
9601).
(17) Response action.--The term ``response action'' has the
meaning given the term ``response'' in section 101 of the
Comprehensive Environmental Response, Compensation, and
Liability Act of 1980 (42 U.S.C. 9601).
(18) Site assessment.--
(A) In general.--The term ``site assessment'' means an
investigation that determines the nature and extent of a
release or potential release of a hazardous substance at a
brownfield site and meets the requirements of 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
brownfield site is contaminated and the threats to human
health and the environment posed by the release of
contaminants at the brownfield site; and
(ii) may include--
(I) review of such information regarding the brownfield
site and previous uses as is available at the time of the
review; and
(II) an offsite evaluation, if appropriate.
(19) State.--The term ``State'' has the meaning given the
term in section 101 of the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980 (42 U.S.C.
9601).
SEC. 102. INVENTORY AND ASSESSMENT GRANT PROGRAM.
(a) In General.--The Administrator shall establish a
program to award grants to States or local governments to
inventory brownfield sites and to conduct site assessments of
brownfield sites.
(b) Scope of Program.--
(1) Grant awards.--To carry out subsection (a), the
Administrator may, on approval of an application, provide
financial assistance to a State or local government.
(2) Grant application.--An application for a grant under
this section shall include, to the extent practicable, each
of the following:
(A) An identification of the brownfield sites for which
assistance is sought and a description of the effect of the
brownfield sites on the community, including a description of
the nature and extent of any known or suspected environmental
contamination within the areas.
(B) A description of the need of the applicant for
financial assistance to inventory brownfield sites and
conduct site assessments.
(C) A demonstration of the potential of the grant
assistance to stimulate economic development, including the
extent to which the assistance will stimulate the
availability of other funds for site assessment, site
identification, or environmental remediation and subsequent
redevelopment of the areas in which eligible brownfield sites
are situated.
(D) A description of the local commitment as of the date of
the application, which shall include a community involvement
plan that demonstrates meaningful community involvement.
(E) A plan that shows how the site assessment, site
identification, or environmental remediation and subsequent
development will be implemented, including--
(i) an environmental plan that ensures the use of sound
environmental procedures;
(ii) an explanation of the appropriate government authority
and support for the project as in existence on the date of
the application;
(iii) proposed funding mechanisms for any additional work;
and
(iv) a proposed land ownership plan.
(F) A statement on the long-term benefits and the
sustainability of the proposed project that includes--
(i) the ability of the project to be replicated nationally
and measures of success of the project; and
(ii) to the extent known, the potential of the plan for
each area in which an eligible brownfield site is situated to
stimulate economic development of the area on completion of
the environmental remediation.
(G) Such other factors as the Administrator considers
relevant to carry out this title.
(3) Approval of application.--
(A) In general.--In making a decision whether to approve an
application under paragraph (1), the Administrator shall--
(i) consider the need of the State or local government for
financial assistance to carry out this section;
(ii) consider the ability of the applicant to carry out an
inventory and site assessment under this section;
(iii) ensure a fair distribution of grant funds between
urban and nonurban areas; and
(iv) consider such other factors as the Administrator
considers relevant to carry out this section.
(B) Grant conditions.--As a condition of 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 as the Administrator determines
appropriate.
(4) Grant amount.--The amount of a grant awarded to any
State or local government under subsection (a) for inventory
and site assessment of 1 or more brownfield sites shall not
exceed $200,000.
(5) Termination of grants.--If the Administrator determines
that a State or local government that receives a grant under
this subsection is in violation of a condition of a grant
referred to in paragraph (3)(B), the Administrator may
terminate the grant made to the State or local government and
require full or partial repayment of the grant.
SEC. 103. GRANTS FOR REVOLVING LOAN PROGRAMS.
(a) In General.--
(1) Establishment.--The Administrator shall establish a
program to award grants to be used by State or local
governments to capitalize revolving loan funds for the
cleanup of brownfield sites.
(2) Loans.--The loans may be provided by the State or local
government to finance cleanups of brownfield sites by the
State or local government, or by an owner or a prospective
purchaser of a brownfield site (including a local government)
at which a cleanup is being conducted or is proposed to be
conducted.
(b) Scope of Program.--
(1) In general.--
(A) Grants.--In carrying out subsection (a), the
Administrator may award a grant to a State or local
government that submits an application to the Administrator
that is approved by the Administrator.
(B) Use of grant.--The grant shall be used by the State or
local government to capitalize a revolving loan fund to be
used for cleanup of 1 or more brownfield sites.
(C) 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 shall
include the following:
(i) Evidence that the grant applicant has the financial
controls and resources to administer a revolving loan fund in
accordance with this title.
(ii) Provisions that--
(I) ensure that the grant applicant has the ability to
monitor the use of funds provided to loan recipients under
this title;
[[Page S349]]
(II) ensure that any cleanup conducted by the applicant is
protective of human health and the environment; and
(III) ensure that any cleanup funded under this Act will
comply with all applicable Federal and State laws that apply
to the cleanup.
(iii) Identification of the criteria to be used by the
State or local government in providing for loans under the
program. The criteria shall include the financial standing of
the applicants for the loans, the use to which the loans will
be put, the provisions to be used to ensure repayment of the
loan funds, and the following:
(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 statement that attests that the cleanup of
the site would not occur without access to the revolving loan
fund.
(III) The proposed method, and anticipated period of time
required, to clean up the environmental contamination at the
brownfield site.
(IV) An estimate of the proposed total cost of the cleanup
to be conducted at the brownfield site.
(V) An analysis that demonstrates the potential of the
brownfield site for stimulating economic development on
completion of the cleanup of the brownfield site.
(2) Grant approval.--In determining whether to award a
grant under this section, the Administrator shall consider--
(A) the need of the State or local government for financial
assistance to clean up brownfield sites that are the subject
of the application, taking into consideration the financial
resources available to the State or local government;
(B) the ability of the State or local government to ensure
that the applicants repay the loans in a timely manner;
(C) the extent to which the cleanup of the brownfield site
or sites would reduce health and environmental risks caused
by the release of contaminants at, or from, the brownfield
site or sites;
(D) the demonstrable potential of the brownfield site or
sites for stimulating economic development on completion of
the cleanup;
(E) the demonstrated ability of the State or local
government to administer such a loan program;
(F) the demonstrated experience of the State or local
government regarding brownfield sites and the reuse of
contaminated land, including whether the government has
received any grant under the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980 (42 U.S.C.
9601 et seq.) to assess brownfield sites, except that
applicants who have not previously received such a grant may
be considered for awards under this section;
(G) the efficiency of having the loan administered by the
level of government represented by the applicant entity;
(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
State or local government to ensure a fair distribution of
grant funds among brownfield sites within the jurisdiction of
the State or local government; and
(J) such other factors as the Administrator considers
relevant to carry out this section.
(3) Grant amount.--The amount of a grant made to a State or
local applicant under this section shall not exceed $500,000.
(4) Revolving loan fund approval.--Each application for a
grant to capitalize a revolving loan fund under this section
shall, as a condition of approval by the Administrator,
include a written statement by the State or local government
that--
(A) cleanups to be funded under the loan program of the
State or local government shall be conducted under the
auspices of, and in compliance with, the State voluntary
cleanup program or State Superfund program or Federal
authority;
(B) the cleanup or proposed voluntary cleanup is cost-
effective; and
(C) the estimated total cost of the cleanup is reasonable.
(c) Grant Agreements.--Each grant under this section for a
revolving loan fund shall be made pursuant to a grant
agreement. At a minimum, the grant agreement shall include
provisions that ensure the following:
(1) Compliance with law.--The grant recipient will 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) Repayment.--The State or local government will require
repayment of the loan consistent with this title.
(3) Use of funds.--The State or local government will use
the funds solely for purposes of establishing and
capitalizing a loan program in accordance with this title and
of cleaning up the environmental contamination at the
brownfield site or sites.
(4) Repayment of funds.--The State or local government will
require in each loan agreement, and take necessary steps to
ensure, that the loan recipient will use the loan funds
solely for the purposes stated in paragraph (3), and will
require the return of any excess funds immediately on a
determination by the appropriate State or local official that
the cleanup has been completed.
(5) Nontransferability.--The funds will not be
transferable, unless the Administrator agrees to the transfer
in writing.
(6) Liens.--
(A) Definitions.--In this paragraph, the terms ``security
interest'' and ``purchaser'' have the meanings given the
terms in section 6323(h) of the Internal Revenue Code of
1986.
(B) Liens.--A lien in favor of the grant recipient shall
arise on the contaminated property subject to a loan under
this section.
(C) Coverage.--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.
(D) Timing.--The lien shall--
(i) 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
(ii) 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 of the
State, county, or other governmental subdivision, as
designated by State law, in which the real property subject
to the lien is located.
(7) Other conditions.--The State or local government will
comply with such other terms and conditions as the
Administrator determines are necessary to protect the
financial interests of the United States and to protect human
health and the environment.
(d) Audits.--
(1) In general.--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.
(2) Future grants.--The result of the audit shall be taken
into account in awarding any future grants to the State or
local government.
SEC. 104. ECONOMIC REDEVELOPMENT GRANTS.
(a) Expenditures From the Superfund.--Amounts in the
Hazardous Substance Superfund established by section 9507 of
the Internal Revenue Code of 1986 shall be made available
consistent with, and for the purposes of carrying out, the
grant programs established under sections 102 and 103.
(b) Authority To Award Grants.--There is authorized to be
appropriated from the Hazardous Substance Superfund for
grants to State and local governments under sections 102 and
103, $25,000,000 for each of fiscal years 1998 through 2002.
SEC. 105. 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 results of each
program established under this title to--
(1) the Committee on Environment and Public Works of the
Senate; and
(2) the Committee on 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 102 and 103
among the States and local governments.
SEC. 106. LIMITATIONS ON USE OF FUNDS.
(a) Excluded Facilities.--A grant for site inventory and
assessment under section 102 or to capitalize a revolving
loan fund under section 103 may not be used for any activity
involving--
(1) a 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 for 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;
(2) a facility included, or proposed for inclusion, on the
National Priorities List maintained by the Administrator
under the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980 (42 U.S.C. 9601 et seq.);
(3) a 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;
(4) a facility that is subject to corrective action under
section 3004(u), 3008(h) of the Solid Waste Disposal Act (42
U.S.C. 6924(u) or 6928(h)) to which a corrective action
permit or order has been issued or modified to require the
implementation of corrective measures;
(5) 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;
[[Page S350]]
(6) a facility at which there has been a release of a
polychlorinated biphenyl and that is subject to the Toxic
Substances Control Act (15 U.S.C. 2601 et seq.);
(7) a 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 in
effect under--
(A) the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980 (42 U.S.C. 9601 et seq.);
(B) the Solid Waste Disposal Act (42 U.S.C. 6901 et seq.);
(C) the Federal Water Pollution Control Act (33 U.S.C. 1251
et seq.);
(D) the Toxic Substances Control Act (15 U.S.C. 2601 et
seq.); or
(E) the Safe Drinking Water Act (42 U.S.C. 300f et seq.);
(8) a facility at which assistance for response activities
may be obtained under 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
(9) a facility owned or operated by a department, agency,
or instrumentality of the United States, except for land held
in trust by the United States for an Indian tribe.
(b) Fines and Cost-Sharing.--A grant made under this title
may not be used to pay any fine or penalty owed to a State or
the Federal Government, or to meet any Federal cost-sharing
requirement.
(c) Other Limitations.--
(1) In general.--Funds made available to a State or local
government under the grant programs established under
sections 102 and 103 shall be used only to inventory and
assess brownfield sites as authorized by this title and for
capitalizing a revolving loan fund as authorized by this
title, respectively.
(2) Responsibility for cleanup action.--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 brownfield sites.
SEC. 107. EFFECT ON OTHER LAWS.
Nothing in this title affects the liability or response
authorities for environmental contamination under 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) the Safe Drinking Water Act (42 U.S.C. 300f et seq.).
SEC. 108. REGULATIONS.
(a) In General.--The Administrator may issue such
regulations as are necessary to carry out this title.
(b) Procedures and Standards.--The regulations shall
include such procedures and standards as the Administrator
considers necessary, including procedures and standards for
evaluating an application for a grant or loan submitted under
this title.
SEC. 109. AUTHORIZATIONS OF APPROPRIATIONS.
(a) Site Assessment Program.--There is authorized to be
appropriated to carry out section 102 $10,000,000 for each of
fiscal years 1998 through 2002.
(b) Economic Redevelopment Assistance Program.--There is
authorized to be appropriated to carry out section 103
$15,000,000 for each of fiscal years 1998 through 2002.
(c) Availability of Funds.--The amounts appropriated under
this section shall remain available until expended.
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:
``(n) Limitations on Liability for Prospective
Purchasers.--Notwithstanding paragraphs (1) through (4) of
subsection (a), to the extent the liability of a person, with
respect to a release or the threat of a release from a
facility, is based solely on subsection (a)(1), the person
shall not be liable under this Act if the person--
``(1) is a bona fide prospective purchaser of the facility;
and
``(2) does not impede the performance of any response
action or natural resource restoration at a facility.''.
(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
amended by inserting after subsection (n) the following:
``(o) Prospective Purchaser and Windfall Lien.--
``(1) In general.--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 (3) are met, the
United States shall have a lien on the 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 the unrecovered costs.
``(2) Amount; duration.--The lien--
``(A) shall be for an amount not to 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 specified in subsection (l)(3); and
``(D) shall continue until the earlier of satisfaction of
the lien or recovery of all response costs incurred at the
facility.
``(3) 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.--The response action increases the
fair market value of the facility above the fair market value
of the facility that existed on the date that is 180 days
before the response action was commenced.''.
(c) Definition of Bona Fide Prospective Purchaser.--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:
``(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 1997, 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 the
person acquired the facility.
``(B) Inquiry.--
``(i) In general.--The person made all appropriate inquiry
into the previous ownership and uses of the facility in
accordance with generally accepted good commercial and
customary standards and practices.
``(ii) Standards.--The standards and practices issued by
the Administrator under paragraph (35)(B)(ii) shall satisfy
the requirements of this subparagraph.
``(iii) Residential property.--In the case of property in
residential or other similar use at the time of purchase by a
nongovernmental or noncommercial entity, a site inspection
and title search that reveal no basis for further
investigation shall 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--
``(i) stop ongoing releases;
``(ii) prevent threatened future releases of hazardous
substances; and
``(iii) 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
such persons as are 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.
``(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--INNOCENT LANDOWNERS
SEC. 301. INNOCENT LANDOWNERS.
(a) Knowledge of Inquiry Requirement.--Section 101(35) of
the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980 (42 U.S.C. 9601(35)) is amended by
striking subparagraph (B) and inserting the following:
``(B) Knowledge of inquiry requirement.--
``(i) Definition of contamination.--In this subparagraph,
the term `contamination' means an existing release, a past
release, or the threat of a release of a hazardous substance.
``(ii) Requirement.--
``(I) Inquiry.--To establish that the defendant had no
reason to know (under subparagraph (A)(i)), the defendant
must have made, at the time of the acquisition, all
appropriate inquiry (as well as comply with clause (vii))
into the previous ownership and uses of the facility,
consistent with good commercial or customary practice in an
effort to minimize liability.
``(II) Considerations.--For the purpose of subclause (I)
and until the President issues or designates standards as
provided in clause (iv), the court shall take into account--
``(aa) any specialized knowledge or experience on the part
of the defendant;
``(bb) the relationship of the purchase price to the value
of the property if uncontaminated;
``(cc) commonly known or reasonably ascertainable
information about the property;
``(dd) the obviousness of the presence or likely presence
of contamination at the property; and
[[Page S351]]
``(ee) the ability to detect the contamination by
appropriate investigation.
``(iii) Conduct of environmental assessment.--A person who
has acquired real property shall be considered to have made
all appropriate inquiry within the meaning of clause (ii)(I)
if--
``(I) the person establishes that, within 180 days prior to
the date of acquisition, an environmental site assessment of
the real property was conducted that meets the requirements
of clause (iv); and
``(II) the person complies with clause (vii).
``(iv) Environmental site assessment.--
``(I) In general.--An environmental site assessment meets
the requirements of this clause if the assessment is
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 any alternative standards issued by regulation by the
President or issued or developed by other entities and
designated by regulation by the President.
``(II) Study of practices.--Before issuing or designating
alternative standards under subclause (I), the President
shall conduct a study of commercial and industrial practices
concerning environmental site assessments in the transfer of
real property in the United States.
``(v) Considerations in issuing standards.--In issuing or
designating any standards under clause (iv), the President
shall consider requirements governing each of the following:
``(I) Conduct of an inquiry by an environmental
professional.
``(II) Interviews of each owner, operator, and occupant of
the property to determine information regarding the potential
for contamination.
``(III) Review of historical sources as necessary to
determine each previous use and occupancy of the property
since the property was first developed. In this subclause,
the term `historical sources' means any of the following, if
reasonably ascertainable: each recorded chain of title
document regarding the real property, including each deed,
easement, lease, restriction, and covenant, any aerial
photograph, fire insurance map, property tax file, United
States Geological Survey 7.5 minutes topographic map, local
street directory, building department record, and zoning/land
use record, and any other source that identifies a past use
or occupancy of the property.
``(IV) Determination of the existence of any recorded
environmental cleanup lien against the real property that has
arisen under any Federal, State, or local law.
``(V) Review of reasonably ascertainable Federal, State,
and local government records of any facility that is likely
to cause or contribute to contamination at the real property,
including, as appropriate--
``(aa) any investigation report for the facility;
``(bb) any record of activities likely to cause or
contribute to contamination at the real property, including
any landfill or other disposal location record, underground
storage tank record, hazardous waste handler and generator
record, and spill reporting record; and
``(cc) any other reasonably ascertainable Federal, State,
and local government environmental record that could reflect
an incident or activity that is likely to cause or contribute
to contamination at the real property.
``(VI) A visual site inspection of the real property and
each facility and improvement on the real property and a
visual site inspection of each immediately adjacent property,
including an investigation of any hazardous substance use,
storage, treatment, or disposal practice on the property.
``(VII) Any specialized knowledge or experience on the part
of the person that acquired the property.
``(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 the
contamination by appropriate investigation.
``(vi) Reasonably ascertainable.--A record shall be
considered to be reasonably ascertainable for purposes of
clause (v) if a copy or reasonable facsimile of the record is
publicly available by request (within reasonable time and
cost constraints) and the record is practicably reviewable.
``(vii) Appropriate inquiry.--A person shall not be treated
as having made all appropriate inquiry under clause (ii)(I)
unless--
``(I) the person has maintained a compilation of the
information reviewed and gathered in the course of any
environmental site assessment;
``(II) the person exercised appropriate care with respect
to hazardous substances found at the facility by taking
reasonable steps to--
``(aa) stop ongoing releases of hazardous substances;
``(bb) prevent threatened future releases of hazardous
substances; and
``(cc) prevent or limit human or natural resource exposure
to hazardous substances previously released into the
environment; and
``(III) the person provides full cooperation, assistance,
and facility access to such persons as are 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.
``(viii) 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 shall satisfy the requirements of clause
(ii).''.
(b) Regulatory Authority.--
(1) In general.--The Administrator of the Environmental
Protection Agency may--
(A) issue such regulations as the Administrator considers
necessary to carry out the amendment made by this section;
and
(B) delegate and assign any duties or powers imposed on or
assigned to the Administrator by the amendment made by this
section, including the authority to issue regulations.
(2) Authority to clarify and implement.--The authority
under paragraph (1) includes authority to clarify or
interpret all terms, including the terms used in this
section, and to implement any provision of the amendment made
by this section.
____
Section-by-Section Summary of the Brownfields and Environmental Cleanup
Act of 1997
Section 1 states the short title: the ``Brownfields and
Environmental Cleanup Act of 1997.''
Section 2(a) makes 10 findings summarizing the brownfields
problem, and affirming a need for financial incentives and
assistance to redevelop brownfield sites; and (b) states the
purpose of the bill: economic redevelopment of the sites.
title i--brownfield remediation and environmental cleanup
Section 101 presents 19 definitions of terms used in the
bill.
Section 102 Inventory and Assessment Grant Program. The
bill directs EPA to establish a program of grants to local
governments to inventory brownfield sites within their
jurisdictions, and to conduct site characterizations of sites
targeted for cleanup under a state cleanup program. It sets
eight requirements of what the grant application must
contain, and establishes the criteria EPA is to use in
deciding whether to approve a grant. EPA may attach
conditions to the grant award, and may terminate the grant if
the conditions are violated. Grants may not exceed $200,000.
Section 103. Grants for Revolving Loan Programs. The bill
directs EPA to establish a grant program for state and local
governments to capitalize loan programs for site cleanup. The
loan fund is to be used by the local or state entity to make
loans to finance brownfield cleanups by the owner or a
prospective purchaser of an affected site. The grant
application must demonstrate the government's ability to
manage a revolving loan program and oversee loans they grant
under the program. Twelve factors to be considered by EPA in
determining whether to award a grant are laid out. A loan
program grant to a local or State applicant shall not exceed
$500,000.
Section 104 authorizes $25 million to be appropriated from
the Superfund for each of fiscal years 1997 through 2001 for
the programs provided for in sections 101 and 102.
Section 105 requires EPA to submit an annual report to the
congressional authorizing committees describing the
achievements of each program, including the number of
applications received and approved, and detailing the
allocation of assistance among the states and local
governments.
Section 106 limits how funds may be used. No grant may be
used to pay fines or penalties to a state or the federal
government, or for federal cost-sharing requirements. Nor may
it be used to relieve a state or local government of its
cleanup responsibility under state law at affected sites.
Section 107. Statutory Construction. The section states
that nothing in this title is intended to affect the
liability of response authorities of any other law, including
the Comprehensive Environmental Response, Compensation, and
Liability Act (CERCLA, or the Superfund Act), the Solid Waste
Disposal Act, the Federal Water Pollution Control Act, and
the Safe Drinking Water Act.
Section 108 authorizes EPA to promulgate regulations to
carry out the Act.
Section 109 specifies that $10 million of the section 104
appropriation shall be for the section 101 site
characterization program each year, and $15 million shall be
for the section 102 economic redevelopment assistance
program. The appropriations shall remain available until
expended.
title II--prospective purchasers
Section 201(a). Liability Limitation. The bill amends
section 107 of CERCLA, exempting a bona fide prospective
purchaser from liability provided he does not impede the
performance of response actions or natural resource
restoration at a facility.
Section 1201(b). Windfall Lien. The bill further amends
section 107 to give the United States a lien on the facility
when a response action has been carried out at the facility
and there are unrecovered response costs for which the
prospective purchaser is not liable. Alternatively, the
United States may obtain from the appropriate responsible
party a lien on other property or other assurances of
payment. The lien shall not be for
[[Page S352]]
more than the increase in fair market value of the property
attributable to the response action.
Section 201(c) amends section 101 of CERCLA to define
``bona fide prospective purchaser.'' The definition requires
that: all disposal of hazardous substances occurred before
the person acquired the facility; the purchaser made all
appropriate inquiry into its previous ownership and uses; the
person provided proper notice regarding the discovery of
hazardous substances at the facility; he exercised
appropriate care; he provided full cooperation, assistance,
and facility access to those conducting the response action;
and there is no family or business relationship with a
potentially responsible party at the facility.
title iii--innocent landowners
Section 301(a) amends section 101(35) of CERCLA clarifying
the exception from liability of innocent landowners. The
requirements that such a person make ``all appropriate
inquiry'' is satisfied if he has an environmental site
assessment conducted within the 180 days preceding the
acquisition of the property ``Environmental site assessment''
means one conducted in accordance with the American Society
of Testing and Materials (ASTM) standard for a Phase I
environmental site assessment (Standard E1527-94), or an
alternative standard issued by the President. To be treated
as having made ``all appropriate inquiry,'' a person must:
(1) maintain a compilation of the information gathered in the
course of the site assessment; (2) exercise appropriate care
by stopping on-going releases, preventing threatened future
releases, and limiting human and natural resource exposure to
hazardous substances; and (3) provide full cooperation
assistance, and facility access to persons conducting
response actions at the facility. For the purposes of this
subsection and 101(35) (the definition of ``contractual
relationship''), the term ``contamination'' means an
existing release, a past release, or the threat of a
release.
The court shall take into account any specialized knowledge
of the defendant, the relationship of the purchase price to
the value of the property if uncontaminated, commonly known
information about the property, the obviousness of the
presence of contamination at the property, and the ability to
detect the contamination. EPA shall issue or designate
standards and practices that satisfy these requirements. The
bill identifies 10 factors for EPA to consider in issuing the
standards:
1. Conduct of an inquiry by an environmental professional.
2. Interviews with past and present owners, operators, and
occupants of the facility.
3. A review of historical sources, such as chain of title
documents, aerial photographs, building department records,
and land use records.
4. A search for recorded environmental liens, filed under
Federal, state, or local law.
5. 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.
6. A visual inspection of the facility, and adjoining
properties.
7. Any specialized knowledge or experience on the part of
the defendant.
8. The relationship of the purchase price to the value of
the property if uncontaminated.
9. Commonly known or reasonably ascertainable information
about the property.
10. The obviousness of the presence of contamination, and
the ability to detect it by appropriate investigation.
In the case of a property for residential or similar use
purchased by a nongovernmental or noncommercial entity, a
site inspection and title search are sufficient to satisfy
the requirements.
Section 301(b) authorizes EPA to issue regulations to carry
out section 301, and gives it the authority to clarify or
interpret all terms.
Regional Plan Association,
Newark, NJ, January 20, 1997.
Senator Frank Lautenberg,
Hart Office Building, Washington, DC.
Re: Brownfields and Environmental Cleanup Act of 1997.
Dear Senator Lautenberg: As Director of the New Jersey
Office of Regional Plan Association, I am happy to support
your proposed Brownfields and Environmental Cleanup Act. RPA
is the country's oldest private, non profit regional planning
organization charged with improving transportation,
environmental conservation and economic development in the
31-county New York, New Jersey and Connecticut metropolitan
area. RPA has been a leading force in brownfields
redevelopment in New Jersey, having successfully coordinated
the award-winning OENJ brownfields Model Redevelopment
Project in Elizabeth, and overseeing the Legislative and
Regulatory Reform committee of the EPA Brownfields Pilot
Project in Newark.
The proposed Brownfields and Environmental Cleanup Act of
1997 will go a long way towards stimulating redevelopment of
the region's abandoned, contaminated land. In particular, the
provisions for local site characterization grants and site
cleanup loans will provide an important incentive for local
governments to prioritize and implement redevelopment of
critical sites within their municipalities. The liability
limitations under Section 201 are also important incentives
at the federal level to encourage prospective purchasers to
invest in brownfields redevelopment. Some of these provisions
are being discussed at the State level in New Jersey. The
passage of federal legislation will greatly assist our
efforts to promote brownfields cleanup nationwide.
I am grateful for this opportunity to support your far-
reaching legislation, and wish you the best of luck in its
speedy passage.
Sincerely,
Linda P. Morgan,
Director.
______
By Mr. DODD (for himself, Mr. Daschle, Mr. Kennedy, Ms. Mikulski,
Mr. Rockefeller, Mrs. Murray, Mr. Torricelli, and Mrs. Boxer):
S. 19. A bill to provide funds for child care for low-income working
families, and for other purposes; to the Committee on Labor and Human
Resources
working families child care act of 1997
Mr. DODD. Mr. President, I rise today to introduce the Working
Families Child Care Act of 1997.
Mr. President, balancing the daunting responsibilities of work with
the responsibilities of raising children is always a difficult task. It
is especially challenging when so many parents today are working
outside the home and are forced to depend on child care.
Not surprisingly, these challenges are especially acute for low
income, working families. In fact according to a national child care
study, when compared to all other income groups, the working poor are
the least likely to receive assistance with child care costs--even
though it consumes a disproportionate share of their income--24
percent, compared to 6 percent for middle income families.
What's more, it's a constant struggle for low income families to
remain self sufficient without child care assistance. In a survey of
families on a waiting list in one community, it was found that of those
paying for child care, 71 percent faced serious debt or bankruptcy.
Currently, in 38 States and the District of Columbia the working poor
are on waiting lists to receive child care. Georgia has 41,000 on its
waiting list; Texas 36,000; Illinois 20,000; Alabama 20,000. Most of
the States which don't have a waiting list either don't keep one, are
expecting to create one in the future, or currently are experiencing a
brief respite.
In my own State of Connecticut, new openings for child care
assistance were frozen in November 1993. When new slots became
available, for only two days this past summer, 5,500 applications were
received.
During the last Congress, we intensely debated the issue of child
care--in the larger context of welfare reform legislation. The original
welfare legislation in January 1995 cut funds for child care and
eliminated critically important health and safety standards.
In the 104th Congress I continued to fight for child care, offering
amendments to increase funding and ensure quality. While I disagreed
with the final welfare reform bill, I am pleased that many of these
amendments succeeded and that in the end, the final bill included child
care funding of $14.2 billion over 6 years and restored rigorous health
and safety standards.
However, while the bill we passed made significant and crucial
strides in providing child care for welfare recipients--there is still
work to be done.
The bill I am proposing today will address the issue of child care
for low income working families and make it easier for them to access
adequate child care assistance.
First, this legislation restores $1.4 billion in child care funding.
According to a recent CBO report, even if states meet the work
requirements of the welfare bill they will still be short $1.4 billion
for money needed to continue serving certain low income working
families. These aren't new recipients we're talking about, but instead
families who were receiving child care assistance prior to passage of
welfare reform legislation.
The legislation I am introducing today will prevent working parents
from losing child care assistance simply as a result of the welfare
reform bill.
Second, it begins to address the shortage of assistance for working
families, by raising the authorization for child care subsidies for low
income working families from $1 billion per year to $2 billion per
year.
[[Page S353]]
And finally, it authorizes $500 million per year through 2002 to help
communities meet supply shortages in areas such as infant care and
school age care.
Even when subsidies are available, child care can be difficult to
obtain. According to the National Academy of Sciences, there is
``Consistent evidence of a relatively low supply of care for infants,
for school age children, for children with disabilities and special
health care needs and for parents with unconventional or shifting work
hours.''
What's more, a 1995 GAO study based in Michigan found a shortage of
infant and special needs child care in inner cities and a shortage of
all types of child care in rural areas. So, we're not simply talking
about financial assistance for child care, but whether child care
actually exists.
This shortage of child care is a problem for both working families
and welfare recipients who want to become self-sufficient. How can we
expect someone to make the difficult transition from welfare to work
when they cannot find an adequate provider for an infant or are forced
to have a 6, 7 or 8 year old spend hours alone at home when the school
day ends?
This lack of supervision can have a devastating long-term impact. One
study found that children who start to take care of themselves in
elementary school are significantly more likely to report high use of
alcohol by the eighth grade. Eighth graders left home alone for 11 or
more hours a week report significantly greater use of cigarettes,
alcohol, and marijuana then children not left home alone. We know all
this, and yet only one third of the schools in low income neighborhoods
offer school age child care, compared with 52 percent in more affluent
areas.
For those struggling to make the difficult journey to self-
sufficiency, the lack of available child care before 9, after 5, and on
weekends can be an enormous problem. What's worse, such arrangements
put the safety of a child in question.
The reality is that nearly 1 in 5 full time workers--14.3 million--
work nonstandard hours. More than 1 in 3 are women. However, only 10
percent of child care centers and 6 percent of family day care provide
care on weekends. Yet one third of working mothers with incomes below
poverty and one fourth of mothers with income above poverty, but below
$25,000, work on weekends.
An additional supply problem is that head start and other
prekindergarten programs are part day and part year. As a result, they
often do not meet the needs of parents who work full time. Less than 30
percent of Head Start programs operate on a full-time, full-year basis.
Simply put, child care funds need to be available to make these
programs accessible for working parents. In my view, we as a nation
have a solemn commitment to guarantee that children will not be left to
fend for themselves while their parents are working to put food on the
table.
Child care is one of the most important ingredients for helping poor
working families achieve and maintain economic security. Like parents
in any community and of any financial background, low income families
need to know that when they go to work, their children will receive the
care and assistance they need.
The bill I am introducing today will make it easier for low income,
working families to balance the responsibilities of work and caring for
their children. I urge all my colleagues to join together in supporting
this legislation--for the good of America's children.
S. 19
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Working
Families Child Care Act of 1997''.
(b) Table of Contents.--The table of contents for this Act
is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Assistance for low-income working families.
Sec. 4. Grants for child care supply shortages.
Sec. 5. Report on access to child care by low-income working families.
Sec. 6. Effective date.
SEC. 2. FINDINGS.
Congress makes the following findings:
(1) Availability and affordability of quality child care is
a major obstacle for working parents who struggle to remain
self-sufficient.
(A) Compared to all other income groups, the working poor
are the least likely to receive assistance with their child
care costs.
(B) Low-income families spend 24 percent of their household
income on child care, whereas middle-income families spend 6
percent of their household income on child care.
(C) 38 States have waiting lists for child care for the
working poor. Among those States, Georgia has 41,000
individuals on its waiting list, Texas has 36,000 individuals
on its waiting list, and Illinois and Alabama each have
20,000 individuals on their waiting lists.
(D) One survey of low-income families on a waiting list for
subsidized child care found that of those families paying for
child care out of their own funds, 71 percent faced serious
debt or bankruptcy.
(E) Half of the States and the District of Columbia, even
before the enactment of the Personal Responsibility and Work
Opportunity Reconciliation Act of 1996 (Public Law 104-193,
110 Stat. 2105) during the 104th Congress, increased the
proportion of child care slots or dollars going to families
on welfare, rather than to working poor families.
(2) The Congressional Budget Office estimates that there
will be $1,400,000,000 less expenditures of child care funds
for working poor families as a result of the States
implementing the work requirements imposed under the Personal
Responsibility and Work Opportunity Reconciliation Act of
1996 (Public Law 104-193, 110 Stat. 2105).
(3) Important types of child care are not available in
certain States including infant care, school-age care, care
for children with disabilities and special health care needs,
and child care for parents with unconventional or shifting
work hours.
(A) A 1995 State study by the Comptroller General of the
United States found a shortage of child care for infants and
children with special needs in inner cities, and a shortage
of all types of child care in rural areas.
(B) Only \1/3\ of the schools in low-income neighborhoods
offer school-age child care, compared with 52 percent of
schools in more affluent areas offering such care.
(C) Eighth-graders who are left home alone for 11 or more
hours a week report significantly greater use of cigarettes,
alcohol, and marijuana than eighth-graders who are not left
home alone.
(D) Existing child care arrangements do not accommodate the
work schedules of many working women. According to a 1995
statistic published by the Department of Labor, 14,300,000
workers, nearly 1 in 5 full-time workers work nonstandard
hours, and more than 1 in 3 of those workers are women.
(E) Only 10 percent of child care centers and 6 percent of
family day care providers offer child care on weekends. Yet
\1/3\ of working mothers with annual incomes below the
poverty level and \1/4\ of mothers with annual incomes above
the poverty level but below $25,000 work on weekends.
(F) Less than 30 percent of Head Start programs operate on
a full-time, full-year basis.
SEC. 3. ASSISTANCE FOR LOW-INCOME WORKING FAMILIES.
Section 658B of the Child Care Development Block Grant Act
of 1990 (42 U.S.C. 9858) is amended to read as follows:
``SEC. 658B. FUNDING OF GRANTS.
``(a) Authorization of Appropriations.--Except as provided
in subsection (b), there is authorized to be appropriated to
carry out this subchapter $2,000,000,000 for each of fiscal
years 1997 through 2002.
``(b) Appropriation.--The Secretary shall pay, from funds
in the Treasury not otherwise appropriated, $1,400,000,000
for fiscal years 1997 through 2002, through the awarding of
grants to States under this subchapter for the purpose of
providing child care services for families who have left the
State program of assistance under part A of title IV of the
Social Security Act because of employment, families that are
at risk of becoming dependent on such assistance program, and
low-income working families described in section
658E(c)(3)(D). Funds shall be paid under this subsection to
the States in the same manner, and subject to the same
requirements and limitations, as funds are paid to the States
under section 418 of the Social Security Act (42 U.S.C.
618).''.
SEC. 4. GRANTS FOR CHILD CARE SUPPLY SHORTAGES.
(a) Grants for Child Care Supply Shortages.--Section
658E(c)(3) of the Child Care Development Block Grant Act of
1990 (42 U.S.C. 9858c(c)(3)) is amended by adding at the end
the following:
``(E) Child care supply shortages.--
``(i) In general.--A State shall ensure that 100 percent of
amounts paid to the State out of funds appropriated under
section 658B(a)(2) with respect to each of the fiscal years
1997 through 2002 shall be used to carry out child care
activities described in clause (ii) in geographic areas
within the State that have a shortage, as determined by the
State, in consultation with localities, of child care
services.
``(ii) Child care activities described.--The child care
activities described in this clause include the following:
``(I) Infant care programs.
``(II) Before- and after-school child care programs.
``(III) Resource and referral programs.
``(IV) Nontraditional work hours child care programs.
[[Page S354]]
``(V) Extending the hours of pre-kindergarten programs to
provide full-day services.
``(VI) Any other child care programs that the Secretary
determines are appropriate.''.
(b) Authorization of Appropriations.--Section 658B(a) of
the Child Care Development Block Grant Act of 1990 (42 U.S.C.
9858(a)), as amended by section 2, is amended--
(1) by striking ``Except as provided in'' and inserting the
following:
``(1) In general.--Except as provided in paragraph (2)
and''; and
(2) by adding at the end the following:
``(2) Child care supply shortages.--There is authorized to
be appropriated to carry out section 658E(c)(3)(E),
$500,000,000 for each of fiscal years 1997 through 2002.''.
(c) Conforming Amendment.--Section 658(c)(3)(A) of the
Child Care Development Block Grant Act of 1990 (42 U.S.C.
9858c(c)(3)(A)) is amended by striking ``(D)'' and inserting
``(E)''.
SEC. 5. REPORT ON ACCESS TO CHILD CARE BY LOW-INCOME WORKING
FAMILIES.
(a) State Reporting Requirement.--Section 658K(a)(2) of the
Child Care Development Block Grant Act of 1990 (42 U.S.C.
9858i(a)(2)) is amended--
(1) in subparagraph (D), by striking ``and'' at the end;
and
(2) by inserting after subparagraph (E), the following:
``(F) the total number of families described in section
658B(b) that were eligible for but did not receive assistance
under this subchapter or under section 418 of the Social
Security Act and a description of the obstacles to providing
such assistance; and
``(G) the total number of families described in section
658B(b) that received assistance provided under this
subchapter or under section 418 of the Social Security Act
and a description of the manner in which that assistance was
provided;''.
(b) Secretarial Reporting Requirement.--Section 658L of the
Child Care Development Block Grant Act of 1990 (42 U.S.C.
9858j) is amended by inserting ``, with particular emphasis
on access of low-income working families,'' after ``public''.
SEC. 6. EFFECTIVE DATE.
This Act and the amendments made by this Act take effect as
if included in the enactment of the Personal Responsibility
and Work Opportunity Reconciliation Act of 1996 (Public Law
104-193, 110 Stat. 2105).
______
By Mr. DASCHLE (for himself, Mr. Reid, Mr. Lieberman, Mr. Dorgan,
Mr. Breaux, Mr. Kohl, Mr. Wyden, and Mr. Bingaman):
S. 20. A bill to amend the Internal Revenue Code of 1986 to increase
the rate and spread the benefits of economic growth, and for other
purposes; to the Committee on Finance.
targeted investment incentive and economic growth act of 1997
Mr. DASCHLE. 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. 20
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE.
(a) Short Title.--This Act may be cited as the ``Targeted
Investment Incentive and Economic Growth Act of 1997''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this Act an amendment or repeal is
expressed in terms of an amendment to, or repeal of, a
section or other provision, the reference shall be considered
to be made to a section or other provision of the Internal
Revenue Code of 1986.
TITLE I--TAXATION OF CAPITAL GAINS AND LOSSES
SEC. 101. ROLLOVER OF CAPITAL GAINS ON CERTAIN SMALL BUSINESS
INVESTMENTS.
(a) In General.--Part III of subchapter O of chapter 1
(relating to common nontaxable exchanges) is amended by
adding at the end the following new section:
``SEC. 1045. ROLLOVER OF GAIN ON SMALL BUSINESS INVESTMENTS.
``(a) Nonrecognition of Gain.--In the case of the sale of
any eligible small business investment with respect to which
the taxpayer elects the application of this section, gain
from such sale shall be recognized only to the extent that
the amount realized on such sale exceeds--
``(1) the cost of any other eligible small business
investment purchased by the taxpayer during the 6-month
period beginning on the date of such sale, reduced by
``(2) any portion of such cost previously taken into
account under this section.
This section shall not apply to any gain which is treated as
ordinary income for purposes of this subtitle.
``(b) Definitions and Special Rules.--For purposes of this
section--
``(1) Purchase.--The term `purchase' has the meaning given
such term by section 1043(b)(4).
``(2) Eligible small business investment.--Except as
otherwise provided in this section, the term `eligible small
business investment' means any stock in a domestic
corporation, and any partnership interest in a domestic
partnership, which is originally issued after December 31,
1996, if--
``(A) as of the date of issuance, such corporation or
partnership is a qualified small business entity,
``(B) such stock or partnership interest is acquired by the
taxpayer at its original issue (directly or through an
underwriter)--
``(i) in exchange for money or other property (not
including stock), or
``(ii) as compensation for services (other than services
performed as an underwriter of such stock or partnership
interest), and
``(C) the taxpayer has held such stock or interest at least
6 months as of the time of the sale described in subsection
(a).
A rule similar to the rule of section 1202(c)(3) shall apply
for purposes of this section.
``(3) Active business requirement.--Stock in a corporation,
and a partnership interest in a partnership, shall not be
treated as an eligible small business investment unless,
during substantially all of the taxpayer's holding period for
such stock or partnership interest, such corporation or
partnership meets the active business requirements of
subsection (c). A rule similar to the rule of section
1202(c)(2)(B) shall apply for purposes of this section.
``(4) Qualified small business entity.--
``(A) In general.--The term `qualified small business
entity' means any domestic corporation or partnership if--
``(i) such entity (and any predecessor thereof) had
aggregate gross assets (as defined in section 1202(d)(2)) of
less than $25,000,000 at all times before the issuance of the
interest described in paragraph (2), and
``(ii) the aggregate gross assets (as so defined) of the
entity immediately after the issuance (determined by taking
into account amounts received in the issuance) are less than
$25,000,000.
``(B) Aggregation rules.--Rules similar to the rules of
section 1202(d)(3) shall apply for purposes of this
paragraph.
``(c) Active Business Requirement.--
``(1) In general.--For purposes of subsection (b)(3), the
requirements of this subsection are met by a qualified small
business entity for any period if--
``(A) the entity is engaged in the active conduct of a
trade or business, and
``(B) at least 80 percent (by value) of the assets of such
entity are used in the active conduct of a qualified trade or
business (within the meaning of section 1202(e)(3)).
Such requirements shall not be treated as met for any period
if during such period the entity is described in subparagraph
(A), (B), (C), or (D) of section 1202(e)(4).
``(2) Special rule for certain activities.--For purposes of
paragraph (1), if, in connection with any future trade or
business, an entity is engaged in--
``(A) startup activities described in section 195(c)(1)(A),
``(B) activities resulting in the payment or incurring of
expenditures which may be treated as research and
experimental expenditures under section 174, or
``(C) activities with respect to in-house research expenses
described in section 41(b)(4),
such entity shall be treated with respect to such activities
as engaged in (and assets used in such activities shall be
treated as used in) the active conduct of a trade or
business. Any determination under this paragraph shall be
made without regard to whether the entity has any gross
income from such activities at the time of the determination.
``(3) Certain rules to apply.--Rules similar to the rules
of paragraphs (5), (6), (7), and (8) of section 1202(e) shall
apply for purposes of this subsection.
``(d) Certain Other Rules To Apply.--Rules similar to the
rules of subsections (f), (g), (h), and (j) of section 1202
shall apply for purposes of this section, except that a 6-
month holding period shall be substituted for a 5-year
holding period where applicable.
``(e) Basis Adjustments.--If gain from any sale is not
recognized by reason of subsection (a), such gain shall be
applied to reduce (in the order acquired) the basis for
determining gain or loss of any eligible small business
investment which is purchased by the taxpayer during the 6-
month period described in subsection (a).
``(f) Statute of Limitations.--If any gain is realized by
the taxpayer on the sale or exchange of any eligible small
business investment and there is in effect an election under
subsection (a) with respect to such gain, then--
``(1) the statutory period for the assessment of any
deficiency with respect to such gain shall not expire before
the expiration of 3 years from the date the Secretary is
notified by the taxpayer (in such manner as the Secretary may
by regulations prescribe) of--
``(A) the taxpayer's cost of purchasing other eligible
small business investments which the taxpayer claims results
in nonrecognition of any part of such gain,
``(B) the taxpayer's intention not to purchase other
eligible small business investments within the 6-month period
described in subsection (a), or
``(C) a failure to make such purchase within such 6-month
period, and
``(2) such deficiency may be assessed before the expiration
of such 3-year period notwithstanding the provisions of any
other law or rule of law which would otherwise prevent such
assessment.
``(g) Regulations.--The Secretary shall prescribe such
regulations as may be appropriate to carry out the purposes
of this section, including regulations to prevent the
[[Page S355]]
avoidance of the purposes of this section through splitups,
shell corporations, partnerships, or otherwise and
regulations to modify the application of section 1202 to the
extent necessary to apply such section to a partnership
rather than a corporation.''
(b) Conforming Amendment.--Paragraph (23) of section
1016(a) is amended--
(1) by striking ``or 1044'' and inserting ``, 1044, or
1045'', and
(2) by striking ``or 1044(d)'' and inserting ``, 1044(d),
or 1045(e)''.
(c) Clerical Amendment.--The table of sections for part III
of subchapter O of chapter 1 is amended by adding at the end
the following new item:
``Sec. 1045. Rollover of gain on small business investments.''
(d) Effective Date.--The amendments made by this section
shall apply to taxable years ending after December 31, 1996.
SEC. 102. LOSSES ON ELIGIBLE SMALL BUSINESS INVESTMENTS.
(a) Increase in Maximum Amount.--Section 1244(b) (relating
to maximum amount for any taxable year) is amended--
(1) by striking ``$50,000'' in paragraph (1) and inserting
``$150,000'', and
(2) by striking ``$100,000'' in paragraph (2) and inserting
``$300,000''.
(b) Extension of Application of Section 1244 to Partnership
Interest and Increase in Value of Corporations Eligible for
Application.--
(1) Extension to partnerships.--So much of section 1244(c)
as precedes paragraph (2) is amended to read as follows:
``(c) Section 1244 Interest Defined.--
``(1) Section 1244 interest.--For purposes of this
section--
``(A) In general.--The term `section 1244 interest' means
an eligible small business investment (as defined in section
1045(b)(1)) in a qualified small business entity (as defined
in section 1045(b)(4)) if such entity, during the period of
its 5 most recent taxable years ending before the date the
loss on such investment was sustained, derived more than 50
percent of its aggregate gross receipts from sources other
than royalties, rents, dividends, interests, annuities, and
sales or exchanges of stocks or securities.
``(B) Transition rule.--Any stock in a domestic corporation
issued before January 1, 1997, which was section 1244 stock
under this section on December 31, 1996 (determined under
this section as in effect on such date), shall be treated as
a section 1244 interest for purposes of this section.''
(2) Conforming amendments.--
(A) Section 1244(a) is amended by striking ``section 1244
stock'' and inserting ``a section 1244 interest''.
(B) Section 1244(c)(2) is amended--
(i) by striking ``paragraph (1)(c)'' in the heading and
inserting ``paragraph (1)'',
(ii) by striking ``paragraph (1)(C)'' each place it appears
and inserting ``paragraph (1)'',
(iii) by striking ``corporation'' each place it appears and
inserting ``entity'', and
(iv) by striking ``Paragraph (1)(C)'' in subparagraph (C)
and inserting ``Paragraph (1)''.
(C) Section 1244(c) is amended by striking paragraph (3).
(D) Section 1244(d) is amended--
(i) by striking ``section 1244 stock'' each place it
appears and inserting ``a section 1244 interest'',
(ii) by striking ``stock'' each place it appears and
inserting ``interest'',
(iii) by striking ``paragraphs (1)(C) and (3)(A) of
subsection (c)'' in paragraph (2) and inserting ``subsection
(c)(1)'', and
(iv) by striking ``(other than subparagraph (C) thereof)''
and inserting ``(other than the gross receipts test
thereof)''.
(E)(i) The heading for section 1244 is amended by striking
``stock'' and inserting ``interest''.
(ii) The item relating to section 1244 in the table of
sections for part IV of subchapter P of chapter 1 is amended
by striking ``stocks'' and inserting ``interests''.
(F) Section 165(m)(5) is amended by striking ``stock'' and
inserting ``interests''.
(G) Section 1274(c)(3)(A)(i) is amended--
(i) by inserting ``, as in effect on the day before the
date of enactment of subclause (IV)'' after ``section
1244(c)(3)'' in subclauses (II) and (III),
(ii) by striking ``or'' at the end of subclause (II),
(iii) by striking the period at the end of subclause (III)
and inserting ``, or'', and
(iv) by adding at the end the following new subclause:
``(IV) by a section 1244 interest (as defined in section
1244(c)(1)).''
(c) Effective Date.--The amendments made by this section
shall apply to taxable years ending after December 31, 1996.
SEC. 103. MODIFICATIONS TO EXCLUSION OF GAIN ON CERTAIN SMALL
BUSINESS STOCK.
(a) Exclusion Available to Corporations.--
(1) In general.--Subsection (a) of section 1202 is amended
by striking ``other than a corporation''.
(2) Technical amendment.--Subsection (c) of section 1202 is
amended by adding at the end the following new paragraph:
``(4) Stock held among members of controlled group not
eligible.--Stock shall not be treated as qualified small
business stock if such stock was at any time held by any
member of the parent-subsidiary controlled group (as defined
in subsection (d)(3)) which includes the qualified small
business.''
(b) Repeal of Minimum Tax Preference.--
(1) In general.--Section 57(a) is amended by striking
paragraph (7).
(2) Technical amendment.--Section 53(d)(1)(B)(ii)(II) is
amended by striking ``, (5), and (7)'' and inserting ``and
(5)''.
(c) Stock of Larger Businesses Eligible for Exclusion.--
(1) Section 1202(d)(1) is amended by striking
``$50,000,000'' each place it appears and inserting
``$100,000,000''.
(2) Section 1202(d) is amended by adding at the end the
following new paragraph:
``(4) Inflation adjustment of asset limitation.--In the
case of stock issued in any calendar year after 1997, the
$100,000,000 amount contained in paragraph (1) shall be
increased by an amount equal to--
``(A) such dollar amount, multiplied by
``(B) the cost-of-living adjustment determined under
section 1(f)(3) for the calendar year in which the taxable
year begins, determined by substituting `calendar year 1996'
for `calendar year 1992' in subparagraph (B) thereof.
If any amount as adjusted under the preceding sentence is not
a multiple of $1,000,000, such amount shall be rounded to the
next lower multiple of $1,000,000.''
(d) Per-Issuer Limitation.--Section 1202(b)(1)(A) is
amended by striking ``$10,000,000'' and inserting
``$20,000,000''.
(e) Other Modifications.--
(1) Working capital limitation.--Section 1202(e)(6) is
amended by striking ``2 years'' each place it appears and
inserting ``5 years''.
(2) Redemption rules.--Section 1203(c)(3) is amended by
adding at the end the following new subparagraph:
``(D) Waiver where business purpose.--A purchase of stock
by the issuing corporation shall be disregarded for purposes
of subparagraph (B) if the issuing corporation establishes
that there was a business purpose for such purchase and one
of the principal purposes of the purchase was not to avoid
the limitation of this section.''
(f) Effective Dates.--
(1) In general.--The amendments made by this section shall
apply to stock issued after the date of the enactment of this
Act.
(2) Special rule.--The amendments made by subsection (b),
(d), and (e) shall apply to stock issued after August 10,
1993.
SEC. 104. EXEMPTION FROM TAX FOR GAIN ON SALE OF PRINCIPAL
RESIDENCE.
(a) In General.--Section 121 (relating to one-time
exclusion of gain from sale of principal residence by
individual who has attained age 55) is amended to read as
follows:
``SEC. 121. EXCLUSION OF GAIN FROM SALE OF PRINCIPAL
RESIDENCE.
``(a) Exclusion.--Gross income shall not include gain from
the sale or exchange of property if, during the 5-year period
ending on the date of the sale or exchange, such property has
been owned and used by the taxpayer as the taxpayer's
principal residence for periods aggregating 2 years or more.
``(b) Limitations.--
``(1) Dollar limitation.--The amount of gain excluded from
gross income under subsection (a) with respect to any sale or
exchange shall not exceed $250,000 ($500,000 in the case of a
joint return where both spouses meet the use requirement of
subsection (a)).
``(2) Application to only 1 sale or exchange every 2
years.--
``(A) In general.--Subsection (a) shall not apply to any
sale or exchange by the taxpayer if, during the 2-year period
ending on the date of such sale or exchange, there was any
other sale or exchange by the taxpayer or his spouse to which
subsection (a) applied.
``(B) Premarriage sales by spouse not taken into account.--
If, but for this subparagraph, subsection (a) would not apply
to a sale or exchange by a married individual by reason of a
sale or exchange by such individual's spouse before their
marriage--
``(i) subparagraph (A) shall be applied without regard to
the sale or exchange by such individual's spouse, but
``(ii) the amount of gain excluded from gross income under
subsection (a) with respect to the sale or exchange by such
individual shall not exceed $250,000.
``(C) Pre-1997 sales not taken into account.--Subparagraph
(A) shall be applied without regard to any sale or exchange
before January 1, 1997.
``(c) Exclusion for Taxpayers Failing To Meet Certain
Requirements.--
``(1) In general.--In the case of a sale or exchange to
which this subsection applies, the ownership and use
requirements of subsection (a) shall not apply and subsection
(b)(2) shall not apply; but the amount of gain excluded from
gross income under subsection (a) with respect to such sale
of exchange shall not exceed--
``(A) the amount which bears the same ratio to the amount
which would be so excluded if such requirements had been met,
as
``(B) the shorter of--
``(i) the aggregate periods, during the 5-year period
ending on the date of such sale or exchange, such property
has been owned and used by the taxpayer as the taxpayer's
principal residence, or
``(ii) the period after the date of the most recent prior
sale or exchange by the taxpayer or his spouse to which
subsection (a) applied and before the date of such sale or
exchange,
bears to 2 years.
``(2) Sales and exchanges to which subsection applies.--
This subsection shall apply to any sale or exchange if--
[[Page S356]]
``(A) subsection (a) would not (but for this subsection)
apply to such sale or exchange by reason of--
``(i) a failure to meet the ownership and use requirements
of subsection (a), or
``(ii) subsection (b)(2), and
``(B) such sale or exchange is by reason of a change in
place of employment, health, or other unforeseen
circumstances.
``(d) Special Rules.--
``(1) Joint returns.--For purposes of this section, if a
husband and wife make a joint return for the taxable year of
the sale or exchange of property, subsection (a) shall,
subject to the provisions of subsection (b), apply if either
spouse meets the ownership and use requirements of subsection
(a) with respect to such property.
``(2) Property of deceased spouse.--For purposes of this
section, in the case of an unmarried individual whose spouse
is deceased on the date of the sale or exchange of property,
the period such unmarried individual owned such property
shall include the period such deceased spouse held such
property before death.
``(3) Tenant-stockholder in cooperative housing
corporation.--For purposes of this section, if the taxpayer
holds stock as a tenant-stockholder (as defined in section
216) in a cooperative housing corporation (as defined in such
section), then--
``(A) the holding requirements of subsection (a) shall be
applied to the holding of such stock, and
``(B) the use requirements of subsection (a) shall be
applied to the house or apartment which the taxpayer was
entitled to occupy as such stockholder.
``(4) Involuntary conversions.--
``(A) In general.--For purposes of this section, the
destruction, theft, seizure, requisition, or condemnation of
property shall be treated as the sale of such property.
``(B) Application of section 1033.--In applying section
1033 (relating to involuntary conversions), the amount
realized from the sale or exchange of property shall be
treated as being the amount determined without regard to this
section, reduced by the amount of gain not included in gross
income pursuant to this section.
``(C) Property acquired after involuntary conversion.--If
the basis of the property sold or exchanged is determined (in
whole or in part) under section 1033(b) (relating to basis of
property acquired through involuntary conversion), then the
holding and use by the taxpayer of the converted property
shall be treated as holding and use by the taxpayer of the
property sold or exchanged.
``(5) Recognition of gain attributable to depreciation.--
Subsection (a) shall not apply to so much of the gain from
the sale of any property as does not exceed the portion of
the depreciation adjustments (as defined in section
1250(b)(3)) attributable to periods after December 31, 1996,
in respect of such property.
``(6) Determination of use during periods of out-of-
residence care.--In the case of a taxpayer who--
``(A) becomes physically or mentally incapable of self-
care, and
``(B) owns property and uses such property as the
taxpayer's principal residence during the 5-year period
described in subsection (a) for periods aggregating at least
1 year,
then the taxpayer shall be treated as using such property as
the taxpayer's principal residence during any time during
such 5-year period in which the taxpayer owns the property
and resides in any facility (including a nursing home)
licensed by a State or political subdivision to care for an
individual in the taxpayer's condition.
``(7) Determination of marital status.--In the case of any
sale or exchange, for purposes of this section--
``(A) the determination of whether an individual is married
shall be made as of the date of the sale or exchange, and
``(B) an individual legally separated from his spouse under
a decree of divorce or of separate maintenance shall not be
considered as married.
``(e) Denial of Exclusion for Expatriates.--This section
shall not apply to any sale or exchange by an individual if
the treatment provided by section 877(a)(1) applies to such
individual.
``(f) Election To Have Section Not Apply.--This section
shall not apply to any sale or exchange with respect to which
the taxpayer elects not to have this section apply.
``(g) Residences Acquired in Rollovers Under Section
1034.--For purposes of this section, in the case of property
the acquisition of which by the taxpayer resulted under
section 1034 (as in effect on the day before the date of the
enactment of this sentence) in the nonrecognition of any part
of the gain realized on the sale or exchange of another
residence, in determining the period for which the taxpayer
has owned and used such property as the taxpayer's principal
residence, there shall be included the aggregate periods for
which such other residence (and each prior residence taken
into account under section 1223(7) in determining the holding
period of such property) had been so owned and used.''
(b) Repeal of Nonrecognition of Gain on Rollover of
Principal Residence.--Section 1034 (relating to rollover of
gain on sale of principal residence) is hereby repealed.
(c) Conforming Amendments.--
(1) The following provisions of the Internal Revenue Code
of 1986 are each amended by striking ``section 1034'' and
inserting ``section 121'': sections 25(e)(7), 56(e)(1)(A),
56(e)(3)(B)(i), 143(i)(1)(C)(i)(I), 163(h)(4)(A)(i)(I),
280A(d)(4)(A), 464(f)(3)(B)(i), 1033(h)(3), 1274(c)(3)(B),
6334(a)(13), and 7872(f)(11)(A).
(2) Paragraph (4) of section 32(c) is amended by striking
``(as defined in section 1034(h)(3))'' and by adding at the
end the following new sentence: ``For purposes of the
preceding sentence, the term `extended active duty' means any
period of active duty pursuant to a call or order to such
duty for a period in excess of 90 days or for an indefinite
period.''
(3) Subparagraph (A) of 143(m)(6) is amended by inserting
``(as in effect on the day before the date of the enactment
of the Targeted Investment Incentive and Economic Growth Act
of 1997)'' after ``1034(e)''.
(4) Subsection (e) of section 216 is amended by striking
``such exchange qualifies for nonrecognition of gain under
section 1034(f)'' and inserting ``such dwelling unit is used
as his principal residence (within the meaning of section
121)''.
(5) Section 512(a)(3)(D) is amended by inserting ``(as in
effect on the day before the date of the enactment of the
Targeted Investment Incentive and Economic Growth Act of
1997)'' after ``1034''.
(6) Paragraph (7) of section 1016(a) is amended by
inserting ``(as in effect on the day before the date of the
enactment of the Targeted Investment Incentive and Economic
Growth Act of 1997)'' after ``1034'' and by inserting ``(as
so in effect)'' after ``1034(e)''.
(7) Paragraph (3) of section 1033(k) is amended to read as
follows:
``(3) For exclusion from gross income of gain from
involuntary conversion of principal residence, see section
121.''
(8) Subsection (e) of section 1038 is amended to read as
follows:
``(e) Principal residences.--If--
``(1) subsection (a) applies to a reacquisition of real
property with respect to the sale of which gain was not
recognized under section 121 (relating to gain on sale of
principal residence); and
``(2) within 1 year after the date of the reacquisition of
such property by the seller, such property is resold by him,
then, under regulations prescribed by the Secretary,
subsections (b), (c), and (d) of this section shall not apply
to the reacquisition of such property and, for purposes of
applying section 121, the resale of such property shall be
treated as a part of the transaction constituting the
original sale of such property.''
(9) Paragraph (7) of section 1223 is amended by inserting
``(as in effect on the day before the date of the enactment
of the Targeted Investment Incentive and Economic Growth Act
of 1997)'' after ``1034''.
(10) Paragraph (7) of section 1250(d) is amended to read as
follows:
``(7) Disposition of principal residence.--Subsection (a)
shall not apply to a disposition of property to the extent
used by the taxpayer as his principal residence (within the
meaning of section 121, relating to gain on sale of principal
residence).''
(11) Subsection (c) of section 6012 is amended by striking
``(relating to one-time exclusion of gain from sale of
principal residence by individual who has attained age 55)''
and inserting ``(relating to gain from sale of principal
residence)''.
(12) Paragraph (2) of section 6212(c) is amended by
striking subparagraph (C) and by redesignating the succeeding
subparagraphs accordingly.
(13) Section 6504 is amended by striking paragraph (4) and
by redesignating the succeeding paragraphs accordingly.
(14) The item relating to section 121 in the table of
sections for part III of subchapter B of chapter 1 is amended
to read as follows:
``Sec. 121. Exclusion of gain from sale of principal residence.''
(15) The table of sections for part III of subchapter O of
chapter 1 of such Code is amended by striking the item
relating to section 1034.
(d) Effective Date.--
(1) In general.--The amendments made by this section shall
apply to sales and exchanges after December 31, 1996.
(2) Binding contracts, etc.--At the election of the
taxpayer, the amendments made by this section shall not apply
to a sale or exchange after December 31, 1996, if--
(A) such sale or exchange is pursuant to a contract which
was binding on the date of the enactment of this Act, or
(B) without regard to such amendments, gain would not be
recognized under section 1034 of the Internal Revenue Code of
1986 (as in effect on the day before the date of the
enactment of this Act) on such sale or exchange by reason of
a new residence acquired on or before such date.
This paragraph shall not apply to any sale or exchange by an
individual if the treatment provided by section 877(a)(1) of
the Internal Revenue Code of 1986 applies to such individual.
TITLE II--RETIREMENT SAVINGS
SEC. 201. INCREASE IN DEDUCTION FOR CONTRIBUTIONS TO
INDIVIDUAL RETIREMENT PLANS.
(a) In General.--Section 219(b)(1)(A) is amended by
striking ``$2,000'' and inserting ``$2,500''.
(b) Conforming Amendments.--Subsections (a)(1), (b), and
(j) of section 408 are each amended by striking ``$2,000''
each place it appears and inserting ``$2,500''.
[[Page S357]]
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
1996.
SEC. 202. ROLLOVER OF GAIN FROM SALE OF FARM ASSETS TO
INDIVIDUAL RETIREMENT PLANS.
(a) In General.--Part III of subchapter O of chapter 1
(relating to common nontaxable exchanges) is amended by
inserting after section 1034 the following new section:
``SEC. 1034A. ROLLOVER OF GAIN ON SALE OF FARM ASSETS INTO
ASSET ROLLOVER ACCOUNT.
``(a) Nonrecognition of Gain.--Subject to the limits of
subsection (c), if a taxpayer has a qualified net farm gain
from the sale of a qualified farm asset, then, at the
election of the taxpayer, gain (if any) from such sale shall
be recognized only to the extent such gain exceeds the
contributions to 1 or more asset rollover accounts of the
taxpayer for the taxable year in which such sale occurs.
``(b) Asset Rollover Account.--
``(1) General rule.--Except as provided in this section, an
asset rollover account shall be treated for purposes of this
title in the same manner as an individual retirement plan.
``(2) Asset rollover account.--For purposes of this title,
the term `asset rollover account' means an individual
retirement plan which is designated at the time of the
establishment of the plan as an asset rollover account. Such
designation shall be made in such manner as the Secretary may
prescribe.
``(c) Contribution Rules.--
``(1) No deduction allowed.--No deduction shall be allowed
under section 219 for a contribution to an asset rollover
account.
``(2) Aggregate contribution limitation.--Except in the
case of rollover contributions, the aggregate amount for all
taxable years which may be contributed to all asset rollover
accounts established on behalf of an individual shall not
exceed--
``(A) $400,000 ($200,000 in the case of a separate return
by a married individual), reduced by
``(B) the amount by which the aggregate value of the assets
held by the individual (and spouse) in individual retirement
plans (other than asset rollover accounts) exceeds $100,000.
The determination under subparagraph (B) shall be made as of
the close of the taxable year for which the determination is
being made.
``(3) Annual contribution limitations.--
``(A) General rule.--The aggregate contribution which may
be made in any taxable year to all asset rollover accounts
shall not exceed the lesser of--
``(i) the qualified net farm gain for the taxable year, or
``(ii) an amount determined by multiplying the number of
years the taxpayer is a qualified farmer by $10,000.
``(B) Spouse.--In the case of a married couple filing a
joint return under section 6013 for the taxable year,
subparagraph (A) shall be applied by substituting `$20,000'
for `$10,000' for each year the taxpayer's spouse is a
qualified farmer.
``(4) Time when contribution deemed made.--For purposes of
this section, a taxpayer shall be deemed to have made a
contribution to an asset rollover account on the last day of
the preceding taxable year if the contribution is made on
account of such taxable year and is made not later than the
time prescribed by law for filing the return for such taxable
year (not including extensions thereof).
``(d) Qualified Net Farm Gain; Etc.--For purposes of this
section--
``(1) Qualified net farm gain.--The term `qualified net
farm gain' means the lesser of--
``(A) the net capital gain of the taxpayer for the taxable
year, or
``(B) the net capital gain for the taxable year determined
by only taking into account gain (or loss) in connection with
a disposition of a qualified farm asset.
``(2) Qualified farm asset.--The term `qualified farm
asset' means an asset used by a qualified farmer in the
active conduct of the trade or business of farming (as
defined in section 2032A(e)).
``(3) Qualified farmer.--
``(A) In general.--The term `qualified farmer' means a
taxpayer who--
``(i) during the 5-year period ending on the date of the
disposition of a qualified farm asset materially participated
in the trade or business of farming, and
``(ii) owned (or who with the taxpayer's spouse owned) 50
percent or more of such trade or business during such 5-year
period.
``(B) Material participation.--For purposes of this
paragraph, a taxpayer shall be treated as materially
participating in a trade or business if the taxpayer meets
the requirements of section 2032A(e)(6).
``(4) Rollover contributions.--Rollover contributions to an
asset rollover account may be made only from other asset
rollover accounts.
``(e) Distribution Rules.--For purposes of this title, the
rules of paragraphs (1) and (2) of section 408(d) shall apply
to any distribution from an asset rollover account.
``(f) Individual Required To Report Qualified
Contributions.--
``(1) In general.--Any individual who--
``(A) makes a contribution to any asset rollover account
for any taxable year, or
``(B) receives any amount from any asset rollover account
for any taxable year,
shall include on the return of tax imposed by chapter 1 for
such taxable year and any succeeding taxable year (or on such
other form as the Secretary may prescribe) information
described in paragraph (2).
``(2) Information required to be supplied.--The information
described in this paragraph is information required by the
Secretary which is similar to the information described in
section 408(o)(4)(B).
``(3) Penalties.--For penalties relating to reports under
this paragraph, see section 6693(b).''
(b) Contributions Not Deductible.--Section 219(d) (relating
to other limitations and restrictions) is amended by adding
at the end the following new paragraph:
``(5) Contributions to asset rollover accounts.--No
deduction shall be allowed under this section with respect to
a contribution under section 1034A.''
(c) Excess Contributions.--
(1) In general.--Section 4973 (relating to tax on excess
contributions to individual retirement accounts, certain
section 403(b) contracts, and certain individual retirement
annuities) is amended by adding at the end the following new
subsection:
``(e) Asset Rollover Accounts.--For purposes of this
section, in the case of an asset rollover account referred to
in subsection (a)(1), the term `excess contribution' means
the excess (if any) of the amount contributed for the taxable
year to such account over the amount which may be contributed
under section 1034A.''
(2) Conforming amendments.--
(A) Section 4973(a)(1) is amended by inserting ``an asset
rollover account (within the meaning of section 1034A),''
after the comma at the end.
(B) The heading for section 4973 is amended by inserting
``ASSET ROLLOVER ACCOUNTS,'' after ``CONTRACTS''.
(C) The table of sections for chapter 43 is amended by
inserting ``asset rollover accounts,'' after ``contracts'' in
the item relating to section 4973.
(d) Technical Amendments.--
(1) Section 408(a)(1) (defining individual retirement
account) is amended by inserting ``or a qualified
contribution under section 1034A,'' before ``no
contribution''.
(2) Section 408(d)(5)(A) is amended by inserting ``or
qualified contributions under section 1034A'' after
``rollover contributions''.
(3)(A) Section 6693(b)(1)(A) is amended by inserting ``or
1034A(f)(1)'' after ``408(o)(4)''.
(B) Section 6693(b)(2) is amended by inserting ``or
1034A(f)(1)'' after ``408(o)(4)''.
(4) The table of sections for part III of subchapter O of
chapter 1 is amended by inserting after the item relating to
section 1034 the following new item:
``Sec. 1034A. Rollover of gain on sale of farm assets into asset
rollover account.''
(e) Effective Date.--The amendments made by this section
shall apply to sales and exchanges after the date of the
enactment of this Act.
TITLE III--PERFORMANCE STOCK OPTIONS
SEC. 301. PERFORMANCE STOCK OPTIONS.
(a) In General.--Part II of subchapter D of chapter 1
(relating to certain stock options) is amended by
redesignating section 424 as section 425 and by inserting
after section 423 the following new section:
``SEC. 424. PERFORMANCE STOCK OPTIONS.
``(a) In General.--Section 421(a) shall apply with respect
to the transfer of a share of stock to any person pursuant to
the exercise of a performance stock option if no disposition
of such share is made by such person within 1 year after the
transfer of such share to such person.
``(b) Performance Stock Option.--For purposes of this
part--
``(1) In general.--The term `performance stock option'
means an option to purchase stock of any corporation
described in paragraph (4) which is granted to any person--
``(A) in connection with the performance of services for an
entity described in paragraph (4), and
``(B) upon the attainment of performance goals established
by the entity.
``(2) Additional requirements.--An option shall not be
treated as a performance stock option unless the following
requirements are met:
``(A) Nondiscrimination.--Either--
``(i) the option is granted to an employee who, at the time
of the grant, is not a highly compensated employee, or
``(ii) immediately after the grant of the option, employees
who are not highly compensated employees hold performance
share options which permit the acquisition of at least 50
percent of all shares which may be acquired pursuant to all
performance stock options outstanding (whether or not
exercisable) as of such time.
For purposes of clause (ii), only that portion of the options
held by persons other than nonhighly compensated employees
which results in the requirements of clause (ii) not being
met shall be treated as options which are not performance
stock options, and such portion shall be allocated among
options held by such persons in such manner as the Secretary
may prescribe.
``(B) Specific number of options.--The option is granted
pursuant to a plan that includes either--
``(i) the aggregate number of shares that may be issued
under options granted under the plan, or
[[Page S358]]
``(ii) a method by which the aggregate number of shares
that may be issued under options granted under the plan can
be determined (without regard to whether such aggregate
number may change under such method),
and which is approved by the stockholders of the granting
corporation within 12 months before or after the date such
plan is adopted.
``(C) Time when option granted.--The option is granted
within 10 years after the date the plan described in
subparagraph (B) is adopted, or the date such plan is
approved by the stockholders, whichever is earlier.
``(D) Time for exercising option.--The option by its terms
is not exercisable after the expiration of 10 years from the
date such option is granted.
``(E) Option price.--Except as provided in paragraph (6) of
subsection (c), the option price is not less than the fair
market value of the stock at the time the option is granted.
``(F) Transferability.--The option by its terms is not
transferable by the person holding the option, other than--
``(i) in the case of an individual, by will or the laws of
descent and distribution, or pursuant to a qualified domestic
relations order (as defined in subsection (p) of section
414), and
``(ii) in the case of any other person, by any transaction
in which gain or loss is not recognized in whole or in part.
``(3) Election not to treat option as performance stock
option.--An option shall not be treated as a performance
stock option if--
``(A) as of the time the option is granted the terms of
such option provide that it will not be treated as a
performance stock option, or
``(B) as of the time such option is exercised the grantor
and holder agree that such option will not be treated as a
performance stock option.
``(4) Entities to which section applies.--This section
shall apply to an option granted to a person who performs
services for--
``(A) the corporation issuing the option, or its parent or
subsidiary corporation,
``(B) a partnership in which the corporation issuing the
option holds (at the time of the grant) a capital or profits
interest representing at least 20 percent of the total
capital or profits interest of the partnership, or
``(C) a corporation or a parent or subsidiary corporation
of such corporation issuing or assuming a stock option in a
transaction to which section 425(a) applies.
``(5) Highly compensated employee.--For purposes of this
subsection, the term `highly compensated employee' has the
meaning given such term by section 414(q).
``(c) Special Rules.--
``(1) Good faith efforts to value stock.--If a share of
stock is acquired pursuant to the exercise by any person of
an option which would fail to qualify as a performance stock
option under subsection (b) because there was a failure in an
attempt, made in good faith, to meet the requirement of
subparagraph (E) of subsection (b)(2), the requirement of
subparagraph (E) of subsection (b)(2) shall be considered to
have been met.
``(2) Permissible provisions.--An option that meets the
requirements of subsection (b) shall be treated as a
performance stock option even if--
``(A) the option holder may pay for the stock with stock of
the corporation granting the option,
``(B) the option holder has the right to receive property
at the time of the exercise of the option,
``(C) the right to exercise all or any portion of a
performance stock option may be subject to any condition,
contingency or other criteria (including, without limitation,
the continued performance of services, achievement of
performance objectives, or the occurrence of any event) which
are determined in accordance with the provisions of the plan
or the terms of such option, or
``(D) the option is subject to any condition not
inconsistent with the provisions of subsection (b).
``(3) Fair market value.--For purposes of this section, the
fair market value of stock shall be determined without regard
to any restriction other than a restriction that, by its
terms, will never lapse.
``(4) Definition of parent and subsidiary corporations.--
For purposes of this section, the terms `parent corporation'
and `subsidiary corporation' have the meanings given such
terms by subsections (e) and (f) of section 425 except that
such subsections shall be applied by substituting `20
percent' for `50 percent' each place it appears.
``(5) Performance criteria.--In the case of a performance
stock option that provides that its exercise is subject to
any conditions or criteria described in subparagraph (C) of
paragraph (2), the date or time the option is granted with
respect to each share that may be acquired shall be the date
or time the original performance share option is granted and
subject to the provisions of section 425(h), no portion of
the option shall be treated as granted at any other time.
``(6) Conversion of options.--If--
``(A) there is a transfer of an incentive stock option in
exchange for a performance stock option, and
``(B) the number of shares that may be acquired pursuant to
such performance stock option and the transferred incentive
stock option are the same,
then the option acquired shall qualify as a performance stock
option if the option price pursuant to the performance share
option is no less than the option price under the transferred
incentive stock option.''
(b) Conforming Amendments.--
(1) Section 421(a) is amended by striking ``or 423(a)'' and
inserting ``, 423(a), or 424(a)''.
(2) Section 421(b) is amended--
(A) by striking ``or 423(a)'' and inserting ``, 423(a), or
424(a)'', and
(B) by striking ``or 423(a)(1)'' and inserting ``423(a)(1),
or 424(a)''.
(3) Section 421(c)(1)(A) is amended by inserting ``and the
holding period requirement of section 424(a)'' after
``423(a)''.
(4)(A) Sections 421(a)(2), 422(a)(2), and 423(a)(2) are
each amended by striking ``424(a)'' and inserting ``425(a)''.
(B) Clause (ii) of section 402(e)(4)(E) is amended by
striking ``424'' and inserting ``425''.
(5) Section 423(b)(3) is amended by striking ``424(d)'' and
inserting ``425(d)''.
(6) Section 425(a), as redesignated by subsection (a), is
amended by striking ``424(a)'' and inserting ``425(a)''.
(7) Section 425(c)(3)(A)(ii), as redesignated by subsection
(a), is amended by striking ``or 423(a)(1)'' and inserting
``, 423(a)(1), or 424(a)''.
(8) Section 425(g), as redesignated by subsection (a), is
amended by striking ``and 423(a)(2)'' and inserting ``,
423(a)(2) and 424(b)(4) (as modified by section 424(c)(4))''.
(9) Section 425(j), as redesignated by subsection (a)
(relating to cross-references), is amended by inserting
``performance stock option'' after ``employee stock purchase
plans,''.
(10) Section 1042(c)(1)(B)(ii) is amended by striking ``or
423'' and inserting ``423, or 424''.
(11)(A) Section 6039(a)(1) is amended by inserting ``or
performance stock option'' after ``incentive stock option''.
(B) Section 6039(b)(1) is amended by inserting ``,
performance share option,'' after ``incentive stock option''.
(C) Section 6039(c) is amended by striking ``and'' at the
end of paragraph (1), by striking the period at the end of
paragraph (2) and inserting ``, and'' and by adding at the
end the following new paragraph:
``(3) the term `performance share option', see 424(b).''
(12) The table of sections for part II of subchapter D of
chapter 1 is amended by striking the item relating to section
424 and inserting the following new items:
``Sec. 424. Performance stock options.
``Sec. 425. Definitions and special rules.''
SEC. 302. TAX TREATMENT OF GAIN ON PERFORMANCE SHARE OPTIONS.
(a) Exclusion.--
(1) In general.--Part I of subchapter P of chapter 1
(relating to capital gains and losses) is amended by adding
at the end the following new section:
``SEC. 1203. 50-PERCENT EXCLUSION FOR GAIN FROM STOCK
ACQUIRED THROUGH PERFORMANCE STOCK OPTIONS.
``(a) General Rule.--Gross income shall not include 50
percent of the gain from the disposition of any stock
acquired pursuant to the exercise of a performance stock
option if such disposition occurs more than 2 years after the
date on which such option was exercised with respect to such
stock.
``(b) Definitions and Rules.--For purposes of this
section--
``(1) Performance stock option.--The term `performance
stock option' has the meaning given such term by section
424(b).
``(2) Certain acquisitions disregarded.--If stock described
in subsection (a) is disposed of and the basis of the person
acquiring the stock is determined by reference to the basis
of the stock in the hands of the person who acquired it
through exercise of the performance stock option, such person
shall be treated as acquiring such stock pursuant to such
option on the date such stock was acquired pursuant to the
exercise of such option.
``(3) Exercise by estate.--If a performance stock option is
exercised after the death of an individual holder by the
estate of the decedent, or by a person who acquired the right
to exercise such option by bequest or inheritance or by
reason of the death of the decedent, the 2-year holding
requirement of subsection (a) shall not apply to the
disposition by such estate or person.''
(2) Conforming amendments.--
(A) Section 172(d)(2) (relating to modifications with
respect to net operating loss deduction) is amended to read
as follows:
``(2) Capital gains and losses of taxpayers other than
corporations.--In the case of a taxpayer other than a
corporation--
``(A) the amount deductible on account of losses from sales
or exchanges of capital assets shall not exceed the amount
includable on account of gains from sales or exchanges of
capital assets, and
``(B) the exclusion provided by section 1202 shall not be
allowed.''
(B) Paragraph (4) of section 642(c) is amended to read as
follows:
``(4) Adjustments.--To the extent that the amount otherwise
allowable as a deduction under this subsection consists of
gain described in section 1202(a), proper adjustment shall be
made for any exclusion allowable to the estate or trust under
section 1202 or 1203. In the case of a trust, the deduction
allowed by this subsection shall be subject to section 681
(relating to unrelated business income).''
(C) Paragraph (3) of section 643(a) is amended by adding at
the end thereof the following new sentence: ``The exclusion
[[Page S359]]
under section 1202 or 1203 shall not be taken into account.''
(D) Paragraph (4) of section 691(c) is amended by striking
``1202, and 1211'' and inserting ``1202, 1203, and 1211''.
(E) The second sentence of paragraph (2) of section 871(a)
is amended by inserting ``such gains and losses shall be
determined without regard to sections 1202 and 1203 and''
after ``except that''.
(F) The table of sections for part I of subchapter P of
chapter 1 is amended by adding after the item relating to
section 1202 the following new item:
``Sec. 1203. 50-percent exclusion for gain from stock acquired through
performance stock options.''
(b) Treatment for Wage Withholding and Employment Taxes.--
(1) FICA taxes.--Section 3121(a) (defining wages) is
amended by striking ``or'' at the end of paragraph (20), by
striking the period at the end of paragraph (21) and
inserting ``, or'', and by adding after paragraph (21) the
following new paragraph:
``(22) any gain from the exercise of a performance stock
option (as defined in section 424(b)) or from the disposition
of stock acquired pursuant to the exercise of such a
performance stock option.''
(2) FUTA taxes.--Section 3306(b) (defining wages) is
amended by striking ``or'' at the end of paragraph (16), by
striking the period at the end of paragraph (17) and
inserting ``, or'', and by adding after paragraph (17) the
following new paragraph:
``(18) any gain described in section 3121(a)(22).''
(3) Wage withholding.--
(A) Section 3401(a) (defining wages) is amended by striking
``or'' at the end of paragraph (20), by striking the period
at the end of paragraph (21) and inserting ``, or'', and by
adding at the end the following new paragraph:
``(22) any gain from the exercise of a performance stock
option (as defined in section 424(b)) or from the disposition
of stock acquired pursuant to such a performance stock
option.''
(B) Section 421(b) (relating to effect of disqualifying
disposition) is amended by adding at the end the following
new sentence: ``A deduction to the employer corporation in
the case of a transfer pursuant to an option described in
section 422, 423, or 424 shall not be disallowed by reason of
a failure to withhold tax under chapter 24 with respect to
gain on stock acquired in the transfer.''
SEC. 303. EFFECTIVE DATE.
The amendments made by this title shall apply to options
granted after the date of the enactment of this Act.
TITLE IV--EMPLOYER-PROVIDED TRAINING
SEC. 401. EXTENSION OF EXCLUSION FOR EDUCATIONAL ASSISTANCE
PROGRAMS.
(a) In General.--Section 127 is amended by striking
subsection (d) and by redesignating subsection (e) as
subsection (d).
(b) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
1996.
SEC. 402. STUDY OF NONDISCRIMINATION RULES APPLICABLE TO
EDUCATIONAL ASSISTANCE PROGRAMS.
(a) Study.--The Secretary of Labor, in consultation with
the Secretary of the Treasury, shall conduct a study which
examines--
(1) the pattern in which taxpayers providing job-related
training and education assistance programs under section 127
of the Internal Revenue Code of 1986 extend such benefits to
highly compensated employees and nonhighly compensated
employees;
(2) the merits and administrative feasibility of applying
nondiscrimination rules to job-related training and
educational assistance programs under section 127 of the
Internal Revenue Code of 1986 which are similar to the
nondiscrimination rules applicable to employer-provided
pension plans; and
(3) the merits and administrative feasibility of
conditioning the exclusion for job-related training and
section 127 assistance on an employee remaining with the
employer for at least 1 year after receiving the training or
educational assistance.
(b) Report.--Not later than 9 months after the date of the
enactment of this Act, the Secretary of Labor shall report to
the Congress the results of the study conducted under
subsection (a), including any recommendations for legislation
as the Secretary determines appropriate.
TITLE V--ESTATE TAX RELIEF
SEC. 501. FAMILY-OWNED BUSINESS EXCLUSION.
(a) In General.--Part III of subchapter A of chapter 11
(relating to gross estate) is amended by inserting after
section 2033 the following new section:
``SEC. 2033A. FAMILY-OWNED BUSINESS EXCLUSION.
``(a) In General.--In the case of an estate of a decedent
to which this section applies, the value of the gross estate
shall not include the lesser of--
``(1) the adjusted value of the qualified family-owned
business interests of the decedent otherwise includible in
the estate, or
``(2) $900,000, reduced by the amount of any exclusion
allowed under this section with respect to the estate of a
previously deceased spouse of the decedent.
``(b) Estates to Which Section Applies.--
``(1) In general.--This section shall apply to an estate
if--
``(A) the decedent was (at the date of the decedent's
death) a citizen or resident of the United States,
``(B) the sum of--
``(i) the adjusted value of the qualified family-owned
business interests described in paragraph (2), plus
``(ii) the amount of the gifts of such interests determined
under paragraph (3),
exceeds 50 percent of the adjusted gross estate, and
``(C) during the 8-year period ending on the date of the
decedent's death there have been periods aggregating 5 years
or more during which--
``(i) such interests were owned by the decedent or a member
of the decedent's family, and
``(ii) there was material participation (within the meaning
of section 2032A(e)(6)) by the decedent or a member of the
decedent's family in the operation of the business to which
such interests relate.
``(2) Includible qualified family-owned business
interests.--The qualified family-owned business interests
described in this paragraph are the interests which--
``(A) are included in determining the value of the gross
estate (without regard to this section), and
``(B) are acquired by any qualified heir from, or passed to
any qualified heir from, the decedent (within the meaning of
section 2032A(e)(9)).
``(3) Includible gifts of interests.--The amount of the
gifts of qualified family-owned business interests determined
under this paragraph is the excess of--
``(A) the sum of--
``(i) the amount of such gifts from the decedent to members
of the decedent's family taken into account under subsection
2001(b)(1)(B), plus
``(ii) the amount of such gifts otherwise excluded under
section 2503(b),
to the extent such interests are continuously held by members
of such family (other than the decedent's spouse) between the
date of the gift and the date of the decedent's death, over
``(B) the amount of such gifts from the decedent to members
of the decedent's family otherwise included in the gross
estate.
``(c) Adjusted Gross Estate.--For purposes of this section,
the term `adjusted gross estate' means the value of the gross
estate (determined without regard to this section)--
``(1) reduced by any amount deductible under paragraph (3)
or (4) of section 2053(a), and
``(2) increased by the excess of--
``(A) the sum of--
``(i) the amount of gifts determined under subsection
(b)(3), plus
``(ii) the amount (if more than de minimis) of other
transfers from the decedent to the decedent's spouse (at the
time of the transfer) within 10 years of the date of the
decedent's death, plus
``(iii) the amount of other gifts (not included under
clause (i) or (ii)) from the decedent within 3 years of such
date, other than gifts to members of the decedent's family
otherwise excluded under section 2503(b), over
``(B) the sum of the amounts described in clauses (i),
(ii), and (iii) of subparagraph (A) which are otherwise
includible in the gross estate.
For purposes of the preceding sentence, the Secretary may
provide that de minimis gifts to persons other than members
of the decedent's family shall not be taken into account.
``(d) Adjusted Value of the Qualified Family-Owned Business
Interests.--For purposes of this section, the adjusted value
of any qualified family-owned business interest is the value
of such interest for purposes of this chapter (determined
without regard to this section), reduced by the excess of--
``(1) any amount deductible under paragraph (3) or (4) of
section 2053(a), over
``(2) the sum of--
``(A) any indebtedness on any qualified residence of the
decedent the interest on which is deductible under section
163(h)(3), plus
``(B) any indebtedness to the extent the taxpayer
establishes that the proceeds of such indebtedness were used
for the payment of educational and medical expenses of the
decedent, the decedent's spouse, or the decedent's dependents
(within the meaning of section 152), plus
``(C) any indebtedness not described in clause (i) or (ii),
to the extent such indebtedness does not exceed $10,000.
``(e) Qualified Family-Owned Business Interest.--
``(1) In general.--For purposes of this section, the term
`qualified family-owned business interest' means--
``(A) an interest as a proprietor in a trade or business
carried on as a proprietorship, or
``(B) an interest in an entity carrying on a trade or
business, if--
``(i) at least--
``(I) 50 percent of such entity is owned (directly or
indirectly) by the decedent and members of the decedent's
family,
``(II) 70 percent of such entity is so owned by members of
2 families, or
``(III) 90 percent of such entity is so owned by members of
3 families, and
``(ii) for purposes of subclause (II) or (III) of clause
(i), at least 30 percent of such entity is so owned by the
decedent and members of the decedent's family.
``(2) Limitation.--Such term shall not include--
[[Page S360]]
``(A) any interest in a trade or business the principal
place of business of which is not located in the United
States,
``(B) any interest in an entity, if the stock or debt of
such entity or a controlled group (as defined in section
267(f)(1)) of which such entity was a member was readily
tradable on an established securities market or secondary
market (as defined by the Secretary) at any time within 3
years of the date of the decedent's death,
``(C) any interest in a trade or business not described in
section 542(c)(2), if more than 35 percent of the adjusted
ordinary gross income of such trade or business for the
taxable year which includes the date of the decedent's death
would qualify as personal holding company income (as defined
in section 543(a)),
``(D) that portion of an interest in a trade or business
that is attributable to--
``(i) cash or marketable securities, or both, in excess of
the reasonably expected day-to-day working capital needs of
such trade or business, and
``(ii) any other assets of the trade or business (other
than assets used in the active conduct of a trade or business
described in section 542(c)(2)), the income of which is
described in section 543(a) or in subparagraph (B), (C), (D),
or (E) of section 954(c)(1) (determined by
substituting `trade or business' for `controlled foreign
corporation').
``(3) Rules regarding ownership.--
``(A) Ownership of entities.--For purposes of paragraph
(1)(B)--
``(i) Corporations.--Ownership of a corporation shall be
determined by the holding of stock possessing the appropriate
percentage of the total combined voting power of all classes
of stock entitled to vote and the appropriate percentage of
the total value of shares of all classes of stock.
``(ii) Partnerships.--Ownership of a partnership shall be
determined by the owning of the appropriate percentage of the
capital interest in such partnership.
``(B) Ownership of tiered entities.--For purposes of this
section, if by reason of holding an interest in a trade or
business, a decedent, any member of the decedent's family,
any qualified heir, or any member of any qualified heir's
family is treated as holding an interest in any other trade
or business--
``(i) such ownership interest in the other trade or
business shall be disregarded in determining if the ownership
interest in the first trade or business is a qualified
family-owned business interest, and
``(ii) this section shall be applied separately in
determining if such interest in any other trade or business
is a qualified family-owned business interest.
``(C) Individual ownership rules.--For purposes of this
section, an interest owned, directly or indirectly, by or for
an entity described in paragraph (1)(B) shall be considered
as being owned proportionately by or for the entity's
shareholders, partners, or beneficiaries. A person shall be
treated as a beneficiary of any trust only if such person has
a present interest in such trust.
``(f) Tax Treatment of Failure To Materially Participate in
Business or Dispositions of Interests.--
``(1) In general.--There is imposed an additional estate
tax if, within 10 years after the date of the decedent's
death and before the date of the qualified heir's death--
``(A) the material participation requirements described in
section 2032A(c)(6)(B) are not met with respect to the
qualified family-owned business interest which was acquired
(or passed) from the decedent,
``(B) the qualified heir disposes of any portion of a
qualified family-owned business interest (other than by a
disposition to a member of the qualified heir's family or
through a qualified conservation contribution under section
170(h)),
``(C) the qualified heir loses United States citizenship
(within the meaning of section 877) or with respect to whom
an event described in subparagraph (A) or (B) of section
877(e)(1) occurs, and such heir does not comply with the
requirements of subsection (g), or
``(D) the principal place of business of a trade or
business of the qualified family-owned business interest
ceases to be located in the United States.
``(2) Additional estate tax.--
``(A) In general.--The amount of the additional estate tax
imposed by paragraph (1) shall be equal to--
``(i) the applicable percentage of the adjusted tax
difference attributable to the qualified family-owned
business interest (as determined under rules similar to the
rules of section 2032A(c)(2)(B)), plus
``(ii) interest on the amount determined under clause (i)
at the underpayment rate established under section 6621 for
the period beginning on the date the estate tax liability was
due under this chapter and ending on the date such additional
estate tax is due.
``(B) Applicable percentage.--For purposes of this
paragraph, the applicable percentage shall be determined
under the following table:
``If the event described in
paragraph (1) occurs in
the folThe applicable
material percentage is:
1 through 6..................................................100 ....
7.............................................................80 ....
8.............................................................60 ....
9.............................................................40 ....
10............................................................20.....
``(g) Security Requirements for Noncitizen Qualified
Heirs.--
``(1) In general.--Except upon the application of
subparagraph (F) or (M) of subsection (h)(3), if a qualified
heir is not a citizen of the United States, any interest
under this section passing to or acquired by such heir
(including any interest held by such heir at a time described
in subsection (f)(1)(C)) shall be treated as a qualified
family-owned business interest only if the interest passes or
is acquired (or is held) in a qualified trust.
``(2) Qualified trust.--The term `qualified trust' means a
trust--
``(A) which is organized under, and governed by, the laws
of the United States or a State, and
``(B) except as otherwise provided in regulations, with
respect to which the trust instrument requires that at least
1 trustee of the trust be an individual citizen of the United
States or a domestic corporation.
``(h) Other Definitions and Applicable Rules.--For purposes
of this section--
``(1) Qualified heir.--The term `qualified heir'--
``(A) has the meaning given to such term by section
2032A(e)(1), and
``(B) includes any active employee of the trade or business
to which the qualified family-owned business interest relates
if such employee has been employed by such trade or business
for a period of at least 10 years before the date of the
decedent's death.
``(2) Member of the family.--The term `member of the
family' has the meaning given to such term by section
2032A(e)(2).
``(3) Applicable rules.--Rules similar to the following
rules shall apply:
``(A) Section 2032A(b)(4) (relating to decedents who are
retired or disabled).
``(B) Section 2032A(b)(5) (relating to special rules for
surviving spouses).
``(C) Section 2032A(c)(2)(D) (relating to partial
dispositions).
``(D) Section 2032A(c)(3) (relating to only 1 additional
tax imposed with respect to any 1 portion).
``(E) Section 2032A(c)(4) (relating to due date).
``(F) Section 2032A(c)(5) (relating to liability for tax;
furnishing of bond).
``(G) Section 2032A(c)(7) (relating to no tax if use begins
within 2 years; active management by eligible qualified heir
treated as material participation).
``(H) Section 2032A(e)(10) (relating to community
property).
``(I) Section 2032A(e)(14) (relating to treatment of
replacement property acquired in section 1031 or 1033
transactions).
``(J) Section 2032A(f) (relating to statute of
limitations).
``(K) Section 6166(b)(3) (relating to farmhouses and
certain other structures taken into account).
``(L) Subparagraphs (B), (C), and (D) of section 6166(g)(1)
(relating to acceleration of payment).
``(M) Section 6324B (relating to special lien for
additional estate tax).''.
(b) Clerical Amendment.--The table of sections for part III
of subchapter A of chapter 11 is amended by inserting after
the item relating to section 2033 the following new item:
``Sec. 2033A. Family-owned business exclusion.''.
(c) Effective Date.--The amendments made by this section
shall apply to estates of decedents dying after December 31,
1996.
SEC. 502. PORTION OF ESTATE TAX SUBJECT TO 4-PERCENT INTEREST
RATE INCREASED TO $1,600,000.
(a) In General.--Subparagraph (B) of section 6601(j)(2)
(defining 4-percent portion) is amended by striking
``$345,800'' and inserting ``$600,800''.
(b) Effective Date.--The amendment made by this section
shall apply to estates of decedents dying after December 31,
1996.
SEC. 503. CERTAIN CASH RENTALS OF FARMLAND NOT TO CAUSE
RECAPTURE OF SPECIAL ESTATE TAX VALUATION.
(a) In General.--Subsection (c) of section 2032A (relating
to tax treatment of dispositions and failures to use for
qualified use) is amended by adding at the end the following
new paragraph:
``(8) Certain cash rental not to cause recapture.--For
purposes of this subsection, a qualified heir shall not be
treated as failing to use property in a qualified use solely
because such heir rents such property on a net cash basis to
a member of the decedent's family, but only if, during the
period of the lease, such member of the decedent's family
uses such property in a qualified use.''
(b) Effective Date.--The amendment made by subsection (a)
shall apply with respect to rentals occurring after December
31, 1976.
TITLE VI--TRANSPORTATION INVESTMENT
SEC. 601. FINDINGS.
Congress finds that--
(1) decaying roads and bridges are clogging the economic
lifelines and hampering growth of communities around the
country, costing nearly $40,000,000,000 in annual losses from
traffic congestion alone;
(2) with ``just-in-time'' manufacturing a critical aspect
of our economic competitiveness, a modern, efficient
transportation system is more vital now than ever;
(3) user fee revenues continue to flow into our
transportation trust funds for their intended purpose of
infrastructure investment;
(4) Federal budget constraints have prevented States from
fully utilizing all amounts of the transportation trust fund
revenues made available to them;
[[Page S361]]
(5) at the same time, recent Federal initiatives have
equipped States with new infrastructure financing tools that
help attract private investment, stimulate the Nation's
economy, and create jobs; and
(6) enabling States to use a portion of their unobligated
balances of apportioned Highway Trust Fund revenues via these
new financing tools will maximize the benefits of vitally
needed infrastructure investments.
SEC. 602. PROGRAM STRUCTURE.
(a) In General.--The Secretary of Transportation (referred
to in this title as the ``Secretary'') shall make available
to a State a portion of the State's unobligated balance in
accordance with section 603.
(b) Qualifying Project.--Federal funds made available under
this title may be used only to provide assistance with
respect to a project eligible for assistance under section
133(b) of title 23, United States Code.
(c) Project Administration.--A project receiving assistance
under this title shall be carried out in accordance with
title 23, United States Code.
SEC. 603. FUNDING.
(a) Unobligated Balances.--
(1) In general.--For each fiscal year, upon the request of
a State, the Secretary shall make available to the State to
carry out projects eligible for assistance under this title
an aggregate amount not to exceed 10 percent, as of the last
day of the preceding fiscal year, of the funds that were
apportioned to the State under sections 104(b)(1), 104(b)(3),
104(b)(5), 144, and 160 of title 23, United States Code, and
are not obligated.
(2) Urbanized areas over 200,000.--Funds that were
apportioned to a State under section 104(b)(3) or 160 of
title 23, United States Code, and attributed to an urbanized
area of the State with an urbanized area population of over
200,000 under section 133(d)(3) of that title may be made
available by the Secretary under paragraph (1) only if the
metropolitan planning organization designated for the area
concurs, in writing, with that use.
(b) Use of Funds.--
(1) State infrastructure banks.--
(A) In general.--A State shall contribute the amounts made
available to the State under subsection (a)(1) to the State
infrastructure bank established by the State in accordance
with section 350 of the National Highway System Designation
Act of 1995 (23 U.S.C. 101 note; 109 Stat. 618). Federal
funds contributed to the bank under this subparagraph shall
constitute a capitalization grant for the infrastructure
bank.
(B) Disbursements.--The Secretary shall ensure that the
disbursements of the Federal funds referred to in
subparagraph (A) to the infrastructure bank shall be at a
rate consistent with historic rates for the Federal-aid
highway program.
(2) Grants.--In lieu of contributing the funds to an
infrastructure bank, and upon approval by the Secretary, a
State may obligate amounts made available to the State under
subsection (a)(1) for a project eligible for assistance under
section 602(b).
(3) No obligation limitation.--No limitation shall apply to
obligations of amounts made available under subsection
(a)(1).
______
By Mr. MOYNIHAN:
S. 21. A bill to establish a medical education trust fund, and for
other purposes; to the Committee on Finance.
the medical education trust fund act of 1997
Mr. MOYNIHAN. Mr. President, I rise to reintroduce legislation that
would establish a medical education trust fund to support America's 142
accredited medical schools and 1,250 teaching hospitals. These
institutions are national treasures; they are the very best in the
world. Yet today they find themselves in a precarious financial
situation as market forces reshape the health care delivery system in
the United States. Explicit and dedicated funding for these
institutions, which this legislation will provide, will ensure that the
United States continues to lead the world in the quality of its health
care system.
This legislation requires that the public sector, through the
Medicare and Medicaid programs, and the private sector, through an
assessment on health insurance premiums, contribute broad-based and
fair financial support.
brief history
My particular interest in this subject began in 1994, when the
Finance Committee took up the President's Health Security Act. I was
chairman of the committee at the time. In January of that year, I asked
Dr. Paul Marks, M.D., president of Memorial Sloan-Kettering Cancer
Center in New York City, if he would arrange a seminar for me on health
care issues. He agreed, and gathered a number of medical school deans
together one morning in New York.
Early on in the meeting, one of the seminarians remarked that the
University of Minnesota might have to close its medical school. In an
instant I realized I had heard something new. Minnesota is a place
where they open medical schools, not close them. How, then, could this
be? The answer was that Minnesota, being Minnesota, was a leading State
in the growth of competitive health care markets, in which competing
managed care organizations try to deliver services at lower costs. In
this environment, HMO's and the like do not send patients to teaching
hospitals, absent which you cannot have a medical school.
We are in the midst of a great era of discovery in medical science.
It is certainly not a time to close medical schools. This great era of
medical discovery is occurring right here in the United States, not in
Europe like past ages of scientific discovery. And it is centered in
New York City. This heroic age of medical science started in the late
1930's. Before then, the average patient was probably as well off,
perhaps better, out of a hospital as in one. Progress from that point
sixty years ago has been remarkable. The last few decades have brought
us images of the inside of the human body based on the magnetic
resonance of bodily tissues; laser surgery; micro surgery for
reattaching limbs; and organ transplantation, among other wonders.
Physicians are now working on a gene therapy that might eventually
replace bypass surgery. I can hardly imagine what might be next.
After months of hearings and debate on the President's Health
Security Act, I became convinced that special provisions would have to
be made for medical schools, teaching hospitals, and medical research
if we were not to see this great moment in medical science suddenly
constrained. To that end, when the Committee on Finance voted 12 to 8
on July 2, 1994 to report the Health Security Act, it included a
Graduate Medical Education and Academic Health Centers Trust Fund. The
trust fund provided an 80-percent increase in Federal funding for
academic medicine; as importantly, it represented stable, long-term
funding. While nothing came of the effort to enact universal health
care coverage, the medical education trust fund enjoyed widespread
support. An amendment by Senator Malcolm Wallop to kill the trust fund
by striking the source of its revenue--a 1.75-percent assessment on
health insurance premiums--failed on a 7 to 13 vote in the Finance
Committee.
I continued to press the issue in the first session of the 104th
Congress. On September 29, 1995, during Finance Committee consideration
of budget reconciliation legislation, I offered an amendment to
establish a similar trust fund. With a new majority in control and the
committee in the midst of considering a highly partisan budget
reconciliation bill, my amendment failed on a tie vote, 10 to 10.
Notably, however, the House version of the reconciliation bill did
include a graduate medical education trust fund. That provision
ultimately passed both houses as part of the conference agreement,
which was subsequently vetoed by President Clinton. The budget
resolution for fiscal year 1997 as passed by Congress also appeared to
assume that a similar trust fund was to be included in the Medicare
reconciliation bill--a bill which never materialized.
The chairman of the House Ways and Means Committee, Representative
Bill Archer, was largely responsible for the inclusion of trust fund
provisions in the Balanced Budget Act of 1995 and the budget resolution
for fiscal year 1997. He and I share a strong commitment to ensuring
the continued success of our system of medical education. Indeed,
Chairman Archer and I were both honored last year to receive the
American Association of Medical Colleges' Public Service Excellence
Award.
That is the history of this effort, briefly stated.
need for legislation
Medical education is one of America's most precious public resources.
Within our increasingly competitive health care system, it is rapidly
becoming a public good--that is, a good from which everyone benefits,
but for which no one is willing to pay. Therefore, it would be
explicitly financed with contributions from all sectors of the health
care system, not just the Medicare Program as is the case today. The
fiscal pressures of a competitive health market are increasingly
closing off traditional implicit revenue sources
[[Page S362]]
(such as additional payments from private payers) that have supported
medical schools, graduate medical education, and research until now. In
its June, 1995 Report to Congress, the Prospective Payment Assessment
Commission [ProPAC], created to advise Congress on Medicare Hospital
Insurance [Part A] payment, summarized the situation of teaching
hospitals as follows:
As competition in the health care system intensifies, the
additional costs borne by teaching hospitals will place them
at a disadvantage relative to other facilities. The role,
scale, function, and number of these institutions
increasingly will be challenged. . . . Accelerating price
competition in the private sector . . . is reducing the
ability of teaching hospitals to obtain the higher patient
care rates from other payers that traditionally have
contributed to financing the costs associated with graduate
medical education.
ProPAC's June, 1996 Report to Congress confirmed that ``major
teaching hospitals have the dual problems of higher overall losses from
uncompensated care and less above-cost revenue from private insurers.''
The State of New York provides a good example of what is happening as
health care markets become more competitive. Effective at the end of
the 1996 calendar year, New York repealed a State law that set hospital
rates. Hospitals must now negotiate their fees with each and every
health plan in the State. Where teaching hospitals were once guaranteed
a payment that recognized, to some degree, its higher costs of
providing services, the private sector is free to squeeze down payments
to hospitals with no such recognition. While the State of New York
operates funding pools that provide partial support for graduate
medical education and uncompensated care, it is largely up to the
teaching hospitals to try to win higher rates than other hospitals when
negotiating contracts with health plans. Some may succeed in doing so,
but most will probably not. New York's State law was unique, but the
same process of negotiation between hospitals and private health plans
takes place across the country. Who, in this context, will pay for the
higher costs of operating teaching hospitals?
It is obvious that teaching hospitals can no longer rely on higher
payments from private payers to do so. Nor should they. The
establishment of this trust fund, which explicitly reimburses teaching
hospitals for the costs of graduate medical education, will ensure that
teaching hospitals can pursue their vitally important patient care,
training, and research missions in the face of an increasingly
competitive health system.
Medical schools also face an uncertain future. There are many policy
issues that need to be examined regarding the role of medical schools
in our health system, but two threats faced by medical schools require
immediate attention. This legislation addresses both. First, many
medical schools are immediately threatened by the dire financial
condition of their affiliated teaching hospitals. Medical schools rely
on teaching hospitals to provide a place for their faculty to practice
and perform research, a place to send third and fourth-year medical
school students for training, and for some direct revenues. By
improving the financial condition of teaching hospitals, this
legislation significantly improves the outlook for medical schools.
The second immediate threat faced by medical schools stems from their
reliance on a portion of the clinical practice revenue generated by
their faculties to support their operations. As competition within the
health system intensifies and managed care proliferates, these revenues
are shrinking. This legislation provides payments to medical schools
from the trust fund that are designed to partially offset this loss of
revenue.
None of the foregoing is meant to suggest that the new competitive
forces reshaping health care have brought only negative results. To the
contrary, the onset of competition has had many beneficial effects, the
dramatic curtailing of growth in health insurance premiums being the
most obvious. But as Monsignor Charles J. Fahey of Fordham warned in
testimony before the Finance Committee in 1994, we must be wary of the
``commodification of health care,'' by which he meant that health care
is not just another commodity. We can rely on competition to hold down
costs in much of the health system, but we must not allow it to bring a
premature end to this great age of medical discovery, an age made
possible by this country's exceptionally well-trained health
professionals and superior medical schools and teaching hospitals. This
legislation complements a competitive health market by providing tax-
supported funding for the public services provided by teaching
hospitals and medical schools.
description of legislation
Accordingly, the medical education trust fund established in the
legislation I have just reintroduced would receive funding from three
sources broadly representing the entire health care system: a 1.5
percent tax on health insurance premiums--the private sector's
contribution--Medicare and Medicaid--the latter two sources comprising
the public sector's contribution. The relative contribution from each
of these sources will be in rough proportion to the medical education
costs attributable to their respective covered populations.
Over the 5 years following enactment, the medical education trust
fund provides average annual payments of about $17 billion. The tax on
health insurance premium--including self-insured health plans--raises
approximately $4 billion per year for the trust fund. Federal health
programs contribute about $13 billion per year to the trust fund: $9
billion in transfers of Medicare graduate medical education payments
and $4 billion in federal Medicaid spending.
This legislation is only a first step. It establishes the principle
that, as a public good, medical education should be supported by
dedicated, long-term Federal funding. To ensure that the United States
continues to lead the world in the quality of its medical education and
its health system as a whole, the legislation would also create a
Medical Education Advisory Commission to conduct a thorough study and
make recommendations, including the potential use of demonstration
projects, regarding the following: alternative and additional sources
of medical education financing; alternative methodologies for financing
medical education; policies designed to maintain superior research and
educational capacities in an increasingly competitive health system;
the appropriate role of medical schools in graduate medical education;
and policies designed to expand eligibility for graduate medical
education payments to institutions other than teaching hospitals.
Mr. President, the services provided by this Nation's teaching
hospitals and medical schools--ground breaking research, highly skilled
medical care, and the training of tomorrow's physicians--are vitally
important and must be protected in this time of intense economic
competition in the health system.
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. 21
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Medical
Education Trust Fund Act of 1997''.
(b) Table of Contents.--The table of contents of this title
is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Medical Education Trust Fund.
Sec. 3. Amendments to medicare program.
Sec. 4. Amendments to medicaid program.
Sec. 5. Assessments on insured and self-insured health plans.
Sec. 6. Medical Education Advisory Commission.
Sec. 7. Demonstration projects.
SEC. 2. MEDICAL EDUCATION TRUST FUND.
The Social Security Act (42 U.S.C. 300 et seq.) is amended
by adding after title XX the following new title:
``TITLE XXI--MEDICAL EDUCATION TRUST FUND
``table of contents of title
``Sec. 2101. Establishment of Trust Fund.
``Sec. 2102. Payments to medical schools.
``Sec. 2103. Payments to teaching hospitals.
``SEC. 2101. ESTABLISHMENT OF TRUST FUND.
``(a) In General.--There is established in the Treasury of
the United States a fund to be known as the Medical Education
Trust Fund (in this title referred to as the `Trust Fund'),
consisting of the following accounts:
[[Page S363]]
``(1) The Medical School Account.
``(2) The Medicare Teaching Hospital Indirect Account.
``(3) The Medicare Teaching Hospital Direct Account.
``(4) The Non-Medicare Teaching Hospital Indirect Account.
``(5) The Non-Medicare Teaching Hospital Direct Account.
Each such account shall consist of such amounts as are
allocated and transferred to such account under this section,
sections 1876(a)(7), 1886(j) and 1931, and section 4503 of
the Internal Revenue Code of 1986. Amounts in the accounts of
the Trust Fund shall remain available until expended.
``(b) Expenditures From Trust Fund.--Amounts in the
accounts of the Trust Fund are available to the Secretary for
making payments under sections 2102 and 2103.
``(c) Investment.--
``(1) In general.--The Secretary of the Treasury shall
invest amounts in the accounts of the Trust Fund which the
Secretary determines are not required to meet current
withdrawals from the Trust Fund. Such investments may be made
only in interest-bearing obligations of the United States.
For such purpose, such obligations may be acquired on
original issue at the issue price, or by purchase of
outstanding obligations at the market price.
``(2) Sale of obligations.--The Secretary of the Treasury
may sell at market price any obligation acquired under
paragraph (1).
``(3) Availability of income.--Any interest derived from
obligations held in each such account, and proceeds from any
sale or redemption of such obligations, are hereby
appropriated to such account.
``(d) Monetary Gifts to Trust Fund.--There are appropriated
to the Trust Fund such amounts as may be unconditionally
donated to the Federal Government as gifts to the Trust Fund.
Such amounts shall be allocated and transferred to the
accounts described in subsection (a) in the same proportion
as the amounts in each of the accounts bears to the total
amount in all the accounts of the Trust Fund.
``SEC. 2102. PAYMENTS TO MEDICAL SCHOOLS.
``(a) Federal Payments to Medical Schools for Certain
Costs.--
``(1) In general.--In the case of a medical school that in
accordance with paragraph (2) submits to the Secretary an
application for fiscal year 1998 or any subsequent fiscal
year, the Secretary shall make payments for such year to the
medical school for the purpose specified in paragraph (3).
The Secretary shall make such payments from the Medical
School Account in an amount determined in accordance with
subsection (b), and may administer the payments as a
contract, grant, or cooperative agreement.
``(2) Application for payments.--For purposes of paragraph
(1), an application for payments under such paragraph for a
fiscal year is in accordance with this paragraph if--
``(A) the medical school involved submits the application
not later than the date specified by the Secretary; and
``(B) the application is in such form, is made in such
manner, and contains such agreements, assurances, and
information as the Secretary determines to be necessary to
carry out this section.
``(3) Purpose of payments.--The purpose of payments under
paragraph (1) is to assist medical schools in maintaining and
developing quality educational programs in an increasingly
competitive health care system.
``(b) Availability of Trust Fund for Payments; Annual
Amount of Payments.--
``(1) Availability of trust fund for payments.--The
following amounts shall be available for a fiscal year for
making payments under subsection (a) from the amount
allocated and transferred to the Medical School Account under
sections 1876(a)(7), 1886(j), 1931, 2101(c)(3) and (d), and
section 4503 of the Internal Revenue Code of 1986:
``(A) In the case of fiscal year 1998, $200,000,000.
``(B) In the case of fiscal year 1999, $300,000,000.
``(C) In the case of fiscal year 2000, $400,000,000.
``(D) In the case of fiscal year 2001, $500,000,000.
``(E) In the case of fiscal year 2002, $600,000,000.
``(F) In the case of each subsequent fiscal year, the
amount specified in this paragraph in the previous fiscal
year updated through the midpoint of the year by the
estimated percentage change in the general health care
inflation factor (as defined in subsection (d)) during the
12-month period ending at that midpoint, with appropriate
adjustments to reflect previous underestimations or
overestimations under this subparagraph in the projected
health care inflation factor.
``(2) Amount of payments for medical schools.--
``(A) In general.--Subject to the annual amount available
under paragraph (1) for a fiscal year, the amount of payments
required under subsection (a) to be made to a medical school
that submits to the Secretary an application for such year in
accordance with subsection (a)(2) is an amount equal to an
amount determined by the Secretary in accordance with
subparagraph (B).
``(B) Development of formula.--The Secretary shall develop
a formula for allocation of funds to medical schools under
this section consistent with the purpose described in
subsection (a)(3).
``(c) Medical School Defined.--For purposes of this
section, the term `medical school' means a school of medicine
(as defined in section 799 of the Public Health Service Act)
or a school of osteopathic medicine (as defined in such
section).
``(d) General Health Care Inflation Factor.--The term
`general health care inflation factor' means the consumer
price index for medical services as determined by the Bureau
of Labor Statistics.
``SEC. 2103. PAYMENTS TO TEACHING HOSPITALS.
``(a) Formula Payments to Eligible Entities.--
``(1) In general.--In the case of any fiscal year beginning
after September 30, 1997, the Secretary shall make payments
to each eligible entity that, in accordance with paragraph
(2), submits to the Secretary an application for such fiscal
year. Such payments shall be made from the Trust Fund, and
the total of the payments to the eligible entity for the
fiscal year shall equal the sum of the amounts determined
under subsections (b), (c), (d), and (e).
``(2) Application.--For purposes of paragraph (1), an
application shall contain such information as may be
necessary for the Secretary to make payments under such
paragraph to an eligible entity during a fiscal year. An
application shall be treated as submitted in accordance with
this paragraph if it is submitted not later than the date
specified by the Secretary, and is made in such form and
manner as the Secretary may require.
``(3) Periodic payments.--Payments under paragraph (1) to
an eligible entity for a fiscal year shall be made
periodically, at such intervals and in such amounts as the
Secretary determines to be appropriate (subject to applicable
Federal law regarding Federal payments).
``(4) Administrator of programs.--The Secretary shall carry
out responsibility under this title by acting through the
Administrator of the Health Care Financing Administration.
``(5) Eligible entity.--For purposes of this title, the
term `eligible entity', with respect to any fiscal year,
means--
``(A) for payment under subsections (b) and (c), an entity
which would be eligible to receive payments for such fiscal
year under--
``(i) section 1886(d)(5)(B), if such payments had not been
terminated for discharges occurring after September 30, 1997;
``(ii) section 1886(h), if such payments had not been
terminated for cost reporting periods beginning after
September 30, 1997; or
``(iii) both sections; or
``(B) for payment under subsections (d) and (e)--
``(i) an entity which meets the requirement of subparagraph
(A); or
``(ii) an entity which the Secretary determines should be
considered an eligible entity.
``(b) Determination of Amount From Medicare Teaching
Hospital Indirect Account.--
``(1) In general.--The amount determined for an eligible
entity for a fiscal year under this subsection is the amount
equal to the applicable percentage of the total amount
allocated and transferred to the Medicare Teaching Hospital
Indirect Account under sections 1876(a)(7) and 1886(j)(1),
and subsections (c)(3) and (d) of section 2101 for such
fiscal year.
``(2) Applicable percentage.--For purposes of paragraph
(1), the applicable percentage for any fiscal year is equal
to the percentage of the total payments which would have been
made to the eligible entity in such fiscal year under section
1886(d)(5)(B) if--
``(A) such payments had not been terminated for discharges
occurring after September 30, 1997; and
``(B) such payments included payments for individuals
enrolled in a plan under section 1876, except that for fiscal
years 1998, 1999, and 2000, only the applicable percentage
(as defined in section 1876(a)(7)(B)) of such payments shall
be taken into account.
``(c) Determination of Amount From Medicare Teaching
Hospital Direct Account.--
``(1) In general.--The amount determined for an eligible
entity for a fiscal year under this subsection is the amount
equal to the applicable percentage of the total amount
allocated and transferred to the Medicare Teaching Hospital
Direct Account under sections 1876(a)(7) and 1886(j)(2), and
subsections (c)(3) and (d) of section 2101 for such fiscal
year.
``(2) Applicable percentage.--For purposes of paragraph
(1), the applicable percentage for any fiscal year is equal
to the percentage of the total payments which would have been
made to the eligible entity in such fiscal year under section
1886(h) if--
``(A) such payments had not been terminated for cost
reporting periods beginning after September 30, 1997; and
``(B) such payments included payments for individuals
enrolled in a plan under section 1876, except that for fiscal
years 1998, 1999, and 2000, only the applicable percentage
(as defined in section 1876(a)(7)(B)) of such payments shall
be taken into account.
``(d) Determination of Amount From Non-Medicare Teaching
Hospital Indirect Account.--
``(1) In general.--The amount determined for an eligible
entity for a fiscal year under this subsection is the amount
equal to the applicable percentage of the total amount
allocated and transferred to the Non-Medicare Teaching
Hospital Indirect Account for such fiscal year under section
1931, subsections
[[Page S364]]
(c)(3) and (d) of section 2101, and section 4503 of the
Internal Revenue Code of 1986.
``(2) Applicable percentage.--For purposes of paragraph
(1), the applicable percentage for any fiscal year for an
eligible entity is equal to the percentage of the total
payments which, as determined by the Secretary, would have
been made in such fiscal year under section 1886(d)(5)(B)
if--
``(A) such payments had not been terminated for discharges
occurring after September 30, 1997; and
``(B) non-medicare patients were taken into account in lieu
of medicare patients.
``(e) Determination of Amount From Non-Medicare Teaching
Hospital Direct Account.--
``(1) In general.--The amount determined for an eligible
entity for a fiscal year under this subsection is the amount
equal to the applicable percentage of the total amount
allocated and transferred to the Non-Medicare Teaching
Hospital Direct Account for such fiscal year under section
1931, subsections (c)(3) and (d) of section 2101, and section
4503 of the Internal Revenue Code of 1986.
``(2) Applicable percentage.--For purposes of paragraph
(1), the applicable percentage for any fiscal year for an
eligible entity is equal to the percentage of the total
payments which, as determined by the Secretary, would have
been made in such fiscal year under section 1886(h) if--
``(A) such payments had not been terminated for cost
reporting periods beginning after September 30, 1997; and
``(B) non-medicare patients were taken into account in lieu
of medicare patients.''.
SEC. 3. AMENDMENTS TO MEDICARE PROGRAM.
(a) In General.--Section 1886 of the Social Security Act
(42 U.S.C. 1395ww) is amended--
(1) in subsection (d)(5)(B), in the matter preceding clause
(i), by striking ``The Secretary shall provide'' and
inserting the following: ``For discharges occurring before
October 1, 1997, the Secretary shall provide'';
(2) in subsection (h)--
(A) in paragraph (1), in the first sentence, by striking
``the Secretary shall provide'' and inserting ``the Secretary
shall, subject to paragraph (6), provide''; and
(B) by adding at the end the following new paragraph:
``(6) Limitation.--
``(A) In general.--The authority to make payments under
this subsection shall not apply with respect to--
``(i) cost reporting periods beginning after September 30,
1997; and
``(ii) any portion of a cost reporting period beginning on
or before such date which occurs after such date.
``(B) Rule of construction.--This paragraph may not be
construed as authorizing any payment under section 1861(v)
with respect to graduate medical education.''; and
(3) by adding at the end the following new subsection:
``(j) Transfers to Medical Education Trust Fund.--
``(1) Indirect costs of medical education.--
``(A) Transfer.--
``(i) In general.--From the Federal Hospital Insurance
Trust Fund, the Secretary shall, for fiscal year 1998 and
each subsequent fiscal year, transfer to the Medical
Education Trust Fund an amount equal to the amount estimated
by the Secretary under subparagraph (B).
``(ii) Allocation.--Of the amount transferred under clause
(i)--
``(I) there shall be allocated and transferred to the
Medical School Account an amount which bears the same ratio
to the total amount available under section 2102(b)(1) for
the fiscal year (reduced by the balance in such account at
the end of the preceding fiscal year) as the amount
transferred under clause (i) bears to the total amounts
transferred to the Medical Education Trust Fund under title
XXI (excluding amounts transferred under subsections (c)(3)
and (d) of section 2101) for such fiscal year; and
``(II) the remainder shall be allocated and transferred to
the Medicare Teaching Hospital Indirect Account.
``(B) Determination of amounts.--The Secretary shall make
an estimate for each fiscal year involved of the nationwide
total of the amounts that would have been paid under
subsection (d)(5)(B) to hospitals during the fiscal year if
such payments had not been terminated for discharges
occurring after September 30, 1997.
``(2) Direct costs of medical education.--
``(A) Transfer.--
``(i) In general.--From the Federal Hospital Insurance
Trust Fund and the Federal Supplementary Medical Insurance
Trust Fund, the Secretary shall, for fiscal year 1998 and
each subsequent fiscal year, transfer to the Medical
Education Trust Fund an amount equal to the amount estimated
by the Secretary under subparagraph (B).
``(ii) Allocation.--Of the amount transferred under clause
(i)--
``(I) there shall be allocated and transferred to the
Medical School Account an amount which bears the same ratio
to the total amount available under section 2102(b)(1) for
the fiscal year (reduced by the balance in such account at
the end of the preceding fiscal year) as the amount
transferred under clause (i) bears to the total amounts
transferred to the Medical Education Trust Fund under title
XXI (excluding amounts transferred under subsections (c)(3)
and (d) of section 2101) for such fiscal year; and
``(II) the remainder shall be allocated and transferred to
the Medicare Teaching Hospital Direct Account.
``(B) Determination of amounts.--For each hospital, the
Secretary shall make an estimate for the fiscal year involved
of the amount that would have been paid under subsection
(h) to the hospital during the fiscal year if such
payments had not been terminated for cost reporting
periods beginning after September 30, 1997.
``(C) Allocation between funds.--In providing for a
transfer under subparagraph (A) for a fiscal year, the
Secretary shall provide for an allocation of the amounts
involved between part A and part B (and the trust funds
established under the respective parts) as reasonably
reflects the proportion of direct graduate medical education
costs of hospitals associated with the provision of services
under each respective part.''.
(b) Medicare HMO's.--Section 1876(a) of the Social Security
Act (42 U.S.C. 1395mm(a)) is amended by inserting after
paragraph (6) the following new paragraph:
``(7)(A) In determining the adjusted average per capita
cost under paragraph (4) for fiscal years after 1997, the
Secretary shall not take into account the applicable
percentage of costs under sections 1886(d)(5)(B) (indirect
costs of medical education) and 1886(h) (direct graduate
medical education costs).
``(B) For purposes of subparagraph (A), the applicable
percentage is--
``(i) for fiscal year 1998, 25 percent;
``(ii) for fiscal year 1999, 50 percent;
``(iii) for fiscal year 2000, 75 percent; and
``(iv) for fiscal year 2001 and each subsequent fiscal
year, 100 percent.
``(C)(i) There is appropriated and transferred to the
Medical Education Trust Fund each fiscal year an amount equal
to the aggregate amounts not taken into account under
paragraph (4) by reason of subparagraph (A).
``(ii) Of the amounts transferred under clause (i)--
``(I) there shall be allocated and transferred to the
Medical School Account an amount which bears the same ratio
to the total amount available under section 2102(b)(1) for
the fiscal year (reduced by the balance in such account at
the end of the preceding fiscal year) as the amount
transferred under clause (i) bears to the total amounts
transferred to the Medical Education Trust Fund under section
2101 (excluding amounts transferred under subsections (c)(3)
and (d) of such section) for such fiscal year; and
``(II) the remainder shall be allocated and transferred to
the Medicare Teaching Hospital Indirect Account under such
section and the Medicare Teaching Hospital Direct Account
under such section in the same proportion as the amounts
attributable to the costs under sections 1886(d)(5)(B) and
1886(h) were of the amounts transferred under clause (i).
``(iii) The Secretary shall make payments under clause (i)
from the Federal Hospital Insurance Trust Fund and the
Federal Supplementary Medical Insurance Trust Fund, in the
same manner as the Secretary determines under section
1886(j).''.
SEC. 4. AMENDMENTS TO MEDICAID PROGRAM.
(a) In General.--Title XIX of the Social Security Act (42
U.S.C. 1396 et seq.) is amended--
(1) by redesignating section 1931 as section 1932; and
(2) by inserting after section 1930, the following new
section:
``transfer of funds to accounts
``Sec. 1931. (a) Transfer of Funds.--
``(1) In general.--For fiscal year 1998 and each subsequent
fiscal year, the Secretary shall transfer to the Medical
Education Trust Fund an amount equal to the amount determined
under subsection (b).
``(2) Allocation.--Of the amount transferred under
paragraph (1)--
``(A) there shall be allocated and transferred to the
Medical School Account an amount which bears the same ratio
to the total amount available under section 2102(b)(1) for
the fiscal year (reduced by the balance in such account at
the end of the preceding fiscal year) as the amount
transferred under paragraph (1) bears to the total amounts
transferred to the Medical Education Trust Fund under title
XXI (excluding amounts transferred under subsections (c)(3)
and (d) of section 2101) for such fiscal year; and
``(B) the remainder shall be allocated and transferred to
the Non-Medicare Teaching Hospital Indirect Account and the
Non-Medicare Teaching Hospital Direct Account, in the same
proportion as the amounts transferred to each account under
section 1886(j) relate to the total amounts transferred under
such section for such fiscal year.
``(b) Amount Determined.--
``(1) Outlays for acute medical services during preceding
fiscal year.--Beginning with fiscal year 1998, the Secretary
shall determine 5 percent of the total amount of Federal
outlays made under this title for acute medical services, as
defined in paragraph (2), for the preceding fiscal year.
``(2) Acute medical services defined.--The term `acute
medical services' means items and services described in
section 1905(a) other than the following:
``(A) Nursing facility services (as defined in section
1905(f)).
``(B) Intermediate care facility for the mentally retarded
services (as defined in section 1905(d)).
[[Page S365]]
``(C) Personal care services (as described in section
1905(a)(24)).
``(D) Private duty nursing services (as referred to in
section 1905(a)(8)).
``(E) Home or community-based services furnished under a
waiver granted under subsection (c), (d), or (e) of section
1915.
``(F) Home and community care furnished to functionally
disabled elderly individuals under section 1929.
``(G) Community supported living arrangements services
under section 1930.
``(H) Case-management services (as described in section
1915(g)(2)).
``(I) Home health care services (as referred to in section
1905(a)(7)), clinic services, and rehabilitation services
that are furnished to an individual who has a condition or
disability that qualifies the individual to receive any of
the services described in a previous subparagraph.
``(J) Services furnished in an institution for mental
diseases (as defined in section 1905(i)).
``(c) Entitlement.--This section constitutes budget
authority in advance of appropriations Acts and represents
the obligation of the Federal Government to provide for the
payment to the Non-Medicare Teaching Hospital Indirect
Account, the Non-Medicare Teaching Hospital Direct Account,
and the Medical School Account of amounts determined in
accordance with subsections (a) and (b).''.
(b) Effective Date.--The amendment made by subsection (a)
shall be effective on and after October 1, 1997.
SEC. 5. ASSESSMENTS ON INSURED AND SELF-INSURED HEALTH PLANS.
(a) General Rule.--Subtitle D of the Internal Revenue Code
of 1986 (relating to miscellaneous excise taxes) is amended
by adding after chapter 36 the following new chapter:
``CHAPTER 37--HEALTH RELATED ASSESSMENTS
``Subchapter A. Insured and self-insured health plans.
``Subchapter A--Insured and Self-Insured Health Plans
``Sec. 4501. Health insurance and health-related administrative
services.
``Sec. 4502. Self-insured health plans.
``Sec. 4503. Transfer to accounts.
``Sec. 4504. Definitions and special rules.
``SEC. 4501. HEALTH INSURANCE AND HEALTH-RELATED
ADMINISTRATIVE SERVICES.
``(a) Imposition of Tax.--There is hereby imposed--
``(1) on each taxable health insurance policy, a tax equal
to 1.5 percent of the premiums received under such policy,
and
``(2) on each amount received for health-related
administrative services, a tax equal to 1.5 percent of the
amount so received.
``(b) Liability for Tax.--
``(1) Health insurance.--The tax imposed by subsection
(a)(1) shall be paid by the issuer of the policy.
``(2) Health-related administrative services.--The tax
imposed by subsection (a)(2) shall be paid by the person
providing the health-related administrative services.
``(c) Taxable Health Insurance Policy.--For purposes of
this section--
``(1) In general.--Except as otherwise provided in this
section, the term `taxable health insurance policy' means any
insurance policy providing accident or health insurance with
respect to individuals residing in the United States.
``(2) Exemption of certain policies.--The term `taxable
health insurance policy' does not include any insurance
policy if substantially all of the coverage provided under
such policy relates to--
``(A) liabilities incurred under workers' compensation
laws,
``(B) tort liabilities,
``(C) liabilities relating to ownership or use of property,
``(D) credit insurance, or
``(E) such other similar liabilities as the Secretary may
specify by regulations.
``(3) Special rule where policy provides other coverage.--
In the case of any taxable health insurance policy under
which amounts are payable other than for accident or health
coverage, in determining the amount of the tax imposed by
subsection (a)(1) on any premium paid under such policy,
there shall be excluded the amount of the charge for the
nonaccident or nonhealth coverage if--
``(A) the charge for such nonaccident or nonhealth coverage
is either separately stated in the policy, or furnished to
the policyholder in a separate statement, and
``(B) such charge is reasonable in relation to the total
charges under the policy.
In any other case, the entire amount of the premium paid
under such policy shall be subject to tax under subsection
(a)(1).
``(4) Treatment of prepaid health coverage arrangements.--
``(A) In general.--In the case of any arrangement described
in subparagraph (B)--
``(i) such arrangement shall be treated as a taxable health
insurance policy,
``(ii) the payments or premiums referred to in subparagraph
(B)(i) shall be treated as premiums received for a taxable
health insurance policy, and
``(iii) the person referred to in subparagraph (B)(i) shall
be treated as the issuer.
``(B) Description of arrangements.--An arrangement is
described in this subparagraph if under such arrangement--
``(i) fixed payments or premiums are received as
consideration for any person's agreement to provide or
arrange for the provision of accident or health coverage to
residents of the United States, regardless of how such
coverage is provided or arranged to be provided, and
``(ii) substantially all of the risks of the rates of
utilization of services is assumed by such person or the
provider of such services.
``(d) Health-Related Administrative Services.--For purposes
of this section, the term `health-related administrative
services' means--
``(1) the processing of claims or performance of other
administrative services in connection with accident or health
coverage under a taxable health insurance policy if the
charge for such services is not included in the premiums
under such policy, and
``(2) processing claims, arranging for provision of
accident or health coverage, or performing other
administrative services in connection with an applicable
self-insured health plan (as defined in section 4502(c))
established or maintained by a person other than the person
performing the services.
For purposes of paragraph (1), rules similar to the rules of
subsection (c)(3) shall apply.
``SEC. 4502. SELF-INSURED HEALTH PLANS.
``(a) Imposition of Tax.--In the case of any applicable
self-insured health plan, there is hereby imposed a tax for
each month equal to 1.5 percent of the sum of--
``(1) the accident or health coverage expenditures for such
month under such plan, and
``(2) the administrative expenditures for such month under
such plan to the extent such expenditures are not subject to
tax under section 4501.
In determining the amount of expenditures under paragraph
(2), rules similar to the rules of subsection (d)(3) apply.
``(b) Liability for Tax.--
``(1) In general.--The tax imposed by subsection (a) shall
be paid by the plan sponsor.
``(2) Plan sponsor.--For purposes of paragraph (1), the
term `plan sponsor' means--
``(A) the employer in the case of a plan established or
maintained by a single employer,
``(B) the employee organization in the case of a plan
established or maintained by an employee organization, or
``(C) in the case of--
``(i) a plan established or maintained by 2 or more
employers or jointly by 1 or more employers and 1 or more
employee organizations,
``(ii) a voluntary employees' beneficiary association under
section 501(c)(9), or
``(iii) any other association plan,
the association, committee, joint board of trustees, or other
similar group of representatives of the parties who establish
or maintain the plan.
``(c) Applicable Self-Insured Health Plan.--For purposes of
this section, the term `applicable self-insured health plan'
means any plan for providing accident or health coverage if
any portion of such coverage is provided other than through
an insurance policy.
``(d) Accident or Health Coverage Expenditures.--For
purposes of this section--
``(1) In general.--The accident or health coverage
expenditures of any applicable self-insured health plan for
any month are the aggregate expenditures paid in such month
for accident or health coverage provided under such plan to
the extent such expenditures are not subject to tax under
section 4501.
``(2) Treatment of reimbursements.--In determining accident
or health coverage expenditures during any month of any
applicable self-insured health plan, reimbursements (by
insurance or otherwise) received during such month shall be
taken into account as a reduction in accident or health
coverage expenditures.
``(3) Certain expenditures disregarded.--Paragraph (1)
shall not apply to any expenditure for the acquisition or
improvement of land or for the acquisition or improvement of
any property to be used in connection with the provision of
accident or health coverage which is subject to the allowance
under section 167, except that, for purposes of paragraph
(1), allowances under section 167 shall be considered as
expenditures.
``SEC. 4503. TRANSFER TO ACCOUNTS.
``For fiscal year 1998 and each subsequent fiscal year,
there are hereby appropriated and transferred to the Medical
Education Trust Fund amounts equivalent to taxes received in
the Treasury under sections 4501 and 4502, of which--
``(1) there shall be allocated and transferred to the
Medical School Account an amount which bears the same ratio
to the total amount available under section 2102(b)(1) for
the fiscal year (reduced by the balance in such account at
the end of the preceding fiscal year) as the amount
transferred to the Medical Education Trust Fund under title
XXI of the Social Security Act under this section bears to
the total amounts transferred to such Trust Fund (excluding
amounts transferred under subsections (c)(3) and (d) of
section 2101 of such Act) for such fiscal year; and
``(2) the remainder shall be allocated and transferred to
the Non-Medicare Teaching Hospital Indirect Account and the
Non-Medicare Teaching Hospital Direct Account, in the same
proportion as the amounts transferred to such account under
section 1886(j) relate to the total amounts transferred under
such section for such fiscal year.
Such amounts shall be transferred in the same manner as under
section 9601.
[[Page S366]]
``SEC. 4504. DEFINITIONS AND SPECIAL RULES.
``(a) Definitions.--For purposes of this subchapter--
``(1) Accident or health coverage.--The term `accident or
health coverage' means any coverage which, if provided by an
insurance policy, would cause such policy to be a taxable
health insurance policy (as defined in section 4501(c)).
``(2) Insurance policy.--The term `insurance policy' means
any policy or other instrument whereby a contract of
insurance is issued, renewed, or extended.
``(3) Premium.--The term `premium' means the gross amount
of premiums and other consideration (including advance
premiums, deposits, fees, and assessments) arising from
policies issued by a person acting as the primary insurer,
adjusted for any return or additional premiums paid as a
result of endorsements, cancellations, audits, or
retrospective rating. Amounts returned where the amount is
not fixed in the contract but depends on the experience of
the insurer or the discretion of management shall not be
included in return premiums.
``(4) United states.--The term `United States' includes any
possession of the United States.
``(b) Treatment of Governmental Entities.--
``(1) In general.--For purposes of this subchapter--
``(A) the term `person' includes any governmental entity,
and
``(B) notwithstanding any other law or rule of law,
governmental entities shall not be exempt from the taxes
imposed by this subchapter except as provided in paragraph
(2).
``(2) Exempt governmental programs.--In the case of an
exempt governmental program--
``(A) no tax shall be imposed under section 4501 on any
premium received pursuant to such program or on any amount
received for health-related administrative services pursuant
to such program, and
``(B) no tax shall be imposed under section 4502 on any
expenditures pursuant to such program.
``(3) Exempt governmental program.--For purposes of this
subchapter, the term `exempt governmental program' means--
``(A) the insurance programs established by parts A and B
of title XVIII of the Social Security Act,
``(B) the medical assistance program established by title
XIX of the Social Security Act,
``(C) any program established by Federal law for providing
medical care (other than through insurance policies) to
individuals (or the spouses and dependents thereof) by reason
of such individuals being--
``(i) members of the Armed Forces of the United States, or
``(ii) veterans, and
``(D) any program established by Federal law for providing
medical care (other than through insurance policies) to
members of Indian tribes (as defined in section 4(d) of the
Indian Health Care Improvement Act).
``(c) No Cover Over to Possessions.--Notwithstanding any
other provision of law, no amount collected under this
subchapter shall be covered over to any possession of the
United States.''.
(b) Clerical Amendment.--The table of chapters for subtitle
D of the Internal Revenue Code of 1986 is amended by
inserting after the item relating to chapter 36 the following
new item:
``Chapter 37. Health related assessments.''
(c) Effective Date.--The amendments made by this section
shall apply with respect to premiums received, and expenses
incurred, with respect to coverage for periods after
September 30, 1997.
SEC. 6. MEDICAL EDUCATION ADVISORY COMMISSION.
(a) Establishment.--There is hereby established an advisory
commission to be known as the Medical Education Advisory
Commission (in this section referred to as the ``Advisory
Commission'').
(b) Duties.--
(1) In general.--The Advisory Commission shall--
(A) conduct a thorough study of all matters relating to--
(i) the operation of the Medical Education Trust Fund
established under section 2;
(ii) alternative and additional sources of graduate medical
education funding;
(iii) alternative methodologies for compensating teaching
hospitals for graduate medical education;
(iv) policies designed to maintain superior research and
educational capacities in an increasing competitive health
system;
(v) the role of medical schools in graduate medical
education; and
(vi) policies designed to expand eligibility for graduate
medical education payments to institutions other than
teaching hospitals;
(B) develop recommendations, including the use of
demonstration projects, on the matters studied under
subparagraph (A) in consultation with the Secretary of Health
and Human Services and the entities described in paragraph
(2);
(C) not later than January 1999, submit an interim report
to the Committee on Finance of the Senate, the Committee on
Ways and Means of the House of Representatives, and the
Secretary of Health and Human Services; and
(D) not later than January 2001, submit a final report to
the Committee on Finance of the Senate, the Committee on Ways
and Means of the House of Representatives, and the Secretary
of Health and Human Services.
(2) Entities described.--The entities described in this
paragraph are--
(A) other advisory groups, including the Council on
Graduate Medical Education, the Prospective Payment
Assessment Commission, and the Physician Payment Review
Commission;
(B) interested parties, including the Association of
American Medical Colleges, the Association of Academic Health
Centers, and the American Medical Association;
(C) health care insurers, including managed care entities;
and
(D) other entities as determined by the Secretary of Health
and Human Services.
(c) Number and Appointment.--The membership of the Advisory
Commission shall include 9 individuals who are appointed to
the Advisory Commission from among individuals who are not
officers or employees of the United States. Such individuals
shall be appointed by the Secretary of Health and Human
Services, and shall include individuals from each of the
following categories:
(1) Physicians who are faculty members of medical schools.
(2) Officers or employees of teaching hospitals.
(3) Officers or employees of health plans.
(4) Deans of medical schools.
(5) Such other individuals as the Secretary determines to
be appropriate.
(d) Terms.--
(1) In general.--Except as provided in paragraph (2),
members of the Advisory Commission shall serve for the lesser
of the life of the Advisory Commission, or 4 years.
(2) Service beyond term.--A member of the Advisory
Commission may continue to serve after the expiration of the
term of the member until a successor is appointed.
(e) Vacancies.--If a member of the Advisory Commission does
not serve the full term applicable under subsection (d), the
individual appointed to fill the resulting vacancy shall be
appointed for the remainder of the term of the predecessor of
the individual.
(f) Chair.--The Secretary of Health and Human Services
shall designate an individual to serve as the Chair of the
Advisory Commission.
(g) Meetings.--The Advisory Commission shall meet not less
than once during each 4-month period and shall otherwise meet
at the call of the Secretary of Health and Human Services or
the Chair.
(h) Compensation and Reimbursement of Expenses.--Members of
the Advisory Commission shall receive compensation for each
day (including travel time) engaged in carrying out the
duties of the Advisory Commission. Such compensation may not
be in an amount in excess of the maximum rate of basic pay
payable for level IV of the Executive Schedule under section
5315 of title 5, United States Code.
(i) Staff.--
(1) Staff director.--The Advisory Commission shall, without
regard to the provisions of title 5, United States Code,
relating to competitive service, appoint a Staff Director who
shall be paid at a rate equivalent to a rate established for
the Senior Executive Service under 5382 of title 5, United
States Code.
(2) Additional staff.--The Secretary of Health and Human
Services shall provide to the Advisory Commission such
additional staff, information, and other assistance as may be
necessary to carry out the duties of the Advisory Commission.
(j) Termination of the Advisory Commission.--The Advisory
Commission shall terminate 90 days after the date on which
the Advisory Commission submits its final report under
subsection (b)(1)(D).
(k) Authorization of Appropriations.--There are authorized
to be appropriated such sums as may be necessary to carry out
the purposes of this section.
SEC. 7. DEMONSTRATION PROJECTS.
(a) Establishment.--The Secretary of Health and Human
Services (in this section referred to as the ``Secretary'')
shall establish, by regulation, guidelines for the
establishment and operation of demonstration projects which
the Medical Education Advisory Commission recommends under
subsection (b)(1)(B) of section 6.
(b) Funding.--
(1) In general.--For any fiscal year after 1997, amounts in
the Medical Education Trust Fund under title XXI of the
Social Security Act shall be available for use by the
Secretary in the establishment and operation of demonstration
projects described in subsection (a).
(2) Funds available.--
(A) Limitation.--Not more than \1/10\ of 1 percent of the
funds in such trust fund shall be available for the purposes
of paragraph (1).
(B) Allocation.--Amounts under paragraph (1) shall be paid
from the accounts established under paragraphs (2) through
(5) of section 2101(a) of the Social Security Act, in the
same proportion as the amounts transferred to such accounts
bears to the total of amounts transferred to all 4 such
accounts for such fiscal year.
(c) Limitation.--Nothing in this section shall be construed
to authorize any change in the payment methodology for
teaching hospitals and medical schools established by this
Act.
____
Summary of the Medical Education Trust Fund Act of 1997
Overview
The legislation establishes a Medical Education Trust Fund
to support America's 142
[[Page S367]]
medical schools and 1,250 teaching hospitals. These
institutions are in a precarious financial situation as
market forces reshape the health care delivery system.
Explicit and dedicated funding for these institutions will
guarantee that the United States continues to lead the world
in the quality of its health care system.
The Medical Education Trust Fund Act of 1997 recognizes the
need to begin moving away from existing medical education
payment policies. Funding would be provided for demonstration
projects and alternative payment methods, but permanent
policy changes would await a report from a new Medical
Education Advisory Commission established by the bill. The
primary and immediate purpose of the legislation is to
establish as Federal policy that medical education is a
public good which should be supported by all sectors of the
health care system.
To ensure that the burden of financing medical education is
shared equitably by all sectors, the Medical Education Trust
Fund will receive funding from three sources: a 1.5 percent
assessment on health insurance premiums (the private sector's
contribution), Medicare, and Medicaid (the public sector's
contribution). The relative contribution from each of these
sources is in rough proportion to the medical education costs
attributable to their respective covered populations.
Over the five years following enactment, the Medical
Education Trust Fund will provide average annual payments of
about $17 billion, roughly doubling federal funding for
medical education. The assessment on health insurance
premiums (including self-insured health plans) contributes
approximately $4 billion per year to the Trust Fund. Federal
health programs contribute about $13 billion per year to the
Trust Fund: $9 billion in transfers of current Medicare
graduate medical education payments and $4 billion in federal
Medicaid spending.
Estimated average annual trust fund revenue by source, first 5 years
[In billions of dollars]
1.5 percent assessment................................................4
Medicare..............................................................9
Medicaid..............................................................4
________
Total..........................................................17
interim payment methodologies
Payments to Medical Schools
Medical schools rely on a portion of the clinical practice
revenue generated by their faculties to support their
operations. As competition within the health system
intensifies and managed care proliferates, these revenues are
being constrained. Payments to medical schools from the Trust
Fund are designed to partially offset this loss of revenue.
Initially, these payments will be based upon an interim
methodology developed by the Secretary of Health and Human
Services.
Payments to Teaching Hospitals
To cover the costs of education, teaching hospitals have
traditionally charged higher rates than other hospitals. As
private payers become increasingly unwilling to pay these
higher rates, the future of these important institutions, and
the patient care, training, and research they provide, is
placed at risk. Payments from the Trust Fund reimburse
teaching hospitals for both the direct \1\ and indirect \2\
costs of graduate medical education.
---------------------------------------------------------------------------
\1\ *Footnotes to appear at end of article.
---------------------------------------------------------------------------
Payments for direct costs are based on the actual of costs
of employing medical residents. Payments for indirect costs
are based on the number of patients cared for in each
hospital and the severity of their illnesses as well as a
measure of the teaching load in that hospital.\3\ For the
purposes of payments to teaching hospitals, the allocation of
Medicare funds is based on the number of Medicare patients in
each hospital; the allocation of the tax revenue and Medicaid
funds is based on the number of non-Medicare patients in each
hospital.
The legislation also includes a ``carve out'' of graduate
medical education payments from Medicare's payment to HMOs.
Under current law, this payment is based on Medicare's
average fee-for-service costs--including graduate medical
education costs. Therefore, every time a Medicare beneficiary
enrolls in an HMO, money that was being paid to teaching
hospitals for medical education in the form of additional
payments for direct and indirect costs, is paid instead to an
HMO as part of a monthly premium. There is no requirement
that HMOs use any of this payment to support medical
education. Over a four-year period, the legislation removes
graduate medical education payments from HMO payment
calculation. These funds are deposited into the Medical
Education Trust Fund and paid directly to teaching hospitals.
medical education advisory commission
The legislation also establishes a Medical Education
Advisory Commission to conduct a study and make
recommendations, including the potential use of demonstration
projects, regarding the following: Operations of the Medical
Education Trust Fund; alternative and additional sources of
medical education financing; alternative methodologies for
distributing medical education payments; policies designed to
maintain superior research and educational capacities in an
increasingly competitive health system; the role of medical
schools in graduate medical education; and policies designed
to expand eligibility for graduate medical education payments
to institutions other than teaching hospitals.
The Commission, comprised of nine individuals appointed by
the Secretary of Health and Human Services, will be required
to issue an interim report no later than January 1, 1999, and
a final report no later than January 1, 2001.
footnotes
\1\ Medical residents' salaries are the primary direct cost.
\2\ These indirect costs include the cost of treating more
seriously ill patients and the costs of additional tests that
may be ordered by medical residents.
\3\ The legislation will use Medicare's measure of teaching
load as an interim measure.
______
By Mr. MOYNIHAN:
S. 22. A bill to establish a bipartisan national commission to
address the year 2000 computer problem; to the Committee on
Governmental Affairs.
the year 2000 computer problem legislation
Mr. MOYNIHAN. Mr. President, 1,074 days. Rather, one thousand
seventy-four days and counting. We have 1,074 days until January 1,
2000. Historically, the passage of the century has caused quite a stir.
Until now, however, there has been little factual basis on which
doomsayers and apocalyptic fearmongers could spread their gospel. I
rise today, on the first day of legislative business in the 105th
Congress, to warn that we have cause for fear.
In the 6th century AD, the Western world began the practice of
numbering years consecutively. The 6th-century monk, Dionysius Exiguus
(known as ``Denis the Small''), introduced the first consecutive year
calendar. Popular mythology would have us believe that at the end of
the first millennium, Christians and pagans everywhere were cowering in
fear of the end of the world. Yet, current historians believe that at
the end of the year 999, much of the populace had no idea what year it
was, and thus no idea that the millennium was coming to a close. In an
ironic twist of fate, many calendars in our current, most advanced
technological society ever may be as inaccurate as those of the people
who faced the beginning of the Second Millennia A.D.
I have no proof that the Sun is about to rise on the apocalyptic
millennium of which chapter 20 of the Book of Revelation speaks, nor do
I have proof that, armed with flood and catastrophe, the Four Horseman
will arrive on January 1, 2000. I do know, however, that a seemingly
innocuous ``computer glitch'' relating to how computers use the date
could wreak worldwide havoc. This lack of recognition on the part of
computers--called the year 2000 Computer Problem, or ``Y2K'' as
computer aficionados call it--could cause everything from the failure
of weapons systems, widespread disruption of business operations, the
miscalculation of taxes by the Internal Revenue Service, possible
misdiagnosis or improper medical treatment due to errors in medical
records, to incorrect traffic signals at street corners across the
country.
In the 1950's and 1960's, computer programmers decided that, in order
to minimize the consumption of computer memory, most computer languages
would be designed to express the date with only six digits. In this
format, the date of this speech would be 97-01-21. The century
designation ``19'' is assumed. The problem is that many programs will
read January 1, 2000 as January 1, 1900. Millions of computer programs
will not function correctly because they cannot recognize the 21st
century. The answer to this problem is a costly, time-consuming process
of rewriting the computer codes.
Estimates to fix the problem in the United States alone are in the
range of $300 billion ($600 billion worldwide). That's billion with a
``B''. Experts have estimated that about half the cost of upgrading
U.S. computers will have to be paid by Government entities.
Furthermore, the cost of fixing the `Y2K' problem will increase at 20-
50 percent per year due to the decreasing supply of, and increasing
demand for, the skilled professionals who can rewrite the codes.
There is no time to cower at the immensity and pervasiveness of the
problem, even though it is true that at our current rate of addressing
this problem, millions of computer programs across the globe will not
recognize the year 2000. We have developed the medicine to cure the
disease. It is our job to recognize the extent of our ills and the
time-consuming nature of the cure.
I now enter my second year warning of this problem. People have begun
to
[[Page S368]]
listen. But neither the public nor private sector is anywhere near
where they need to be. I congratulate my counterparts in the other
Chamber of Congress, namely Representative Stephen Horn, Representative
Carolyn Maloney, Representative Connie Morella, and Representative John
Tanner, who have held hearings on this matter and helped uncover the
Federal Government's lack of preparation for this crisis. The
administration has only begun to stir.
In his November 25, 1996 letter (answering my July 31st letter to the
President) Franklin Raines, the Director of the Office of Management
and Budget, stated that:
We have been meeting with senior agency officials and
urging them to complete their assessments of the scope of the
problem now, so they will have time to fix it. We have
assurances that all of their systems will either be fixed,
replaced, or scrapped before 2000, and we will continue to
monitor their progress. As we develop the President's 1998
budget, we are working with the agencies to assure that there
is adequate funding to support agency year 2000 activities.
Mr. Raines paints a much more comfortable picture than was revealed
in the Congressional findings of just 2 months prior. In September
1996, the House Committee on Government Oversight reported that: only 9
of the 24 departments and agencies (which the Committee had just
queried) had a plan for addressing the problem; five had not even
designated an official within the organization to be responsible for
the problem; and 17 of the departments and agencies lacked any cost
estimates for the problem. I am encouraged that Representative Stephen
Horn (R-CA) will continue his subcommittee's oversight hearings on
February 24, 1997.
Yet, someone or something needs to ensure that the Federal
Government, State governments, and all sectors of the economy are
``Year 2000 Compliant.'' The OMB has neither the staff nor the
resources to do this alone. I am introducing today a revamped bill that
will set up a Commission to address this problem.
Commissions are not by definition weak. This commission will assume
responsibility for assuring that all Federal agencies are Year 2000
compliant by January 1, 1999 ( a year early, so as to leave enough time
for testing--some say the longest part). The Commission will be
composed of experts on the Federal response and the State response in
order to face the problems of integration. The Commission will
prioritize which agencies are most at risk of not performing vital
functions, and through its reports to the President and Congress, it
will recommend the appropriate triage process and medicine. It it not
enough to recognize that this problem exists. Unless we install the
doctors for the triage, the Y2K disease will manifest itself in all
sectors of government and the economy.
We are told that the President will include adequate funding for the
Executive Agencies in his budget plan for fiscal year 1998. My hope is
that Congress will recognize the importance of providing the funding
now; for if we wait, not only will the costs rise, but we are liable to
see major Government agencies and State governments unable to perform
critical functions.
It is January 21 of 1997; we have 1,074 days remaining until January
1, 2000. Too late to lament, time to act.
In the first stanza of his epic work, ``The Second Coming,'' Yeats
wrote of the onslaught of the apocalypse:
Turning and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the center cannot hold;
Mere anarchy is loosed upon the world,
The blood dimmed tide is loosed . . .
At the upcoming turn of the millennium, we cannot test what ``blood
dimmed tide'' computer malfunctions could loose on our society.
______
By Mr. SPECTER (for himself and Ms. Moseley-Braun):
S. 23. A bill to promote a new urban agenda, and for other purposes;
to the Committee on Finance.
new agenda for aiding america's cities act of 1997
Mr. SPECTER. Mr. President, I have sought recognition to introduce
legislation that will deal with the plight of our nation's cities and
Washington's increasing neglect of them. There is an urgent need to
improve our urban economies and the quality of life for the millions of
American who live in our cities. My proposal, the ``New Agenda For
Aiding America's Cities Act of 1997'' is based on legislation which I
introduced in the 103rd and 104th Congress along with my distinguished
colleague, Senator Carol Moseley-Braun, and I am pleased she is again
joining in this effort. The bill constitutes an effort to give our
cities some much-needed attention, but reflects the federal budget
constraints which govern all that we in Congress do these days.
This bill, based in significant part on suggestions by Philadelphia
Mayor Edward G. Rendell and the League of Cities, offers aid to the
cities without increasing federal expenditures and by re-instituting
important cost-effective tax breaks which have been discontinued.
If we are to really address many of the very serious social issues
that we face--unemployment, teenage pregnancy, welfare dependency, and
other pressing issues--we cannot give up on our cities. There must be
new strategies for dealing with the problems of urban America. The days
of creating ``Great Society'' federal aid programs are clearly past,
but that is no excuse for the national government to turn a blind eye
to the problems of the cities.
The goals of this initiative have strong bipartisan support as
indicated during the vice-presidential debate in the 1996 campaign,
where both the Republican and Democratic candidates spoke of the need
to focus our economic resources in our nation's urban areas. The recent
November elections reaffirm the basic principle of limited government.
Limited government, however, does not mean an uncaring or do-nothing
government.
The impact of last year's welfare reform legislation also requires
close scrutiny on what will be happening to America's big cities.
Urban areas remain integral to America's greatness as centers of
commerce, industry, education, health care, and culture. Yet urban
areas, particularly the inner cities which tend to have a
disproportionate share of our nation's poor, also have special needs
which must be recognized. We must develop ways of aiding our cities
that do not require either new taxes or more government bureaucracy.
I commend the Mayor of Philadelphia, Edward Rendell, for his efforts
to revitalize America's cities. Collaborating with the Conference of
Mayors and the National League of Cities, he proposed in 1994 a ``New
Urban Agenda.'' Much of that proposal is the basis of this legislation.
As a Philadelphia resident, I have first-hand knowledge of the
growing problems that plague our cities. As of 1990, Philadelphia had
over 300,000 individuals in poverty. Reflecting on my experience as a
Philadelphian, I have long supported a variety of programs to assist
our cities, such as increased funding for Community Development Block
Grants and legislation to establish enterprise and empowerment zones.
To encourage similar efforts, in April, 1994, I hosted my Senate
Republican colleagues on a visit to explore urban problems in my
hometown. We talked with people who wanted to obtain work, but had
found few opportunities. We saw a crumbling infrastructure and its
impact on residents and businesses. We were reminded of the devastating
effect that the loss of inner city businesses and jobs has had on our
neighborhoods in America's cities. What my Republican colleagues saw
then in Philadelphia is the urban rule across our country and not the
exception.
There are many who do not know of city life, who are far removed from
the cities and would not be expected to have any key interest in what
goes on in the big cities of America. I cite my own boyhood experience
illustratively: Born in Wichita, Kansas, raised in Russell, a small
town of 5,000 people on the plains of Kansas, where there is not much
detailed knowledge of what goes on in Philadelphia, Pennsylvania, or
other big cities like Los Angeles, San Francisco, New York, Miami,
Pittsburgh, Dallas, Detroit or Chicago.
Those big cities are alien to people in much of America. But there is
a growing understanding that the problems of big cities contribute
significantly to the general problems affecting our nation and have an
economic impact, at the very least, on our small towns. For rural
America to prosper, we need to make sure that urban America prospers
and vice-versa. For example, if
[[Page S369]]
cities had more economic growth, taxes could be reduced on all
Americans at the federal and state level because revenues would
increase and social welfare spending would be reduced.
What are the problems? Crime for one. Take the Bloods and the Crips
gangs from Los Angeles, California, and similar gangs; that are all
over America. They are in Lancaster, Pennsylvania; Des Moines, Iowa;
Portland, Oregon; Jackson, Mississippi; Racine, Wisconsin; and
Martinsburg, West Virginia. They are literally everywhere, big city and
small city alike.
According to the National League of Cities 1992 report, ``State of
America's Cities,'' 397 randomly selected municipal leaders said that
after overall economic conditions, crime and drugs were the second and
third items that had caused their cities to deteriorate the most in the
prior five years. In Atlanta, the number of crimes per 100,000 people
was 17,067, making it number one in 1995. We have all heard of that
unenviable moniker for our nation's capital--the ``murder capital.''
Not just municipal leaders voice concern about crime's impact. Mr.
Scott Zelov, President of VIZ Manufacturing in the Germantown section
of Philadelphia, told my staff that his workers can't even walk to work
in safety anymore, making it difficult for him to retain his employees
and to continue to stay in business, causing him to consider moving out
of the city to a safer location or even closing his business
altogether.
Dan DeRitis, owner of Sisko, Inc., a property management and
development company in the University City section of West
Philadelphia, wrote to me to tell me while he has been a resident and
business owner in West Philadelphia for more than twenty years, and
while the city had been good to him and his family in the past,
recently, he has had reason to fear for the safety of his children, his
employees and ultimately, his business. He looks desperately for
reasons to stay, but everyday it gets harder and harder.
Joblessness and a less skilled work force is another problem. To
facilitate economic development and job creation in the United States,
I supported the Balanced Budget Act of 1995, which contained such
provisions as the Job Training Partnership Act and the Targeted Job Tax
Credit. As Congress put the final touches on that legislation, I
circulated a joint letter from several Senators to then-Majority Leader
Dole and Speaker Gingrich recommending spurring job creation and
economic growth in our cities through several urban initiatives such
as: a targeted capital gains exclusion, commercial revitalization tax
credit, historic rehabilitation tax credit, and child care credit.
As part of that effort, on December 19, 1995, I arranged a meeting
between Majority Leader Dole and Mayors Edward Rendell of Philadelphia,
Thomas Menino of Boston, Richard Daley of Chicago, and Victor Ashe, of
Knoxville, Tennessee, to discuss their top tax priorities, which were
reflected in the joint letter to the Majority Leader Dole and Speaker
Gingrich. In that meeting the Mayors stressed the necessity of
strengthening economic growth in our urban centers to impact directly
on social ills identified with weak economic infrastructures. These
problems include poverty, crime, and joblessness. Census data from 1990
shows that many of our urban centers suffered from critically high
poverty rates as of 1989.
As of 1990, New York City led the way, with 1.3 million individuals
in poverty. My home of Philadelphia had 313,374 individuals in poverty
at that time. These facts emphasize the need for more efforts to be
focused on strengthening our inner city businesses which, in turn, will
boost local economies and serve to provide more jobs, reduce poverty
and, hopefully, reduce crime.
I have previously introduced legislation to provide targeted tax
incentives for investing in small minority- or women-owned businesses.
Small businesses provide the bulk of the jobs in this country. Many
minority entrepreneurs, for instance, have told me that they are
dedicated to staying in the cities to employ people there, but continue
to confront capital access issues. My ``Minority and Women Capital
Formation Act of 1993'' would have helped remove the capital access
barriers, thereby enabling these entrepreneurs to grow their businesses
and payrolls.
Municipal leaders are stressing many of the same concerns that
business people are voicing. In a July, 1994 National League of Cities
report dealing with poverty and economic development, municipal leaders
ranked inadequate skills and education of workers as one of the top
three reasons, in addition to shortage of jobs and below-poverty wages,
for poverty and joblessness in their cities. They said, according to
the survey, that more jobs must be created through local economic
development initiatives.
This ``skills deficit'' is highlighted in an urban revitalization
plan prepared in 1991 by the National Urban League called ``Playing to
Win: A Marshall Plan for America's Cities.'' The report cites a
statistic by the Commission on Achieving Necessary Skills which showed
that 60 percent of all 21-25 year-olds lack the basic reading and
writing skills needed for the modern workplace, and only 10 percent of
those in that age group have enough mathematical competence for today's
jobs.
The economic problems our cities are facing are not easy to deal with
or answer. In a report by the National League of Cities entitled ``City
Fiscal Conditions in 1996,'' municipal officials from 381 cities
answered questions on the economic state of their cities. In response
to state budgetary problems, 21.7 percent of responding cities reduced
municipal employment and 18.5 percent had frozen municipal employment.
Nearly 6 out of 10 cities raised or imposed new taxes or user fees
during the past twelve months.
These numbers are of concern to me and I believe they highlight the
need for federal legislation to enhance the ability of cities to
achieve competitive economic status. An added concern is that city
managers are forced to balance cuts in services or enact higher taxes.
Neither choice is easy and it often counteracts municipal efforts to
retain residents or businesses.
One issue, in particular, that is hurting many cities is the erosion
of their tax bases, evidenced particularly by middle-class flight to
the suburbs. Mr. Ronald Walters, professor of Political Science at
Howard University, in testimony before the Senate Banking Committee in
April 1993, stated that in 1950, 23 percent of the American population
lived outside central cities; by 1988, that number was up to 46
percent.
In an October 9, 1994 article in The Washington Post Magazine, David
Finkel profiled Ward 7 of Washington, DC and wrote that Ward 7 lost
13,000 residents between 1980 and 1990 alone. He noted further that the
population decline in Washington, DC has averaged 10,000 people a year
since 1990. This trend continues into 1997. These losses are
devastating, not only to the financial stability of the city, but to
the social fabric as well.
On the financial side, statistics show that those people fleeing
cities were earning an average of $30,000 to $75,000 a year. On the
social side, roughly half of these are African-American middle-class
families. By losing this critical demographic group, the city loses
much of what makes it strong.
Eroding tax bases are also caused by job-flight and job loss.
Professor Walters testified that Chicago lost 47 percent of its
manufacturing jobs between 1972 and 1982. Los Angeles lost 327,000
jobs, half of which were in the manufacturing sector. More recently,
according to Census data, New York City had only 11.4 percent of its
population employed in manufacturing. According to Stephen Moore and
Dean Stansel in a March, 1994 USA Today Magazine article, since the
1970's more than 50 Fortune 500 company headquarters have fled New York
City, representing a loss of over 500,000 jobs.
It is clear that the social fabric of our cities is also
deteriorating. The issues of infant mortality and single-parent
families are tragic problems that plague American urban areas.
According to 1990 Census data, Washington, DC ranked first out of 77
cities for infant death rates per 1,000 live births in 1988. Detroit
led the same number of cities in the percentage of one-parent
households in 1990 at 53 percent.
When I traveled to Pittsburgh in 1984, I saw one-pound babies for the
first time and I learned that Pittsburgh had the highest infant
mortality rate of African-American babies of any city in the United
States. It is a human tragedy for a child to be born weighing 16
[[Page S370]]
ounces with attendant problems that last a lifetime. I wondered, how
could that be true of Pittsburgh, which has such enormous medical
resources. It was an amazing thing for me to see a one-pound baby,
about as big as my hand. Indeed, our cities are desperate, and the
issues are heavy.
Historically, cities have been the center of commerce and culture.
Surrounding communities have relied on a thriving, growing economy in
our metropolitan areas to provide jobs and opportunities. As I have
noted though, over the past several decades, America's cities have
struggled with the loss or exodus of residents, businesses and industry
and other problems. The resulting tax base shrinkage causes enormous
budget problems for city governments. Across the country, cities such
as New York, Los Angeles, and the District of Columbia have experienced
the flight of major industries to the suburbs.
As a result, city residents who remain are faced with problems
ranging from increased tax burdens and lesser services to dwindling
economic opportunities, leading to welfare dependence and unemployment
assistance. In the face of all this, what do we do?
The federal government has attempted to revitalize our ailing urban
infrastructure by providing federal funding for transit and sewer
systems, roads and bridges. I have supported this. For example, as a
member of the Transportation Appropriations Subcommittee and as co-
chair of an informal Senate Transit Coalition, I have been a strong
supporter of public transit which provides critically needed
transportation services in urban areas. Transit helps cities meet clean
air standards, reduce traffic congestion, and allows disadvantaged
persons access to jobs. Federal assistance for urban areas, however,
has become increasingly scarce as we grapple with the nation's deficit
and debt. Therefore, we must find alternatives to reinvigorate our
nation's cities so they can once again be economically productive areas
providing promising opportunities for residents and neighboring areas.
I believe there are ways Congress can assist the cities. In 1994,
Mayor Rendell came up with a legislative package which contains many
good ideas. I have since added and revised provisions to take into
account new developments at the federal, state and local levels.
First, recognizing that the federal government is the nation's
largest purchaser of goods and services, this legislation would require
that no less than 15 percent of federal government purchases be made
from businesses and industries within designated urban Empowerment
Zones and Enterprise Communities. Similarly, it would require that not
less than 15 percent of foreign aid funds be redeemed through purchases
of products manufactured in urban Empowerment Zones and Enterprise
Communities. I presented this idea to then-Treasury Secretary Bentsen
at a March 22, 1994, hearing of the Appropriations Subcommittee on
Foreign Operations. The Secretary responded favorably.
I have also written to several mayors across the country regarding
this concept. By letter dated July 28, 1994, Miami Mayor Stephen P.
Clark responded: ``Miami's selection as a procurement center for
foreign aid would be a natural complement to our status as the Business
Capital of the Americas.'' Miami has a wide range of businesses, such
as high-technology firms and medical equipment manufacturers that would
benefit from this provision. And by letter dated April 6, 1994,
Harrisburg, Pennsylvania Mayor Stephen R. Reed wrote: ``Many of our
existing businesses would no doubt seize upon the opportunity to
broaden their market by engaging in export activity triggered by
foreign aid vouchers. . . Therefore, in brief, we believe the voucher
proposal has considerable merit and that this city would benefit from
the same.'' I ask unanimous consent that a copy of my letter and the
letters from Mayor Clark and Mayor Reed be included in the Record at
the end of my statement.
The second major provision of this bill would commit the federal
government to play an active role in restoring the economic health of
our cities by encouraging the location, or relocation, of federal
facilities in urban areas. To accomplish this, all federal agencies
would be required to prepare and submit to the President an Urban
Impact Statement detailing the impact that relocation or downsizing
decisions would have on the affected city. Presidential approval would
be required to place a federal facility outside an urban area, or to
downsize a city-based agency.
The third critical component of this bill would revive and expand
federal tax incentives that were eliminated or restricted in the Tax
Reform Act of 1986. Until there is passage of legislation on the flat
tax, which would provide benefits superior to all targeted tax breaks,
I believe America's cities should have the advantages of such tax
benefits. These provisions offer meaningful incentives to business to
invest in our cities. I am calling for the restoration of the Historic
Rehabilitation Tax Credit which supports inner city revitalization
projects. According to information provided by Mayor Rendell, there
were 8,640 construction jobs involved in 356 projects in Philadelphia
from 1978 to 1985 stimulated by the Historic Rehabilitation Tax Credit.
In Chicago, 302 projects prior to 1985 generated $524 million in
investment and created 20,695 jobs. In St. Louis, 849 projects
generated $653 million in investment and created 27,735 jobs.
Nationally, according to National Park Service estimates for the 16
years before the 1986 Act, the Historic Rehabilitation Tax Credit
stimulated $16 billion in private investment for the rehabilitation of
24,656 buildings and the creation of 125,306 homes which included
23,377 low and moderate income housing units. The 1986 Tax Act
dramatically reduced the pool of private investment capital available
for rehabilitation projects. In Philadelphia, projects dropped from 356
to 11 by 1988 from 1985 levels. During the same period, investments
dropped 46 percent in Illinois and 92 percent in St. Louis.
Another tool is to expand the authorization of commercial industrial
development bonds. Under the Tax Reform Act of 1986, authorization for
commercial industrial bonds was permitted to expire. Consequently,
private investment in cities declined. For instance, according to Mayor
Rendell, from 1986--the last year commercial development bonds were
permitted--to 1987, the total number of city-supported projects in
Philadelphia was reduced by more than half.
Industrial development or private activity bonds encourage private
investment by allowing, under certain circumstances, tax-exempt status
for projects where more than 10 percent of the bond proceeds are used
for private business purposes. The availability of tax-exempt
commercial industrial development bonds will encourage private
investment in cities, particularly the construction of sports,
convention and trade show facilities; free standing parking facilities
owned and operated by the private sector; air and water pollution
facilities owned and operated by the private sector; and, industrial
parks.
The bill I am introducing would allow this. It would also increase
the small issue exemption--which means a way to help finance private
activity in the building of manufacturing facilities--from $10 million
to $50 million to allow increased private investment in our cities.
A minor change in the federal tax code related to arbitrage rebates
on municipal bond interest earnings could also free additional capital
for infrastructure and economic development by cities. Currently,
municipalities are required to rebate to the federal government any
arbitrage--a financial term meaning interest earned in excess of
interest paid on the debt--earned from the issuance of tax-free
municipal bonds. I am informed that compliance, or the cost for
consultants to perform the complicated rebate calculations, is actually
costing municipalities more than the actual rebate owed to the
government. This bill would allow cities to keep the arbitrage earned
so that they can use it to fund city projects and for other necessary
purposes.
My legislation also provides important incentives for businesses to
invest and locate in our nation's cities. Specifically, the bill
includes a provision which I have advocated to provide a 50 percent
exclusion for capital gains tax purposes for any gain resulting from
targeted investments in small businesses located in urban empowerment
[[Page S371]]
zones, enterprise communities, or enterprise zones. I also want to note
that the exclusion would extend to any venture funds that invest in
those small businesses, which is critical because venture funds are
often the lifeblood of a small business. This is one of the incentives
I recommended to Senator Dole in December, 1995 for inclusion in the
Balanced Budget Act of 1995 which was later vetoed by President
Clinton. A targeted capital gains exclusion will serve as a catalyst
for job creation and economic growth in our cities by encouraging
additional private investment in our urban areas.
A fourth provision of this legislation provides needed reforms to
regulations concerning affordable housing. This legislation provides
language to study streamlining federal housing program assistance to
urban areas into ``block grant'' form so that municipal agencies can
better serve local residents. Affordable housing is not currently
widely available to most low income families. According to the National
Housing Law Project, in 1996, only one in four families were eligible
to receive HUD assistance. The bill would improve the circumstances of
public housing tenants by encouraging the location of newly built units
on the lots of demolished older housing and allowing the original
residents to move into the new units. This provision will contribute to
community stability and promote urban renewal.
Last, this bill helps urban areas by taking several important steps
toward reforming the current Superfund law. First, the legislation
authorizes a federal brownfields program to help clean up idle or
underused industrial and commercial facilities and waives federal
liability for persons who fully comply with a state cleanup plan to
clean sites in urban areas pursuant to state law, provided that the
site is not listed or proposed to be listed on the National Priorities
List. The Environmental Protection Agency currently operates this pilot
program under general authority provided by the Superfund law. My
legislation would make this a permanent program and substantially
increase the funding levels from $36.7 million to a $50 million
authorized level for FY'98. The EPA could expend funds to identify and
examine potential idle or underused Brownfield sites and to provide
grants to States and local governments of up to $200,000 per site to
put them back to productive use. One such grant has been used to great
success by Pittsburgh Mayor Tom Murphy, and I hope this provision will
generate additional success stories of redeveloping urban brownfields.
The Brownfields program allows sites with minor levels of toxic waste
to be cleaned up by State and local governments with federal and non-
federal funds. Companies and individuals who are interested in
developing land into industrial, commercial, recreational, or
residential use are often reluctant to purchase property with any level
of toxic waste because of a fear of being saddled with cleanup
liability under the Superfund law. Through expanded Brownfields grants,
cleanup at such sites will be expedited and will encourage
redevelopment of otherwise unusable urban property.
My bill would also waive federal liability for persons who fully
comply with a state cleanup plan to clean sites in urban areas pursuant
to state law, providing that the site is not listed or proposed to be
listed on the National Priorities List. Many states, including
Pennsylvania, have developed their own toxic waste cleanup programs and
have done good work to clean up many of these sites. Pennsylvania
Governor Tom Ridge has developed an extensive plan, where contaminated
sites are made safe based on sound science by returning the site to
productive use through the development of uniform cleanup standards, by
creating a set of standardized review procedures, by releasing owners
and developers from liability who fully comply with the state cleanup
standards and procedures, and by providing financial assistance.
However, the efforts of states like Pennsylvania are often stifled
because the federal government has not been willing to work with the
States to release owners and developers from liability, even when they
fully comply with the state plans.
This section of my bill only applies only to sites that are not on
the National Priorities List. These are sites that the state has
identified for which the state has created a comprehensive cleanup
plan. If the federal government has concerns with the cleanup procedure
or the safety of the site, then the government has full authority to
place that site on the National Priority List. The plans, like that
developed by Governor Ridge, deal with sites not controlled by the
Superfund law. By not allowing the individual states to take the
initiative to clean up these sites, and by not providing a waiver for
federal liability to those who fully comply with the procedures and
standards of the state cleanup, the federal government chills the
efforts of the states to work to clean up their own sites. This
provision takes a significant step toward encouraging states to take
the responsibility for their toxic waste sites and to encourage the
effective cleanup of these sites in our nation's urban areas.
In the 103d Congress, my ``New Urban Agenda Act'' (S. 2535) contained
a section that would eliminate unfunded federal mandates based on
legislation I cosponsored in the 103d Congress (S. 993) which was
introduced by my distinguished colleague from Idaho, Senator Dirk
Kempthorne. There is no longer a need to include that provision in my
urban agenda bill because Congress enacted the unfunded federal
mandates bill in February, 1995.
Mr. President, it may well be that America has given up on its
cities. That is a stark statement, but it is one which I believe may be
true--that America has given up on its cities. But this Senator has not
done so. And I believe there are others in this body on both sides of
the aisle who have not done so.
As one of a handful of United States Senators who lives in a big
city, I understand both the problems and the promise of urban America.
This legislation for our cities is good public policy. The plight of
our cities must be of extreme concern to America. We can ill-afford for
them to wither and die. I am committed to a new urban agenda that
relies on market forces, and not welfare-statism, for urban
revitalization. I invite the input and assistance of my colleagues in
order to fashion a strong approach assisting the cities with their
pressing problems.
I ask unanimous consent that my bill be printed in the Record as if
read, along with an Executive Summary. I thank the Chair and yield the
floor.
Executive Summary
new agenda for aiding america's cities act of 1997
A. Promote Urban Economic Development through Empowerment
and Enterprise Zones. Requires a portion of federal and
foreign aid purchases (not less than 15 percent) to be from
businesses operating in urban zones, and commits the
government to purchase recycled products from businesses
operating in urban zones.
B. Locating/Relocating Federal Facilities in Distressed
Urban Areas. Requires an urban impact statement, with
Presidential approval, that details the impact on cities of
agency downsizing or relocation. Under the bill, a
``distressed urban area'' follows HUD's definition, namely
any city having a population of more than 100,000.
C. Revives and Expands Federal Tax Incentives. Expands the
Historic Rehabilitation Tax Credit which was reduced in 1986.
It would restore the issuance of tax-free industrial
development bonds and would allow cities to keep the
arbitrage earned from the issuance of tax-free municipal
bonds. Currently, local governments are required to rebate to
the federal government arbitrage earned from the issuance of
tax-free municipal bonds, and often spend more on compliance
than on the actual rebate.
D. Contains Incentives for Businesses. To encourage
businesses to invest and locate in our nation's cities,
provides a 50 percent exclusion for capital gains tax
purposes for any gain resulting from targeted investments in
small businesses located in urban empowerment zones,
enterprise communities, or enterprise zones. The exclusion
also extends to any venture that invest in those small
businesses.
E. Lifts Federal Restrictions on Community-Based Housing
Development. To boost the efficiency of regional housing
authorities, a study would be done to streamline current and
future housing programs into ``block grants.'' The bill would
also allow the reconstruction of new units on demolished
sites, and relocate the original tenants to the newly
constructed units.
F. Reforms Superfund Law to Encourage Industrial Cleanup.
Authorizes an expanded federal brownfields grant program to
help clean up idle or underused industrial and commercial
facilities. Also provides regulatory relief by waiving
federal liability for businesses and individuals that fully
comply with a state cleanup plan to clean sites in
[[Page S372]]
urban areas pursuant to state law, provided that the site is
not listed or proposed to be listed on the National
Priorities List.
S. 23
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``New Urban
Agenda Act of 1997''.
(b) Table of Contents.--The table of contents for this Act
is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Findings and purposes.
TITLE I--FEDERAL COMMITMENT TO URBAN ECONOMIC DEVELOPMENT
Sec. 101. Federal purchases from businesses in empowerment zones,
enterprise communities, and enterprise zones.
Sec. 102. Minimum allocation of foreign assistance for purchase of
certain United States goods.
Sec. 103. Preference for location of manufacturing outreach centers in
urban areas.
Sec. 104. Preference for construction and improvement of Federal
facilities in distressed urban areas.
Sec. 105. Definitions.
TITLE II--TAX INCENTIVES TO STIMULATE URBAN ECONOMIC DEVELOPMENT.
Sec. 201. Treatment of rehabilitation credit under passive activity
limitations.
Sec. 202. Rehabilitation credit allowed to offset portion of
alternative minimum tax.
Sec. 203. Commercial industrial development bonds.
Sec. 204. Increase in amount of qualified small issue bonds permitted
for facilities to be used by related principal users.
Sec. 205. Simplification of arbitrage interest rebate waiver.
Sec. 206. Qualified residential rental project bonds partially exempt
from state volume cap.
Sec. 207. Expansion of qualified wages subject to work opportunity
credit.
Sec. 208. Exclusion for capital gains on certain investments within
empowerment zones and enterprise communities.
TITLE III--COMMUNITY-BASED HOUSING DEVELOPMENT
Sec. 301. Block grant study.
Sec. 302. Demolition and disposition of public housing.
TITLE IV--RESPONSE TO URBAN ENVIRONMENTAL CHALLENGES
Sec. 401. Release from liability of persons that fulfill requirements
of State and local law.
Sec. 402. Brownfield program.
SEC. 2. FINDINGS AND PURPOSES.
(a) Findings.--The Congress finds that--
(1) cities in the United States have been facing an
economic downhill trend in the past several years; and
(2) a new approach to help such cities prosper is
necessary.
(b) Purposes.--It is the purpose of this Act to--
(1) provide various incentives for the economic growth of
cities in the United States;
(2) provide an economic agenda designed to reverse current
urban economic trends; and
(3) revitalize the jobs and tax base of such cities without
significant new Federal outlays.
TITLE I--FEDERAL COMMITMENT TO URBAN ECONOMIC DEVELOPMENT
SEC. 101. FEDERAL PURCHASES FROM BUSINESSES IN EMPOWERMENT
ZONES, ENTERPRISE COMMUNITIES, AND ENTERPRISE
ZONES.
(a) Requirements.--The Office of Federal Procurement Policy
Act (41 U.S.C. 401 et seq.) is amended by adding at the end
the following new section:
``purchases from businesses in empowerment zones, enterprise
communities, and enterprise zones
``Sec. 38. (a) Minimum Purchase Requirement.--Not less than
15 percent of the total amount expended by executive agencies
for the purchase of goods in a fiscal year shall be expended
for the purchase of goods from businesses located in
empowerment zones, enterprise communities, or enterprise
zones.
``(b) Recycled Products.--To the maximum extent practicable
consistent with applicable law, the head of an executive
agency shall purchase recycled products that meet the needs
of the executive agency from businesses located in
empowerment zones, enterprise communities, or enterprise
zones.
``(c) Regulations.--The Federal Acquisition Regulations
shall include provisions that ensure the attainment of the
minimum purchase requirement set out in subsection (a).
``(d) Definitions.--In this section:
``(1) The term `empowerment zone' means a zone designated
as an empowerment zone pursuant to subchapter U of chapter 1
of the Internal Revenue Code of 1986 (26 U.S.C. 1391 et
seq.).
``(2) The term `enterprise community' means a community
designated as an enterprise community pursuant to subchapter
U of chapter 1 of the Internal Revenue Code of 1986 (26
U.S.C. 1391 et seq.).
``(3) The term `enterprise zone' has the meaning given such
term in section 701(a)(1) of the Housing and Community
Development Act of 1987 (42 U.S.C. 11501(a)(1)).''.
(b) Effective Date.--Section 38 of the Office of Federal
Procurement Policy Act, as added by subsection (a), shall
take effect on the date of the enactment of this Act and
shall apply with respect to fiscal years beginning after
September 30, 1996.
(c) Conforming Amendment.--The table of contents in section
1(b) of the Office of Federal Procurement Policy Act is
amended by adding at the end the following new item:
``Sec. 38. Purchases from businesses in empowerment zones, enterprise
communities, and enterprise zones.''.
SEC. 102. MINIMUM ALLOCATION OF FOREIGN ASSISTANCE FOR
PURCHASE OF CERTAIN UNITED STATES GOODS.
(a) Allocation of Assistance.--Notwithstanding any other
provision of law, effective beginning with fiscal year 1997,
not less than 15 percent of United States assistance provided
in a fiscal year shall be provided in the form of credits
which may only be used for the purchase of United States
goods produced, manufactured, or assembled in empowerment
zones, enterprise communities, or enterprise zones within the
United States.
(b) United States Assistance.--As used in this section, the
term ``United States assistance'' means--
(1) any assistance under the Foreign Assistance Act of 1961
(22 U.S.C. 2151 et seq.);
(2) sales, or financing of sales under the Arms Export
Control Act (22 U.S.C. 2751 et seq.); and
(3) assistance and other activities under the Support for
East European Democracy (SEED) Act of 1989 (22 U.S.C. 5401 et
seq.).
SEC. 103. PREFERENCE FOR LOCATION OF MANUFACTURING OUTREACH
CENTERS IN URBAN AREAS.
(a) Designation.--In designating an organization as a
manufacturing outreach center under paragraph (11) of section
5 of the Stevenson-Wydler Technology Innovation Act of 1980
(15 U.S.C. 3704(11)), the Secretary of Commerce shall, to the
maximum extent practicable, designate organizations that are
located in empowerment zones, enterprise communities, or
enterprise zones.
(b) Financial Assistance.--In utilizing a competitive,
merit-based review process to determine the manufacturing
outreach centers to which to provide financial assistance
under such section, the Secretary shall give such additional
preference to centers located in empowerment zones,
enterprise communities, and enterprise zones as the Secretary
determines appropriate in order to ensure the continuing
existence of such centers in such zones.
SEC. 104. PREFERENCE FOR CONSTRUCTION AND IMPROVEMENT OF
FEDERAL FACILITIES IN DISTRESSED URBAN AREAS.
(a) Preference.--Notwithstanding any other provision of
law, in determining the location for the construction of a
new facility of a department or agency of the Federal
Government, in determining to improve an existing facility
(including an improvement in lieu of such construction), or
in determining the location to which to relocate functions of
a department or agency, the head of the department or agency
making the determination shall take affirmative action to
construct or improve the facility, or to relocate the
functions, in a distressed urban area.
(b) Urban Impact Statement.--A determination to construct a
new facility of a department or agency of the Federal
Government, to improve an existing facility, or to relocate
the functions of a department or agency may not be made until
the head of the department or agency making the determination
prepares and submits to the President a report that--
(1) in the case of a facility to be constructed--
(A) identifies at least one distressed urban area that is
an appropriate location for the facility;
(B) describes the costs and benefits arising from the
construction and utilization of the facility in the area,
including the effects of such construction and utilization on
the rate of unemployment in the area; and
(C) describes the effect on the economy of the area of the
closure or consolidation, if any, of Federal facilities
located in the area during the 10-year period ending on the
date of the report, including the total number of Federal and
non-Federal employment positions terminated in the area as a
result of such closure or consolidation;
(2) in the case of a facility to be improved that is not
located in a distressed urban area--
(A) identifies at least one facility located in a
distressed urban area that would serve as an appropriate
alternative location for the facility;
(B) describes the costs and benefits arising from the
improvement and utilization of the facility located in such
area as an alternative location for the facility to be
improved, including the effect of the improvement and
utilization of the facility so located on the rate of
unemployment in such area; and
(C) describes the effect on the economy of such area of the
closure or consolidation, if any, of Federal facilities
located in such area during the 10-year period ending on the
date of the report, including the total number of
[[Page S373]]
Federal and non-Federal employment positions terminated in
such area as a result of such closure or consolidation;
(3) in the case of a facility to be improved that is
located in a distressed urban area--
(A) describes the costs and benefits arising from the
improvement and continuing utilization of the facility in the
area, including the effect of such improvement and continuing
utilization on the rate of unemployment in the area; and
(B) describes the effect on the economy of the area of the
closure or consolidation, if any, of Federal facilities
located in the area during the 10-year period ending on the
date of the report, including the total number of Federal and
non-Federal employment positions terminated in the area as a
result of such closure or consolidation; or
(4) in the case of a relocation of functions--
(A) identifies at least one distressed urban area that
would serve as an appropriate location for the carrying out
of the functions;
(B) describes the costs and benefits arising from carrying
out the functions in the area, including the effect of
carrying out the functions on the rate of unemployment in the
area; and
(C) describes the effect on the economy of the area of the
closure or consolidation, if any, of Federal facilities
located in the area during the 10-year period ending on the
date of the report, including the total number of Federal and
non-Federal employment positions terminated in the area as a
result of such closure or consolidation.
(c) Applicability to Department of Defense Facilities.--The
requirements set forth in subsections (a) and (b) shall apply
to a determination to construct or improve any facility of
the Department of Defense, or to relocate any functions of
the Department, unless the President determines that the
waiver of the application of such requirements to the
facility, or to such relocation, is in the national interest.
(d) Definition.--In this section, the term ``distressed
urban area'' means any city having a population of more than
100,000 that meets (as determined by the Secretary of Housing
and Urban Development) the qualifications for making an Urban
Development Action Grant to a community experiencing severe
economic distress that are otherwise established for large
cities and urban counties under subpart G of part 570 of
title 24, Code of Federal Regulations.
SEC. 105. DEFINITIONS.
As used in this title:
(1) The term ``empowerment zone'' means a zone designated
as an empowerment zone pursuant to subchapter U of chapter 1
of the Internal Revenue Code of 1986 (26 U.S.C. 1391 et
seq.).
(2) The term ``enterprise community'' means a community
designated as an enterprise community pursuant to subchapter
U of chapter 1 of the Internal Revenue Code of 1986 (26
U.S.C. 1391 et seq.).
(3) The term ``enterprise zone'' has the meaning given such
term in section 701(a)(1) of the Housing and Community
Development Act of 1987 (42 U.S.C. 11501(a)(1)).
TITLE II--TAX INCENTIVES TO STIMULATE URBAN ECONOMIC DEVELOPMENT
SEC. 201. TREATMENT OF REHABILITATION CREDIT UNDER PASSIVE
ACTIVITY LIMITATIONS.
(a) General Rule.--Paragraphs (2) and (3) of section 469(i)
of the Internal Revenue Code of 1986 (relating to $25,000
offset for rental real estate activities) are amended to read
as follows:
``(2) Dollar limitations.--
``(A) In general.--Except as otherwise provided in this
paragraph, the aggregate amount to which paragraph (1)
applies for any taxable year shall not exceed $25,000,
reduced (but not below zero) by 50 percent of the amount (if
any) by which the adjusted gross income of the taxpayer for
the taxable year exceeds $100,000.
``(B) Phaseout not applicable to low-income housing
credit.--In the case of the portion of the passive activity
credit for any taxable year which is attributable to any
credit determined under section 42--
``(i) subparagraph (A) shall not apply, and
``(ii) paragraph (1) shall not apply to the extent that the
deduction equivalent of such portion exceeds--
``(I) $25,000, reduced by
``(II) the aggregate amount of the passive activity loss
(and the deduction equivalent of any passive activity credit
which is not so attributable and is not attributable to the
rehabilitation credit determined under section 47) to which
paragraph (1) applies after the application of subparagraph
(A).
``(C) $55,500 limit for rehabilitation credits.--In the
case of the portion of the passive activity credit for any
taxable year which is attributable to the rehabilitation
credit determined under section 47--
``(i) subparagraph (A) shall not apply, and
``(ii) paragraph (1) shall not apply to the extent that the
deduction equivalent of such portion exceeds--
``(I) $55,500, reduced by
``(II) the aggregate amount of the passive activity loss
(and the deduction equivalent of any passive activity credit
which is not so attributable) to which paragraph (1) applies
for the taxable year after the application of subparagraphs
(A) and (B).
``(3) Adjusted gross income.--For purposes of paragraph
(2)(A), adjusted gross income shall be determined without
regard to--
``(A) any amount includable in gross income under section
86,
``(B) any amount excludable from gross income under section
135, 911, 931, or 933,
``(C) any amount allowable as a deduction under section
219, and
``(D) any passive activity loss.''.
(b) Conforming Amendments.--
(1) Subparagraph (B) of section 469(i)(4) of the Internal
Revenue Code of 1986 is amended to read as follows:
``(B) Reduction for surviving spouse's exemption.--For
purposes of subparagraph (A), the $25,000 amounts under
paragraph (2)(A) and (2)(B)(ii) and the $55,500 amount under
paragraph (2)(C)(ii) shall each be reduced by the amount of
the exemption under paragraph (1) (determined without regard
to the reduction contained in paragraph (2)(A)) which is
allowable to the surviving spouse of the decedent for the
taxable year ending with or within the taxable year of the
estate.''.
(2) Subparagraph (A) of section 469(i)(5) of such Code is
amended by striking clauses (i), (ii), and (iii) and
inserting the following:
``(i) `$12,500' for `$25,000' in subparagraphs (A) and
(B)(ii) of paragraph (2),
``(ii) `$50,000' for `$100,000' in paragraph (2)(A)'', and
``(iii) `$27,750' for `$55,500' in paragraph (2)(C)(ii).''.
(3) The subsection heading for subsection (i) of section
469 of such Code is amended by striking ``$25,000''.
(c) Effective Date.--The amendments made by this section
shall apply to property placed in service on or after the
date of the enactment of this Act, in taxable years ending on
or after such date.
SEC. 202. REHABILITATION CREDIT ALLOWED TO OFFSET PORTION OF
ALTERNATIVE MINIMUM TAX.
(a) In General.--Section 38(c) of the Internal Revenue Code
of 1986 (relating to limitation based on amount of tax) is
amended by redesignating paragraph (3) as paragraph (4) and
by inserting after paragraph (2) the following new paragraph:
``(3) Rehabilitation investment credit may offset portion
of minimum tax.--
``(A) In general.--In the case of the rehabilitation
investment tax credit--
``(i) this section and section 39 shall be applied
separately with respect to such credit, and
``(ii) for purposes of applying paragraph (1) to such
credit--
``(I) the tentative minimum tax under subparagraph (A)
thereof shall be reduced by the minimum tax offset amount
determined under subparagraph (B) of this paragraph, and
``(II) the limitation under paragraph (1) (as modified by
subclause (I)) shall be reduced by the credit allowed under
subsection (a) for the taxable year (other than the
rehabilitation investment tax credit).
``(B) Minimum tax offset amount.--For purposes of
subparagraph (A)(ii)(I), the minimum tax offset amount is an
amount equal to--
``(i) in the case of a taxpayer not described in clause
(ii), the lesser of--
``(I) 25 percent of the tentative minimum tax for the
taxable year, or
``(II) $20,000, or
``(ii) in the case of a C corporation other than a closely
held C corporation (as defined in section 469(j)(1)), 5
percent of the tentative minimum tax for the taxable year.
``(C) Rehabilitation investment tax credit.--For purposes
of this paragraph, the term `regular investment tax credit'
means the portion of the credit under subsection (a) which is
attributable to the credit determined under section 47.''.
(b) Conforming Amendment.--Section 38(d) of the Internal
Revenue Code of 1986 (relating to components of investment
credit) is amended by adding at the end the following new
paragraph:
``(4) Special rule for rehabilitation credit.--
Notwithstanding paragraphs (1) and (2), the rehabilitation
investment tax credit (as defined in subsection (c)(2)(C))
shall be treated as used last.''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
1996.
SEC. 203. COMMERCIAL INDUSTRIAL DEVELOPMENT BONDS.
(a) Facility Bonds.--
(1) In general.--Subsection (a) of section 142 of the
Internal Revenue Code of 1986 (relating to exempt facility
bond) is amended by striking ``or'' at the end of paragraph
(11), by striking the period at the end of paragraph (12) and
inserting a comma, and by adding at the end the following new
paragraphs:
``(13) sports facilities,
``(14) convention or trade show facilities,
``(15) freestanding parking facilities,
``(16) air or water pollution control facilities, or
``(17) industrial parks.''.
(2) Industrial parks defined.--Section 142 of the Internal
Revenue Code of 1986 is amended by adding at the end the
following new subsection:
``(k) Industrial Parks.--A facility shall be treated as
described in subsection (a)(17) only if all of the property
to be financed by the net proceeds of the issue--
``(1) is--
``(A) land, and
``(B) water, sewage, drainage, or similar facilities, or
transportation, power, or communication facilities incidental
to the use of such land as an industrial park, and
``(2) is not structures or buildings (other than with
respect to facilities described in paragraph (1)(B)).''.
[[Page S374]]
(3) Conforming amendments.--
(A) Section 147(c) of the Internal Revenue Code of 1986
(relating to limitation on use for land acquisition) is
amended by adding at the end the following new paragraph:
``(4) Special rule for industrial parks.--In the case of a
bond described in section 142(a)(17), paragraph (1)(A) shall
be applied by substituting `50 percent' for `25 percent'.''.
(B) Section 147(e) of such Code (relating to no portion of
bonds may be issued for skyboxes, airplanes, gambling
establishments, etc.) is amended by striking ``A private
activity bond'' and inserting ``Except in the case of a bond
described in section 142(a)(13), a private activity bond''.
(b) Small Issue Bonds.--Section 144(a)(12) of the Internal
Revenue Code of 1986 (relating to termination of qualified
small issue bonds) is amended--
(1) by striking ``any bond'' in subparagraph (A)(i) and
inserting ``any bond described in subparagraph (B)'',
(2) by striking ``a bond'' in subparagraph (A)(ii) and
inserting ``a bond described in subparagraph (B)'', and
(3) by striking subparagraph (B) and inserting the
following:
``(B) Bonds for farming purposes.--A bond is described in
this subparagraph if it is issued as part of an issue 95
percent or more of the net proceeds of which are to be used
to provide any land or property not in accordance with
section 147(c)(2).''.
(c) Effective Date.--The amendments made by this section
shall apply to bonds issued after December 31, 1996.
SEC. 204. INCREASE IN AMOUNT OF QUALIFIED SMALL ISSUE BONDS
PERMITTED FOR FACILITIES TO BE USED BY RELATED
PRINCIPAL USERS.
(a) In General.--Clause (i) of section 144(a)(4)(A) of the
Internal Revenue Code of 1986 (relating to $10,000,000 limit
in certain cases) is amended by striking ``$10,000,000'' and
inserting ``$50,000,000''.
(b) Clerical Amendment.--The heading of paragraph (4) of
section 144(a) of the Internal Revenue Code of 1986 is
amended by striking ``$10,000,000'' and inserting
``$50,000,000''.
(c) Effective Date.--The amendments made by this section
shall apply to--
(1) obligations issued after the date of the enactment of
this Act, and
(2) capital expenditures made after such date with respect
to obligations issued on or before such date.
SEC. 205. SIMPLIFICATION OF ARBITRAGE INTEREST REBATE WAIVER.
(a) In General.--Clause (ii) of section 148(f)(4)(C) of the
Internal Revenue Code of 1986 (relating to exception from
rebate for certain proceeds to be used to finance
construction expenditures) is amended to read as follows:
``(ii) Spending requirement.--The spending requirement of
this clause is met if 100 percent of the available
construction proceeds of the construction issue are spent for
the governmental purposes of the issue within the 3-year
period beginning on the date the bonds are issued.''.
(b) Conforming Amendments.--
(1) Clause (iii) of section 148(f)(4)(C) of the Internal
Revenue Code of 1986 (relating to exception for reasonable
retainage) is repealed.
(2) Subclause (II) of section 148(f)(4)(C)(vi) of such Code
(relating to available construction proceeds) is amended by
striking ``2-year period'' and inserting ``3-year period''.
(3) Subclause (I) of section 148(f)(4)(C)(vii) of such Code
(relating to election to pay penalty in lieu of rebate) is
amended by striking ``, with respect to each 6-month period
after the date the bonds were issued,'' and ``, as of the
close of such 6-month period,''.
(4) Clause (viii) of section 148(f)(4)(C) of such Code
(relating to election to terminate 1\1/2\ percent penalty) is
amended by striking ``to any 6-month period'' in the matter
preceding subclause (I).
(5) Clause (ii) of section 148(c)(2)(D) of such Code
(relating to bonds used to provide construction financing) is
amended by striking ``2 years'' and inserting ``3 years''.
(c) Effective Date.--The amendments made by this section
shall apply to bonds issued after the date of the enactment
of this Act.
SEC. 206. QUALIFIED RESIDENTIAL RENTAL PROJECT BONDS
PARTIALLY EXEMPT FROM STATE VOLUME CAP.
(a) In General.--Section 146(g) of the Internal Revenue
Code of 1986 (relating to exception for certain bonds) is
amended by striking ``and'' at the end of paragraph (3), by
striking the period at the end of paragraph (4) and inserting
``, and'', and by inserting after paragraph (4) the
following:
``(5) 75 percent of any exempt facility bond issued as part
of an issue described in section 142(a)(7) (relating to
qualified residential rental projects).''.
(b) Effective Date.--The amendments made by this section
shall apply to bonds issued after the date of the enactment
of this Act.
SEC. 207. EXPANSION OF QUALIFIED WAGES SUBJECT TO WORK
OPPORTUNITY CREDIT.
(a) Increase in Percentage.--Section 51(a) of the Internal
Revenue Code of 1986 (relating to determination of amount) is
amended by striking ``35 percent'' and inserting ``50
percent''.
(b) First 3 Years of Wages Subject to Credit.--Section 51
of the Internal Revenue Code of 1986 (relating to amount of
credit) is amended--
(1) in subsections (a) and (b)(3), by striking ``first-
year''; and
(2) in subsection (b)--
(A) by striking paragraphs (1) and (2) and inserting the
following:
``(1) In general.--The term `qualified wages' means the
wages paid or incurred by the employer during the taxable
year--
``(A) with respect to an individual who is a member of a
targeted group, and
``(B) attributable to service rendered by such individual
during the 3-year period beginning with the day the
individual begins work for the employer.''; and
(B) by redesignating paragraph (3) as paragraph (2).
(b) Effective Date.--The amendments made by this section
shall apply to individuals who begin work for the employer
after the date of the enactment of this Act.
SEC. 208. EXCLUSION FOR CAPITAL GAINS ON CERTAIN INVESTMENTS
WITHIN EMPOWERMENT ZONES AND ENTERPRISE
COMMUNITIES.
(a) In General.--Part II of subchapter U of chapter 1 of
the Internal Revenue Code of 1986 is amended by adding at the
end the following new section:
``SEC. 1395. EXCLUSION FOR GAIN FROM ZONE OR COMMUNITY
INVESTMENTS.
``(a) General Rule.--In the case of a taxpayer, gross
income shall not include any qualified capital gain
recognized on the sale or exchange of a qualified zone asset
held for more than 3 years.
``(b) Qualified Zone Asset.--For purposes of this section--
``(1) In general.--The term `qualified zone asset' means,
with respect to any qualified small business--
``(A) any qualified zone stock,
``(B) any qualified zone property, and
``(C) any qualified zone partnership interest.
``(2) Qualified small business.--
``(A) In general.--The term `qualified small business'
means any entity or proprietorship the aggregate gross assets
(within the meaning of section 1202(d)(2)) of which do not
exceed $50,000,000.
``(B) Application of rules.--In determining if an entity or
proprietorship is a qualified small business, rules similar
to the rules of subsections (a) and (b) of section 52 shall
apply.
``(3) Qualified zone stock.--
``(A) In general.--Except as provided in subparagraph (B),
the term `qualified zone stock' means any stock in a domestic
corporation if--
``(i) such stock is acquired by the taxpayer on original
issue from the corporation solely in exchange for cash,
``(ii) as of the time such stock was issued, such
corporation was an enterprise zone business (or, in the case
of a new corporation, such corporation was being organized
for purposes of being an enterprise zone business), and
``(iii) during substantially all of the taxpayer's holding
period for such stock, such corporation qualified as an
enterprise zone business.
``(B) Redemptions.--The term `qualified zone stock' shall
not include any stock acquired from a corporation which made
a substantial stock redemption or distribution (without a
bona fide business purpose therefor) in an attempt to avoid
the purposes of this section.
``(4) Qualified zone property.--
``(A) In general.--The term `qualified zone property' has
the meaning given to such term by section 1397C, except that
references to empowerment zones shall be treated as including
references to enterprise communities.
``(5) Qualified zone partnership interest.--The term
`qualified zone partnership interest' means any interest in a
partnership if--
``(A) such interest is acquired by the taxpayer from the
partnership solely in exchange for cash,
``(B) as of the time such interest was acquired, such
partnership was an enterprise zone business (or, in the case
of a new partnership, such partnership was being organized
for purposes of being an enterprise zone business), and
``(C) during substantially all of the taxpayer's holding
period for such interest, such partnership qualified as an
enterprise zone business.
A rule similar to the rule of paragraph (2)(B) shall apply
for purposes of this paragraph.
``(6) Treatment of subsequent purchasers.--The term
`qualified zone asset' includes any property which would be a
qualified zone asset but for paragraph (3)(A)(i), section
1397(a)(1)(B), or paragraph (5)(A) in the hands of the
taxpayer if such property was a qualified zone asset in the
hands of any prior holder.
``(7) 10-year safe harbor.--If any property ceases to be a
qualified zone asset by reason of paragraph (3)(A)(iii),
section 1397(a)(1)(C), or paragraph (5)(C) after the 10-year
period beginning on the date the taxpayer acquired such
property, such property shall continue to be treated as
meeting the requirements of such paragraph; except that the
amount of gain to which subsection (a) applies on any sale or
exchange of such property shall not exceed the amount which
would be qualified capital gain had such property been sold
on the date of such cessation.
``(8) Treatment of zone or community terminations.--The
termination of any designation of an area as an empowerment
zone or enterprise community shall be disregarded for
purposes of determining whether any property is a qualified
zone asset.
``(c) Other Definitions and Special Rules.--For purposes of
this section--
[[Page S375]]
``(1) Enterprise zone business.--For purposes of this
section, the term `enterprise zone business' has the meaning
given to such term by section 1394(b)(3).''.
``(2) Qualified capital gain.--Except as otherwise provided
in this subsection, the term `qualified capital gain' means
any long-term capital gain.
``(3) Certain gain on real property not qualified.--The
term `qualified capital gain' shall not include any gain
which would be treated as ordinary income under section 1250
if section 1250 applied to all depreciation rather than the
additional depreciation.
``(4) Gain attributable to periods after termination of
zone or community designation not qualified.--The term
`qualified capital gain' shall not include any gain
attributable to periods after the termination of any
designation of an area as an empowerment zone or enterprise
community.
``(d) Treatment of Pass-Thru Entities.--
``(1) Sales and exchanges.--Gain on the sale or exchange of
an interest in a pass-thru entity which is a qualified small
business held by the taxpayer (other than an interest in an
entity which was an enterprise zone business during
substantially all of the period the taxpayer held such
interest) for more than 3 years shall be treated as gain
described in subsection (a) to the extent such gain is
attributable to amounts which would be qualified capital gain
on qualified zone assets (determined as if such assets had
been sold on the date of the sale or exchange) held by such
entity for more than 3 years and throughout the period the
taxpayer held such interest. A rule similar to the rule of
paragraph (2)(B) shall apply for purposes of the preceding
sentence.
``(2) Distributions.--
``(A) In general.--Any amount included in income by reason
of holding an interest in a pass-thru entity (other than an
entity which was an enterprise zone business during
substantially all of the period the taxpayer held the
interest to which such inclusion relates) shall be treated as
gain described in subsection (a) if such amount meets the
requirements of subparagraph (B).
``(B) Requirements.--An amount meets the requirements of
this subparagraph if--
``(i) such amount is attributable to gain on the sale or
exchange by the pass-thru entity of property which is a
qualified zone asset in the hands of such entity and which
was held by such entity for the period required under
subsection (a), and
``(ii) such amount is includible in the gross income of the
taxpayer by reason of the holding of an interest in such
entity which was held by the taxpayer on the date on which
such pass-thru entity acquired such asset and at all times
thereafter before the disposition of such asset by such pass-
thru entity.
``(C) Limitation based on interest originally held by
taxpayer.--Subparagraph (A) shall not apply to any amount to
the extent such amount exceeds the amount to which
subparagraph (A) would have applied if such amount were
determined by reference to the interest the taxpayer held in
the pass-thru entity on the date the qualified zone asset was
acquired.
``(3) Pass-thru entity.--For purposes of this subsection,
the term `pass-thru entity' means--
``(A) any partnership,
``(B) any S corporation,
``(C) any regulated investment company, and
``(D) any common trust fund.
``(e) Sales and Exchanges of Interests in Partnerships and
S Corporations Which are Qualified Zone Businesses.--In the
case of the sale or exchange of an interest in a partnership,
or of stock in an S Corporation, which was an enterprise zone
business during substantially all of the period the taxpayer
held such interest or stock) is an enterprise zone business,
the amount of qualified capital gain shall be determined
without regard to--
``(1) any intangible, and any land, which is not an
integral part of any qualified business (as defined in
section 1397B(d)), and
``(2) gain attributable to periods before the designation
of an area as an empowerment zone or enterprise community.
``(f) Certain Tax-Free and Other Transfers.--For purposes
of this section--
``(1) In general.--In the case of a transfer of a qualified
zone asset to which this subsection applies, the transferee
shall be treated as--
``(A) having acquired such asset in the same manner as the
transferor, and
``(B) having held such asset during any continuous period
immediately preceding the transfer during which it was held
(or treated as held under this subsection) by the transferor.
``(2) Transfers to which subsection applies.--This
subsection shall apply to any transfer--
``(A) by gift,
``(B) at death, or
``(C) from a partnership to a partner thereof of a
qualified zone asset with respect to which the requirements
of subsection (d)(2) are met at the time of the transfer
(without regard to the 3-year holding requirement).
``(3) Certain rules made applicable.--Rules similar to the
rules of section 1244(d)(2) shall apply for purposes of this
section.''.
(b) Conforming Amendments.--
(1) Section 172(d)(2)(B) of the Internal Revenue Code of
1986 (relating to modifications with respect to net operating
loss deduction) is amended by striking ``section 1202'' and
inserting ``sections 1202 and 1395B''.
(2) Section 642(c)(4) of such Code (relating to
adjustments) is amended by inserting ``or 1395B(a)'' after
``section 1202(a)'' and by inserting ``or 1395B'' after
``section 1202''.
(3) Section 643(a)(3) of such Code (defining distributable
net income) is amended by striking ``section 1202'' and
inserting ``sections 1202 and 1395B''.
(4) Section 691(c)(4) of such Code (relating to
coordination with capital gain provisions) is amended by
striking ``1202, and 1211'' and inserting ``1202, 1395B, and
1211''.
(5) The second sentence of section 871(a)(2) of such Code
(relating to capital gains of aliens present in the United
States 183 days or more) is amended by inserting ``or 1395B''
after ``section 1202''.
(6) Part II of subchapter U of chapter 1 of such Code is
amended to read as follows:
``PART II--INCENTIVES FOR EMPOWERMENT ZONES AND ENTERPRISE
COMMUNITIES.''.
(7) The table of parts of subchapter U of chapter 1 of such
Code is amended to read as follows:
``Part II. Incentives for empowerment zones and enterprise
communities.''.
(8) The table of sections of part II of subchapter U of
chapter 1 of such Code is amended by adding at the end the
following new item:
``Sec. 1395. Exclusion for gain from zone or community investments.''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
1997.
TITLE III--COMMUNITY-BASED HOUSING DEVELOPMENT
SEC. 301. BLOCK GRANT STUDY.
(a) Study.--
(1) In general.--The Secretary of Housing and Urban
Development shall conduct a study regarding--
(A) the feasibility of consolidating existing public and
low-income housing programs under the United States Housing
Act of 1937 into a comprehensive block grant system of
Federal aid that--
(i) provides assistance on an annual basis;
(ii) maximizes funding certainty and flexibility; and
(iii) minimizes paperwork and delay; and
(B) the possibility of administering future public and low-
income housing programs under the United States Housing Act
of 1937 in accordance with such a block grant system.
(2) Public housing/section 8 moving to work
demonstration.--In conducting the study described in
paragraph (1), the Secretary of Housing and Urban Development
shall consider data from and assessments of the demonstration
program conducted under section 204 of the Omnibus
Consolidated Rescissions and Appropriations Act of 1996
(Public Law 104-134, 110 Stat. 1321).
(b) Report to Comptroller General.--Not later than 18
months after the date of enactment of this Act, the Secretary
of Housing and Urban Development shall submit to the
Comptroller General of the United States a report that
includes--
(1) the results of the study conducted under subsection
(a); and
(2) any recommendations for legislation.
(c) Report to Congress.--Not later than 24 months after the
date of enactment of this Act, the Comptroller General of the
United States shall submit to the Congress a report that
includes--
(1) an analysis of the report submitted under subsection
(b); and
(2) any recommendations for legislation.
SEC. 302. DEMOLITION AND DISPOSITION OF PUBLIC HOUSING.
Section 18(b) of the United States Housing Act of 1937 (42
U.S.C. 1437p(b)) is amended--
(1) in paragraph (1), by striking ``and'' at the end;
(2) in paragraph (2), by striking the period and inserting
``; and''; and
(3) by adding at the end the following:
``(3) the public housing agency develops a plan that
provides, subject to the approval of both the unit of general
local government in which the property on which the units to
be demolished or disposed of are located and the local public
housing agency, for--
``(A) the eventual reconstruction of units on the same
property on which the units to be demolished or disposed of
are located; and
``(B) the ultimate relocation of displaced tenants to that
property.''.
TITLE IV--RESPONSE TO URBAN ENVIRONMENTAL CHALLENGES
SEC. 401. RELEASE FROM LIABILITY OF PERSONS THAT FULFILL
REQUIREMENTS OF STATE AND LOCAL LAW.
Section 107 of the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (42 U.S.C. 9607) (as
amended by section 2) is amended by adding at the end the
following:
``(o) Release From Liability of Persons That Fulfill
Requirements of State and Local Law.--
``(1) In general.--Neither the President nor any other
person may bring an administrative or judicial enforcement
action under this Act with respect to a facility located in
an urban area that is not listed or proposed for listing on
the National Priorities List against a person that has
fulfilled all requirements applicable to the person under
State and local law to conduct response action at the
facility, as evidenced by a release from liability issued by
authorized State and
[[Page S376]]
local officials, to the extent that the administrative or
judicial action would seek to require response action that is
within the scope of the response action conducted in
accordance with State and local law.
``(2) Urban area defined.--For purposes of paragraph (1),
the term `urban area' has the meaning given that term under
section 1393(a)(3) of the Internal Revenue Code of 1986.''.
SEC. 402. BROWNFIELD PROGRAM.
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:
``SEC. 127. BROWNFIELD PROGRAM.
``(a) Definition of Brownfield Facility.--In this section,
the term `brownfield facility' means--
``(1) a parcel of land that contains an abandoned, idled,
or underused commercial or industrial facility, the expansion
or redevelopment of which is complicated by the presence or
potential presence of a hazardous substance; but
``(2) does not include--
``(A) a facility that is the subject of a removal or
planned removal under this title;
``(B) a facility that is listed or has been proposed for
listing on the National Priorities List or that has been
removed from the National Priorities List;
``(C) a 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 at which an
application for a grant or loan concerning the facility is
submitted under this section;
``(D) a land disposal unit with respect to which--
``(i) a closure notification under subtitle C of the Solid
Waste Disposal Act (42 U.S.C. 6921 et seq.) has been
submitted; and
``(ii) closure requirements have been specified in a
closure plan or permit;
``(E) a facility with respect to which an administrative
order on consent or judicial consent decree requiring cleanup
has been entered into by the United States under this Act,
the Solid Waste Disposal Act (42 U.S.C. 6901 et seq.), the
Federal Water Pollution Control Act (33 U.S.C. 1251 et seq.),
the Toxic Substances Control Act (15 U.S.C. 2601 et seq.), or
the Safe Drinking Water Act (42 U.S.C. 300f et seq.);
``(F) a facility that is owned or operated by a department,
agency, or instrumentality of the United States; or
``(G) a portion of a facility, for which portion,
assistance for response activity has been obtained under
subtitle I of the Solid Waste Disposal Act (42 U.S.C. 6991 et
seq.) from the Leaking Underground Storage Tank Trust Fund
established under section 9508 of the Internal Revenue Code
of 1986.
``(b) Maintenance of Brownfield Program.--The Administrator
shall maintain the brownfield program established by the
Administrator before the date of enactment of this section.
``(c) Elements of Program.--In conducting the brownfield
program, the Administrator may--
``(1) expend funds to identify and examine idle or
underused industrial and commercial facilities for inclusion
in the brownfield program; and
``(2) provide grants to State and local governments to
clean up brownfields and return brownfields to productive
use.
``(d) Maximum Grant Amount.--A grant under subsection (c)
shall not exceed $200,000 with respect to any brownfield
facility.
``(e) Authorization of Appropriations.--There are
authorized to be appropriated out of the Hazardous Substance
Superfund to carry out this section--
``(1) $50,000,000 for fiscal year 1998;
``(2) $55,000,000 for fiscal year 1999; and
``(3) $60,000,000 for fiscal year 2000.''.
______
By Mr. SPECTER:
S. 24. A bill to provide improved access to health care, enhance
informed individual choice regarding health care services, lower health
care costs through the use of appropriate providers, improve the
quality of health care, improve access to long-term care, and for other
purposes; to the Committee on Finance.
HEALTH CARE ASSURANCE ACT OF 1997
Mr. SPECTER. Mr. President, the start of the 105th Congress gives
those of us in the Senate and the House a new opportunity to make a
real difference in the lives of the American people. It is a chance for
us to learn from the past concerning how to best respond to the
challenges that are before us and forge important alliances to enable
us to pass legislation that is important to the American people. One of
our first priorities must be additional reforms of our Nation's health
care system.
In the 104th Congress, I was pleased to cosponsor the Health
Insurance Portability and Accountability Act of 1996, better known as
the Kassebaum-Kennedy bill (S. 1028). There is no question that
Kassebaum-Kennedy made significant steps forward in addressing
troubling issues in health care. The bill's incremental approach to
health care reform is what allowed it to generate consensus support in
the Senate; we knew that it did not address every single problem in the
health care delivery system, but it would make life better for millions
of American men, women, and children.
There is much more that needs to be done. Accordingly, today I am
introducing the Health Care Assurance Act of 1997, which, if enacted,
will take us further down the path of incremental reforms started by
Kassebaum-Kennedy. It is my firm belief that the best approach to
addressing our Nation's health care problems is to enact reforms that
improve upon our current market based health care system without
completely overhauling our current system. My bill is intended to
initiate and stimulate discussion in order to move the health care
reform debate forward. I welcome any suggestions my colleagues may have
concerning how the bill can be improved, as long as such suggestions
are consistent with the incremental approach to reform that has proven
to be the only way to obtain successful health care reform.
I want to note at the outset that through a State-run voucher system,
my legislation would address health care coverage for the first time
for the vast majority of the 10 million American children who lack
health care insurance today. My proposal is compassionate and efficient
and will preserve patient choice as its hallmark.
____________________