[Congressional Record Volume 143, Number 4 (Tuesday, January 21, 1997)]
[Senate]
[Pages S379-S557]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                          INCREASING COVERAGE

  According to the U.S. Bureau of the Census, in 1995, 224 million 
Americans derived their health insurance coverage as follows: 
approximately 64 percent from employer plans; 14.3 percent from 
Medicare and Medicaid; 4 percent from other public sources; and about 7 
percent from other private insurance. However, 40.3 million people were 
not covered by any type of health insurance.
  Statistics from the Employment Benefit Research Institute November 
1996 show that small businesses generally provide less health insurance 
coverage than larger businesses or the public sector. About 73 percent 
of employees in the public sector are provided with health insurance; 
while 55.5 percent of employees in the private sector are covered. Both 
levels are far higher than businesses with fewer than 10 employees 
(25.8%); with 10 to 24 employees (38.8%); or with 25 to 99 employees 
(54.4%).
  As I mentioned previously, title I of the bill gives federal 
subsidies to provide health care coverage for our Nation's children. 
Early estimates are that the total cost of these vouchers will be 
approximately $24 billion over 5 years. This $24 billion is a 
worthwhile investment because it will mean healthier children and 
substantially reduced anxiety for millions of parents who cannot afford 
to pay for needed medical care for their children.
  Title II contains provisions to make it easier for small businesses 
to buy health insurance for their workers by establishing voluntary 
purchasing groups. It also obligates employers to offer, but not pay 
for, at least two health insurance plans that protect individual 
freedom of choice and that meet a standard minimum benefits package. It 
extends COBRA benefits and coverage options to provide portability and 
security of affordable coverage between jobs. While it is not possible 
to predict with certainty how many additional Americans will be covered 
as a result of the reforms in title II, a reasonable expectation would 
be that these reforms will cover approximately 10 million Americans. 
This estimate encompasses the provisions included in title II which I 
will discuss in further detail.
  Specifically, title II extends the COBRA benefit option from 18 
months to 24 months. COBRA refers to a measure which was enacted in 
1985 as part of the Consolidated Omnibus Budget Reconciliation Act 
[COBRA '85] to allow employees who leave their job, either through a 
layoff or by choice, to continue receiving their health care benefits 
by paying the full cost of such coverage. By extending this option, 
such unemployed persons will have enhanced coverage options.
  In addition, options under COBRA are expanded to include plans with 
lower premiums and higher deductibles of either $1,000 or $3,000. This 
provision is incorporated from legislation introduced in the 103d 
Congress by Senator Phil Gramm and will provide an extra cushion of 
coverage options for people in transition. According to Senator Gramm, 
with these options, the typical monthly premium paid for a family of 
four would drop by as much as 20 percent when switching to a $1,000 
deductible and as much as 52 percent when switching to a $3,000 
deductible.
  With respect to the uninsured and underinsured, my bill would permit 
individuals and families to purchase guaranteed, comprehensive health 
coverage through purchasing groups. Health insurance plans offered 
through the purchasing groups would be required to meet basic, 
comprehensive standards with respect to benefits. Such benefits must 
include a variation of benefits permitted among actuarially equivalent 
plans to be developed by the National Association of Insurance 
Commissioners. The standard plan would consist of the following 
services when medically necessary or appropriate: First, Medical and 
surgical devices; second, medical equipment; third preventive services; 
and fourth, emergency transportation in frontier areas. It is estimated 
that for businesses with fewer than 50 employees, voluntary purchasing 
cooperatives such as those included in my legislation could cover up to 
10 million people who are currently uninsured.

  My bill would also create individual health insurance purchasing 
groups for individuals wishing to purchase health insurance on their 
own. In today's market, such individuals often face a market where 
coverage options are not affordable. Purchasing groups will allow small 
businesses and individuals to buy coverage by pooling together within 
purchasing groups, and choose from among insurance plans that provide 
comprehensive benefits, with guaranteed enrollment and renewability, 
and equal pricing through community rating adjusted by age and family 
size. Community rating will assure that no one small business or 
individual will be singularly priced out of being able to buy 
comprehensive health coverage because of health status. With community 
rating, a small group of individuals and businesses can join together, 
spread the risk, and have the same purchasing power that larger 
companies have today.
  For example, Pennsylvania has the ninth lowest rate of uninsured in 
the Nation, with 90 percent of all Pennsylvanians enrolled in some form 
of health coverage. Lewin and Associates found that one of the factors 
enabling Pennsylvania to achieve this low rate of uninsured persons is 
that Pennsylvania's Blue Cross-Blue Shield plans provide guaranteed 
enrollment and renewability, an open enrollment period, community 
rating, and coverage for persons with preexisting conditions. My 
legislation seeks to enact reforms to provide for more of these types 
of practices. The purchasing groups, as developed and administered on a 
local level, will provide small businesses and all individuals with 
affordable health coverage options.
  Unique barriers to coverage exist in both rural and urban medically 
underserved areas. Within my State of Pennsylvania, such barriers 
result from a lack of health care providers in rural areas, and other 
problems associated with the lack of coverage for indigent populations 
living in inner cities. This bill improves access to health care 
services for these populations by: First, Expanding Public Health 
Service programs and training more primary care

[[Page S380]]

providers to serve in such areas; second, increasing the utilization of 
nonphysician providers, including nurse practitioners, clinical nurse 
specialists, and physician assistants, through direct reimbursements 
under the Medicare and Medicaid Programs; and third, increasing support 
for education and outreach.
  Title II of my bill also includes an important provision to give the 
self-employed 100-percent deductibility of their health insurance 
premiums. The Kassebaum-Kennedy bill extended the deductibility of 
health insurance for the self-employed to 80 percent by 2006. My bill 
would extend this to 100 percent in 2007. Under current law, all other 
employers can deduct 100 percent of the cost of health care insurance 
for their workers. It is unfair not to give the self-employed the same 
tax benefit as other employers receive. The self-employed are every bit 
in need of this benefit and we should be doing everything we can to 
support this important group which is the backbone of the American 
economy.
  While I reiterate the difficulty of making definitive conclusions 
regarding the reforms put forth under this legislation and 
accomplishing universal health coverage for all Americans, I believe 
this is a promising starting point. Admittedly, the figures are 
inexact, but by my rough calculations, potentially 17.6 million of the 
40.3 million uninsured will be able to obtain affordable health care 
coverage under my bill. I arrive at this figure by estimating that at 
least 7.6 million children will receive health insurance under the 
title I voucher system. In addition, 10 million will be able to 
purchase insurance by encouraging individuals and small employers to 
purchase insurance through voluntary purchasing cooperatives.
  I welcome any and all suggestions that make sense within our current 
constraints to increase coverage. I am committed to enacting reforms 
this year and would like to determine a time certain when Congress must 
revisit this issue. We should act on these reforms and correct problems 
related to coverage where they still exist.


                              COST SAVINGS

  It is anticipated that the increased costs to employers electing to 
cover their employees as provided under title II in my bill would be 
offset by the administrative savings generated by development of the 
small employer purchasing groups. Such savings have been estimated at 
levels as high as $9 billion annually. In addition, by addressing some 
of the areas within the health care system that have exacerbated costs, 
significant savings can be achieved and then redirected toward direct 
health care services.
  While examining the issues that have contributed to our health care 
crisis, I was struck by the fact that so much attention has been 
focused on treating symptoms and very little attention has been given 
to the root causes. Although our existing health care system suffers 
from very serious structural problems, commonsense steps can be taken 
to head off the remaining problems before they reach crisis 
proportions. Title III of my bill includes three initiatives which will 
enhance primary and preventive care services aimed at preventing 
disease and ill-health.
  Each year about 7 percent, or 273,000, of the approximately 3.9 
million babies born in the United States are born with a low birth 
weight, multiplying their risk of death and disability. Approximately 
29,338 of those born die before their first birthday, but about 1,000 
of those deaths are preventable. Although the infant mortality rate in 
the United States fell to an all-time low in 1989, an increasing 
percentage of babies still are born of low birth weight. The Executive 
Director of the National Commission To Prevent Infant Mortality put it 
this way: ``More babies are being born at risk and all we are doing is 
saving them with expensive technology.''
  It is a human tragedy for a child to be born weighing 16 ounces with 
attendant problems which last a lifetime. I first saw 1-pound babies in 
1984 when I was astounded to learn that Pittsburgh, PA, had the highest 
infant mortality rate of African-American babies of any city in the 
United States. I wondered how that could be true of Pittsburgh, which 
has such enormous medical resources. It was an amazing thing for me to 
see a 1-pound baby, about as big as my hand.
  Beyond the human tragedy of a low birth weight, there are serious 
financial consequences which result. Although low birth weight infants 
represent only about 7 percent of all births, the National Center for 
Health Statistics reports that in 1994, the expenditures for their care 
totaled about 57 percent of costs incurred for all newborns. In 
addition, the Department of Health and Human Services states that care 
for each premature baby costs from $10,000 to $25,000 with a total 
national cost estimate of $2 billion a year. Low birth weight children, 
those who weigh less than 5.5 pounds, account for 16 percent of all 
costs for initial hospitalization, rehospitalization, and special 
services up to age 35.
  The short- and long-term costs of saving and caring for infants of 
low birth weight is staggering. A study issued by the Office of 
Technology Assessment in 1988 concluded that $8 billion was expended in 
1987 for the care of 262,000 low birth weight infants in excess of that 
which would have been spent on an equivalent number of babies born of 
normal birth weight, averted by earlier or more frequent prenatal care. 
If adequate prenatal care had been provided, especially to women at-
risk for delivering low birth weight babies, the U.S. health care 
system could have saved between $14,000 and $30,000 per child in the 
first year in addition to the projected savings over the lifetime of 
each child. The Department of Health and Human Services has also 
estimated that between $1.1 billion and $2.5 billion per year could be 
saved if the number of low birth weight children were reduced by 82,000 
births.
  We know that in most instances, prenatal care is effective in 
preventing low birth weight babies. Numerous studies have demonstrated 
that low birth weight that does not have a genetic link is most often 
associated with inadequate prenatal care or the lack of prenatal care. 
To improve pregnancy outcomes for women at risk of delivering babies of 
low birth weight, title III of my bill authorizes the Secretary of 
Health and Human Services to award grants to States for Healthy Start 
projects to reduce infant mortality and the incidence of low birth 
weight births, as well as to improve the health and well-being of 
mothers and their families, pregnant women and infants. The funds would 
be awarded to community-based consortia, made up of State and local 
governments, the private sector, religious groups, community health 
centers, and hospitals and medical schools, whose goal would be to 
develop and coordinate effective health care and social support 
services for women and their babies.
  I initiated action that led to the creation of the Healthy Start 
Program in 1991, working with the Bush administration and Senator 
Harkin. As chairman of the Appropriations Subcommittee with 
jurisdiction over the Department of Health and Human Services, I have 
worked with my colleagues to ensure the continued growth of this 
important program. In 1991, we allocated $25 million for the 
development of 15 demonstration projects. This number grew to 22 in 
1994, and the Health Resources and Services Administration expects the 
number of projects to increase again in 1997. For fiscal year 1997, we 
secured $96 million for the program, which is currently undergoing a 
formal evaluation by Mathematica Policy Research, Inc. However, 
preliminary results from the projects themselves suggest these programs 
have been enormously successful. In Pennsylvania, our Pittsburgh 
Healthy Start project estimates that infant mortality has decreased 20 
percent in the overall project area as a result of this program. For 
those women in Pittsburgh who have taken advantage of the case 
management offered by the program, infant mortality has been reduced by 
as much as 61 percent. Similarly, our Philadelphia project reports that 
infant mortality has been reduced by 25 percent.
  The second initiative under title III involves the provision of 
comprehensive health education and prevention initiatives for our 
Nation's children. The Carnegie Foundation for the Advancement of 
Teaching recently conducted a survey of teachers. More than half of the 
respondents said that poor nourishment among students is a serious 
problem at their schools; 60 percent cited poor health as a serious 
problem. Another study issued in 1992 by the

[[Page S381]]

Children's Defense Fund reported that children deprived of basic health 
care and nutrition are ill-prepared to learn. Both studies indicated 
that poor health and social habits are carried into adulthood and often 
passed on to the next generation.

  To interrupt this tragic cycle, our Nation must invest in proven 
preventive health education programs. My legislation provides increased 
support to local educational agencies to develop and strengthen 
comprehensive health education programs, and to Head Start resource 
centers to support health education training programs for teachers and 
other day care workers.
  Title III further expands the authorization of a variety of public 
health programs, such as breast and cervical cancer prevention, 
childhood immunizations, family planning, and community health centers. 
These existing programs are designed to improve the public health and 
prevent disease through primary and secondary prevention initiatives. 
It is essential that we invest more resources in these programs now if 
we are to make any substantial progress in reducing the costs of acute 
care in this country.
  As chairman of the Appropriations Subcommittee with jurisdiction over 
the Department of Health and Human Services, I have greatly encouraged 
the development of prevention programs which are essential to keeping 
people healthy and lowering the cost of health care in this country. In 
my view, no aspect of health care policy is more important. 
Accordingly, my prevention efforts have been widespread. Specifically, 
I joined my colleagues in efforts to ensure that funding for the 
Centers for Disease Control and Prevention [CDC] increased $1.3 billion 
or 132 percent since 1989. Fiscal year 1997 funding for the CDC totals 
$2.304 billion. We have also worked to elevate funding for CDC's breast 
and cervical cancer early detection program to $140 million in fiscal 
year 1997, a 40 percent increase in 2 years. In addition, I have 
supported providing funding to CDC to improve the detection and 
treatment of re-emerging infectious diseases.
  I have also supported programs at CDC which help children. CDC's 
childhood immunization program seeks to eliminate preventable diseases 
through immunization and to ensure that at least 90 percent of 2 year 
olds are vaccinated. The CDC also continues to educate parents and care 
givers on the importance of immunization for children under 2 years. 
Along with my colleagues on the Appropriations Committee, I have helped 
to ensure that funding for this important program increased by $172 
million, or 58 percent. The CDC's lead poisoning prevention program 
annually identifies about 50,000 children with elevated blood levels 
and places those children under medical management. The program 
prevents children's blood levels from reaching dangerous levels and is 
currently funded at over $38 million.
  In recent years, we have also strengthened funding for community and 
migrant health centers, which provide immunizations, health advice, and 
health professions training. For fiscal year 1997, over $800 million 
was provided for these centers, an increase of about $44 million over 
fiscal year 1996.
  As chairman of the Select Committee on Intelligence and Chairman of 
the Appropriations Subcommittee with jurisdiction over the Department 
of Health and Human Services, I have worked to transfer CIA imaging 
technology to the fight against breast cancer. Through the Office of 
Women's Health within the Department of Health and Human Services, I 
secured a $2 million contract in fiscal year 1996 for the University of 
Pennsylvania and a consortium to perform the first clinical trials 
testing the use of intelligence community technology for breast cancer 
detection. For fiscal year 1997, an additional $2 million was 
appropriated to continue the clinical trials.
  Finally, I have been a strong supporter of funding for AIDS research, 
education, and prevention programs. In fiscal year 1997, AIDS funding 
increased 14 percent, $392 million above the fiscal year 1996 level, 
for a total of $3.115 billion. Within this amount, $617 million was 
allocated for prevention, testing, and counseling at the CDC.
  The proposed expansions in preventive health services included in 
title III of my bill are conservatively projected to save approximately 
$2.5 billion per year or $12.5 billion over 5 years. However, I believe 
the savings will be higher. Again, it is impossible to be certain of 
such savings--only experience will tell. For example, how do you 
quantify today the savings that will surely be achieved tomorrow from 
future generations of children that are truly educated in a range of 
health-related subjects including hygiene, nutrition, physical and 
emotional health, drug and alcohol abuse, and accident prevention and 
safety? I have suggested these projections, subject to future 
modification, to give a generalized perspective on the potential impact 
of this bill.
  Title IV of my bill would establish a Federal standard and create 
uniform national forms concerning a patient's right to decline medical 
treatment. Nothing in my bill mandates the use of uniform forms, 
rather, the purpose of this provision is to make it easier for 
individuals to make their own choices and determination regarding their 
treatment during this vulnerable and highly personal time. Studies have 
also indicated that advance directives do not increase health care 
costs. According to recent data from the Journal of the American 
Medical Association authored by Ezekiel Emmanuel of the Center for 
Outcomes and Policy Research of the Dana Farber Cancer Institute, end-
of-life costs account for about 10 percent of total health care 
spending and 27 percent of total Medicare expenditures. It has been 
projected that a 10 percent savings made in the final days of life 
would result in approximately $10 billion of savings in medical costs 
per year, and about $4.7 billion in savings for Medicare alone.
  However, economic considerations are not and should not be the 
primary reasons for using advance directives. They provide a means for 
patients to exercise their autonomy over end-of-life decisions. A study 
done at the Thomas Jefferson University Medical College in Philadelphia 
cited research which found that about 90 percent of the American 
population has expressed interest in discussing advance directives, but 
only 8 to 15 percent of adults have prepared a living will. My bill 
would provide information on an individual's rights regarding living 
wills and advanced directives, and would make it easier for people to 
have their wishes known and honored. In my view, no one has the right 
to decide for anyone else what constitutes appropriate medical 
treatment. Encouraging the use of advance directives will ensure that 
patients are not needlessly and unlawfully treated against their will. 
No health care provider would be permitted to treat an adult contrary 
to the adult's wishes as outlined in an advance directive. However, in 
no way would the use of advance directives condone assisted suicide or 
any affirmative act to end human life.
  Incentives to improve the supply of generalist physicians and 
increase the utilization of nonphysician providers, such as nurse 
practitioners, clinical nurse specialists and physician assistants, 
through direct reimbursement under the Medicare and Medicaid Programs 
are contained in title V of my bill. I believe these provisions will 
also yield substantial savings. A study of the Canadian health system 
utilizing nurse practitioners projected savings of 10 to 15 percent of 
all medical costs. While our system is dramatically different from that 
of Canada, it may not be unreasonable to project annual savings of 5 
percent, or $55 billion, from an increased number of primary care 
providers in our system. Again, experience will raise or lower this 
projection. Assuming these savings, based on an average expenditure for 
health care of $3,821 per person in 1995, it seems reasonable that we 
could cover over 10 million uninsured persons with these savings.
  Outcomes research, included in title VI of my bill, is another area 
where we can achieve considerable long term health care savings while 
also improving the quality of care. According to most outcomes 
management experts, it is estimated that about 25 to 30 percent of 
medical care is inappropriate or unnecessary. Dr. Marcia Angell, former 
editor-in-chief of the New England Journal of Medicine, also stated 
that 20 to 30 percent of health care procedures are either 
inappropriate, ineffective or unnecessary. In 1995, health care 
expenditures totaled $1.1 trillion annually. A cost of illness model 
published in the October 1995 issue of Archives of

[[Page S382]]

Internal Medicine estimated that $76.6 billion annually is for drug-
related morbidity and mortality in the ambulatory setting. It is not 
unreasonable to anticipate that with the implementation of medical 
practice guidelines and enhanced appropriateness of care, 10 to 20 
percent of costs could be eliminated, resulting in savings between $8 
and $15 billion in drug-related morbidity and mortality alone. Ideally, 
if all inappropriate care could be removed, between $110 and $220 
billion in savings could be realized annually for all health care 
expenditures. A reasonable estimate is that with the implementation of 
medical practice guidelines, we may achieve savings of 20 to 30 percent 
of the lower range end--$110 billion--which amounts to $22 to $33 
billion in savings annually.
  A well-funded program for outcomes research is therefore essential, 
and is supported by Dr. C. Everett Koop, former Surgeon General of the 
United States. Title V of my bill would establish such a program by 
imposing a one-tenth of one cent surcharge on all health insurance 
premiums. Based on the Health Care Financing Administration's 1995 
health spending review, private health insurance premiums totaled 
$325.4 billion. As provided in my bill, a surcharge would generate 
$325.4 million for an outcomes research fund, in addition to the $144 
million appropriated in this area for fiscal year 1997.

  It is also vital to reduce the administrative costs incurred by our 
health care system. According to the Health Care Financing 
Administration, in 1994, about 6.2 percent of our total national health 
care expenditures were for administrative costs--over $58 billion 
annually. We can reasonably expect to reduce administrative costs by 5 
percent, or $2.9 billion annually. While the development of a national 
electronic claims system to handle the billions of dollars in claims is 
complex and will take time to implement fully, I believe it is an 
essential component in the operation of a more efficient health care 
system, and for achieving the necessary savings to provide insurance 
for the remaining uninsured Americans. Title VI of my bill is intended 
to improve consumer access to health care information. True cost 
containment and competition cannot occur if purchasers of health care 
services do not have the information available to them to compare cost 
and quality.
  Title VI also authorizes the Secretary of Health and Human Services 
to award grants to States to establish or improve a health care data 
information system. Currently, 38 States have a mandate to establish 
such a system, and 23 States are in various stages of implementation. 
In my own State, the Pennsylvania Health Care Cost Containment Council 
has received national recognition for the work it has done to help 
control health care costs through the promotion of competition in the 
collection, analysis and distribution of uniform cost and quality data 
for all hospitals and physicians in the Commonwealth. Consumers, 
businesses, labor, insurance companies, health maintenance 
organizations, and hospitals have utilized this important information. 
Specifically, hospitals have used this information to become more 
competitive in the marketplace; businesses and labor have used this 
data to lower their health care expenditures; health plans have used 
this information when contracting with providers; and consumers have 
used this information to compare costs and outcomes of health care 
providers and procedures.
  The States have not yet produced any figures on statewide savings 
resulting from the implementation of health information systems, 
however, there are many examples of savings experienced by users of 
these systems across the country. For example, the Pennsylvania Health 
Care Cost Containment Council [PHC4] has been utilized by the Hershey 
Foods Corp., which provides health insurance coverage for its 
employees, their dependents, and retirees, totaling roughly 17,000 
persons. Hershey has offered a flexible benefits package since 1988, 
but saw health care expenditures increase in the late 1980's and early 
1990's. The company used the PHC4 data as part of its health care plan 
reengineering efforts and created its own Health Maintenance 
Organization [HMO] called HealthStyles as another alternative to the 
four traditional HMO's already offered to employees and retirees. The 
PHC4 data were used to help Hershey define its specialized hospital 
network within this new HMO. Hershey states that the company has seen 
costs decline for some of the services provided by the other HMO plans 
offered to its employees. This is just one example of how health data 
information can be used wisely to inform the public and consumers and 
allow the market to control costs. There are many other examples of 
savings being achieved, and I believe that if these systems were 
implemented in every State, the savings could be substantial.
  Home nursing care is another significant issue which must be 
addressed. The cost of this care is exorbitant. Title VII of my bill 
therefore would provide a tax credit for premiums paid to purchase 
private long-term care insurance. It also proposes home and community-
based care benefits as less costly alternatives to institutional care. 
The Joint Tax Committee estimates that the cost of this long term care 
tax credit to the Treasury would be approximately $14 billion over 5 
years. Other tax incentives and reforms provided in my bill to make 
long term care insurance more affordable include: First, allowing 
employees to select long-term care insurance as part of a cafeteria 
plan and allowing employers to deduct this expense; second, excluding 
from income tax the life insurance savings used to pay for long term 
care; and third, setting standards for long term care insurance that 
reduce the bias that currently favors institutional care over community 
and home-based alternatives.
  While precision is again impossible, it is reasonable to project that 
my proposal could achieve a net annual savings of between $94 and $105 
billion. I arrive at this sum by totaling the projected savings of $101 
to $112 billion annually--$9 billion in small employer market reforms 
coupled with employer purchasing groups; $2.5 billion for preventive 
health services; $22 to $33 billion for reducing inappropriate care 
through outcomes research; $10 billion from advanced directives; $55 
billion from increasing primary care providers; and $2.9 billion by 
reducing administrative costs and netting this against the $2.8 billion 
for long term care; and $4.8 billion for increasing childrens' 
coverage. I ask unanimous consent that a list of anticipated savings 
and costs associated with the bill be included in the Record.
  Although there are no precise savings estimates for each of these 
areas, I propose this bill as a starting point to address the remaining 
problems with our health care system. Experience will require 
modification of these projections, and I am prepared to work with my 
colleagues to develop implementing legislation and to press for further 
action in the important area of health care reform.


                               conclusion

  The provisions which I have outlined today contain the framework for 
providing affordable health care for all Americans. I am opposed to 
rationing health care. I do not want rationing for myself, for my 
family, or for America. The question is whether we have the essential 
resources--doctors and other health care providers, hospitals, and 
pharmaceutical products--to provide medical care for all Americans. I 
am confident that we do. The issue is how to pay for and deliver such 
health care.
  In my judgment, we should not scrap, but rather we should build on 
our current health delivery system. We do not need the overwhelming 
bureaucracy that President Clinton and other Democratic leaders 
proposed in 1993 to accomplish this. I believe we can provide care for 
the 40.3 million Americans who are now not covered and reduce health 
care costs for those who are covered within the currently growing $1.1 
trillion in health care spending.
  With the savings projected in this bill, I believe it is possible to 
provide access to comprehensive affordable health care for 17.6 million 
Americans. This bill is a significant next step in obtaining that 
objective. It is obvious that reforming our health care system will not 
be achieved immediately or easily, but the time has come for concerted 
action in this arena.
  I understand that there are several controversial issues presented in 
this bill and I am open to suggestions on possible modifications. I 
urge the congressional leadership, including the appropriate committee 
chairmen, to

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move this legislation and other health care bills forward promptly.
  I ask unanimous consent that a summary and other material be printed 
in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                   Health Care Assurance Act of 1997


                          summary of the bill

       Title I: Health Care Coverage for Children: Title I ensures 
     health care coverage for all eligible children in the United 
     States under the age of 18. States complying with rules 
     approved by the Secretary shall receive federal funds to 
     provide vouchers to families with eligible children. This 
     will enable the states to enroll children in health plans 
     that provide coverage for preventive, primary care, and acute 
     care services. Payments to states will be calculated based 
     upon the average annual cost of enrollment in a health care 
     plan providing those types of services to children in the 
     state. Children in families with a combined income of 185% of 
     poverty level ($28,860 for a family of four) and not eligible 
     for Medicaid will receive a full subsidy for enrollment in 
     health plans, and children who are in families with incomes 
     up to 235% of poverty level ($36,660 for a family of four) 
     will receive a partial subsidy reduced on a sliding scale 
     based on poverty level. States will have the flexibility to 
     design and implement their programs as they see fit.
       Title II: Health Care Insurance Coverage: Tax Equity for 
     the Self-Employed: Provides self-employed individuals and 
     their families 100 percent tax deductibility for the cost of 
     health insurance coverage beginning in 2007. Under current 
     law, beginning in 1997, self-employed persons may deduct 40 
     percent of cost; 45 percent in 1998 through 2002; 50 percent 
     in 2003; 60 percent in 2004; 70 percent in 2005; and 80 
     percent in 2006 and thereafter. However, all other employers 
     may deduct 100 percent of such costs. Title II corrects this 
     inequity for the self-employed, 3.9 million of which are 
     currently uninsured.
       Small Employer and Individual Purchasing Groups: 
     Establishes voluntary small employer and individual 
     purchasing groups designed to provide affordable, 
     comprehensive health coverage options for such employers, 
     their employees, and other uninsured and underinsured 
     individuals and families. Health plans offering coverage 
     through such groups will: (1) provide a standard health 
     benefits package; (2) adjust community rated premiums by age 
     and family size in order to spread risk and provide price 
     equity to all; and (3) meet certain other guidelines 
     involving marketing practices.
       Standard Benefits Package: The standard package of benefits 
     would include a variation of benefits permitted among 
     actuarially equivalent plans developed through the National 
     Association of Insurance Commissioners (NAIC). The standard 
     plan will consist of the following services when medically 
     necessary or appropriate: (1) medical and surgical services; 
     (2) medical equipment; (3) preventive services; and (4) 
     emergency transportation in frontier areas.
       COBRA Portability Reform: For those persons who are 
     uninsured between jobs and for insured persons who fear 
     losing coverage should they lose their jobs, Title II reforms 
     the existing COBRA law by: (1) extending to 24 months the 
     minimum time period in which COBRA covers individuals through 
     their former employers' plans; and (2) expanding coverage 
     options to include plans with a lower premium and a $1,000 
     deductible--saving a typical family of four 20 percent in 
     monthly premiums--and plans with a lower premium and a $3,000 
     deductible--saving a family of four 52 percent in monthly 
     premiums.
       Title III: Primary and Preventive Care Services: Authorizes 
     the Secretary of Health and Human Services to provide grants 
     to States for projects (healthy start initiatives) to reduce 
     infant mortality and low weight births and to improve the 
     health and well-being of mothers and their families, pregnant 
     women and infants. Title III also would provide assistance 
     through a grant program to local education agencies and pre-
     school programs to provide comprehensive health education. In 
     addition, Title III increases authorization of several 
     existing preventive health programs such as, breast and 
     cervical cancer prevention, childhood immunizations, and 
     community health centers. In addition, Title II reauthorizes 
     the Adolescent Family Life program (Title XX) for the first 
     time since 1984. It has been funded annually in Labor, Health 
     and Human Services and Education appropriations, but without 
     authorization or reform. This program provides demonstration 
     grants and contracts for initiatives focusing directly on 
     issue of abstinence education.
       Title IV: Patient's Right to Decline Medical Treatment: 
     Improves the effectiveness and portability of advance 
     directives by strengthening the federal law regarding patient 
     self-determination and establishing uniform federal forms 
     with regard to self-determination.
       Title V: Primary and Preventive Care Providers: Utilizes 
     non-physician providers such as nurse practitioners, 
     physician assistants, and clinical nurse specialists by 
     providing direct reimbursement without regard to the setting 
     where services are provided through the Medicare and Medicaid 
     programs. Title V also seeks to encourage students early on 
     in their medical training to pursue a career in primary care 
     and it provides assistance to medical training programs to 
     recruit such students.
       Title VI: Cost Containment: Cost containment provisions 
     include: Outcomes Research: Expands funding for outcomes 
     research necessary for the development of medical practice 
     guidelines and increasing consumers' access to information in 
     order to reduce the delivery of unnecessary and overpriced 
     care.
       New Drug Clinical Trials Program: Authorizes a program at 
     the National Institutes of Health to expand support for 
     clinical trials on promising new drugs and disease treatments 
     with priority given to the most costly diseases impacting the 
     greatest number of people.
       National Health Insurance Data and Claims System: 
     Authorizes the development of a National Health Insurance 
     Data System to curtail the escalating costs associated with 
     paperwork and bureaucracy. The Secretary of Health and Human 
     Services is directed to create a system to centralize health 
     insurance and health outcomes information incorporating 
     effective privacy protections. Standardizing such information 
     will reduce the time and expense involved in processing 
     paperwork, increase efficiency, and reduce costs.
       Health Care Cost Containment and Quality Information 
     Project: Authorizes the Secretary  of Health and Human 
     Services to award grants to States to establish a health 
     care cost and quality information system or to improve an 
     existing system. Currently 39 States have State mandates 
     to establish an information system, and of those 39, 
     approximately 20 States have information systems in 
     operation. Information such as hospital charge data and 
     patient procedure outcomes data, which the State agency or 
     council collects is used by businesses, labor, health 
     maintenance organizations, hospitals, researchers, 
     consumers, States, etc. Such data has enabled hospitals to 
     become more competitive, businesses to save health care 
     dollars, and consumers to make informed choices regarding 
     their care.
       Title VII: Tax Incentives for Purchase of Qualified Long-
     Term Care Insurance: Increases access to long-term care by: 
     (1) establishing a tax credit for amounts paid toward long-
     term care services of family members; (2) excluding life 
     insurance savings used to pay for long-term care from income 
     tax; (3) allowing employees to select long-term care 
     insurance as part of a cafeteria plan and allowing employers 
     to deduct this expense; (4) setting standards that require 
     long-term care to eliminate the current bias that favors 
     institutional care over community and home-based 
     alternatives.
       Title VIII: National Fund for Health Research: Authorizes 
     the establishment of a National Fund for Health Research to 
     supplement biomedical research through the National 
     Institutes of Health. Funds will be distributed to each of 
     the member institutes and centers in the same proportion as 
     the amount of appropriations they receive for the fiscal 
     year.

NET ANNUAL HEALTH CARE SYSTEM SAVINGS FROM THE HEALTH CARE ASSURANCE ACT
                                 OF 1997                                
                        [In billions of dollars]                        
------------------------------------------------------------------------
                                                      Annual     Annual 
                    Bill title                       savings      cost  
------------------------------------------------------------------------
I--Increase health insurance coverage for children  .........      (4.8)
II--Small businesses group purchasing.............        9.0           
III--Preventive care services.....................        2.5           
IV--Advanced directives...........................         10           
V--Increase use of non-physician providers........         55           
VI--Outcomes research.............................         33           
--national electronic claims system...............        2.9           
VII--Long term care...............................  .........      (2.8)
    Net Annual Total Savings......................       104.           
------------------------------------------------------------------------

                                                    
                                                                    ____
           [From the Pittsburgh Post Gazette, Oct. 12, 1996]

                  Ray Attacks New Specter Brain Tumor

                            (By Steve Twedt)

       U.S. Sen. Arlen Specter greeted well-wishers in spirited 
     fashion yesterday, hours after undergoing a specialized 
     radiation treatment at the University of Pittsburgh Medical 
     Center to stop the regrowth of a benign brain tumor.
       And, after answering reporters' questions at a hastily 
     scheduled press conference, Specter, his wife, Joan, and son, 
     Shanin, left the hospital, declining his doctor's suggestion 
     that he stay overnight.
       ``I feel fine,'' he assured everyone. ``I've had a tougher 
     time when I've gone to the dentist.'''
       Specter, 66, revealed yesterday that, during a routine 
     magnetic resonance imaging scan in June, doctors discovered 
     that a tumor surgically removed three years earlier had 
     reappeared at the left front part of his brain. He said he 
     never felt any symptoms.
       The tumor was one-tenth the size of the one found in 1993 
     and, because it grew slowly, Specter waited until the end of 
     the congressional session to seek treatment.
       He said he came to UPMC because of the experience and 
     reputation of Dr. L. Dade Lunsford's gamma knife program, the 
     first of its kind in North America when it began in 1987. The 
     program has treated more than 2,000 patients during the past 
     nine years.
       The gamma knife is used to treat tumors and malformed blood 
     vessels in sensitive areas of the brain. Without making a 
     surgical cut, the machine precisely shoots 201 beams of 
     cobalt-60 photon radiation at the tumor while the patient 
     lies on a bed with a special helmet covering his head. Only a 
     local anesthetic is used.

[[Page S384]]

       Specter's procedure took less than four hours. When the 
     Philadelphia Republican met with reporters a few hours later, 
     the only evidence of his treatment was a faint red mark on 
     each side of his forehead from the pins used to hold his head 
     still.
       Lunsford, who is chief of neurosurgery at UPMC, said he saw 
     no evidence that the tumor in Specter's brain, called a 
     meningioma, was malignant, nor any indication of other 
     tumors.
       On the basis of his experience with other patients, 
     Lunsford said, there's a 98 percent chance the gamma knife 
     will accomplish its goal--halting the tumor's growth. Nearly 
     half the time, the tumors will even shrink, he said.
       Patients undergoing $12,000 gamma knife treatment usually 
     do not experience nausea or headaches, and typically leave 
     the hospital within 24 hours.
                                                                    ____


              [From the East Penn Press, Nov. 4-10, 1996]

                 Sometimes Patients Should Be Impatient

       I can personally report on the miracles of modern medicine.
       Three years ago, an MRI detected a benign tumor 
     (meningioma) at the outer edge of my brain. It was removed by 
     conventional surgery with five days of hospitalization and 
     five more weeks of recuperation.
       When a small regrowth was detected by a follow-up MRI this 
     June, it was treated with high powered radiation from the 
     ``Gamma Knife.'' I entered the hospital in the morning and 
     left the same afternoon, ready to resume my regular schedule. 
     Like the MRI, the Gamma Knife is a recent invention, coming 
     into widespread use in the past decade.
       My own experience as a patient has given me deeper insights 
     into the American health care system beyond the U.S. Senate 
     hearings where I preside as chairman of the Appropriations 
     Subcommittee with jurisdiction over health and human 
     services. I have learned: (1) our health care system, the 
     best in the world, is worth every cent we pay for it; (2) 
     patients sometimes have to press their own cases beyond the 
     doctors' standard advice; (3) greater flexibility must be 
     provided on testing and treatment; and (4) our system has the 
     resources to treat the 40 million Americans not now covered, 
     but we must find the way to pay for it.
       Health care in America costs $1 trillion out of our $7 
     trillion economy. The Senate and House Subcommittees on 
     Health have taken the lead to raise funding for medical 
     research for the National Institutes of Health.
       Notwithstanding budget cuts generally, we added $820 
     million this year to bring the total research budget to $12.7 
     billion.
       For that investment, we have seen dramatic breakthroughs in 
     gene therapy and advances in treatment for heart disease, 
     cancer, AIDS, diabetes, Alzheimers, etc. Scanning devices 
     such as satellite imaging used by the CIA are now applied to 
     detect breast cancer. Complex computerization assists MRIs to 
     define the scope of treatment.
       It isn't enough to have such machines. We have to use them 
     more extensively.
       In the spring of 1993, I complained to many doctors about a 
     tightness in my collar and light pains running up the sides 
     of my head. All tests proved negative. The symptoms 
     persisted.
       I asked for an MRI scan. The doctor said it wasn't 
     indicated. I insisted. I got it. The MRI showed a benign 
     tumor the size of a golf ball between my brain and skull.
       While MRIs are expensive, those costs can be reduced by 
     around-the-clock use of the machine. The marginal cost of 
     operating it from midnight to 8 a.m. are small.
       The inconvenience to the patient is worth it. The extra 
     cost to insurance companies would be more than made up by 
     preventing more serious illness and higher costs later.
       While my June 1993 operation was performed by one of the 
     finest surgeons at one of the best hospitals, I was among the 
     approximately 15 percent where tiny calls at the margin 
     apparently caused a small regrowth. The general 
     recommendation was surgery.
       A minority of doctors suggested consideration of a 
     relatively new procedure known as the Gamma Knife. Since 
     there was no urgency. I took some time to study the 
     alternatives.
       Most doctors, even some with extensive experience with the 
     Gamma Knife, insisted on conventional surgery. Why? (1) 
     Because that was the traditional approach; (2) because there 
     was more long-term follow-up data on surgery even though 
     successful Gamma Knife procedures were on record for more 
     than 20 years; and (8) because the tumor was in a good 
     location for surgery.
       Somehow the Gamma Knife, it was argued, should be reserved 
     for locations the surgeon's knife could not reach. But my 
     tumor was also in a good spot for radiation.
       My inquiries among doctors in the United States and Sweden 
     (where the Gamma Knife was invented) disclosed almost 
     universal agreement that the Gamma Knife, if unsuccessful, 
     would not make the tumor more difficult to treat. Later 
     surgery could always be utilized. The non-invasive Gamma 
     Knife eliminated the risk of anesthesia and infection from 
     surgery.
       With a high success rate from the worldwide experience of 
     40,000 Gamma Knife procedures and 5,000 meningioma like my 
     own, it was hard to understand why it was not used more. I 
     found Dr. Dade Lunsford at the University of Pittsburgh 
     Presbyterian Hospital had to most experience in the United 
     States with the Gamma Knife.
       Since 1987, his team had used the procedure 2,100 times. 
     Only one of his 270 memingioma patients had required later 
     surgery. Dr. Lunsford estimated the overall success rate at 
     98 percent.
       So I checked into the hospital at 6:15 one morning, had a 
     brace attached to my head and took another MRI. All I 
     required was local anesthesia before pins were pressed to my 
     head to make the brace secure.
       I then watched the computer calculate how much radiation 
     should be applied to the tumor and its margins as shown on 
     the MRI scan.
       At about 9:30 a.m., my head was inserted into a 500 pound 
     helmet with 201 holes which directed cobalt beams from all 
     directions to focus on the meningioma. Each beam was 
     relatively minute, but the confluence was high powered.
       There were seven bombardments of radiation for three 
     minutes or less. In between, my position was altered with one 
     change of the helmet.
       At about 10:50 a.m., the radiation was completed and a head 
     compress was applied for two hours. After lunch and a brief 
     conversation with Dr. Lunsford, we briefed the news media. I 
     left the hospital in mid-afternoon to spend the night in a 
     local hotel and then resume my schedule the next day.
       Now, five days later, I feel fine. I am back on the squash 
     court. I am back to my 14-hour days traveling across 
     Pennsylvania.
       An MRI will be taken in six months. I have some 
     apprehension as to how it will all work out, but so far, so 
     good. I feel very lucky!
       Nothing is more important than a person's health. We have 
     done a great job in the United States in producing the 
     greatest health care system in the world. I am aware that it 
     is better for some, like myself, than for others. I am 
     convinced that America has the doctors, nurses, hospitals, 
     medical equipment, pharmaceuticals, etc. to provide for all 
     our people. My pending legislation provides a plan to do that 
     with the current $1 trillion expenditure.
       Informed, aggressive patients can do much to help 
     themselves.
                                 ______
                                 
      By Mr. McCAIN (for himself, Mr. Feingold, Mr. Thompson, Mr. 
        Wellstone, Mr. Graham, Mr. Kerrey, Mr. Dodd, Mr. Kerry, Mr. 
        Bingaman, Mr. Glenn, Mrs. Murray, Mr. Kohl, Mr. Wyden, Ms. 
        Moseley-Braun, Mr. Reid, Mr. Ford, Mr. Leahy, Mr. Cleland, Mr. 
        Johnson, and Mr. Durbin):
  S. 25. A bill to reform the financing of Federal elections; to the 
Committee on Rules and Administration.


              THE BIPARTISAN CAMPAIGN FINANCE BILL OF 1997

  Mr. McCAIN. Mr. President, I am pleased to be joined by Senators 
Feingold, Thompson, and Wellstone in introducing the Bipartisan 
Campaign Finance Reform bill of 1997. This measure is similar to last 
year's bill that we introduced on the same subject. I will not lay out 
all the details of the bill at this time, but will submit for the 
record a summary of our bill at a later date.
  Passage of campaign finance reform is necessary if we are to curb the 
public's growing cynicism for politics and Congress in particular. We 
can no longer wait to address this issue.
  I am under no illusions that this will be an easy fight. No other 
issue is felt more personally by Members of this body. No other issue 
stirs the emotions of Members of the Senate more. But we were sent here 
to make tough decisions and we must address this subject.
  The public demands that we achieve three goals: limit the role of 
money in politics, make the playing field more level between 
challengers and incumbents, and to pass a legislative initiative that 
will become law.
  To pass a bill will require principled compromise and a great deal of 
work. I want the members of my party to know that I am willing to work 
with you to address your concerns regarding this legislation. I want to 
let my friends know on the other side of the aisle that the offer also 
stands for them. The co-sponsors for this bill are willing to negotiate 
technical aspects of the bill. The three principals I just outlined, 
however, are not negotiable.
  Twenty-five years after Watergate, the electoral system is out of 
control. Our elections are awash in money which is flowing into the 
system at record levels. Some public interest groups estimate that when 
all is said and done, that nearly $1 billion will have been spent 
during this last election cycle. Something must be done.
  Do we have the perfect solution? No. I do not know if a perfect 
solution even exists. But our bill, the McCain-Feingold-Thompson bill 
is a good first step toward reform. I hope that soon we will be on the 
floor debating this measure. I look forward to working

[[Page S385]]

with all my colleagues as we move forward. It is only in a bipartisan 
manner, putting parochial interests aside, that we will be able to do 
the people's business--that we will pass meaningful campaign finance 
reform.
  Mr. FEINGOLD. I rise today to join with my colleague from Arizona 
[Mr. McCain] in introducing the Bipartisan Campaign Reform Act.
  I want to acknowledge the Democratic and Republican Senators who have 
agreed to join myself and the Senator from Arizona [Mr. McCain] as 
original co-sponsors in introducing this historic legislation. Those 
co-sponsors include the Senator from Tennessee [Mr. Thompson], the 
Senator from Minnesota [Mr. Wellstone], the Senator from Florida [Mr. 
Graham], the Senator from Connecticut [Mr. Dodd], the Senator from 
Nebraska [Mr. Kerrey], the Senator from Massachusetts [Mr. Kerry], the 
Senator from New Mexico [Mr. Bingaman], the Senator from Washington 
[Mrs. Murray], the Senator from Wisconsin [Mr. Kohl], the Senator from 
Oregon [Mr. Wyden], the Senator from Illinois [Ms. Moseley-Braun], the 
Senator from Kentucky [Mr. Ford], the Senator from Vermont [Mr. Leahy], 
the Senator from Nevada [Mr. Reid], the Senator from Georgia [Mr. 
Cleland], the Senator from South Dakota [Mr. Johnson] and the Senator 
from Illinois [Mr. Durbin].
  I think it is clear Mr. President, that the few remaining pillars 
holding up our crumbling election system finally collapsed. According 
to the latest figures provided by the Federal Election Commission, 
congressional candidates spent a total of $742 million in the 1996 
elections, a noticeable increase over the 1994 levels despite the 
absence of a single Senate contest in any of the largest States 
including California, New York, Florida, Pennsylvania, or Ohio. And 
that $742 million figure does not even include the record amounts of 
so-called ``soft money'' contributions raised and spent by the national 
political parties in the last election cycle.
  Every campaign year we are hit with these astonishing spending 
figures and every year we acknowledge that a new record has been set. 
And just when the spending and abuses seem like they cannot get any 
worse, they do. Last November, our campaign finance system lurched out 
of control, filling the headlines and airwaves with charges and 
countercharges about which candidates and parties were abusing our laws 
and loopholes the worst. Another cadre of millionaires spent vast sums 
of personal wealth on their campaigns, 94 percent of House and Senate 
challengers lost their election bids, and the smallest percentage of 
Americans went to the ballot box in 72 years.
  Coupled with the continued need to reduce the Federal budget deficit, 
there may be no more fundamentally important issue than the need to 
pass meaningful reform of our campaign finance system.
  The bill we are introducing today has several components, but is 
centered primarily on what I believe are the two cornerstones of 
reform. The first cornerstone is the creation of a voluntary system 
that offers qualified candidates an opportunity to participate in the 
electoral process without being compelled to raise and spend outrageous 
sums of money.
  This voluntary system merely says to candidates that if you agree to 
follow a set of ground rules, we will provide you with the tools that 
will not only reduce the high costs associated with campaigning, but at 
the same time enhance your ability to sufficiently convey your message 
to the voters of your State.
  What are those ground rules and benefits, Mr. President.
  First, candidates who elect to voluntarily participate in the system 
must agree to limit the overall amount of money they spend on their 
campaigns. This spending cap is based on the voting-age population in 
each State. For example, in my State of Wisconsin the primary spending 
limit would be about $1 million while the general election cap would be 
about $1.5 million. In a larger State such as New York, the primary 
limit would be about $2.7 million while the general election limit 
would be about $4 million.
  The second rule candidates must follow is to limit how much of their 
personal wealth they contribute to their campaigns. Again, this would 
be based on the size of each State. In Wisconsin, it would be about 
$150,000 and in no State would it be higher than $250,000.
  Finally, candidates must agree to raise 60 percent of their 
contributions from individuals within their home States. This rule is 
grounded in our belief that anyone wishing to receive the benefits of 
the bill should be able to demonstrate a strong base of support from 
the people they intend to represent. Moreover, candidates and 
officeholders will be compelled to focus their campaign and fundraising 
activities on the people who matter most --the voters back home.
  If candidates elect to participate in the system and follow these 
simple ground rules, they are entitled to certain benefits.
  The first benefit is a postage discount. Eligible candidates would be 
given a special postage rate, currently only available to non-profit 
organizations and political parties, for a number of mailings equal to 
two times the voting-age population of the candidate's State.
  Second, the bill provides each eligible candidate with up to 30 
minutes of free television advertising time from the broadcast stations 
in the candidate's State and any adjoining States.
  Third, and most importantly, the bill offers eligible candidates a 
50-percent discount off of the lowest unit rate for their television 
advertising 60 days before their general election and 30 days before 
the primary. Current law merely provides Federal candidates with the 
lowest unit rate--our bill would cut the costs of television 
advertising for eligible candidates almost in half.
  That, Mr. President, is the first foundation of meaningful reform, 
creating a voluntary system--purely voluntary--that provides candidates 
who agree to limit their campaign spending with the means to convey 
their ideas and message to the voters and also significantly reduce 
their campaign costs, therefore reducing the need to raise millions and 
millions of dollars.
  The second foundation of reform is to ban so-called ``soft money,'' 
those contributions to the national parties from corporations, labor 
unions and wealthy individuals that are unlimited and unregulated by 
federal election law and yet are funneled into federal campaigns around 
the country.
  It was soft money, Mr. President, that garnered so much outrage in 
the last election. To illustrate how expansive of a loophole soft money 
has become, consider how much of this unregulated money the national 
parties have raised over the last two election cycles in which we had a 
presidential election. In 1992, the Republican National Committee 
raised $50 million in soft money while the Democratic National 
Committee raised $36 million. In 1996, the RNC raised $141 million 
while the DNC raised $122 million. Overall, soft money contributions to 
the two parties went from $86 million in 1992 to $263 million in 1996. 
That is a staggering increase.
  In the wake of the countless media reports documenting this abuse, 
Americans were left wondering why an individual who is limited to 
contributing $1,000 to a federal candidate by federal election law is 
somehow able to contribute $100,000 or $1 million to the Democratic or 
Republican National Committees. They want to understand why labor 
unions and corporations, which are prohibited by law from using their 
treasury funds to make contributions or expenditures to advocate for or 
against a federal candidate, are able to funnel millions and millions 
of their treasury dollars directly into the two national parties and 
indirectly into various House and Senate elections. Clearly, a ban on 
soft money contributions to the political parties must be a part of a 
serious reform proposal.
  The Supreme Court has spoken clearly on the constitutionality of 
limiting campaign contributions from individuals and organizations. 
They have upheld the statutes barring corporate and labor union direct 
contributions. They have upheld the statute limiting individuals to 
contributing $1,000 to federal candidates per election and $20,000 to 
national parties per year. And yet the soft money loophole has allowed 
interested parties to blow these limits away, leaving the average 
citizen who wishes to contribute $25 to their local congressman 
wondering just how much of a voice they have in the electoral process.
  The McCain-Feingold proposal simply bans all soft money contributions

[[Page S386]]

to the national parties. Individuals can still contribute to the 
national parties, but they will have to abide by the current law 
$20,000 ``hard money'' limit. Corporations and labor unions will also 
be able to contribute to the national parties, but they too will have 
to follow the ``hard money'' limits. That means they will have to 
contribute through their separate segregate funds, also known as PAC's, 
rather than using their general treasury funds, and their contributions 
to the national parties will be limited to $15,000 per party committee 
per year.
  We heard considerable debate in the last election about foreign 
money--both coming from foreign nationals oversees, which is clearly 
illegal, and from noncitizens residing in the United States, which is 
not. This is a problem and we have a new provision in our legislation 
to address this abuse. But I have always said that the problem is 
whether anyone should be permitted to contribute $400,000 in our 
election system, whether it is from Jakarta or Janesville, WI. And the 
soft money ban in our legislation will prohibit any future such 
contributions, regardless of their source.
  The legislation includes a new proposal that bars anyone who is not 
eligible to vote in a federal election from contributing to a federal 
candidate. This will affect noncitizens, minors under 18 years of age 
and certain convicted felons. Simply put, if our laws and Constitution 
do not allow an individual to participate in the political process with 
their ballot, there is no reason the same individual should be 
permitted to participate with their checkbook.
  The McCain-Feingold bill includes a number of other important 
provisions as well. For example, we propose a new definition of what 
constitutes ``express advocacy'' in a federal election. ``Express 
advocacy'' is the standard used to determine to what extent election 
activities may be limited and regulated. If a particular activity, such 
as an independent expenditure, is deemed to expressly advocate the 
election or defeat of a particular federal candidate, then that 
activity must be paid for with fully disclosed and limited ``hard 
money'' dollars. Labor unions, corporations and other political 
organizations would have to fund such activities through a PAC, 
comprised of voluntary, limited and disclosed contributions.
  If on the other hand, an expenditure is used for an activity that 
does not expressly advocate the election or defeat of a particular 
candidate, such as a television ad that attempts to raise important 
issues without advocating a candidate, then that expenditure may be 
funded with ``soft money'' dollars--undisclosed and unlimited monies, 
such as corporation's profits or a labor union's member dues.
  Unquestionably, the largest abuse in recent elections is the use of 
non-party soft money to fund huge electioneering activities under the 
guise that there is an absence of express advocacy. Current FEC 
regulations defining express advocacy are so weak that these 
organizations are able to channel unlimited resources into activities 
that are thinly veiled as ``voter education'' or ``issue ads'' when in 
truth they seek to directly advocate the election or defeat of a 
candidate.
  These activities, outside the scope of federal election law, have 
come to dominate many House and Senate campaigns. And while political 
parties and outside organizations have poured unlimited resources into 
these ``issue ads,'' candidates have found their role in their own 
elections shockingly diminished.
  If we are to have any control of our election process, we must have a 
clear standard in the law that defines what sort of activities are an 
attempt to influence the outcome of a federal election.
  The McCain-Feingold proposal includes a new definition of what 
constitutes ``express advocacy.'' Under this proposal, the definition 
of ``express advocacy'' will include any general public communication 
that advocates the election or defeat of a clearly identified candidate 
for federal office by using such expressions as ``vote for'', 
``support'' or ``defeat''. Further, any disbursement aggregating 
$10,000 or more for a communication that is made within 30 days of a 
primary election or 60 days of a general election shall be considered 
express advocacy if the communication refers to a clearly identified 
candidate and a reasonable person would understand it as advocating the 
election or defeat of that candidate.

  If such a communication is made outside of the 30 day period before 
the primary election or the 60 day period before the general election, 
it shall be considered express advocacy if the communication is made 
with the purpose of advocating the election or defeat of a candidate as 
shown by one or more factors including a statement or action by the 
person making the communication, the targeting or placement of the 
communication, or the use by the person making the communication of 
polling or other similar data relating to the candidate's campaign or 
election.
  This will ensure that a much larger proportion of the expenditures 
made by political parties and independent organizations with the intent 
to influence the outcome of a federal election will be covered by 
federal law and subject to the appropriate restrictions and disclosure 
requirements.
  The McCain-Feingold proposal will also protect candidates who are 
targeted by independent expenditures. First, the legislation requires 
groups who fund independent expenditures to immediately disclose those 
expenditures. The FEC would then be required to transmit a copy of that 
report to any candidate who has agreed to limit their spending and has 
been targeted by such an expenditure. This will give candidates advance 
notice that they have been targeted. The legislation also allows 
candidates to respond to such expenditures without these ``response 
expenditures'' counting against their overall spending limit. This will 
ensure that targeted candidates are not bound by the spending caps and 
unable to respond. And finally, the bill tightens statutory language to 
ensure that independent expenditures made by political parties are 
truly independent and not coordinated with campaigns in any way.
  The legislation also includes a ban on Political Action Committee 
[PAC] contributions to federal candidates. In case such a ban is held 
to be unconstitutional by the Supreme Court, the legislation includes a 
``back-up'' provision that lowers the PAC contribution limit from 
$5,000 to $1,000 and limits Senate candidates to accepting no more than 
20% of the applicable overall spending limit in aggregate PAC 
contributions.
  The bipartisan bill is further helpful to challengers in that it 
prohibits Senators from sending out taxpayer-financed, unsolicited 
franked mass mailings in the calendar year of an election. Often, these 
mass mailings are thinly disguised ``newsletters'' that help to bolster 
an incumbent's name recognition and inform constituents of their 
accomplishments. Such unsolicited activity by officeholders can be 
unfair in an election year.
  The final major piece of this reform effort is our enhanced 
enforcement provisions. There is legitimate criticism that our federal 
election laws are not adequately enforced, and much of this problem can 
be directly attributed to Congress' unwillingness to provide adequate 
funding to what is supposed to be the government's watchdog agency, the 
Federal Election Commission. Regardless, there are reforms we can pass 
that will allow the FEC to better enforce the current laws we have on 
the books as well as the new laws enacted as part of this legislation.
  First and foremost is a provision that will require all federal 
campaigns to file their disclosure reports with the FEC electronically. 
Currently, this is optional and the result is a disclosure system that 
is marginally reliable. We need a disclosure system that is readily 
accessible to the public and will allow the American people to know 
where from and to whom the money is flowing. The bill also requires 
candidates to disclose the name and address of every contributor who 
gives more than $50 to a candidate. Currently, that threshold is only 
for contributions over $200 and the result is millions of dollars of 
undisclosed contributor information.
  Second, we allow the FEC to conduct random audits of campaigns. This 
will provide a mechanism to make sure candidates are complying with all 
of the limitations and restrictions in federal election law.

[[Page S387]]

  The bill toughens penalties for ``knowing and willful'' violations of 
the law. If such a standard is met, the FEC is permitted to triple the 
amount of the civil penalty. We must send a message to candidates and 
campaigns that deliberate attempts to evade the law will be met with 
serious penalties.
  Mr. President, the support the McCain-Feingold proposal garnered last 
year was bipartisan and broad based. It was strongly supported by 
President Clinton, who first endorsed the McCain-Feingold proposal in 
his State of the Union Address almost one year ago and has recently 
reaffirmed his strong commitment to the legislation this year. It was 
endorsed by Ross Perot, Common Cause, Public Citizen, United We Stand 
America, the American Association of Retired Persons and some 30 other 
grassroots organizations. It received editorial support from over 60 
newspapers nationwide.
  This legislation is also bicameral. Republican Representative Chris 
Shays, Democratic Representative Marty Meehan and a number of others 
will soon be introducing a House version of the McCain-Feingold 
proposal in the 105th Congress.
  Recently, the Wall Street Journal conducted a poll on this issue. 
They found that 92 percent of the American people believe we spend too 
much money on political campaigns. This is consistent with numerous 
other polls that have found similar results. Coupled with the troubling 
fact that the smallest percentage of Americans went to the ballot box 
in 72 years, it is clear that the American people want meaningful 
reform of our electoral process. It is also clear that they want less 
polarization in the Congress, and for Democrats and Republicans to work 
together and find effective solutions to our common problems.
  For years, campaign finance reform has stalled because of the 
inability of the two parties to join together and craft a reform 
proposal that was fair to both sides. We believed we have bridged those 
differences, and produced a proposal that calls for mutual disarmament 
and will lead to fair and competitive elections.
  It is my hope that the distinguished majority leader will recognize 
how important this issue is to the American people and our democratic 
system and will allow this legislation to be considered in the coming 
weeks. I want to thank my friend from Arizona [Mr. McCain] for his 
dedication to this issue.
  Mr. THOMPSON. Mr. President I join my colleagues in reintroducing our 
campaign finance reform legislation with mixed emotions. On the one 
hand, I am more optimistic about the chances of our being able to enact 
reforms than I was when we introduced our bill over a year ago. On the 
other hand, I regret that it has taken another round of public 
disappointment and anger over the role of money in federal elections to 
bring us to this point.
  The factors which led us to introduce this legislation in the last 
Congress have become even more prominent. Too much money is needed, too 
much time must be spent raising it, too much is asked of a limited 
number of special interests, and too much is going on outside of the 
regulatory system we established--some within the bounds of the law, 
some allegedly not.
  Most importantly, in my view, the public is increasingly concerned by 
what they see happening here. If they have no faith in the system which 
put us here, if they are turned off by what we do to get elected, how 
are they going to trust us to carry out our work in their best 
interests?
  Next, money raising consumes an inordinate amount of office-holders' 
and candidates' time and effort. Candidates should be reaching out to 
as broad a spectrum of people and interests as possible, and not feel 
they must concentrate on those who can afford to make a donation.
  Last, it is difficult for a challenger to raise sufficient funds to 
get his or her message out. Congress needs to move away from 
professionalism and more toward a citizen legislature. The process 
should be more open, instead of more closed. Because of the role money 
plays, unless a candidate has access to large sums of money, he or she 
is pretty much cut out of the process.
  I believe the revised legislation I am joining my colleagues Senators 
McCain and Feingold in introducing provides some solutions to these 
problems. It doesn't provide all the solutions, or perfect solutions, 
but it is a good faith effort and, in my view, a good place to start.
  This legislation reduces the appearance and reality of special 
interests buying and selling political favors by prohibiting federal 
PACs, restricting contribution ``bundling'', prohibiting so-called 
``soft money'', and putting a cap on out-of-state fundraising. I do not 
believe PACs are inherently evil. There are other ways special 
interests can enhance their financial influence in a campaign. 
Contributions are bundled, or the word just goes out that a particular 
interest--be it business, or social, or labor--is concentrating 
donations on a particular race. PACs are a more formal association of 
people with common interests. Our test in legislating reforms should be 
whether the public feels they continue to serve an acceptable purpose.
  Furthermore, in this revised bill we have tightened up on the 
definitions of independent and coordinated expenditures, as well as 
those for express advocacy. Today we have a system under which, in many 
cases, the majority of the expenditures in an election are outside the 
system and the candidate's control. In 1992, ``soft money'' 
expenditures by the Republican and Democratic parties totaled $86 
million. In 1996, they totaled $263 million. It is little wonder that 
we are looking at where some of it came from.
  I look forward to working with our colleagues on both sides of the 
aisle, in the House of Representatives, and with the President to 
fashion and pass meaningful reform. I believe a successful effort will 
renew the public's faith in our system and in us, and thus in our 
ability to do what they sent us here to do.
  Mr. WELLSTONE. Mr. President. I am extremely pleased to be an 
original cosponsor of the McCain-Feingold-Thompson-Wellstone campaign 
finance reform bill. I hope the Senate will bring it to the floor very 
early in this Congress--preferably during the first three months of 
this year. Campaign finance reform is clearly one of the most crucial 
issues we face, and the public is more than ready for fundamental 
reform.
  I have been working hard with my colleagues on this bipartisan bill, 
which we hope becomes the vehicle for genuine reform this year. I hope 
that public dissatisfaction with campaign politics-as-usual, especially 
as exemplified by the abuses of the campaign season just past, will 
push this Congress to act decisively. We should choose the best aspects 
of the various bills that will be introduced this year and fix the 
problems which have made themselves so apparent. We know there will 
opposition to any significant changes in the way we organize and 
finance campaigns for federal office, but if there is sufficient 
pressure from around the country, we can pass real reform.
  So let us bring this bill to the floor and amend it. No reform bill 
is perfect. Let Republicans and Democrats offer their changes. As the 
only viable, bipartisan campaign finance reform bill, this proposal 
represents our best hope for taking a significant step toward genuine 
reform.
  In some ways this bill does not go as far as I believe will be 
necessary in order to repair our damaged campaign finance system. But 
it would ban ``soft money'' contributions to parties. It would impose 
voluntary spending limits and require greater disclosure of independent 
expenditures. It would restrict PAC contributions and ``bundling,'' and 
it would place more restrictions on foreign contributions. It is a good 
bill. Its enactment would be an excellent start toward restoring 
integrity to our political process.
  We must enact comprehensive reform. But I am especially committed 
this year to addressing the striking abuses in the areas of ``soft 
money'' and issue-advocacy ads. A system which invites circumvention 
mocks itself.
  Mr. President, I intend to speak at greater length in the coming days 
on the subject of campaign finance reform. Today, I enthusiastically 
endorse this bipartisan effort to move real reform and to begin to 
restore Americans' belief in our democratic institutions.
                                 ______
                                 
      By Mr. DASCHLE (for himself, Mr. Johnson, Mr. Dorgan, Mr.

[[Page S388]]

        Conrad, Mr. Kerrey, and Mr. Bingaman):
  S. 26. A bill to provide a safety net for farmers and consumers and 
to promote the development of farmer-owned value added processing 
facilities, and for other purposes; to the Committee on Agriculture, 
Nutrition, and Forestry.


                  agricultural safety net act of 1997

       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. 26

       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 ``Agricultural Safety Net Act 
     of 1997''.

     SEC. 2. MARKETING ASSISTANCE LOANS.

       (a) In General.--Section 132 of the Agricultural Market 
     Transition Act (7 U.S.C. 7232) is amended--
       (1) in subsection (a)(1)--
       (A) by striking ``be--'' and all that follows through ``(A) 
     not'' and inserting ``be not''; and
       (B) by striking ``; but'' and all that follows through 
     ``per bushel'';
       (2) in subsection (b)(1)--
       (A) by striking ``be--'' and all that follows through ``(A) 
     not'' and inserting ``be not''; and
       (B) by striking ``; but'' and all that follows through 
     ``per bushel'';
       (3) in subsection (c)(2), by striking ``or more than 
     $0.5192 per pound'';
       (4) in subsection (d)--
       (A) by striking ``be--'' and all that follows through ``(1) 
     not'' and inserting ``be not''; and
       (B) by striking ``; but'' and all that follows through 
     ``per pound''; and
       (5) in subsection (f)--
       (A) in paragraph (1)(B), by striking ``or more than 
     $5.26''; and
       (B) in paragraph (2)(B), by striking ``or more than 
     $0.093''.
       (b) Term of Loan.--Section 133 of the Agricultural Market 
     Transition Act (7 U.S.C. 7233) is amended by striking 
     subsection (c) and inserting the following:
       ``(c) Extensions.--The Secretary may extend the term of a 
     marketing assistance loan for any loan commodity for a period 
     not to exceed 6 months.''.

     SEC. 3. EXPANSION OF CROP REVENUE INSURANCE.

       Section 508 of the Federal Crop Insurance Act (7 U.S.C. 
     1508) is amended--
       (1) in subsection (b)--
       (A) by striking paragraph (9); and
       (B) by redesignating paragraph (10) as paragraph (9); and
       (2) by adding at the end the following:
       ``(o) Crop Revenue Insurance.--
       ``(1) In general.--The Secretary shall offer a producer of 
     wheat, feed grains, soybeans, or such other commodity as the 
     Secretary considers appropriate insurance against loss of 
     revenue from prevented or reduced production of the 
     commodity, as determined by the Secretary.
       ``(2) Administration.--Revenue insurance under this 
     subsection shall--
       ``(A) be offered by the Corporation or through a re-
     insurance arrangement with a private insurance company;
       ``(B) offer at least a minimum level of coverage that is an 
     alternative to catastrophic crop insurance; and
       ``(C) be actuarially sound''.

     SEC. 4. PRIORITY FOR FARMER-OWNED VALUE-ADDED PROCESSING 
                   FACILITIES.

       Section 310B of the Consolidated Farm and Rural Development 
     Act (7 U.S.C. 1932) is amended by adding at the end the 
     following:
       ``(h) Priority for Farmer-Owned Value-Added Processing 
     Facilities.--In approving applications for loans and grants 
     authorized under this section, section 306(a)(11), and other 
     applicable provisions of this title (as determined by the 
     Secretary), the Secretary shall give a high priority to 
     applications for projects that encourage farmer-owned value-
     added processing facilities.''.
                                 ______
                                 
      By Mr. THURMOND:
  S. 27. A bill to amend title 1 of the United States Code to clarify 
the effect and application of legislation; to the Committee on the 
Judiciary.


      an act to clarify the application and effect of legislation

  Mr. THURMOND. Mr. President, I rise today to introduce an act to 
clarify the application and effect of legislation which the Congress 
enacts. My act provides that unless future legislation expressly states 
otherwise, new enactments would be applied prospectively, would not 
create private rights of action, and would be presumed not to preempt 
existing State law. This will significantly reduce unnecessary 
litigation and court costs, and will benefit both the public and our 
judicial system.
  The purpose of this legislation is quite simple. Many congressional 
enactments do not indicate whether the legislation is to be applied 
retroactively, whether it creates private rights of action, or whether 
it preempts existing State law. The failure or inability of the 
Congress to address these issues in each piece of legislation results 
in unnecessary confusion and litigation. Additionally, this contributes 
to the high cost of litigation and the congestion of our courts.
  In the absence of action by the Congress on these critical threshold 
questions of retroactivity, private rights of action and preemption, 
the outcome is left up to the courts. The courts are frequently 
required to resolve these matters without any guidance from the 
legislation itself. Although these issues are generally raised early in 
a lawsuit, a decision that the lawsuit can proceed generally cannot be 
appealed until the end of the case. If the appellate court eventually 
rules that one of these issues should have prevented the trial, the 
litigants have been put to substantial burden and unnecessary expense 
which could have been avoided.
  Trial courts around the country often reach conflicting and 
inconsistent results on these issues, as do appellate courts when the 
issues are appealed. As a result, many of these cases eventually make 
their way to the Supreme Court. This problem was dramatically 
illustrated after the passage of the Civil Rights Act of 1991. District 
courts and courts of appeal all over this Nation were required to 
resolve whether the 1991 act should be applied retroactively, and the 
issue ultimately was considered by the U.S. Supreme Court. However, by 
the time the Supreme Court resolved the issue in 1994, well over 100 
lower courts had ruled on this question, and their decisions were 
split. Countless litigants across the country expended substantial 
resources debating this threshold procedural issue.
  In the same way, the issues of whether new legislation creates a 
private right of action or preempts State law are frequently presented 
in courts around the country, yielding expensive litigation and 
conflicting results.
  The bill I am introducing today eliminates this problem by providing 
the rule of construction that, unless future legislation specifies 
otherwise, newly enacted laws are not to be applied retroactively, do 
not create a private right of action, and are presumed not to preempt 
State law. Of course, my bill does not in any way restrict the Congress 
on these important issues. The Congress may override this ordinary rule 
by simply stating when it wishes legislation to be retroactive, create 
new private rights of action or preempt existing State law.
  This act will eliminate uncertainty and provide rules which are 
applicable when the Congress fails to specify its position on these 
important issues in legislation it passes. One U.S. District Judge in 
my State informs me that he spends 10 to 15 percent of his time on 
these issues. It is clear that this legislation would save litigants 
and our judicial system millions and millions of dollars by avoiding 
much uncertainty and litigation which currently exists over these 
issues.
  Mr. President, if we are truly concerned about relieving the backlog 
of cases in our courts and reducing the costs of litigation, we should 
help our judicial system to focus its limited resources, time and 
effort on resolving the merits of disputes, rather than deciding these 
preliminary matters.
                                 ______
                                 
      By Mr. LUGAR:
  S. 29. A bill to repeal the Federal estate and gift taxes and the tax 
on generation-skipping transfers; to the Committee on Finance.
  S. 30 A bill to increase the unified estate and gift tax credit to 
exempt small businesses and farmers from inheritance taxes; to the 
Committee on Finance.
  S. 31. A bill to phase out and repeal the Federal estate and gift 
taxes and the tax on generation-skipping transfers; to the Committee on 
Finance.


                         estate tax legislation

  Mr. LUGAR. Mr. President, I am pleased to introduce three bills aimed 
at eliminating the burden that estate and gift taxes place on our 
economy. My first bill would repeal the estate and gift taxes outright. 
My second bill would phase out the estate tax over 5 years by gradually 
raising the unified credit each year until the tax is repealed after 
the fifth year. My third bill would immediately raise the effective 
unified credit from $600,000 to $5

[[Page S389]]

million in an effort to address the disproportionate burden that the 
estate tax places on farmers and small businesses.
  I believe the best option is a simple repeal of the estate tax. I am 
hopeful that during this Congress, as Members become more aware of the 
effects of this tax, we can eliminate it from the Tax Code. However, 
even if the estate tax is not repealed, the unified credit must be 
raised. The credit has not been increased since 1987 when it was 
established at the $600,000 level. Since then, inflation has caused a 
growing percentage of estates to be subjected to the estate tax. My 
second bill is intended to highlight this point and provide a gradual 
path to repeal.
  Finally, my third bill focuses on relieving the estate tax burden 
that falls disproportionately on farmers and small business owners. By 
raising the exemption amount from $600,000 to $5 million, 96 percent of 
estates with farm assets and 90 percent of estates with noncorporate 
business assets would not have to pay estate taxes, according to the 
IRS.
  The estate tax began as a temporary tax in 1916, limited to 10 
percent of one's inheritance. The tax intended to prevent the 
accumulation of wealth in the hands of a few families. Today, however, 
the effect is often the opposite. The estate tax forces many family-
owned farms and small businesses to sell to larger corporations, 
further concentrating the wealth.
  The estate tax has mushroomed into an exorbitant tax on death that 
discourages savings, economic growth and job formation by blocking the 
accumulation of entrepreneurial capital and by breaking up family 
businesses and farms. With the highest marginal rate at 55 percent, 
more than half of an estate can go directly to the government. By the 
time the inheritance tax is levied on families, their assets have 
already been taxed at least once. This form of double taxation violates 
perceptions of fairness in our tax system.
  In addition to tax liabilities, families often must pay lawyers, 
accountants and planners to untangle one of the most complicated areas 
of our tax code. In 1996, a Gallup poll estimated that a small family-
owned business spent an average of $33,138 for lawyers and accountants 
to settle estates with the IRS. Larger family-owned businesses averaged 
$70,000. Families averaged 167 hours complying with the Byzantine rules 
of the estate tax, and the IRS estimates that they must audit nearly 40 
percent of estate tax returns--a much higher rate than the 1.7 percent 
audit rate on incomes taxes.
  Let us consider the consequences of the estate tax on the American 
economy. The estate tax is counterproductive because it falls so 
heavily on our most dynamic job creators--small businesses. About two 
out of every three new jobs in this country are created by small 
business. From 1989 to 1991, a period of unusually slow economic 
growth, virtually all new net jobs were created by firms with fewer 
than twenty employees.
  Recent economic studies and surveys of small business owners support 
the thesis that the estate tax discourages economic growth. A 1994 
study by the Tax Foundation concluded that the estate tax may have 
roughly the same effect on entrepreneurial incentives as would a 
doubling of income tax rates. A 1996 report prepared by Price 
Waterhouse found that even more family business owners were concerned 
about estate taxes than about capital gains taxes. A Gallup poll found 
that one-third of family-owned businesses expect to sell their family's 
firm to pay estate tax liability. Sixty-eight percent said the estate 
tax makes them less likely to make investments in their business, and 
60 percent said that without an estate tax, they would have expanded 
their workforce.
  If we are sincere about boosting economic growth, we must consider 
what effect the estate tax has on a business owner deciding whether to 
invest in new capital goods or hire a new employee. We must consider 
its affect on a farmer deciding whether to buy new land, additional 
livestock or a new tractor. If you know that when you die your children 
will probably have to sell the business you build up over your 
lifetime, does that make you more likely to take the risk of starting a 
new business or enlarging your present business? It is apparent that 
the estate tax does discourage business and farm investments.
  One might expect that for all the economic disincentives caused by 
the estate tax, it must at least provide a sizable contribution to the 
U.S. Treasury. But in reality, the estate tax only accounts for about 1 
percent of federal taxes. It cannot be justified as an indispensable 
revenue raiser. Given the blow delivered to job formation and economic 
growth, the estate tax may even cost the Treasury money. Our nation's 
ability to create new jobs, new opportunities and wealth is damaged as 
a result of our insistence on collecting a tax that earns less than 1 
percent of our revenue.
  But this tax affects more than just the national economy. It affects 
how we as a nation think about community, family and work. Small 
businesses and farms represent much more than assets. They represent 
years of toil and entrepreneurial risk taking. They also represent the 
hopes that families have for their children. Part of the American Dream 
has always been to build up a business, farm or ranch so that economic 
opportunities and a way of life can be passed on to one's children and 
grandchildren.
  I have some personal experience in this area. My father died when I 
was in my early thirties, leaving his 604-acre farm in Marion County, 
Indiana, to his family. I managed the farm, which built up considerable 
debts during my father's illness at the end of his life. Fortunately, 
after a number of years, we were successful in working out the 
financial problems and repaying the money. We were lucky. That farm is 
profitable and still in the family. But many of today's farmers and 
small business owners are not so fortunate. Only about 30 percent of 
businesses are transferred from parent to child, and only about 12 
percent of businesses make it to a grandchild.
  The strongest negative effects of the estate tax are felt by the 
American family farmer. Currently, proprietorships and partnerships 
make up about 95 percent of farms and ranches. In the vast majority of 
cases, family farms do not produce luxurious lifestyles for their 
owners. Farmers have large assets but relatively little income. The 
income of a family-run farm depends on modest returns from sizable 
amounts of invested capital. Much of what the farmer makes after taxes 
in reinvested into the farm, bolstering the estate-tax-derived ``paper 
value'' even more.
  As happens so often, family farms cannot maintain the cash assets 
necessary to pay estate taxes upon the death of the owner. Frequently, 
selling part of a farm is not an option, either because there is no 
suitable buyer or because reducing acreage would make the operation 
inviable. In these cases, a fire-sale of the family farm or business is 
required to pay the estate tax. Devastating to any business, such a 
forced sale hits farm families particularly hard because they 
frequently must sell at a price far below the invested value. Entire 
lifetimes of work are liquidated, and the skills of family members 
experienced in agriculture are lost to the American economy.
  Mr. President, I introduce today a set of bills to repeal the estate 
tax in an effort to expand investment incentives and job creation and 
to reinvigorate an important part of the American Dream. I am hopeful 
that Senators will join me in the effort to free small businesses, 
family farms and our economy from this counterproductive tax.
                                 ______
                                 
      By Mr. THURMOND:
  S. 32. A bill to amend title 28 of the United States Code to clarify 
the remedial jurisdiction of inferior Federal courts; to the Committee 
on the Judiciary.


                   judicial taxation prohibition act

  Mr. THURMOND. Mr. President, I rise today to introduce legislation to 
prohibit Federal judges from ordering new taxes or ordering increases 
in existing tax rates as a judicial remedy.
  In 1990, the Supreme Court decided in Missouri versus Jenkins to 
allow Federal judges to order new taxes or increases as a judicial 
remedy. It is my firm belief that this narrow 5 to 4 decision permits 
Federal judges to exceed their proper boundaries of jurisdiction and 
authority under the Constitution.
  Mr. President, this ruling and congressional response raises two 
constitutional issues which warrant discussion. One is whether Federal 
courts

[[Page S390]]

have authority under the Constitution to inject themselves into the 
legislative area of taxation. The second constitutional issue arises in 
light of the Judicial Taxation Prohibition Act which I am now 
introducing to restrict the remedial jurisdiction of the Federal 
courts. This narrowly drafted legislation would prohibit Federal judges 
from ordering new taxes or ordering increases in existing tax rates. I 
believe it is clear under article III that the Congress has the 
authority to restrict the remedial jurisdiction of the Federal courts 
in this fashion.
  First, I want to speak on the issue of judicial taxation. Not since 
Great Britain's ministry of George Grenville in 1765 have the American 
people faced the assault of taxation without representation as now 
authorized in the Jenkins decision.

  As part of his imperial reforms to tighten British control in the 
colonies, Grenville pushed the Stamp Act through the Parliament in 
1765. This Act required excise duties to be paid by the colonists in 
the forms of revenue stamps affixed to a variety of legal documents. 
This action came at a time when the colonies were in an uproar over the 
Sugar Act of 1764 which levied duties on certain imports such as sugar, 
indigo, coffee, linens and other items.
  The ensuing firestorm of debate in America centered on the power of 
Britain to tax the colonies. James Otis, a young Boston attorney, 
echoed the opinion of most colonists stating that the Parliament did 
not have power to tax the colonies because Americans had no 
representation in that body. Mr. Otis had been attributed in 1761 with 
the statement that ``taxation without representation is tyranny.''
  In October, 1765, delegates from nine states were sent to New York as 
part of the Stamp Act Congress to protest the new law. It was during 
this time that John Adams wrote in opposition to the Stamp Act, ``We 
have always understood it to be a grand and fundamental principle . . . 
that no freeman shall be subject to any tax to which he has not given 
his own consent, in person or by proxy.'' A number of resolutions were 
adopted by the Stamp Act Congress protesting the acts of Parliament. 
One resolution stated, ``It is inseparably essential to the freedom of 
a people . . . that no taxes be imposed on them, but with their own 
consent, given personally or by their representatives.'' The 
resolutions concluded that the Stamp Act had a ``manifest tendency to 
subvert the rights and liberties of the colonists.''
  Opposition to the Stamp Act was vehemently continued through the 
colonies in pamphlet form. These pamphlets asserted that the basic 
premise of a free government included taxation of the people by 
themselves or through their representatives.
  Other Americans reacted to the Stamp Act by rioting, intimidating tax 
collectors, and boycotts directed against England. While Grenville's 
successor was determined to repeal the law, the social, economic and 
political climate in the colonies brought on the American Revolution. 
The principles expressed during the earlier crisis against taxation 
without representation became firmly embedded in our Federal 
Constitution of 1787.
  Yet, the Supreme Court has overlooked this fundamental lesson in 
American history. The Jenkins decision extends the power of the 
judiciary into an area which has traditionally been reserved as a 
legislative function within the Federal, State, and local governments. 
In the Federalist No. 48, James Madison explained that in our 
democratic system, ``the legislative branch alone has access to the 
pockets of the people.''
  This idea has remained steadfast in America for over 200 years. 
Elected officials with authority to tax are directly accountable to the 
people who give their consent to taxation through the ballot box. The 
shield of accountability against unwarranted taxes has been removed now 
that the Supreme Court has sanctioned judicially imposed taxes. The 
American citizenry lacks adequate protection when they are subject to 
taxation by unelected, life tenured Federal judges.

  There are many programs and projects competing for a finite number of 
tax dollars. The public debate surrounding taxation is always intense. 
Sensitive discussions are held by elected officials and their 
constituents concerning increases and expenditures of scarce tax 
dollars. To allow Federal judges to impose taxes is to discount 
valuable public debate concerning priorities for expenditures of a 
limited public resource.
  Mr. President, the dispositive issue presented by the Jenkins 
decision is whether the American people want, as a matter of national 
policy, to be exposed to taxation without their consent by an 
independent and insulated judiciary. I most assuredly believe they do 
not.
  This brings us to the second Constitutional issue which we must 
address in light of this Jenkins decision. That issue is Congressional 
authority under the Constitution to limit the remedial jurisdiction of 
lower Federal courts established by the Congress. Article III, Section 
1, of the Constitution provides jurisdiction to the lower Federal 
courts as the ``Congress may from time to time ordain and establish.'' 
There is no mandate in the Constitution to confer equity jurisdiction 
to the inferior Federal courts. Congress has the flexibility under 
Article III to ``ordain and establish'' the lower Federal courts as it 
deems appropriate. This basic premise has been upheld by the Supreme 
Court in a number of cases including Lockerty versus Phillips, Lauf 
versus E.G. Skinner and Co., Kline versus Burke Construction Co., and 
Sheldon versus Sill.
  This legislation would preclude the lower Federal courts from issuing 
any order or decree requiring imposition of ``any new tax or to 
increase any existing tax or tax rate.'' I firmly believe that this 
language is wholly consistent with Congressional authority under 
Article III, Section 1 of the Constitution.
  There is nothing in this legislation which would restrict the power 
of the Federal courts from hearing constitutional claims. It accords 
due respect to all provisions of the Constitution and merely limits the 
availability of a particular judicial remedy which has traditionally 
been a legislative function. The objective of this legislation is 
straightforward, to prohibit Federal courts from increasing taxes. The 
language in this bill applies to the lower Federal courts and does not 
deny claimants judicial access to seek redress of any Federal 
constitutional right.
  Mr. President, how long will it be before a Federal judge orders tax 
increases to build new highways or prisons? I do not believe the 
Founding Fathers had this type of activism in mind when they 
established the judicial branch of government. The role of the 
judiciary is to interpret the law. The power to tax is an exclusive 
legislative right belonging to the Congress and governments at the 
state level. We are accountable to the citizens and must justify any 
new taxes. The American people deserve a timely response to the Jenkins 
decision and we must provide protection against the imposition of taxes 
by an independent judiciary.
                                 ______
                                 
      By Mr. THURMOND:
  S. 33. A bill to provide that a Federal justice or judge convicted of 
a felony shall be suspended from office without pay, to amend the 
retirement age and service requirements for Federal justices and judges 
convicted of a felony, and for other purposes; to the Committee on the 
Judiciary.


                       federal judge legislation

  Mr. THURMOND. Mr. President, today I am introducing legislation which 
provides that a justice or judge convicted of a felony shall be 
suspended from office without pay pending the disposition of 
impeachment proceedings.
  I believe that the citizens of the United States will agree that 
those who have been convicted of felonies should not be allowed to 
continue to occupy positions of trust and responsibility in our 
Government. Nevertheless, under current constitutional law it is 
possible for judges to continue to receive a salary and to still sit on 
the bench and hear cases even after being convicted of a felony. If 
they are unwilling to resign, the only method which may be used to 
remove them from the Federal payroll is impeachment.
  Currently, the Congress has the power to impeach officers of the 
Government who have committed treason,

[[Page S391]]

bribery, or other high crimes and misdemeanors. Even when a court has 
already found an official guilty of a serious crime, Congress must then 
essentially retry the official before he or she can be removed from the 
Federal payroll. The impeachment process is typically very time 
consuming and can occupy a great deal of the resources of Congress.
  Mr. President, one way to solve this problem would be to amend the 
Constitution. Today, I am also introducing a Senate resolution 
proposing a constitutional amendment providing for forfeiture of office 
by Government officials and judges convicted of felonies involving 
moral turpitude. While I believe that a constitutional amendment may be 
the best solution to the problem, I am also introducing this statutory 
remedy to address the current situation.
  This legislation will provide that a judge convicted of a felony 
involving moral turpitude shall be suspended from office without pay. 
The legislation specifies that the suspension begins upon conviction 
and that no additional time accrues toward retirement from that date. 
However, the judge would be reinstated if the criminal conviction is 
reversed upon appeal or if articles of impeachment do not result in 
conviction by the Senate.
  Mr. President, the framers of the Constitution could not have 
intended convicted felons to continue to serve on the bench and to 
receive compensation once they have seriously violated the law and the 
trust of the people. I urge my colleagues to carefully consider this 
legislation.
                                 ______
                                 
      By Mr. FEINGOLD:
  S. 34. A bill to phase out Federal funding of the Tennessee Valley 
Authority; to the Committee on Environment and Public Works.


                 tennessee valley authority legislation

  Mr. FEINGOLD. Mr. President, today I am introducing legislation, 
similar to that which I sponsored in the 104th Congress, to terminate 
funding for little known activities of the Tennessee Valley Authority 
[TVA], the TVA's nonpower programs, that are funded by appropriated 
funds. In fiscal year 1997, Congress appropriated a total of $106 
million to support these programs.
  The TVA was created in 1933 as a government-owned corporation for the 
unified development of a river basin comprised of parts of seven 
States. Those activities included the construction of an extensive 
power system, for which the region is now famous, and regional 
development or ``nonpower'' programs. TVA's responsibilities in the 
nonpower programs include maintaining its system of dams, reservoirs 
and navigation facilities, and managing TVA-held lands. In addition, 
TVA provides recreational programs, makes economic development grants 
to communities, promotes public use of its land and water resources, 
and operates an Environmental Research Center. Only the TVA power 
programs are intended to be self-supporting, by relying on TVA utility 
customers to foot the bill. The expense of these ``nonpower'' programs, 
on the other hand, are covered by appropriated taxpayer funds.
  This legislation terminates funding for all appropriated programs of 
the TVA after fiscal year 2000. While I understand the role that TVA 
has played in our history, I also know that we face tremendous Federal 
budget pressure to reduce spending in many areas. I believe that TVA's 
discretionary funds should be on the table, and that Congress should 
act, in accordance with this legislation, to put the TVA appropriated 
programs on a glide path toward dependence on sources of funds other 
than appropriated funds. I think that this legislation is a reasonable 
phased-in approach to achieve this objective, and explicitly codifies 
both the fiscal year 1996 President's Budget and TVA's own 
recommendations regarding activities at the TVA's Environmental 
Research Center in Alabama.
  I am introducing this legislation to terminate TVA'S appropriated 
programs because there are lingering concerns, brought to light in a 
1993 Congressional Budget Office [CBO] report, that nonpower program 
funds subsidize activities that should be paid for by non-Federal 
interests. When I ran for the Senate in 1992, I developed an 82+ point 
plan to eliminate the Federal deficit and have continued to work on the 
implementation of that plan since that time. That plan includes a 
number of elements in the natural resource area, including the 
termination of TVA's appropriations-funded programs.
  In its 1993 report, CBO focused on two programs: The TVA Stewardship 
Program and the Environmental Research Center. Stewardship activities 
receive the largest share of TVA's appropriated funds. The funds are 
used for dam repair and maintenance activities. According to 1995 
testimony provided by TVA before the House Subcommittee on Energy and 
Water Appropriations, when TVA repairs a dam it pays 70 percent, on 
average, of repair costs with appropriated dollars and covers the 
remaining 30 percent with funds collected from electricity ratepayers.

  This practice of charging a portion of dam repair costs to the 
taxpayer, CBO highlighted, amounts to a significant subsidy. If TVA 
were a private utility, and it made modifications to a dam or performed 
routine dredging, the ratepayers would pay for all of the costs 
associated with that activity.
  TVA also runs an Environmental Research Center, formerly a Fertilizer 
Research Center, that received $15 million in funding in fiscal year 
1997. The Center formerly developed and tested about 80 percent of 
commercial fertilizers developed in the United States, which CBO 
identified as a direct research cost subsidy to fertilizer companies. 
The measure I am introducing today phases out Federal funding for the 
Center by the year 2000.
  In fiscal year 1996, I successfully sponsored an amendment to cap 
funding for the TVA Environmental Research Center. The amendment also 
required the Center to examine its research program, and evaluate how 
it could reduce its dependence on appropriated funds. Though the 
funding cap was eliminated in conference on the fiscal year 1996 Energy 
and Water Appropriations, TVA did complete an assessment of its 
research program. The Center proposes to make a complete transition to 
competing for Federal grants by fiscal year 2000. My measure would 
codify such a transition.
  I have included specific language on the Environmental Research 
Center in this legislation because I believe that it is important 
certain regions do not receive earmarked preference over others in 
receiving scarce environmental research, natural resource management 
and economic development dollars from the Federal Government. In this 
time of tight budgets, I believe that all opportunities to decrease and 
supplement Federal support for projects and leverage additional 
private, local and State government funds should be examined and 
implemented when feasible.
  Again, while I understand the important role that TVA played in the 
development of the Tennessee Valley, many other areas of the country 
have become more creative in Federal and State financing arrangements 
to address regional concerns. Specifically, in those areas where there 
may be excesses within TVA, I believe we can do better to curb 
subsidies and eliminate the burden on taxpayers without completely 
eliminating the TVA, as some in the other body have suggested.
  Mr. President, I ask unanimous consent that the full text of this 
measure be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 34

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

     SECTION 1. TENNESSEE VALLEY AUTHORITY.

       (a) Discontinuance of Appropriations.--Section 27 of the 
     Tennessee Valley Authority Act of 1933 (16 U.S.C. 831z) is 
     amended--
       (1) by inserting ``for fiscal years through fiscal year 
     2000'' before the period; and
       (2) by adding at the end the following: ``No appropriations 
     may be made available for the Tennessee Vally Authority 
     Environmental Research Center for fiscal year 2000.''.
       (b) Plan.--No later than January 1, 1998, the Director of 
     the Office of Management and Budget shall develop and submit 
     a plan to Congress that--
       (1) provides for the Tennessee Valley Authority 
     Environmental Research Center to make a transition to sources 
     of funds other than appropriated funds by fiscal year 2000; 
     and
       (2) recommends any legislation that may be appropriate to 
     carry out the objectives of this Act.
                                 ______
                                 
      By Mr. FEINGOLD:
  S. 35. A bill to amend the Reclamation Reform Act of 1982 to clarify 
the

[[Page S392]]

acreage limitations and incorporate a means test for certain farm 
operations, and for other purposes; to the Committee on Energy and 
Natural Resources.


                irrigation subsidy reduction act of 1997

  Mr. FEINGOLD. Mr. President, I am introducing a measure that I 
sponsored in the 104th Congress to reduce the amount of Federal 
irrigation subsidies received by large agribusiness interests. I 
believe that reforming Federal water pricing policy by reducing 
subsidies is an important area to examine as a means to achieve our 
deficit reduction objectives. This legislation is also needed to curb 
fundamental abuses of reclamation law that cost the taxpayer millions 
of dollars every year.
  In 1901, President Theodore Roosevelt proposed legislation, which 
came to be known as the Reclamation Act of 1902, to encourage 
development of family farms throughout the western United States. The 
idea was to provide needed water for areas that were otherwise dry and 
give small farms--those no larger than 160 acres--a chance, with a 
helping hand from the Federal Government, to establish themselves. 
According to a 1996 General Accounting Office report, since the passage 
of the Reclamation Act, the Federal Government has spent $21.8 billion 
to construct 133 water projects in the west which provide water for 
irrigation. Irrigators, and other project beneficiaries, are required 
under the law to repay to the Federal Government their allocated share 
of the costs of constructing these projects.
  However, as a result of the subsidized financing provided by the 
Federal Government, some of the beneficiaries of Federal water projects 
repay considerably less than their full share of these costs. According 
to the 1996 GAO report, irrigators generally receive the largest amount 
of Federal financial assistance. Since the initiation of the irrigation 
program in 1902, construction costs associated with irrigation have 
been repaid without interest. The GAO further found, in reviewing the 
Bureau of Reclamation's financial reports, that $16.9 billion, or 78 
percent, of the $21.8 billion of Federal investment in water projects 
is considered to be reimbursable. Of the reimbursable costs, the 
largest share--$7.1 billion--is allocated to irrigators. As of 
September 30, 1994 irrigators have repaid only $941 million of the $7.1 
billion they owe. GAO also found that the Bureau of Reclamation will 
likely shift $3.4 billion of the debt owed by irrigators to other users 
of the water projects for repayment.
  There are several reasons why irrigators continue to receive such 
significant subsidies. Under the Reclamation Reform Act of 1982, 
Congress acted to expand the size of the farms that could receive 
subsidized water from 160 acres to 960 acres. The RRA of 1982 expressly 
prohibits farms that exceed 960 acres in size from receiving federally-
subsidized water. These restrictions were added to the reclamation law 
to close loopholes through which Federal subsidies were flowing to 
large agribusinesses rather than the small family farmers that 
reclamation projects were designed to serve. Agribusinesses were 
expected to pay full cost for all water received on land in excess of 
their 960 acre entitlement. Despite the express mandate of Congress, 
regulations promulgated under the Reclamation Reform Act of 1982 have 
failed to keep big agricultural water users from receiving federal 
subsidies. The General Accounting Office and the Inspector General of 
the Department of the Interior continue to find that the acreage limits 
established in law are circumvented through the creation of 
arrangements such as farming trusts. These trusts, which in total 
acreage will exceed the 960 acre limit, are comprised of smaller units 
that are not subject to the reclamation acreage cap. These smaller 
units are farmed under a single management agreement often through a 
combination of leasing and ownership.

  In a 1989 GAO report, the activities of six agribusiness trusts were 
fully explored. According to GAO, one 12,345 acre cotton farm (roughly 
20 square miles), operating under a single partnership, was reorganized 
to avoid the 960 acre limitation into 15 separate land holdings through 
18 partnerships, 24 corporations, and 11 trusts which were all operated 
as one large unit. A seventh very large trust was the sole topic of a 
1990 GAO report. The Westhaven Trust is a 23,238 acre farming operation 
in California's Central Valley. It was formed for the benefit of 326 
salaried employees of the J.G. Boswell Company. Boswell, GAO found, had 
taken advantage of section 214 of the RRA, which exempts from its 960 
acre limit land held for beneficiaries by a trustee in a fiduciary 
capacity, as long as no single beneficiary's interest exceeds the law's 
ownership limits. The RRA, as I have mentioned, does not preclude 
multiple land holdings from being operated collectively under a trust 
as one farm while qualifying individually for federally subsidized 
water. Accordingly, the J.G. Boswell Company reorganized 23,238 acres 
it held as the Boston Ranch by selling them to the Westhaven Trust, 
with the land holdings attributed to each beneficiary being eligible to 
receive federally subsidized water.
  Before the land was sold to Westhaven Trust, the J.G. Boswell Company 
operated the acreage as one large farm and paid full cost for the 
Federal irrigation water delivered for the 18-month period ending in 
May 1989. When the trust bought the land, due to the loopholes in the 
law, the entire acreage became eligible to receive federally subsidized 
water because the land holdings attributed to the 326 trust 
beneficiaries range from 21 acres to 547 acres--all well under the 960 
acre limit.
  In the six cases the GAO reviewed in 1989, owners or lessees paid a 
total of about $1.3 million less in 1987 for Federal water than they 
would have paid if their collective land holdings were considered as 
large farms subject to the Reclamation Act acreage limits. Had 
Westhaven Trust been required to pay full cost, GAO estimated in 1990, 
it would have paid $2 million more for its water. The GAO also found, 
in all seven of these cases, that reduced revenues are likely to 
continue unless Congress amends the Reclamation Act to close the 
loopholes allowing benefits for trusts.

  The legislation that I am introducing today combines various elements 
of proposals introduced during previous attempts by other Members of 
Congress to close loopholes in the 1982 legislation and to impose a 
$500,000 means test. This new approach limits the amount of subsidized 
irrigation water delivered to any operation in excess of the 960 acre 
limit which claimed $500,000 or more in gross income, as reported on 
their most recent IRS tax form. If the $500,000 threshold were 
exceeded, an income ratio would be used to determine how much of the 
water should be delivered to the user at the full-cost rate, and how 
much at the below-cost rate. For example, if a 961 acre operation 
earned $1 million dollars, a ratio of $500,000 (the means test value) 
divided by their gross income would determine the full cost rate, thus 
the water user would pay the full cost rate on half of their acreage 
and the below cost rate on the remaining half.
  This means testing proposal will be featured, for the second year in 
a row, in this year's 1997 Green Scissors report which is scheduled for 
release next month. This report is compiled by Friends of the Earth and 
Taxpayers for Common Sense and supported by a number of environmental 
and consumer groups, including the Concord Coalition, and the 
Progressive Policy Institute. The premise of the report is that there 
are a number of subsidies and projects that could be cut to both reduce 
the deficit and benefit the environment. This report underscores what I 
and many others in the Senate have long known: we must eliminate 
practices that can no longer be justified in light of our enormous 
annual deficit and national debt. The Green Scissors recommendation on 
means testing water subsidies indicates that if a test is successful in 
reducing subsidy payments to the highest grossing 10% of farms, then 
the Federal Government would recover between $440 million and $1.1 
billion per year, or at least $2.2 billion over 5 years.
  When countless Federal programs are subjected to various types of 
means tests to limit benefits to those who truly need assistance, it 
makes little sense to continue to allow large business interests to dip 
into a program intended to help small entities struggling to survive. 
Taxpayers have legitimate concerns when they learn that their

[[Page S393]]

hard earned tax dollars are being expended to assist large corporate 
interests in select regions of the country who benefit from these 
loopholes, particularly in tight budgetary times. Other users of 
Federal water projects, such as the power recipients, should also be 
concerned when they learn that they will be expected to pick up the tab 
for a portion of the funds that irrigators were supposed to pay back. 
The Federal water program was simply never intended to benefit these 
large interests, and I am hopeful that legislative efforts, such as the 
measure I am introducing today, will prompt Congress to fully 
reevaluate our Federal water pricing policy.

  In conclusion, Mr. President, it is clear that the conflicting 
policies of the Federal Government in this area are in need of reform, 
and that Congress should act. Large agribusinesses should not be able 
to continue to soak the taxpayers, and should make their fair share of 
payments to the Federal Government. We should act to close these 
loopholes and increase the return to the Treasury from irrigators as 
soon as possible.
  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. 35

       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 ``Irrigation Subsidy Reduction 
     Act of 1997''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) the Federal reclamation program has been in existence 
     for over 90 years, with an estimated taxpayer investment of 
     over $70,000,000,000;
       (2) the program has had and continues to have an enormous 
     effect on the water resources and aquatic environments of the 
     western States;
       (3) irrigation water made available from Federal water 
     projects in the West is a very valuable resource for which 
     there are increasing and competing demands;
       (4) the justification for providing water at less than full 
     cost was to benefit and promote the development of small 
     family farms and exclude large corporate farms, but this 
     purpose has been frustrated over the years by inadequate 
     implementation of subsidy and acreage limits;
       (5) below-cost water prices tend to encourage excessive use 
     of scarce water supplies in the arid regions of the West, and 
     reasonable price increases to the wealthiest western farmers 
     would provide an economic incentive for greater water 
     conservation;
       (6) the Federal Government has increasingly applied 
     eligibility tests based on income for Federal entitlement and 
     subsidy programs, measures that are consistent with the 
     historic approach of the reclamation program's acreage 
     limitations that seek to limit water subsidies to smaller 
     farms; and
       (7) including a means test based on gross income in the 
     reclamation program will increase the effectiveness of 
     carrying out the family farm goals of the Federal reclamation 
     laws.

     SEC. 3. AMENDMENTS.

       (a) Definitions.--Section 202 of the Reclamation Reform Act 
     of 1982 (43 U.S.C. 390bb) is amended--
       (1) in paragraph (6), by striking ``owned or operated under 
     a lease which'' and inserting ``that is owned, leased, or 
     operated by an individual or legal entity and that'';
       (2) by redesignating paragraphs (7), (8), (9), (10), and 
     (11) as paragraphs (8), (10), (11), (12), and (13), 
     respectively;
       (3) by inserting after paragraph (6) the following:
       ``(7) Legal entity.--The term `legal entity' includes a 
     corporation, association, partnership, trust, joint tenancy, 
     or tenancy in common, or any other entity that owns, leases, 
     or operates a farm operation for the benefit of more than 1 
     individual under any form of agreement or arrangement.'';
       (4) by inserting after paragraph (8) (as redesignated by 
     paragraph (2)) the following:
       ``(9) Operator.--
       ``(A) In general.--The term `operator'--
       ``(i) means an individual or legal entity that operates a 
     single farm operation on a parcel (or parcels) of land that 
     is owned or leased by another person (or persons) under any 
     form of agreement or arrangement (or agreements or 
     arrangements); and
       ``(ii) if the individual or legal entity--

       ``(I) is an employee of another individual or legal entity, 
     includes each such other individual or legal entity; or
       ``(II) is a legal entity that controls, is controlled by, 
     or is under common control with another legal entity, 
     includes each such other legal entity.

       ``(B) Operation of a farm operation.--For the purposes of 
     subparagraph (A), an individual or legal entity shall be 
     considered to operate a farm operation if the individual or 
     legal entity is the person that performs the greatest 
     proportion of the decisionmaking for, and supervision of, the 
     farm operation on land served with irrigation water.''; and
       (5) by adding at the end the following:
       ``(14) Single farm operation.--
       ``(A) In general.--The term `single farm operation' means 
     the total acreage of land served with irrigation water for 
     which an individual or legal entity is the operator.
       ``(B) Rules for determining whether separate parcels are 
     operated as a single farm operation.--
       ``(i) Equipment- and labor-sharing activities.--The conduct 
     of equipment- and labor-sharing activities on separate 
     parcels of land by separate individuals or legal entities 
     shall not by itself serve as a basis for concluding that the 
     farm operations of the individuals or legal entities 
     constitute a single farm operation.
       ``(ii) Performance of certain services.--The performance by 
     an individual or legal entity of an agricultural chemical 
     application, pruning, or harvesting for a farm operation on a 
     parcel of land shall not by itself serve as a basis for 
     concluding that the farm operation on that parcel of land is 
     part of a single farm operation operated by the individual or 
     entity on other parcels of land.''.
       (b) Identification of Owners, Lessees, and Operators of 
     Single Farm Operations.--The Reclamation Reform Act of 1982 
     (43 U.S.C. 390aa et seq.) is amended by inserting after 
     section 202 the following:

     ``SEC. 202A. IDENTIFICATION OF OWNERS, LESSEES, AND OPERATORS 
                   OF SINGLE FARM OPERATIONS.

       ``(a) In General.--Subject to subsection (b), for each 
     parcel of land to which irrigation water is delivered or 
     proposed to be delivered, the Secretary shall identify a 
     single individual or legal entity as the owner, lessee, or 
     operator.
       ``(b) Shared Decisionmaking and Supervision.--If the 
     Secretary determines that no single individual or legal 
     entity is the owner, lessee, or other individual that 
     performs the greatest proportion of decisionmaking for, and 
     supervision of, the farm operation on a parcel of land--
       ``(1) all individuals and legal entities that own, lease, 
     or perform a proportion of decisionmaking and supervision 
     that is equal as among themselves but greater than the 
     proportion performed by any other individual or legal entity 
     shall be considered jointly to be the owner, lessee, or 
     operator; and
       ``(2) all parcels of land of which any such individual or 
     legal entity is the owner, lessee, or operator shall be 
     considered to be part of the single farm operation of the 
     owner, lessee, or operator identified under paragraph (1).''.
       (c) Pricing.--Section 205 of the Reclamation Reform Act of 
     1982 (43 U.S.C. 390ee) is amended by adding at the end the 
     following:
       ``(d) Single Farm Operations Generating More Than $500,000 
     in Gross Farm Income.--
       ``(1) In general.--Notwithstanding subsections (a), (b), 
     and (c), in the case of--
       ``(A) a qualified recipient that reports gross farm income 
     from a single farm operation in excess of $500,000 for a 
     taxable year; or
       ``(B) a limited recipient that received irrigation water on 
     or before October 1, 1981, and that reports gross farm income 
     from a single farm operation in excess of $500,000 for a 
     taxable year;

     irrigation water may be delivered to the single farm 
     operation of the qualified recipient or limited recipient at 
     less than full cost to a number of acres that does not exceed 
     the number of acres determined under paragraph (2).
       ``(2) Maximum number of acres to which irrigation water may 
     be delivered at less than full cost.--The number of acres 
     determined under this paragraph is the number equal to the 
     number of acres of the single farm operation multiplied by a 
     fraction, the numerator of which is $500,000 and the 
     denominator of which is the amount of gross farm income 
     reported by the qualified recipient or limited recipient in 
     the most recent taxable year.
       ``(3) Inflation adjustment.--
       ``(A) In general.--For any taxable year beginning in a 
     calendar year after 1997, the $500,000 amount under 
     paragraphs (1) and (2) shall be equal to the product of--
       ``(i) $500,000; and
       ``(ii) the inflation adjustment factor for the taxable 
     year.
       ``(B) Inflation adjustment factor.--The term `inflation 
     adjustment factor' means, with respect to any calendar year, 
     a fraction the numerator of which is the GDP implicit price 
     deflator for the preceding calendar year and the denominator 
     of which is the GDP implicit price deflator for 1996. Not 
     later than April 1 of any calendar year, the Secretary shall 
     publish the inflation adjustment factor for the preceding 
     calendar year.
       ``(C) GDP implicit price deflator.--In subparagraph (B), 
     the term `GDP implicit price deflator' means the first 
     revision of the implicit price deflator for the gross 
     domestic product as computed and published by the Secretary 
     of Commerce.
       ``(D) Rounding.--If any adjustment of the $500,000 amount 
     determined under subparagraph (A) is not a multiple of $100, 
     the adjustment shall be rounded to the next lowest multiple 
     of $100.''.
       (d) Certification of Compliance.--Section 206 of the 
     Reclamation Reform Act of 1982 (43 U.S.C. 390ff) is amended 
     to read as follows:

     ``SEC. 206. CERTIFICATION OF COMPLIANCE.

       ``(a) In General.--As a condition to the receipt of 
     irrigation water for land in a district that has a contract 
     described in section 203,

[[Page S394]]

     each owner, lessee, or operator in the district shall furnish 
     the district, in a form prescribed by the Secretary, a 
     certificate that the owner, lessee, or operator is in 
     compliance with this title, including a statement of the 
     number of acres owned, leased, or operated, the terms of any 
     lease or agreement pertaining to the operation of a farm 
     operation, and, in the case of a lessee or operator, a 
     certification that the rent or other fees paid reflect the 
     reasonable value of the irrigation water to the productivity 
     of the land.
       ``(b) Documentation.--The Secretary may require a lessee or 
     operator to submit for the Secretary's examination--
       ``(1) a complete copy of any lease or other agreement 
     executed by each of the parties to the lease or other 
     agreement; and
       ``(2) a copy of the return of income tax imposed by chapter 
     1 of the Internal Revenue Code of 1986 for any taxable year 
     in which the single farm operation of the lessee or operator 
     received irrigation water at less than full cost.''.
       (e) Trusts.--Section 214 of the Reclamation Reform Act of 
     1982 (43 U.S.C. 390nn) is repealed.
       (f) Administrative Provisions.--
       (1) Penalties.--Section 224(c) of the Reclamation Reform 
     Act of 1982 (43 U.S.C. 390ww(c)) is amended--
       (A) by striking ``(c) The Secretary'' and inserting the 
     following:
       ``(c) Regulations; Data Collection; Penalties.--
       ``(1) Regulations; data collection.--The Secretary''; and
       (B) by adding at the end the following:
       ``(2) Penalties.--Notwithstanding any other provision of 
     law, the Secretary shall establish appropriate and effective 
     penalties for failure to comply with any provision of this 
     Act or any regulation issued under this Act.''.
       (2) Interest.--Section 224(i) of the Reclamation Reform Act 
     of 1982 (43 U.S.C. 390ww(i)) is amended by striking the last 
     sentence and inserting the following: ``The interest rate 
     applicable to underpayments shall be equal to the rate 
     applicable to expenditures under section 202(3)(C).''.
       (g) Reporting.--Section 228 of the Reclamation Reform Act 
     of 1982 (43 U.S.C. 390zz) is amended by inserting ``operator 
     or'' before ``contracting entity'' each place it appears.
       (h) Memorandum of Understanding.--The Reclamation Reform 
     Act of 1982 (43 U.S.C. 390aa et seq.) is amended--
       (1) by redesignating sections 229 and 230 as sections 230 
     and 231, respectively; and
       (2) by inserting after section 228 the following:

     ``SEC. 229. MEMORANDUM OF UNDERSTANDING.

       ``The Secretary, the Secretary of the Treasury, and the 
     Secretary of Agriculture shall enter into a memorandum of 
     understanding or other appropriate instrument to permit the 
     Secretary, notwithstanding section 6103 of the Internal 
     Revenue Code of 1986, to have access to and use of available 
     information collected or maintained by the Department of the 
     Treasury and the Department of Agriculture that would aid 
     enforcement of the ownership and pricing limitations of 
     Federal reclamation law.''.
                                 ______
                                 
      By Mr. FEINGOLD:

  S. 37. A bill to terminate the Uniformed Services University of the 
Health Sciences; to the Committee on Armed Services.


 the UNIFORMED SERVICES UNIVERSITY OF THE HEALTH SCIENCES TERMINATION 
                   AND DEFICIT REDUCTION ACT OF 1997

  Mr. FEINGOLD. Mr. President, I am today introducing legislation 
terminating the Uniformed Services University of the Health Sciences 
[USUHS], a medical school run by the Department of Defense. The measure 
is one I proposed when I ran for the U.S. Senate, and was part of a 
larger, 82 point plan to reduce the Federal budget deficit. The 
Congressional Budget Office [CBO] estimates that terminating the school 
would save $369 million over the next six years.
  USUHS was created in 1972 to meet an expected shortage of military 
medical personnel. Today, however, USUHS accounts for only a small 
fraction of the military's new physicians, less than 12 percent in 1994 
according to CBO. This contrasts dramatically with the military's 
scholarship program which provided over 80 percent of the military's 
new physicians in that year.
  Mr. President, what is even more troubling is that USUHS is also the 
single most costly source of new physicians for the military. CBO 
reports that based on figures from 1995, USUHS trained physicians cost 
the military $615,000 per person. By comparison, the scholarship 
program cost about $125,000 per person, with other sources providing 
new physicians at a cost of $60,000. As CBO noted in their Spending and 
Revenue Options publication, even adjusting for the lengthier service 
commitment required of USUHS trained physicians, the cost of training 
them is still higher than that of training physicians from other 
sources, an assessment shared by the Pentagon itself. Indeed, CBO's 
estimate of the savings generated by this measure also includes the 
cost of obtaining physicians from other sources.
  The other body has voted to terminate this program on several 
occasions, and the Vice President's National Performance Review joined 
others, ranging from the Grace Commission to the CBO, in raising the 
question of whether this medical school, which graduated its first 
class in 1980, should be closed because it is so much more costly than 
alternative sources of physicians for the military.
  Mr. President, the real issue we must address is whether USUHS is 
essential to the needs of today's military structure, or if we can do 
without this costly program. The proponents of USUHS frequently cite 
the higher retention rates of USUHS graduates over physicians obtained 
from other sources as a justification for continuation of this program, 
but while a greater percentage of USUHS trained physicians may remain 
in the military longer than those from other sources, the Pentagon 
indicates that the alternative sources already provide an appropriate 
mix of retention rates. Testimony by the Department of Defense before 
the Subcommittee on Force Requirements and Personnel noted that the 
military's scholarship program meets the retention needs of the 
services.
  And while USUHS only provides a small fraction of the military's new 
physicians, it is important to note that relying primarily on these 
other sources has not compromised the ability of military physicians to 
meet the needs of the Pentagon. According to the Office of Management 
and Budget, of the approximately 2,000 physicians serving in Desert 
Storm, only 103, about 5 percent, were USUHS trained.
  Mr. President, let me conclude by recognizing that USUHS has some 
dedicated supporters in the U.S. Senate, and I realize that there are 
legitimate arguments that those supporters have made in defense of this 
institution. The problem, however, is that the federal government can 
no longer afford to continue every program that provides some useful 
function.
  In the face of our staggering national debt and annual deficits, we 
must prioritize and eliminate programs that can no longer be sustained 
with limited Federal dollars, or where a more cost-effective means of 
fulfilling those functions can be substituted. The future of USUHS 
continues to be debated precisely because in these times of budget 
restraint it does not appear to pass the higher threshold tests which 
must be applied to all Federal spending programs.
  Mr. President, I ask unanimous consent that the text of the 
legislation be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 37

       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 ``Uniformed Services 
     University of the Health Sciences Termination and Deficit 
     Reduction Act of 1997''.

     SEC. 2. TERMINATION OF THE UNIFORMED SERVICES UNIVERSITY OF 
                   THE HEALTH SCIENCES.

       (a) Termination.--
       (1) In general.--The Uniformed Services University of the 
     Health Sciences is terminated.
       (2) Conforming amendments.--
       (A) Chapter 104 of title 10, United States Code, is 
     repealed.
       (B) The table of chapters at the beginning of subtitle A of 
     such title, and at the beginning of part III of such 
     subtitle, are each amended by striking out the item relating 
     to chapter 104.
       (b) Effective Date.--The termination referred to in 
     subsection (a), and the amendments made by such subsection, 
     shall take effect on the date of the graduation from the 
     Uniformed Services University of the Health Sciences of the 
     last class of students that enrolled in such university on or 
     before the date of the enactment of this Act.
                                 ______
                                 
      By Mr. FEINGOLD (for himself and Mr. McCain):
  S. 38. A bill to reduce the number of executive branch political 
appointees; to the Committee on Governmental Affairs.

[[Page S395]]

                  presidential appointees legislation

  Mr. FEINGOLD. Mr. President, I am pleased to be joined by my good 
friend the senior Senator from Arizona [Mr. McCain] in introducing 
legislation to reduce the number of presidential political appointees. 
Specifically, the bill caps the number of political appointees at 
2,000. The Congressional Budget Office [CBO] estimates this measure 
would save $392 million over the next 6 years.
  The bill is based on the recommendations of a number of distinguished 
panels, including most recently, the Twentieth Century Fund Task Force 
on the Presidential Appointment Process. The task force findings, 
released last fall, are only the latest in a long line of 
recommendations that we reduce the number of political appointees in 
the executive branch. For many years, the proposal has been included in 
CBO's annual publication Reducing the Deficit: Spending and Revenue 
Options, and it was one of the central recommendations of the National 
Commission on the Public Service, chaired by former Federal Reserve 
Board Chairman Paul Volcker.
  Mr. President, this proposal is also consistent with the 
recommendations of the Vice President's National Performance Review, 
which called for reductions in the number of federal managers and 
supervisors, arguing that ``over-control and micro management'' not 
only ``stifle the creativity of line managers and workers, they consume 
billions per year in salary, benefits, and administrative costs.''
  Those sentiments were also expressed in the 1989 report of the 
Volcker Commission, when it argued the growing number of presidential 
appointees may ``actually undermine effective presidential control of 
the executive branch.'' The Volcker Commission recommended limiting the 
number of political appointees to 2,000, as this legislation does.
  Mr. President, it is essential that any administration be able to 
implement the policies that brought it into office in the first place. 
Government must be responsive to the priorities of the electorate. But 
as the Volcker Commission noted, the great increase in the number of 
political appointees in recent years has not made government more 
effective or more responsive to political leadership.
  Between 1980 and 1992, the ranks of political appointees grew 17 
percent, over three times as fast as the total number of executive 
branch employees and looking back to 1960 their growth is even more 
dramatic. In his recently published book Thickening Government: Federal 
Government and the Diffusion of Accountability, author Paul Light 
reports a startling 430 percent increase in the number of political 
appointees and senior executives in Federal Government between 1960 and 
1992.

  In recommending a cap on political appointees, the Volcker Commission 
report noted that the large number of Presidential appointees simply 
cannot be managed effectively by any President or White House. This 
lack of control is aggravated by the often competing political agendas 
and constituencies that some appointees might bring with them to their 
new positions. Altogether, the commission argued that this lack of 
control and political focus ``may actually dilute the President's 
ability to develop and enforce a coherent, coordinated program and to 
hold cabinet secretaries accountable.''
  The Volcker Commission also reported that the excessive number of 
appointees are a barrier to critical expertise, distancing the 
President and his principal assistants from the most experienced career 
officials. Though bureaucracies can certainly impede needed reforms, 
they can also be a source of unbiased analysis. Adding organizational 
layers of political appointees can restrict access to important 
resources, while doing nothing to reduce bureaucratic impediments.
  Author Paul Light says, ``As this sediment has thickened over the 
decades, presidents have grown increasingly distant from the lines of 
government, and the front lines from them.'' Light adds that 
``Presidential leadership, therefore, may reside in stripping 
government of the barriers to doing its job effectively* * *''
  Finally, the Volcker Commission also asserted that this thickening 
barrier of temporary appointees between the President and career 
officials can undermine development of a proficient civil service by 
discouraging talented individuals from remaining in Government service 
or even pursuing a career in Government in the first place.
  Mr. President, former Attorney General Elliot Richardson put it well 
when he noted:

       But a White House personnel assistant sees the position of 
     deputy assistant secretary as a fourth-echelon slot. In his 
     eyes that makes it an ideal reward for a fourth-echelon 
     political type--a campaign advance man, or a regional 
     political organizer. For a senior civil servant, it's irksome 
     to see a position one has spent 20 or 30 years preparing for 
     preempted by an outsider who doesn't know the difference 
     between an audit exception and an authorizing bill.

  Mr. President, the report of the Twentieth Century Fund Task Force on 
the Presidential Appointment Process identified another problem 
aggravated by the mushrooming number of political appointees, namely 
the increasingly lengthy process of filling these thousands of 
positions. As the task force reported, both President Bush and 
President Clinton were into their presidencies for many months before 
their leadership teams were fully in place. The task force noted that 
``on average, appointees in both administrations were confirmed more 
than eight months after the inauguration--one-sixth of an entire 
presidential term.'' By contrast, the report noted that in the 
presidential transition of 1960, ``Kennedy appointees were confirmed, 
on average, two and a half months after the inauguration.''

  In addition to leaving vacancies among key leadership positions in 
Government, the appointment process delays can have a detrimental 
effect on potential appointees. The Twentieth Century Fund Task Force 
reported that appointees can ``wait for months on end in a limbo of 
uncertainty and awkward transition from the private to the public 
sector.''
  Mr. President, a story in the National Journal in November of 1993, 
focusing upon the delays in the Clinton administration in filling 
political positions, noted that in Great Britain, the transition to a 
new government is finished a week after it begins, once 40 or so 
political appointments are made. That certainly is not the case in the 
United States, recognizing, of course, that we have a quite different 
system of government from the British parliament form of government.
  Nevertheless, there is little doubt that the vast number of political 
appointments that are currently made creates a somewhat cumbersome 
process, even in the best of circumstances. The long delays and logjams 
created in filling these positions under the Bush and Clinton 
administrations simply illustrates another reason why the number of 
positions should be cut back.
  Mr. President, let me also stress that the problem is not simply the 
initial filling of a political appointment, but keeping someone in that 
position over time. In a recent report, the General Accounting Office 
reviewed a portion of these positions for the period of 1981 to 1991, 
and found high levels of turnover--7 appointees in 10 years for one 
position--as well as delays, usually of months but sometimes years, in 
filling vacancies.
  Mr. President, while I recognize that this legislative proposal is 
not likely to be popular with some in both parties, I want to stress 
that this effort to reduce the number of political appointees is 
bipartisan. The sponsorship of this bill reflects this, and the bill 
itself applies not only to the current Democratic administration, but 
to all future administrations as well, whatever their party 
affiliation.
  The sacrifices that deficit reduction efforts require must be spread 
among all of us. This measure requires us to bite the bullet and impose 
limitations upon political appointments that both parties may well wish 
to retain. The test of commitment to deficit reduction, however, is not 
simply to propose measures that impact someone else.
  As we move forward to implement the NPR recommendations to reduce the 
number of government employees, streamline agencies, and make 
government more responsive, we should also right size the number of 
political appointees, ensuring a sufficient number to implement the 
policies of any administration without burdening the Federal budget 
with unnecessary, possibly counterproductive political jobs.
  Mr. President, when I ran for the U.S. Senate in 1992, I developed an 
82 point

[[Page S396]]

plan to reduce the Federal deficit and achieve a balanced budget. Since 
that time, I have continued to work toward enactment of many of the 
provisions of that plan and have added new provisions on a regular 
basis.
  The legislation I am introducing today reflects one of the points 
included on the original 82 point plan calling for streamlining various 
Federal agencies and reducing agency overhead costs. I am pleased to 
have this opportunity to continue to work toward implementation of the 
elements of the deficit reduction plan.
  Mr. President, I ask unanimous consent that the bill be printed in 
the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 38

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

     SECTION 1. REDUCTION IN NUMBER OF POLITICAL APPOINTEES.

       (a) Definition.--In this section, the term ``political 
     appointee'' means any individual who--
       (1) is employed in a position on the executive schedule 
     under sections 5312 through 5316 of title 5, United States 
     Code;
       (2) is a limited term appointee, limited emergency 
     appointee, or noncareer appointee in the senior executive 
     service as defined under section 3132(a) (5), (6), and (7) of 
     title 5, United States Code, respectively; or
       (3) is employed in a position in the executive branch of 
     the Government of a confidential or policy-determining 
     character under Schedule C of subpart C of part 213 of title 
     5 of the Code of Federal Regulations.
       (b) Limitation.--The President, acting through the Office 
     of Management and Budget and the Office of Personnel 
     Management, shall take such actions as necessary (including 
     reduction in force actions under procedures established under 
     section 3595 of title 5, United States Code) to ensure that 
     the total number of political appointees shall not exceed 
     2,000.
       (c) Effective Date.--This section shall take effect on 
     October 1, 1997.

  Mr. McCAIN. Mr. President, I am pleased to join with my good friend, 
the junior Senator from Wisconsin [Mr. Feingold] to introduce 
legislation that will limit the number of political appointees in the 
executive branch a total of 2000. This legislation could save an 
estimated $400 million over the next five years.
  There is no doubt that our Government is bloated. In recent years, 
the number of political appointees has grown exponentially. Author Paul 
Light, in his book Thickening Government: Federal Government and the 
Diffusion of Accountability, reports a 430 percent increase in the 
number of political appointees and senior executives in the Federal 
Government between 1960 and 1992. The Congressional Research Service 
also found that from 1980 to 1992, the number of political appointees 
in the executive branch grew 3 times faster than the total number of 
executive branch employees 17 percent compared to 5.6 percent.
  The Government must continue to tighten its belt, and the executive 
branch must not protect itself from needed cuts. Our current $5 
trillion debt and our efforts to reach a balance budget by the year 
2002 call for immediate action. No area of Government spending should 
be overlooked, not the least of which is funding for Government 
employees. I am hopeful that this administration will live up to their 
rhetoric about reducing the deficit and balancing the budget by 
supporting this and other measures that get us closer to a balanced 
budget.
  Since this measure is consistent with the recommendations of the Vice 
President's National Performance Review [NPR], the administration 
should not have a problem endorsing this legislation. NPR called for 
reducing Federal managers and supervisors, arguing that ``over-control 
and micromanagement'' not only ``stifle the creativity of line managers 
and workers, they consume billions per year in salary, benefits, and 
administrative costs.''
  Limiting the number of political appointees to 2000 was recommended 
by former Federal Reserve Board Chairman Paul Volcker who chaired The 
National Commission on Public Service. His report supported reducing 
the number of Presidential appointees, stating that the number of 
political appointees may ``actually undermine effective presidential 
control of the executive branch.''
  Despite all this compelling evidence, Senator Feingold and I have yet 
to be successful in actually getting this legislation enacted. Last 
year, we passed an amendment to the Treasury-Postal appropriations bill 
that would have placed a 2300 cap on political appointees. 
Unfortunately, however, the cap was dropped in conference. Given the 
new era of bipartisanship and the President's repeated statements that 
he wants to balance the budget, I am hopeful that we will be successful 
in this Congress.
  I look forward to working with my friend from Wisconsin to enact this 
important legislation that will streamline Government operations and 
save the taxpayers money.
                                 ______
                                 
      By Mr. STEVENS (for himself, Mr. Breaux, Mr. Thurmond, and Mr. 
        Murkowski):
  S. 39. A bill to amend the Marine Mammal Protection Act of 1972 to 
support the International Dolphin Conservation Program in the eastern 
tropical Pacific Ocean, and for other purposes; to the Committee on 
Commerce, Science, and Transportation.


           the international dolphin conservation program act

  Mr. STEVENS. Mr. President, during the 104th Congress, Senators 
Breaux, Chafee, Moseley-Braun, Murkowski, Thurmond, Simpson and I 
introduced legislation (S. 1420) to implement the ``Panama 
Declaration,'' an agreement under which twelve nations would comply 
with a new regime to reduce dolphin mortality and conserve marine 
resources in the Eastern Tropical Pacific Ocean (ETP). Our bill was 
approved by voice vote in the Senate Commerce Committee, and its 
companion (H.R. 2823) was passed overwhelmingly in the House of 
Representatives.
  Because of our focus in the second session of the 104th Congress on 
reauthorizing the Magnuson-Stevens Fishery Conservation and Management 
Act, we were not able to turn to the International Dolphin Conservation 
Program Act until the closing weeks, and opponents of the measure were 
able to prevent its passage simply by objecting on the Senate floor. We 
believe the bill would have passed in the Senate by a large majority if 
they had not objected.
  I am pleased today to be joined by Senators Breaux, Thurmond, and 
Murkowski in reintroducing the bill. On September 30, 1996, Majority 
Leader Lott committed to us that he will do everything he can to 
provide time on the Senate floor if it is necessary to pass this 
important measure.
  The Panama Declaration would cap dolphin mortality in the ETP at 
5,000 dolphin per year and set a goal of eventually eliminating dolphin 
mortality altogether in that area. Only twenty years ago, hundreds of 
thousands of dolphin were being killed each year in the ETP. The 
Declaration presents the opportunity to lock in a maximum of 5,000 
dolphin mortalities per year and strengthen other conservation 
measures, including measures relating to fishery observers, bycatch 
reduction, and the protection of specific stocks of dolphins in the 
ETP.
  The dolphin mortality cap and new conservation measures under the 
Panama Declaration will only take effect if specific changes are made 
to U.S. law. The two key changes are: (1) a change to allow tuna caught 
in compliance with the Panama Declaration (including through the 
encirclement of dolphins) to be imported into the United States; and 
(2) a change so that ``dolphin Safe'' in the U.S. will mean tuna caught 
in a set in which no dolphin mortality occurred (rather than through 
non-encirclement). Our bill would make these changes and allow the new 
regime under the Panama Declaration to go forward. If the U.S. does not 
make the changes, other nations will move forward without adequate 
conservation measures and significant increases in dolphin mortality 
may occur.

  Our legislation would guarantee U.S. consumers that no dolphin were 
killed during the harvest of tuna that is labeled as ``dolphin safe.'' 
Under existing law, dolphins may have been killed, but as long as the 
tuna was not harvested by intentionally encircling dolphins, it can be 
labeled as ``dolphin safe.'' To avoid consumer confusion and increase 
confidence in the ``dolphin safe'' label, other labels with respect to 
marine mammals will not be allowed. Only ETP tuna caught without 
killing any dolphins would be labeled as ``dolphin safe.''
  The Administration helped negotiate the Panama Declaration, and the

[[Page S397]]

President and Vice President strongly support our legislation to 
implement it. The bill is also supported by the U.S. tuna boat owners, 
mainstream environmental groups such as Greenpeace, the Center for 
Marine Conservation, the Environmental Defense Fund, the National 
Wildlife Federation, and the World Wildlife Fund, the American 
Sportfishing Association, the National Fisherman's Union, Seafarers 
International, and United Industrial Workers, the 12 nations who signed 
the Panama Declaration (Belize, Columbia, Costa Rica, Ecuador, France, 
Honduras, Mexico, Panama, Spain, Vanuatu, and Venezuela), and the 
editorial boards of a number of the major U.S. newspapers.
  I ask for unanimous consent that the following material related to 
the bill be printed in the Record immediately following my statement: 
First, the Panama Declaration; second, letter from President Clinton to 
the President to the Mexico supporting the legislation; third, letter 
from Vice President Gore supporting the legislation; fourth, article by 
State Department Under Secretary Tim Wirth supporting the legislation; 
and fifth, editorials, op-eds, and opinion pieces from USA Today, the 
Washington Post, the Dallas Morning News, the Houston Chronicle, the 
New York Times, and the Christian Science Monitor supporting the 
legislation; sixth, letters from numerous environmental, fishing, and 
labor organizations supporting the legislation.
  I look forward to working with the Chairman and Ranking Member of the 
Senate Commerce Committee to secure the expeditious approval of the 
Committee of this important bill, and with the majority leader once the 
bill has been reported by the Committee.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                         Declaration of Panama

       The Governments of Belize, Colombia, Costa Rica, Ecuador, 
     France, Honduras, Mexico, Panama, Spain, United States of 
     America, Vanuatu and Venezuela, meeting in Panama City, 
     Republic of Panama on October 4, 1995, hereby reaffirm the 
     commitments and objectives of the La Jolla Agreement of (1) 
     progressively reducing dolphin mortality in the eastern 
     Pacific Ocean (EPO) fishery to levels approaching zero 
     through the setting of annual limits and (2) with a goal of 
     eliminating dolphin mortality in this fishery, seeking 
     ecologically sound means of capturing large yellowfin tunas 
     not in association with dolphins.
       Recognizing the strong commitments of nations participating 
     in the La Jolla Agreement and the substantial successes 
     realized through multilateral cooperation and supporting 
     national action under that Agreement, the Governments meeting 
     in Panama, including those which are, or have announced their 
     intention to become, members of the Inter-American Tropical 
     Tuna Commission (IATTC), announce their intention to 
     formalize by January 31, 1996, the La Jolla Agreement as a 
     binding legal instrument which shall be open to all nations 
     with coastlines bordering the EPO or with vessels fishing for 
     tuna in this region. This shall be accomplished by adoption 
     of a binding resolution of the IATTC or other legally binding 
     instrument. The adoption of the IATTC resolution or other 
     legally binding instrument, that utilizes to the maximum 
     extent possible the existing structure of the IATTC, is 
     contingent upon the enactment of changes in United States law 
     as envisioned in Annex I to this Declaration. The binding 
     legal instrument shall build upon the strengths and 
     achievements of the La Jolla Agreement, the working groups 
     established under it, and the actions of the Governments 
     participating in that Agreement. This binding legal 
     instrument shall consist of the La Jolla Agreement, its 
     appendices, and the decisions of the governments under that 
     Agreement as modified to achieve the objectives and 
     commitments contained herein.
       The Governments meeting in Panama agree that in concluding, 
     adopting, and implementing this binding legal instrument, 
     they will:
       Commit to the conservation of ecosystems and the 
     sustainable use of living marine resources related to the 
     tuna fishery within the EPO. Adopt conservation and 
     management measures that ensure the long-term sustainability 
     of tuna stocks and other stocks of living marine resources in 
     the EPO. Such measures shall be based on the best scientific 
     evidence, including that based on a precautionary 
     methodology, and shall be designed to maintain or restore the 
     biomass of harvested stocks at or above levels capable of 
     producing maximum sustainable yield, and with the goal to 
     maintain or restore the biomass of associated stocks at or 
     above levels capable of producing maximum sustainable yield. 
     These measures and methodology should take into 
     consideration, and account for, natural variation, 
     recruitment rate, natural mortality rate, population growth 
     rate, individual growth rate, population parameters K and r, 
     and scientific uncertainty.
       Commit, according to their capacities and in coordination 
     with the IATTC, to the assessment of the catch and bycatch of 
     juvenile yellowfin tuna and other stocks of living marine 
     resources related to the tuna fishery in the EPO and the 
     establishment of measures to, inter alia, avoid, reduce and 
     minimize the bycatch of juvenile yellowfin tuna and bycatch 
     of non-target species, in order to ensure the long-term 
     sustainability of all these species, taking into 
     consideration of the interrelationships among species in the 
     ecosystem.
       Commit in the exercise of their national sovereignty to 
     enact and enforce this instrument through domestic 
     legislation and/or regulation, as appropriate.
       Adopt cooperative measures to ensure compliance with this 
     instrument, building upon decision IGM 6/93, Appendix IV, 
     ``Guiding Principles Respecting Relationships between Stats 
     Both Party and Non-Party to the Agreement,'' taken by the 
     nations participating in the La Jolla Agreement Working Group 
     in Vanuatu in June 1993, and advance the work of the Working 
     Group on Compliance, building upon decision IGM 6/93, 
     Appendix V, ``Options for Action Against Nations Not 
     Complying With the Agreement.'' (Annex II)
       Enhance the practice of reviewing and reporting on 
     compliance with this instrument, building upon past practices 
     under the La Jolla Agreement.
       Establish a per-stock per-year cap of between 0.2% of the 
     Minimum Estimated Abundance (Nmin) (as calculated by the U.S. 
     National Marine Fisheries Service or equivalent calculation 
     standard) and 0.1% of Nmin, but in no event shall the total 
     annual mortality exceed 5000 consistent with the commitments 
     and objectives stated in the preamble above. In the year 
     2001, the per-stock, per-year cap shall be 0.1% of Nmin.
       Conduct in 1998 a scientific review and assessment of 
     progress toward the year 2001 objective, and consider 
     recommendations as appropriate. Up to the year 2001, in the 
     event that annual mortality of 0.2% of Nmin is exceeded for 
     any stock, all sets on that stock and on any mixed schools 
     containing members of that stock shall cease for that fishing 
     year. Beginning in the year 2001, in the event that annual 
     mortality of 0.1% of Nmin for any stock is exceeded, all sets 
     on that stock and on any mixed schools containing members of 
     that stock shall cease for that fishing year. In the event 
     that annual mortality of 0.1% of Nmin is exceeded for either 
     Eastern Spinner or Northeastern Spotted dolphin stocks, the 
     governments commit to conduct a scientific review and 
     assessment and consider further recommendations.
       Establish a per-vessel maximum annual DML consistent with 
     the established per-year mortality caps.
       Establish a system that provides incentives to vessel 
     captains to continue to reduce dolphin mortality, with the 
     goal of eliminating dolphin mortality in the EPO.
       Establish or strengthen National Scientific Advisory 
     Committees (NATSAC), or the equivalent, of qualified experts, 
     operating in their individual capacities, which shall 
     advise their respective governments on mechanisms to 
     facilitate research, and on the formulation of 
     recommendations for achieving the objectives and 
     commitments contained herein, or strengthen existing 
     structures in order to conform with the requirements 
     delineated herein. Membership to NATSACs shall include, 
     inter alia, qualified scientists from the public and 
     private sector and NGOs. The NATSACs shall:
       1. Receive and review data, including data provided to 
     national authorities by the LATTC;
       2. Advise and recommend to their governments measures and 
     actions that should be undertaken to conserve and manage the 
     stocks of living marine resources of the EPO;
       3. Make recommendations to their governments regarding 
     research needs, including ecosystems; fishing practices; and 
     gear technology research, including the development and use 
     of selective, environmentally safe and cost-effective fishing 
     gear; and the coordination and facilitation of such research;
       4. Conduct scientific reviews and assessments by the year 
     1998 regarding progress toward the year 2001 objective stated 
     above, and make appropriate recommendations to their 
     governments concerning these reviews and assessments, as well 
     as additional assessments in the year 2001 as provided above;
       5. Consult other experts as needed;
       6. Assure the regular and timely full exchange of data 
     among the parties and the NATSACs on catch of tuna and 
     associated species and bycatch, including dolphin mortality 
     data, for the purposes of developing conservation and 
     management recommendations to their governments as well as 
     recommendations for enforcement and scientific research while 
     not violating the confidentiality of business-confidential 
     data;
       7. Establish procedures to, inter alia, hold public 
     meetings and maintain the confidentiality of business-
     confidential data.
       Reports of the NATSACs, including of their cooperative 
     meetings, shall be available to the parties and the public.
       The NATSACs shall cooperate, through regular and timely 
     meetings, including at a minimum in conjunction with the 
     meetings of the LATTC, in the review of data and the status 
     of stocks, and in the development of advice for achieving the 
     objectives and commitments contained herein.
       Promote transparency in their implementation of this 
     Declaration, including through public participation as 
     appropriate.

[[Page S398]]

       As soon as possible, the nations of the Intergovernmental 
     Group convened under the auspices of the LATTC will initiate 
     discussions related to formulation of a new, permanent, 
     binding instrument.


                                ANNEX I

       Envisioned changes in United States law:
       1. Primary and Secondary Embargoes. Effectively lifted for 
     tuna caught in compliance with the La Jolla Agreement as 
     formalized and modified through the processes set forth in 
     the Panama Declaration.
       2. Market Access. Effectively opened to tuna caught in 
     compliance with the La Jolla Agreement as formalized and 
     modified through the processes set forth in the Panama 
     Declaration with respect to States to include: IATTC Member 
     States and other States that have initiated steps, in 
     accordance with Article 5.3 of the IATTC Convention, to 
     become members of that organization.
       3. Labeling. The term ``dolphin safe'' may not be used for 
     any tuna caught in the EPO by a purse seine vessel in a set 
     in which a dolphin mortality occurred as documented by 
     observers by weight calculation and well location.


                                ANNEX II

       Guiding Principles respecting relationships between States 
     both Party and Non-Party to the Agreement.
       The Parties to the Agreement incorporate into the Agreement 
     a guiding principle that no Party shall act in a manner that 
     assists non-parties to avoid compliance with the objectives 
     of the Agreement.
       When a coastal state that is a Party issues a license to 
     engage in fishing in its Exclusive Economic Zone portion of 
     the eastern Pacific Ocean (EPO), either directly or through a 
     licensing agreement, to a vessel of a non-party, the license 
     should be subject to the provisions of the Agreement.
       The Parties should consider prohibiting persons under their 
     jurisdiction from assisting in any way vessels of non-
     complying Parties or non-parties operating in the fishery.
       Any state whose vessels are conducting purse-seine tuna-
     fishing operations in the EPO should be invited to join the 
     Agreement. The Parties should draw the attention of any state 
     that is not a party to the Agreement to any activity 
     undertaken by its nationals or vessels which, in the opinion 
     of the Parties, affects the implementation of the objectives 
     of the Agreement.
       Options for Action With Respect to Nations Party to the 
     Agreement
       Diplomatic actions:
       Collective representation to the non-complying nation. This 
     would constitute a communication emanating from plenary 
     meeting of the participating nations after consultation with 
     the non-complying nation.
       Diplomatic communication. Each participating nation, acting 
     individually or in concert with other nations, would 
     undertake a diplomatic demarche to the non-complying nation.
       Public opinion actions:
       Dissemination of information regarding the non-compliance 
     of the nation to the public through appropriate media, e.g., 
     a press conference.
       Operational restrictions:
       Denial of access to the Exclusive Economic Zones of nations 
     party to the agreement for fishing operations by tuna fishing 
     vessels of the non-complying nation. The scope of this action 
     have to be determined by the International Review Panel (IRP) 
     by defining what constitutes a tuna-fishing vessel, i.e., 
     vessels covered by the Agreement, or other tuna-fishing 
     vessels as well. This action should not restrict freedom of 
     navigation or other rights of vessels under international 
     law.
       Restriction of access to ports and port servicing 
     facilities for tuna fishing vessels of the non-complying 
     nation. This would not apply to vessels in distress.
       Refusal of logistical support and/or supplies to tuna-
     fishing vessels of the non-complying nation. Reduction of 
     Dolphin Mortality Limits (DMLs) to all vessels of the non-
     complying Party by specified percentages. DMLs would be 
     restored immediately upon a determination that the nation is 
     in compliance.
       Economic sanctions:
       Trade measures. The Working Group discussed at length trade 
     measures against non-complying nations. These might include 
     embargoes or other restrictions on the imports of, for 
     example, tuna, other fish products, other marine products, or 
     other products.
       The consideration of such measures was recognized to be an 
     extremely delicate and evolving policy issue for which few 
     guidelines exist in international law. The Working Group 
     noted ongoing discussions concerning this issue in other 
     international fora. In light of these considerations, the 
     Working Group agreed that trade measures should receive 
     further review by the Parties prior to making any 
     recommendation in this respect.
       Fines (monetary penalties). The Working Group considered 
     that the IRP should identify procedures for imposing fines, 
     including defining the value of the fines (this could be 
     based on a percentage of the amount of the commercial value 
     of the catch), and the destination of the fines (e.g., an 
     international trust fund) as issues that the Parties should 
     discuss. The Working Group noted that there apparently is no 
     precedent for such fines.
       B. Options for Action With Respect to Nations Not Party to 
     the Agreement
       Diplomatic actions:
       Collective representation to the non-party. This would 
     constitute a communication emanating from a plenary meeting 
     of the participating nations after consultations with the 
     non-party.
       Diplomatic communication. Each participating nation, acting 
     individually or in concert with other nations, would 
     undertake a diplomatic demarche to the non-party.
       Public opinion actions:
       Dissemination of information regarding the non-compliance 
     of the non-party to the public through appropriate media, 
     e.g., a press conference.
       Operational restrictions:
       Restriction of access to ports and port servicing 
     facilities for tuna-fishing vessels of the non-party. The 
     scope of this action would have to be determined by the IRP 
     by defining what constitutes a tuna-fishing vessel, i.e., 
     solely vessels covered by the Agreement, or other tuna-
     fishing vessels as well. This action should not restrict 
     freedom of navigation and other rights of vessels under 
     international law, and particularly would not apply to 
     vessels in distress.
       Refusal of logistical support and/or supplies to tuna 
     fishing vessels of the non-party nation.
       Prohibiting nationals from assisting in any way vessels of 
     the non-party operating in the fishery.
       Economic sanctions:
       The Working Group noted that economic sanctions with 
     respect to non-parties call into consideration all the issues 
     raised above with respect to the imposition of such sanctions 
     on Parties, and noted that the imposition of such sanctions 
     with respect to non-parties involves additional complex legal 
     considerations. The Working Group recommends that the Parties 
     consider whether such sanctions against non-parties are an 
     appropriate means of promoting compliance with the objectives 
     of the Agreement and whether they are consistent with 
     international law.
                                                                    ____



                                              The White House,

                                      Washington, October 7, 1996.
     His Excellency, Ernesto Zedillo Ponce de Leon,
     President of the United Mexican States, Mexico, D.F.
       Dear Mr. President: As you know, our governments have been 
     working diligently for several years to protect dolphins and 
     other marine life in the Eastern Tropical Pacific. The 
     adoption of the Panama Declaration last year brought with it 
     the promise of further international cooperation in these 
     efforts.
       This year, the United States Congress considered 
     legislation to implement the Panama Declaration. The House of 
     Representatives passed such legislation by a large majority. 
     However, despite the considerable efforts of my 
     Administration and many others in our country who support the 
     Panama Declaration, we were unable to secure final passage of 
     the legislation.
       I wanted to express my deep disappointment with the failure 
     to enact legislation to implement the Panama Declaration this 
     year. Let me assure you that passing such legislation is a 
     top priority for my Administration and for me personally. We 
     will work with members of the bipartisan coalition supporting 
     the Panama Declaration to introduce implementing legislation 
     in the first 30 days of the new Congress and to pass such 
     legislation as soon as possible thereafter.
       I believe it is important for us to continue to work 
     together on this issue.
           Sincerely,
     Bill Clinton.
                                                                    ____



                                           The Vice President,

                                         Washington, June 3, 1996.
     Hon. Ted Stevens,
      Chairman, Subcommittee on Oceans and Fisheries, U.S. Senate, 
         Hart Senate Office Building, Washington, DC.
       Dear Ted: I am writing to thank you for your leadership on 
     the International Dolphin Conservation Program Act, S. 1420. 
     As you know, the Administration strongly supports this 
     legislation, which is essential to the protection of dolphins 
     and other marine life in the Eastern Tropical Pacific.
       In recent years, we have reduced dolphin mortality in the 
     Eastern Tropical Pacific tuna fishery far below historic 
     levels. Your legislation will codify an international 
     agreement to lock these gains in place, further reduce 
     dolphin mortality, and protect other marine life in the 
     region. This agreement was signed last year by the United 
     States and 11 other nations, but will not take effect unless 
     your legislation is enacted into law.
       As you know, S. 1420 is supported by major environmental 
     groups, including Greenpeace, the World Wildlife Fund, the 
     National Wildlife Federation, the Center for Marine 
     Conservation, and the Environmental Defense Fund. The 
     legislation is also supported by the U.S. fishing industry, 
     which has been barred from the Eastern Tropical Pacific tuna 
     fishery.
       Opponents of this legislation promote alternative fishing 
     methods, such as ``log fishing'' and ``school fishing,'' but 
     these are environmentally unsound. These fishing methods 
     involve unacceptably high by-catch of juvenile tunas, 
     billfish, sharks, endangered sea turtles and other species, 
     and pose long-term threats to the marine ecosystem.
       I urge your colleagues to support this legislation. Passage 
     of this legislation this session is integral to ensure 
     implementation of an important international agreement that 
     protects dolphins and other marine life in the Eastern 
     Tropical Pacific.
           Sincerely,
                                                          Al Gore.

[[Page S399]]

     
                                                                    ____
                  [From the Christian Science Monitor]

                Take the Final Step to Protect Dolphins

                         (By Timothy E. Wirth)

       One of the sharpest criticisms of the environmental 
     movement is that it is forever emphasizing major ecological 
     ailments while refusing to acknowledge even the slightest 
     environmental progress.
       Make no mistake, the magnitude of the world's environmental 
     challenges is as immense as it is ominous. Yet in only a 
     flash of human history, we have begun to take on these 
     challenges. There are successes about which we can be 
     optimistic; and they demonstrate that reason and resolve, 
     partnership and passion, can get the better of dangerous 
     ecologist trends.
       Almost 10 years ago, horrific footage of dolphins being 
     slaughtered in large numbers drove home the need for efforts 
     to prevent dolphin mortality in the tuna fishing industry. 
     Having adopted a Marine Mammal Protection Act for domestic 
     fishing operations, the US began working with international 
     partners through the Inter-American Tropical Tuna Commission 
     (IATTC), with the aim of reducing dolphin mortality. Congress 
     also enacted legislation that included a domestic ban on the 
     sale of tuna not caught in a manner deemed ``dolphin safe.''
       The results: Dolphin mortality has been virtually 
     eliminated, cut by more than 90 percent in what is known as 
     the Eastern Tropical Pacific tuna fishery. This dramatic 
     decline in dolphin mortality is attributable to American 
     leadership and international cooperation. The IATTC has 
     evolved into one of the best and most rigorously enforced 
     conservation regimes in the world.
       It's time the United States and all conservationists 
     recognize the enormous drop in dolphin mortality, strengthen 
     this international program, and set the stage for further 
     progress. To do this we must reopen our market to trade in 
     tuna with cooperative nations in the hemisphere.
       Fortunately, last fall a coalition of environmental groups 
     and Latin American countries reached an agreement in Panama 
     that will accomplish these goals. The ``Panama Declaration,'' 
     endorsed by Greenpeace, the Center for Marine Conservation, 
     the Environmental Defense Fund, National Wildlife Federation, 
     and the World Wildlife Fund, is a model agreement not only 
     for international cooperation, but also as a way to 
     acknowledge our accomplishments even as we aim to do better 
     in the future.
       The Panama Declaration sets a goal of eliminating dolphin 
     mortality altogether, establishes a binding program to 
     protect a wide variety of species throughout the Eastern 
     Tropical Pacific ecosystem, and requires that internationally 
     trained observers are on all tuna vessels, as well as 
     additional measures to ensure compliance.
       The US will enable the Panama agreements to take effect by 
     reopening the US market to tuna caught in compliance with the 
     IATTC program, lifting the tuna embargo, and requiring that 
     labels for ``dolphin safe'' tuna define fish caught without 
     incidental deaths of dolphins. A bipartisan coalition--led by 
     Sens. John Breaux (D) of Louisiana and Ted Stevens (R) of 
     Alaska--has introduced legislation to implement these 
     agreements, and the Clinton administration is working with 
     Congress to ensure their immediate passage.
       Gains of this magnitude in the conservation of marine 
     mammals are difficult enough for one nation to achieve. 
     Brokering resolution to these challenges on an international 
     scale is far more challenging. It means persuading other 
     nations, particularly those less fortunate than our own, 
     to sacrifice short-term political and economic interests 
     in the name of long-term ecological and economic health. 
     This is particularly true with dolphin conservation. 
     Without the Panama Declaration, most observers say, the 
     IATTC will collapse.
       There are some environmental organizations who 
     understandably say we should aim for an even higher moral 
     standard, one where no dolphins are killed during tuna 
     fishing (the Panama agreements would allow incidental deaths 
     totalling less than one-tenth of 1 percent of all dolphins in 
     the Eastern Tropical Pacific). Yet the Panama Declaration is 
     more than a moral victory. It celebrates an environmental 
     success story and rewards international partners for their 
     cooperation and commitment in conserving marine mammals. It 
     aims for no dolphin deaths in the future.
       There is little alternative to the agreements signed in 
     Panama. Countries throughout the hemisphere have made it 
     clear they are losing patience with what they see as an 
     unfair trade barrier--particularly in light of the progress 
     made in reducing dolphin mortalities. If the US fails to take 
     the steps necessary to implement the Panama Declaration, 
     these countries intend to return to fishing methods that kill 
     more dolphins.
       At a time when our environmental laws and commitments are 
     under attack, it is essential that we consolidate gains made 
     in protecting the global environment. It's time to declare 
     victory with swift congressional enactment of legislation 
     that will implement the Panama Declaration.
                                                                    ____


                     [From USA Today, Jan. 6, 1997]

                           Help Save Dolphins

       I was pleased to see your Dec. 27 editorial supporting 
     enactment of legislation for the protection of dolphins 
     accidentally caught during fishing operations for tuna 
     (``Dolphin law has served its purpose; reform it,'' Our View, 
     Debate).
       This legislation would implement a strong international 
     agreement among the nations fishing for tuna in the eastern 
     Pacific--one of the best international marine resource 
     agreements in the world.
       The agreement locks into place the dramatic reduction in 
     dolphin mortalities, which is highlighted in the editorial, 
     and includes a commitment by the nations involved in the 
     fishery to work toward a goal of eliminating all dolphin 
     deaths. The agreement also provides for comprehensive 
     monitoring by observers and strict penalties for violations.
       Because the tuna fishery in the eastern Pacific Ocean is 
     conducted almost entirely by foreign vessels on the high seas 
     or in their own waters, it can be regulated effectively only 
     by international agreement. Yet, as your editorial 
     recognizes, the dolphin protection agreement is in jeopardy 
     because tuna trade embargoes imposed before the agreement was 
     negotiated continue against those nations participating in 
     the program. The administration strongly supports your call 
     for legislative reform to remove the trade embargoes and 
     implement this important international program.
                                                                    ____


                     [From USA Today, Jan. 3, 1997]

 International Cooperation Needed to Protect Dolphins, Other Ocean Life

       The editorial ``Dolphin law has served its purpose; reform 
     it'' (Our View, Debate, Dec. 27) hit the nail on the head by 
     pointing out that so-called dolphin-safe fishing methods are 
     harmful to other wildlife including sharks, billfish and sea 
     turtles, which are as much a part of the oceans as dolphins.
       That is a major reason the Center for Marine Conservation 
     (CMC), Environmental Defense Fund, Greenpeace, National 
     Wildlife Federation and World Wildlife Fund all support 
     legislation in Congress to implement the Panama Declaration, 
     a binding international agreement signed by the United States 
     and 11 Latin American nations. The agreement will ensure 
     continued reduction of dolphin deaths in the Eastern Tropical 
     Pacific (ETP) tuna fishery and also protect other ocean 
     wildlife.
       As one of the organizations that led the fight for dolphin-
     safe labeling, CMC agrees with USA TODAY that we should 
     benefit from experience and recognize that the current law is 
     having some unintended and unacceptably harmful impacts on 
     ocean life.
       Our commitment to conserving dolphins and all ocean 
     creatures leads us to support legislation to implement the 
     Panama Declaration. The legislation would lock in the 
     dramatic progress that has been made in reducing dolphin 
     deaths in the ETP by more than 95 percent. It would reduce 
     unintended catches of sharks, billfish and sea turtles in 
     tuna nets and assure U.S. consumers no dolphins died, 
     regardless of fishing method, in capturing the tuna found on 
     the shelves.
       While those who oppose the agreement might like to live in 
     a world where the U.S. dictates international environmental 
     policy, the reality is far different. Increasingly, we are 
     seeing the need to promote international cooperation, which 
     can be a tremendous boon to environmental protection.
       Failure to adopt this legislation could result in loss of 
     controls on dolphin deaths. The choice is between the rule of 
     law and anarchy on the seas.
                                                                    ____


                  [From the USA Today, Dec. 27, 1996]

             Dolphin Law Has Served Its Purpose; Reform It

       Last year, fewer than 3,300 dolphins died in the gigantic 
     nets used to catch yellowfin tuna in the eastern tropical 
     Pacific Ocean. That sounds like a lot, but it's down from 
     more than 130,000 in 1986, and it's compelling evidence that 
     it's time to reform the federal ban on tuna that is not 
     ``dolphin safe.''
       For some unknown reason, tuna swim beneath dolphins. So for 
     years, fishers set their tuna nets around dolphins. 
     Unfortunately, the dolphins would get tangled in the nets 
     with the tuna. Hundreds of thousands drowned each year.
       That slaughter inspired Congress to begin passing laws to 
     protect marine mammals as early as 1972. And the tuna 
     industry has responded, designing dolphin-friendly nets and 
     developing tactics for herding dolphins out before winching 
     tuna in. Most recently, in 1992, Congress embargoed all tuna 
     caught by encircling dolphins and made the ``dolphin-safe'' 
     label a condition for all tuna sold in the country.
       The result has been both satisfying and troubling. The 
     industry has developed safe ways of netting the tuna that run 
     with dolphins. But the embargo also encourages fishers to set 
     their nets around ocean debris and schools of smaller tuna. 
     This is ``dolphin safe,'' but it nets and kills thousands of 
     tons a year of other creatures--sharks, marlin, even 
     endangered sea turtles.
       That's a fast way to trash an ecosystem. Yet the practice 
     continues because otherwise--no label. And no label, no 
     market.
       It's time to sing a different tuna. First, lift the 
     embargo, which applies only to tuna caught by encircling 
     dolphins, even though other tactics may kill some dolphins, 
     too. Instead, embargo fish when strict dolphin mortality 
     rates are exceeded. And redefine ``dolphin safe'' to mean 
     fish caught without a single dolphin death. This will:
       Help ease testy trade relations with countries like Mexico, 
     which has lost market share because of the embargo.

[[Page S400]]

       Give the industry a reason to fish with methods that are 
     ``ocean safe'' as well as dolphin safe.
       And help recover some of the American jobs that fled to 
     Asia when the embargo made it difficult to compete.
       Contrary to some claims, the reforms would not put dolphins 
     in greater peril. In fact, without these changes, nations 
     that now voluntarily follow dolphin-safe practices have 
     threatened to stop. That would increase dolphin mortality.
       There's another reason to reform the law. To be effective, 
     the nation's enviroregs need to harness market forces. And to 
     be credible, they must also acknowledge success. Tuna reform 
     would satisfy both requirements while proving to skeptics 
     that Congress can indeed capitalize on and reward compliance. 
     Doing so should be at the top of the new Congress' fish-list.


                             dolphins safer

       The number of dolphins killed in tuna nets in the eastern 
     tropical Pacific Ocean has fallen steeply.

1989                                                             96,979
1990                                                             52,531
1991                                                             27,292
1992                                                             15,539
1993                                                              3,601
1994                                                              4,096
1995                                                          \1\ 3,274
\1\ Estimated. Source: Marine Mammal Commission.
                                                                    ____


               [From the Washington Post, Dec. 16, 1995]

                            Saving Dolphins

       American law tries to protect dolphins even in 
     international waters, and the time has come to revise that 
     law. In its present form, it will be much less effective in 
     the future. But the opposed revisions now moving through 
     Congress sharply divide environmentalists.
       Tuna have the habit of swimming under the dolphins, and to 
     get the tuna, fishermen encircle the dolphins with their 
     nets. In the past this has led to an immense slaughter of 
     dolphins--three decades ago, more than 700,000 a year died in 
     those nets in the great fishing grounds of the eastern 
     Pacific. American law now bans the importation not only of 
     tuna caught by encirclement but tuna from any country that 
     permits its fishermen to use those nets. That includes 
     Mexico, but Mexican fishermen, hoping to regain access to the 
     U.S. market, have greatly improved their practices. The 
     dolphin kill last year was under 5,000--a triumph of 
     conservation.
       But it won't last. For one thing, the alternative methods 
     of catching tuna, while sparing the dolphins, are wasteful of 
     other valuable and sometimes rare marine life. More 
     important, admission to the U.S. market is becoming less 
     effective as an incentive. Other markets are opening up 
     rapidly in Asian and Latin American countries that have no 
     rules whatever on the tuna catch.
       To lock in the recent progress, the United States has 
     negotiated a binding agreement among all the countries that 
     have fishing fleets in the eastern Pacific. It would continue 
     to press for lower dolphin mortality, but it would permit the 
     use of the encircling nets. They can be manipulated to spill 
     out the dolphin before the tuna are hauled aboard, and 
     international observers are on every tuna boat in the eastern 
     Pacific. The new agreement would allow into this country tuna 
     taken in any supervised haul that did not result in the death 
     of dolphins.
       Some environmental organizations object vehemently to 
     encircling nets on any terms and point out that, while the 
     number of dolphin deaths would be small, it wouldn't be zero. 
     They demand zero. Other environmentalists reply that if 
     Congress doesn't accept this deal, the new international 
     agreement will come unraveled and old-style fishing, cruder 
     and cheaper, will reappear along with much higher dolphin 
     deaths. They're right. This agreement, carried out by the 
     bill that Sens. Ted Stevens (R-Alaska) and John Breaux (D-
     La.) are sponsoring, can provide permanent protection--as 
     present law does not--to the Pacific's dolphins.
                                                                    ____


             [From the Dallas Morning News, July 30, 1996]

                              Foul Fishing


          u.s. should act to make tuna truly ``dolphin-safe''

       Congratulations, Flipper!
       Your chances of surviving to old age have improved greatly 
     since the United States began to embargo tuna caught in 
     dolphin-killing nets and the food industry began to entice 
     environmentally conscious consumers with ``dolphin-safe'' 
     tuna.
       The proof is in the numbers: Dolphin deaths related to tuna 
     fishing in the eastern Pacific Ocean fell to fewer than 5,000 
     in 1994 from 600,000 in 1972.
       However, you probably think that 5,000 dolphin deaths are 
     still too many. And you're probably concerned that the 
     methods used to trap tuna still end up killing hundreds of 
     thousands of pounds of other species, including sharks, 
     marlins and endangered sea turtles.
       Furthermore, you probably worry that the ``dolphin-safe'' 
     label on tuna cans is misleading. The label means only that 
     dolphins were not encircled by nets in the eastern Pacific. 
     It does not mean that no dolphins were killed, or that 
     dolphin-deadly methods were not used elsewhere in the Pacific 
     or in other waters.
       So, you probably like the new international agreement 
     designed to drastically reduce the killing. So do we. 
     Emphatically.
       The Panama Declaration, which was signed last year by the 
     United States and 11 other countries, would allow fleets to 
     return to the old encirclement method of catching tuna. But 
     it would require signatories to use techniques that allow 
     dolphins to escape. Those countries also would investigate 
     ways to avoid killing other species.
       The best thing about the new agreement is that it is 
     multilateral rather than unilateral. In other words, it 
     involves many countries rather than just the United States.
       Current U.S. law is well meaning, but it puts the heaviest 
     burden on U.S. fleets by forbidding them alone from using the 
     ancirclement method. And it puts the United States in the 
     awkward position of heavy-handedly denying its market to 
     foreigners to compel good behavior.
       Bills to approve the agreement have passed unanimously in 
     Senate and House committees. They have President Clinton's 
     support. Despite opposition from some environmental groups, 
     who cling to the outdated notion that unilateral action by 
     the United States is best, there is no good reason why both 
     houses of Congress should not pass the bills and send them to 
     Mr. Clinton for his signature.
                                                                    ____


              [From the Houston Chronicle, July 13, 1996]

                              Dolphin Safe

       Consumers who choose only tuna marked ``dolphin safe'' 
     because they believe it means these highly intelligent 
     mammals are not being harmed in the tuna fishing process may 
     not be getting what they are paying for.
       A bill now before Congress that has broad support from 
     environmental groups and the tuna fishing industry will 
     ensure that ``dolphin safe'' means what it implies. The bill 
     would also help safeguard the delicate ecosystem of prime 
     tuna fishing waters, ensuring a healthy tuna fishery to 
     future generations.
       The pending legislation in the House and Senate would undo 
     damage from a well-intentioned 1988 embargo that banned tuna 
     from any nation that fished in the Eastern Tropic Pacific 
     Ocean (ETP) that killed dolphin at rates higher than did the 
     U.S. fleet, The hope was to stop the annual drowning of 
     hundreds of thousands of dolphins in nets cast around them 
     for the tuna that tend to swim with dolphins. It backfired. 
     Within two years, all foreign nations had been embargoed.
       Then, in 1990, Congress said any fishing boats that stopped 
     using the dangerous encircling net technology in the ETP 
     could label their product ``dolphin safe.'' This too has been 
     a disaster because other fishing methods tend to kill great 
     numbers of other animals, such as endangered sea turtles, 
     sharks, billfish and juvenile tuna.
       Moreover, these attempts to protect dolphins in the ETP 
     prompted a mass exodus of the U.S. tuna fleet in those 
     waters, leaving foreign fishing boats, which were embargoed 
     in the U.S. anyway to continue their harmful fishing 
     practices in the ETP and the U.S. fleet to continue ensnaring 
     dolphins elsewhere.
       Under the proposal before Congress, only tuna catches that 
     involved no dolphin kills whatsoever--and that fact must be 
     certified by an independent inspector aboard ship--could be 
     labeled ``dolphin safe.'' Such observers are already aboard 
     many ships as a result of voluntary measures adopted by 12 
     countries, including the United States and Mexico. The bill 
     also seeks to lift the tuna embargo to give foreign fishermen 
     the incentive to continue those voluntary measures.
       The voluntary agreement, which induced tuna fishermen to 
     actually free ensnared dolphins by hand, are set to expire in 
     1999. Best estimates show only 5,000 dolphins were killed 
     under the voluntary protection measures. Congress should 
     continue this progress by passing this vital legislation.

                [From the New York Times, July 7, 1996]

                     The Best Way To Save Dolphins

       The environmental community is engaged in a rare and bitter 
     brawl over competing Congressional bills aimed at protecting 
     a beloved environmental symbol--the bottle-nosed dolphin. 
     Each side thinks it has the better scheme to protect dolphins 
     that are incidentally trapped and killed by the giant nets 
     used by tuna fleets. This is a complex, emotional issue and 
     all the disputants are animated by the best of intentions. 
     But the approach contained in a measure sponsored by 
     Representative Wayne Gilchrest, a Maryland Republican, and 
     supported by the Clinton Administration, offers the dolphin a 
     better chance than the alternatives.
       Mr. Gilchrest's bill rubs a lot of people the wrong way 
     because it seems to endorse the very fishing methods that got 
     the dolphin in trouble in the first place. For reasons that 
     are not fully understood by scientists, adult tuna in the 
     rich fishing grounds of the eastern Pacific tend to 
     congregate underneath dolphins. Tuna vessels follow a school 
     of dolphins, cast their mile-long nets and haul in the tuna 
     below. Until a few years ago, thousands of dolphins routinely 
     drowned in the nets or were crushed when the boats winched 
     them in.
       In 1990, Congress placed an embargo on all tuna caught by 
     this method, known as ``encirclement,'' costing big tuna-
     fishing countries like Mexico, Ecuador and Costa Rica 
     hundreds of millions of dollars. In 1992, these countries 
     convened in La Jolla, Calif., with United States officials 
     and pledged to adopt safer fishing methods. They did not 
     abandon the encirclement method, but they vastly

[[Page S401]]

     improved it. They installed dolphin ``safety panels'' in 
     their nets, which acted as escape hatches. They deployed 
     divers to assist dolphins who could not find their way out. 
     They learned how to dip their nets deeper into the water to 
     allow dolphins to escape while retaining the tuna. These new 
     techniques led to a stunning drop in dolphin mortality in the 
     eastern Pacific--from 133,000 killed in 1986 to 3,274 last 
     year, a figure calculated by independent monitors on boats 
     that used the improved encirclement techniques. Even so, 
     the tuna caught by encirclement have remained embargoed.
       Mr. Gilchrest's bill, which has the endorsement of Vice 
     President Al Gore, would reward these efforts by lifting the 
     embargo. The bill would also reward any batch of tuna caught 
     without a single dolphin death--a fact to be verified by on-
     board monitors--with the coveted and commercially important 
     ``dolphin-safe'' label.
       The Gilchrest measure has the support of Greenpeace, the 
     Environmental Defense Fund and several other advocacy groups. 
     It is opposed by the Sierra Club and the Defenders of 
     Wildlife, and by the Earth Island Institute in San Francisco, 
     which has done more than any other group to call attention to 
     dolphin mortality. Earth Island's champion in the Senate is 
     Barbara Boxer, the California Democrat, whose bill would 
     continue to ban all tuna caught by the encirclement method.
       Unfortunately, the other methods of trapping tuna carry 
     serious disadvantages. Under one approach, fishermen cast 
     their nets around logs and other debris floating near the 
     shoreline, which often attract tuna. That is safe for 
     dolphins, but it kills a huge ``by-catch'' of sharks, turtles 
     and other valuable marine life, not to mention tons of 
     juvenile tuna whose demise imperils future tuna stocks.
       Senator John Chafee, a Republican environmentalist who is 
     sponsoring a Senate bill comparable to Mr. Gilchrest's, 
     believes that not just the dolphin but an entire marine 
     ecosystem is at stake. He has concluded, rightly, that the 
     best response is the once-reviled but much-improved 
     encirclement method.
                                                                    ____


                [From the Washington Post, July 4, 1996]

                       Save Most of the Dolphins

       For reasons humans have yet to understand, dolphins in the 
     eastern Pacific Ocean often swim above schools of yellowfin 
     tuna. This made them for years the unintended victims of tuna 
     fishermen, innocent bystanders killed at a rate of perhaps 
     half a million per year. In 1990, when American consumers saw 
     videotape of dolphins suffering in giant tuna nets, an outcry 
     led to a movement for ``dolphin-safe'' tuna. The largest 
     canneries pledged not to buy any fish captured alongside 
     dolphin, and Congress enacted an embargo against countries 
     engaging in the kind of fishing that endangers these highly 
     intelligent animals.
       Since then, an international effort led by the United 
     States has led to a remarkable change in the behavior of the 
     fishing fleet. Boats in the eastern Pacific still use circle 
     nets that capture dolphins, but their operators have 
     developed gear and methods that allow most of the dolphins to 
     escape. During the past two years, the number of dolphins 
     killed has fallen to about 4,000 per year. International 
     observers posted on every boat makes these figures credible. 
     The dolphin population of 9.5 million is believed to be 
     stable or increasing.
       Now the Clinton administration, with bipartisan backing in 
     Congress and the support of Greenpeace, the World Wildlife 
     Fund and other environmental groups, wants the embargo 
     lifted. The argument is simple: If fleets do not receive some 
     reward for their changed behavior soon, they will revert to 
     their old and easier ways of fishing, and dolphin casualties 
     will rise. Under the proposal, the international monitoring 
     program would remain in effect.
       But opponents in Congress may stall any action. The 
     opponents are backed by other environmental groups, such as 
     the Sierra Club and Earth Island Institute. They argue for 
     zero-tolerance in dolphin-killing, and they also believe that 
     the chasing and encirclement may harm dolphins without 
     killing them.
       Unfortunately, alternative methods of tuna fishing appear 
     to produce large ``bycatches'' of immature tuna, thus raising 
     questions of depletion, and of other species, including 
     endangered turtles. More to the point, an insistence on zero 
     dolphin deaths could squander the progress made so far, since 
     virtually all of the fishing in question takes place in 
     international waters by foreign fleets. And alternative 
     markets exist.
       Sen. Barbara Boxer (D-Calif.), who helped lead the campaign 
     for dolphin-free tuna, is right to insist on research on the 
     effects on the dolphin population of circle-net fishing. 
     Further studies also should be conducted on the bycatch 
     dangers of alternative methods. But this is one case where a 
     quest for perfection could unravel the substantial progress 
     that has been achieved.
                                                                    ____


Attention Representatives--Open Letter to Representatives on H.R. 2823, 
   the International Dolphin Conservation Program Act and the Panama 
                      Declaration, January 3, 1996

       Dear Representative: Recently, twelve nations, including 
     the United States, signed the Declaration of Panama, an 
     historic international agreement to protect dolphins and 
     biodiversity in the Eastern Tropical Pacific Ocean. The 
     Panama Declaration, endorsed by the Clinton Administration, 
     the Center for Marine Conservation, Environmental Defense 
     Fund, Greenpeace, National Wildlife Federation, and World 
     Wildlife Fund, will continue progress in reducing dolphin 
     deaths in these waters and will extend protection to other 
     marine life as well.
       Further, the Center for Marine Conservation, the 
     Environmental Defense Fund, Greenpeace, National Wildlife 
     Federation, and World Wildlife Fund support H.R. 2823, the 
     International Dolphin Conservation Protection Act. H.R. 2823, 
     if enacted, will implement the Panama Declaration which will:
       Achieve a legally binding agreement on all fishing nations, 
     mandating progressive reductions in dolphin mortality toward 
     zero through the setting of annual limits;
       Build upon recent gains in dolphin protection, accelerate 
     the current schedule for reducing dolphin mortality by 
     several years, impose mortality limits that are more 
     restrictive than those currently in place, and lock in the 
     goal of eliminating dolphin mortality in the tuna fishery;
       Establish mortality limits and protection for individual 
     dolphin stocks to ensure their growth and recovery;
       Preserve and strengthen the existing dolphin conservation 
     program which makes it illegal to set nets around dolphins 
     after dark or use explosives to disorient dolphins;
       Expand and further develop enforceable on-board observer 
     programs and tracking systems that guarantee that no dolphins 
     died to catch ``dolphin-safe'' tuna from the Eastern Tropical 
     Pacific Ocean;
       Prevent the dismantlement of existing international 
     agreements and the Inter-American Tropical Tuna Commission 
     which have effectively reduced dolphin mortality and managed 
     the tuna fishery in the Eastern Tropical Pacific;
       Link enforcement of the binding international agreement to 
     strong embargo provisions;
       Protect the ecosystem of the Eastern Tropical Pacific Ocean 
     by reducing bycatch of other marine species such as juvenile 
     tuna, sharks, and endangered sea turtles in the tuna fishery; 
     and
       Strengthen the scientific basis for the conservation and 
     management of the tuna fishery, as well as research into 
     assessing the impact of chase and encirclement on dolphins 
     and developing gear and techniques that do not require 
     setting nets around dolphins to catch tuna.
       In short, the current voluntary international regime is not 
     durable. Accordingly, it is essential that we act now to lock 
     in long term protections for dolphin populations, rather than 
     wait until the international commitments for dolphin 
     conservation unravel. This legislation will resolve the long-
     standing tuna/dolphin controversy and establish measures that 
     will protect dolphins and the ecosystem. We urge you to co-
     sponsor H.R. 2823. If you have questions, please contact: 
     Rodrigo Prudencio, National Wildlife Federation, 202-797-
     6603; Nina Young, Center for Marine Conservation, 202-857-
     3276; Annie Petsonk, Environmental Defense Fund, 202-387-
     3500; Gerry Leape, Greenpeace, 202-462-1177; Scott Burns/
     David Schorr, World Wildlife Fund, 202-293-4800.
                                                                    ____


Center for Marine Conservation, Environmental Defense Fund Greenpeace, 
           National Wildlife Federation, World Wildlife Fund


                ``green'' points in support of h.r. 2823

       From a conservation and environmental perspective, H.R. 
     2823 (the International Dolphin Conservation Program Act) 
     merits full House passage because (not prioritized):
       1. It's Better for Dolphins:
       Locks into place binding international legal protections 
     for dolphins in the Eastern Tropical Pacific (ETP) Ocean. The 
     current ETP dolphin protection is entirely voluntary, based 
     on the 1992 ``La Jolla'' program. In October 1995, all of the 
     ETP fishing nations signed the ``Panama Declaration.'' That 
     Declaration strengthens further the ``La Jolla'' program, and 
     sets in motion a process to make the program legally binding, 
     contingent on changes in U.S. law that are part and parcel of 
     H.R. 2823's reforms, including observers and other 
     monitoring, verification and tracking of catch; research and 
     enforcement.
       Allows dolphin stocks to recover. The remarkable success of 
     the MMPA and the voluntary La Jolla agreement have resulted 
     in an almost 99 percent reduction in dolphin mortality in the 
     ETP. Up until the early 1990s, though, many dolphin species 
     in the ETP suffered annual mortality rates high enough to 
     hamper or retard their recovery. But now, those stocks are 
     stable, with mortality rates (for all stocks) below 0.2% of 
     the population abundance--a level more than four times lower 
     than that recommended by the National Research Council to 
     allow recovery. Moreover, H.R. 2823 requires that these 
     annual mortality rates be further reduced to less than 0.1% 
     of the population abundance, with the goal of eliminating 
     mortality entirely. These new levels of protection for 
     dolphins have been endorsed by leading scientists.
       Addresses effectively the issue of ``chase and 
     encirclement'' of dolphins, establishing a process for 
     investigation and further action, as merited, regarding the 
     health-related impacts of capture stress. Concerns have been 
     raised that the chase and encirclement

[[Page S402]]

     of dolphins causes harm and stress levels that can impede 
     dolphin reproduction or result in dolphin deaths. While 
     dolphins that are chased and encircled probably experience 
     some level of stress, there is no conclusive scientific 
     evidenced that chase and encirclement reduces reproductive 
     capacity, causes dolphins to die after release, or develop 
     stress-related diseases. In fact, there is evidence that some 
     dolphins have habituated to encirclement and have developed 
     behaviors that reduce their risks in the net. Nevertheless, 
     the stress issue should be further investigated, followed by 
     a report and recommendations to Congress--as called for in 
     H.R. 2823 (Sec. 302(d)(4)).
       2. It's Better for Other Sea Life:
       Contains tough provisions that require fishers to protect 
     not only the dolphins, but also the tuna stocks on which the 
     fishery depends, as well as other species, like sharks, bill 
     fish and sea turtles that get caught in the purse seine nets 
     used in the ETP fishery. One of the MMPA's stated objectives 
     is to maintain the health and stability of marine ecosystems, 
     but to date little attention has been given to this 
     objective. H.R. 2823 requires observers stationed on every 
     vessel to record bycatch of all species, and requires fishers 
     to minimize that bycatch.
       Recognizes that ``dolphin-safe'' and ``ecosystem-safe'' 
     fishing go hand-in-hand. Recent data indicate that fishing 
     methods that do not involve setting nets around dolphins, 
     such as setting nets on schools of tuna or logs, have 10 to 
     100 times greater bycatch of other sea life. This bycatch is 
     alarming, especially for species that reproduce slowly, such 
     as sharks, sea turtles and billfish. In addition, the IATTC 
     estimates that, if sets on dolphin were replaced by school 
     and log sets, from 10 to 25 million juvenile tuna would be 
     discarded. Domestic and international fisheries conservation 
     efforts have made bycatch reduction a priority. H.R. 2823 
     provides the best vehicle to develop immediate measures to 
     avoid, reduce, and minimize bycatch of juvenile yellowfin 
     tuna and other marine life. In contrast, the Miller 
     substitute (H.R. 2856) unfortunately promotes a substantial 
     increase in the waste of immature tuna and other bycatch 
     species, by encouraging shifts to those non-encirclement 
     fishing methods.
       3. It's Better for Consumers:
       Strengthens the popular ``dolphin-safe'' label, assuring 
     consumers that no dolphins died in the catch of labelled 
     tuna. Under the current definition (carried forward in the 
     Miller substitute), consumers are misled into believing the 
     current ``dolphin-safe'' label has solved the tuna-dolphin 
     issue, and that dolphins no longer die in tuna sets. Sadly, 
     this is not the case. Fishers continue to encircle dolphins 
     at the same rate as prior to the establishment of the 
     ``dolphin-safe'' label. Truth-in-labeling lies in the passage 
     of H.R. 2823, because it tells the consumer whether or not a 
     dolphin died, and not just about what fishing technique was 
     used. It gives consumers the ability to choose tuna caught 
     without killing dolphins, and that power of choice, in turn, 
     gives fishers the incentive to reduce dolphin mortality 
     further toward zero.
       4. It's Better for International Environmental Policy:
       Raises other countries' environmental performance to the 
     U.S. level, and to more sustainable levels, by ensuring that 
     foreign-caught tuna sold in foreign countries will meet the 
     same strong dolphin and other species/ecosystem protection 
     requirements that we apply to tuna sold in our country. 
     Moreover, H.R. 2823 provides that if ETP fishing nations fail 
     to meet the multilaterally-agreed standards, their tuna will 
     be banned from import into the United States--a trade 
     sanction that serves as one of the means of ensuring 
     compliance with and enforcement of the proposed legally 
     binding agreement called for in the Panama Declaration.
       Makes possible stronger international conservation policy 
     for dolphins, as well as other marine species impacted in the 
     ETP fishery. The Panama Declaration, and the resulting 
     multilateral environmental agreement (MEA) made possible by 
     H.R. 2823's passage, will result in strengthened conservation 
     and enforcement measures applicable to all ETP fishing 
     nations. At the same time, that MEA, once agreed by all ETP 
     fishing nations, will be far less vulnerable to a WTO-type 
     trade challenge than have been the unilateral MMPA sanctions 
     like those challenged by Mexico in 1991.

               A Dolphin-Safe Label That Really Means It

       What's in a label? Well, if you have eaten tuna in the past 
     five years, take note: the ``dolphin-safe'' label you have 
     grown to trust is neither as dolphin-safe nor ecologically-
     sound as you may think. Our nation's landmark dolphin 
     protection and product labeling laws have resulted in 
     unintended consequences which have actually exacerbated some 
     marine resource problems, while failing to guarantee that 
     dolphins were not killed when harvesting your tuna.
       The campaign to save dolphins had all the right intentions. 
     Combined with the 25-year effort to enact and strengthen the 
     Marine Mammal Protection Act (MMPA), the campaign educated 
     the public about a serious problem. Since its 1972 passage, 
     the MMPA went on to spur a reduction in dolphin mortalities 
     in the Eastern Tropical Pacific ocean (ETP) from as many as 
     600,000 a year to fewer than 5,000 by 1994.
       The effort to continue this success resulted in the 
     landmark 1992 dolphin-safe laws, which encompassed three key 
     elements: disallowing the common fishing practice of 
     encircling dolphins to catch the tuna that migrate with them, 
     monitoring and reporting of any dolphin deaths that did 
     occur, and an embargo on imports of non-dolphin-safe tuna. 
     These principles were the backbone of what American consumers 
     recognize as the ``dolphin-safe'' label.
       More than three years later, however, the failings of the 
     1992 law are evidenced not only in the continuing deaths of 
     dolphins, but of the damage to the ocean ecosystem as a 
     whole. To understand why this destruction of marine life 
     persists, it is necessary to examine the shortcomings of the 
     1992 laws--and the recent and most promising attempt to 
     address these problems on an international level, the Panama 
     Declaration.
       At the root of the problem is the fact that while tuna is 
     caught around the world, U.S. dolphin protection laws are 
     applicable only in the ETP. As strong as the laws may be, 
     they do not uniformly apply in other regions, which yield as 
     much as 80 percent of the world's tuna. Unfortunately, this 
     policy is based on the unproven assumption that tuna outside 
     the ETP do not migrate with marine mammals. Hence, tuna sold 
     in the U.S. from other regions are also afforded the 
     ``dolphin-safe'' label, amounting to little more than a p.r. 
     gimmick here and abroad.
       Furthermore, the ``dolphin-safe'' label only means that no 
     dolphins were ``encircled'' by fishing nets in the ETP; it 
     does not mean that no dolphins or other marine mammals were 
     harmed or killed during tuna harvests. The prohibition of 
     dolphin encirclement by American vessels in the ETP sparked a 
     mass exodus of more than 95 percent of the U.S. fleet. Most 
     vessels headed for the Southern Pacific, while some owners 
     simply sold their boats to citizens of other nations. So 
     while few if any recent dolphin deaths are attributable to 
     U.S. tuna vessels, these deaths continue in regions where 
     U.S. law is irrelevant.
       Disallowing encirclement of dolphins, with whom adult tuna 
     migrate, put fishermen in the position of focusing their 
     effort or juvenile tuna which tend to congregate near shore 
     in schools, or under floating debris such as logs. This 
     breaks the cardinal rule of successful fisheries management; 
     harvest only mature fish which have spawned at least once. 
     Biologists are concerned that a currently well-managed, 
     healthy fishery will begin to decline if efforts continue to 
     focus on young tuna.
       Equally alarming is a Greenpeace study showing that methods 
     considered ``dolphin-safe'' under U.S. law have resulted in 
     hundreds of thousands of pounds of by-catch (incidental 
     harvest) of other species in the past 3 years alone. Sharks, 
     sea turtles, other fish, and yes, even dolphins, congregate 
     with juvenile tuna and are unavoidably killed in the fishery. 
     From an ecosystem perspective, this is intolerable.
       So what needs to be done to protect dolphins? Switching 
     from one fishing method to another in a small section of the 
     world's ocean has not solved the problem. And simply shutting 
     down the tuna fishery altogether would threaten the survival 
     of fishing communities and the ability to feed a growing 
     world population. Tuna is the leading seafood product 
     consumed in America, and a renewable protein source for poor 
     and low-income persons the world over.
       Unilateral embargoes by the U.S. alone also have proved 
     unable to save the world's dolphins. Indeed, the unilateral 
     embargo on imports of ``dolphin-unsafe'' tuna has led to a 
     trade dispute under the General Agreement on Tariffs and 
     Trade (GATT).
       Clearly, there has long been a need for a strong 
     international approach. Recognizing this, international 
     negotiators began developing an alternative, multilateral 
     agreement which put observers on all tuna vessels fishing in 
     the ETP, regardless of nationality and method of fishing. 
     That program also set progressively declining caps on dolphin 
     mortality.
       This plan has now been strengthened and extended in a 
     recent accord known as the ``Panama Declaration.'' Supported 
     by Greenpeace, the Seafarers International Union (SIU), the 
     Clinton administration and a growing contingent in Congress, 
     this accord take a significant step towards achieving the 
     twin goals of saving dolphins and other marine species from 
     extinction while insuring a sustainable and healthy tuna 
     fishery.
       Hammered out through difficult negotiations between 
     government representatives, environmentalists, and fishermen, 
     this agreement would legally bind countries to require 
     mandatory enforcement measures and reporting internationally, 
     while rewarding fishermen who do not kill dolphins. The 
     agreement would mandate continued reductions of dolphin 
     deaths, and would bring many new boats under a regulatory 
     framework to reduce by-catch of all marine species.
       To take the next step, U.S. laws on dolphin-safe labeling 
     requirements must be rewritten in accord with the Panama 
     Declaration. Also, the current unilateral embargo must be 
     replaced with internationally agreed upon enforcement 
     measures which allow the U.S. to impose trade sanctions on 
     nations failing to live up to their commitment to dolphins. 
     Congress is now considering these changes. Greenpeace and the 
     SIU strongly opposed passage of the NAFTA and GATT treaties 
     last year. We believed then as now that those agreements 
     fundamentally weaken a nation's ability to pass and enforce 
     strong environmental, health, safety, and labor protection 
     laws.

[[Page S403]]

       At the same time, many environmental crises know no 
     borders, and the unnecessary killing of marine mammals is one 
     such crisis. One country acting alone cannot save the oceans 
     and protect their bounty. Once we succeed in getting 
     governments and fishermen to agree to a goal of zero dolphin 
     deaths, we will achieve real truth in labeling, and more 
     importantly, a package dolphins can truly live with.
     Barbara Dudley,
       Executive Director, Greenpeace U.S.
     Joseph Sacco,
       Executive Vice President, Seafarers International Union of 
     North America.
     Steve Edney,
       National Director, United Industrial Workers.
     Terry Hoinsky,
       President, Fishermen's Union of America.

  Mr. BREAUX. Mr. President, today, along with Senator Stevens and 
others, I am introducing legislation that will implement the Panama 
Declaration for the protection of dolphins in the tuna fishery of the 
eastern tropical Pacific Ocean. The United States signed the Panama 
Declaration on October 4, 1995, along with the Governments of Belize, 
Colombia, Costa Rica, Ecuador, France, Honduras, Mexico, Panama, Spain, 
Vanuatu, and Venezuela. by agreeing to the Panama Declaration, these 
countries have demonstrated their commitment to the conservation of 
ecosystems and the sustainable use of living resources related to the 
tuna fishery in the eastern tropical Pacific.
  By implementing the Panama Declaration, we will strengthen the Inter-
American Tropical Tuna Commission [IATTC], which has proven to be an 
extremely effective international resource management organization. 
Implementing the Panama Declaration will ensure the reduction of 
dolphin mortalities associated with tuna fishing in the eastern 
tropical Pacific Ocean. In addition, we will enable American tuna 
fishermen to re-enter that tuna fishery on the same footing as foreign 
fishermen.
  Since 1949, the IATTC has served as the regional fishery management 
organization for the tuna fishery of the eastern tropical Pacific 
Ocean, managing that fishery in an exemplary manner. Managing migratory 
species requires a multilateral approach, one which the IATTC is well-
suited to perform. The yellowfin tuna fishery of the eastern tropical 
Pacific Ocean, which the Panama Declaration addresses, falls under the 
auspices of the IATTC. In that fishery, tuna fishermen use dolphins to 
locate schools of large, mature yellowfin tuna which, for unknown 
reasons, associate with schools of dolphin. Once the schools of dolphin 
have been located, the fishermen use purse seine nets to encircle the 
dolphins with the objective of catching the tuna swimming below. The 
dolphins are then safely released before the tuna is hauled abroad.
  In recent years, there has been some concern about these fishing 
practices which, in the past, have resulted in excessive incidental 
mortality to dolphins. In 1992, in an effort to address this problem, 
10 nations with tuna vessels operating in the eastern tropical Pacific 
signed an agreement known as the La Jolla Agreement. The La Jolla 
Agreement established the International Dolphin Conservation Program 
[IDCP], which is administered by the IATTC.
  The regional objective of the IDCP is to reduce dolphin mortalities 
to insignificant levels approaching zero, with a goal of eliminating 
them entirely. Pursuant to that program, the number of dolphins killed 
accidentally in the tuna fishery has been reduced to less than 
4,000. annually from a previous average of over 300,000 killed 
annually. The current dolphin mortality represents approximately four 
one-hundredths of 1 percent of the 9.5 million dolphins of the eastern 
tropical Pacific. Thus, the IDCP has been remarkably successful in 
achieving its goal of reducing unintended dolphin mortalities to 
biologically insignificant levels approaching zero.

  This legislation will implement the Panama Declaration, formalize the 
1992 La Jolla Agreement and make it a legal agreement binding on the 
member countries of the IATTC. The Panama Declaration strengthens the 
IDCP and furthers its goals by placing a cap of 5,000 per year on 
dolphin mortalities.
  Although U.S. fishermen developed the techniques now used in 
capturing tuna and safely releasing dolphins, they effectively have 
been forced from fishing in the eastern tropical Pacific since the 1992 
amendments to the Marine Mammal Protection Act, which prohibit the 
encirclement of dolphins. The legislation to implement the Panama 
Declaration will eliminate the inequitable treatment of United States 
tuna fishermen and enable them to re-enter this important fishery on an 
equal footing with foreign fishermen.
  The 1992 ban on encirclement of dolphins has required fishermen to 
use alternative fishing practices which have serious environmental 
consequences. Alternative fishing practices lead to excessive bycatch 
of endangered sea turtles, sharks, billfish, and great numbers of 
immature tuna and other fish species. In an attempt to manage a single 
species, in this case dolphins, we have caused serious harm to the 
entire ecosystem. This legislation will result in a reduction of this 
bycatch problem as well as permit fishermen to encircle dolphins as 
long as they comply with the stringent regulations imposed by the 
IATTC.
  The purpose of this bill is to improve and solidify efforts to 
protect dolphins in the eastern tropical Pacific Ocean, eliminate the 
bycatch problems caused by alternative fishing methods, and recognize 
the tremendous gains by other countries in reducing dolphin mortality. 
The Panama Declaration establishes a common environmental standard for 
all countries fishing in the region. By formalizing the La Jolla 
Agreement, U.S. and foreign fishermen in the eastern tropical Pacific 
will be subject to the most stringent fishery regulations in the world.
  The Panama Declaration represents a tremendous environmental 
achievement, and it enjoys support from such diverse interests as 
major, mainstream environmental groups, the U.S. tuna fishing fleet, 
the Clinton administration, and other countries whose fishermen operate 
in the eastern tropical Pacific.
  Mr. President, I ask unanimous consent that a letter of support from 
Vice President Gore be entered into the Record.
  I am encouraged that the majority leader, on the Senate floor on 
September 30, 1996, had promised to provide floor time at the beginning 
of this Congress to vote on this legislation. I urge my colleagues to 
join me in supporting this legislation in order that we may implement 
this important international agreement.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:


                                           The Vice President,

                                         Washington, June 3, 1996.
     Hon. John B. Breaux,
     U.S. Senate,
     Washington, DC.
       Dear John: I am writing to thank you for your leadership on 
     the International Dolphin Conservation Program Act, S. 1420. 
     As you know, the Administration strongly supports this 
     legislation, which is essential to the protection of dolphins 
     and other marine life in the Eastern Tropical Pacific.
       In recent years, we have reduced dolphin mortality in the 
     Eastern Tropical Pacific tuna fishery far below historic 
     levels. Your legislation will codify an international 
     agreement to lock these gains in place, further reduce 
     dolphin mortality, and protect other marine life in the 
     region. This agreement was signed last year by the United 
     States and 11 other nations, but will not take effect unless 
     your legislation is enacted into law.
       As you know, S. 1420 is supported by major environmental 
     groups, including Greenpeace, the World Wildlife Fund, the 
     National Wildlife Federation, the Center for Marine 
     Conservation, and the Environmental Defense Fund. The 
     legislation is also supported by the U.S. fishing industry, 
     which has been barred from the Eastern Tropical Pacific tuna 
     fishery.
       Opponents of this legislation promote alternative fishing 
     methods, such as ``log fishing'' and ``school fishing,'' but 
     these are environmentally unsound. These fishing methods 
     involve unacceptably high by-catch of juvenile tunas, 
     billfish, sharks, endangered sea turtles and other species, 
     and pose long-term threats to the marine ecosystem.
       I urge your colleagues to support this legislation. Passage 
     of this legislation this session is integral to ensure 
     implementation of an important international agreement that 
     protects dolphins and other marine life in the Eastern 
     Tropical Pacific.
           Sincerely,
                                                          Al Gore.
                                 ______
                                 
      By Mr. HELMS:
  S. 41. A bill to prohibit the provision of Federal funds to any State 
or local

[[Page S404]]

educational agency that denies or prevents participation in 
constitutional prayer in schools; read twice and placed on the 
calendar.


                   voluntary school prayer protection

  Mr. HELMS. Mr. President, this year marks the 200th anniversary of 
George Washington's departure from public life. A few months before the 
end of his Presidency, in his farewell address to the Nation, he 
included a parting word of advice--and a final warning--that is just as 
significant and relevant today as it was then. Washington counseled the 
new Nation:

       Of all the dispositions and habits which lead to political 
     prosperity, religion and morality are indispensable supports. 
     In vain would that man claim the tribute to patriotism who 
     should labor to subvert these great pillars of human 
     happiness.

  Our Founding Fathers understood well the intricate relationship 
between freedom and responsibility. They knew that the blessings of 
liberty engendered certain obligations on the part of a free people--
namely, that citizens conduct their actions in such a way that society 
can remain cohesive without excessive government intrusion. The 
American experiment would never have succeeded without the traditional 
moral and spiritual values of the American people--values that allow 
people to govern themselves, rather than be governed.
  Not long ago, my friend, Margaret Thatcher, highlighted for us the 
words of another of our Nation's founders, John Adams, who said, ``Our 
Constitution was designed only for a moral and religious people. It is 
wholly inadequate for the government of any other.'' Yet over the last 
30 years, our society has evidenced increasing apathy--and, in some 
cases, outright hostility--toward the spiritual principles upon which 
our Nation was founded.
  Mr. President, Bill Bennett once observed to me that America has 
become the kind of country that civilized countries once dispatched 
missionaries to centuries ago. If we care about cleaning up the streets 
and classrooms, if we care about the long-term survival of our Nation--
how could there be anything more important for Congress to protect than 
the right of America's children to participate in voluntary, 
constitutionally protected prayer in their schools?
  Mr. President, the legislation I am introducing today will ensure 
that student-initiated prayer is treated the same as all other student-
initiated free speech--which the U.S. Supreme Court has upheld as 
constitutionally protected as long as it is done in an appropriate 
time, place, and manner such that it ``does not materially disrupt the 
school day''. [Tinker v. Des Moines School District, 393 U.S. 503.]
  Under this bill, school districts could not continue--in 
constitutional ignorance--enforcing blanket denials of students' rights 
to voluntary prayer and religious activity in the schools. For the 
first time, schools would be faced with real consequences for making 
uninformed and unconstitutional decisions prohibiting all voluntary 
prayer. The bill creates a complete system of checks and balances to 
ensure that school districts do not shortchange their students one way 
or the other.
  This proposal, Mr. President, prevents public schools from 
prohibiting constitutionally protected voluntary student-initiated 
prayer. It does not mandate school prayer and suggestions to the 
contrary are simply in error. Nor does it require schools to write any 
particular prayer, or compel any student to participate in prayer. It 
does not prevent school districts from establishing appropriate time, 
place, and manner restrictions on voluntary prayer--the same kind of 
restrictions that are placed on other forms of speech in the schools.

  What this proposal will do is prevent school districts from 
establishing official policies or procedures with the intent of 
prohibiting students from exercising their constitutionally protected 
right to lead, or participate in, voluntary prayer in school.
  Mr. President, this bill is especially noxious to school prayer 
opponents because it explodes the myth popular among school 
administrators and bureaucrats--a myth perpetuated by liberal groups 
such as the American Civil Liberties Union--that the U.S. Constitution 
somehow prohibits every last vestige of religion from the public 
schools.
  Seldom is it heard on the issue of school prayer that the 
Constitution also forbids governmental restrictions on the free 
exercise of religion, or that the Constitution protects students' free 
speech--whether religious or not--and that student-initiated, voluntary 
prayer expressed at an appropriate time, place and manner, has never 
been outlawed by the Supreme Court.
  Mr. President, I find it more than a little ironic that I am forced 
to revisit this issue on the floor of the Senate. I remind Senators 
that in 1994, this same proposal--offered in amendment form by Senator 
Lott and myself--passed this body overwhelmingly, 75 to 22. In the 
House of Representatives, this language was approved on two different 
occasions by similar 3-to-1 margins. Yet this simple protection of 
constitutional rights was dropped in the closing 60 seconds of a 
conference with no debate, no discussion, and no vote--just a wink and 
a nod between the senior Senator from Massachusetts and his counterpart 
on the House side.
  So I am obliged to offer this measure once again to protect the 
constitutional rights of America's children to participate in voluntary 
school prayer. Indeed, standing here brings to mind the words of the 
legendary New York Yankee catcher, manager, and philosopher Yogi Berra: 
``it's deja vu all over again.''
  Well, this time, Mr. President, I hope Congress will accede to the 
wishes of a huge majority of the American people, and enact this 
legislation. A Wirthlin poll reported in Reader's Digest indicates that 
75 percent of our citizens favor prayer in public schools. My 
legislation ensures that the American people's will to protect 
constitutionally sanctioned prayer in our Nation's schools is 
accomplished--and shows Congress's respect for the moral and spiritual 
values that make our Nation whole.
                                 ______
                                 
      By Mr. HELMS:
  S. 42. A bill to protect the lives of unborn human beings; read 
twice, and placed on the calendar.


                 the unborn children's civil rights act

  Mr. HELMS. Mr. President, 2 years ago--and on five occasions prior to 
that--I have offered the Unborn Children's Civil Rights Act, proposing 
that the Senate go on record in favor of reversing the Roe versus Wade 
decision. That wrongful U.S. Supreme Court decision, handed down 24 
years ago tomorrow, paved the way for the destruction of more than 35 
million innocent children--1.5 million little innocent, helpless lives 
every year.
  An enormous number of men and women of all ages will descend upon 
Washington tomorrow--as they have every year since the fateful Roe 
versus Wade decision--pleading with Congress to remember that a nation 
which fails to value the God-given gifts of life and liberty will one 
day find itself in the dustbin of history.
  So, as the 105th Congress begins its work, I do hope that all 
Senators will give thought to the need to put an end to the legalized 
deliberate destruction of the lives of innocent, helpless little human 
beings.
  The Unborn Children's Civil Rights Act proposes four things:
  First, to put Congress clearly on record as declaring that one, every 
abortion destroys deliberately, the life of an unborn child; two, that 
the U.S. Constitution sanctions no right to abortion; and three, that 
Roe versus Wade was improperly decided.
  Second, this legislation will prohibition Federal funding to pay for, 
or to promote, abortion. Further, this legislation proposes to defund 
abortion permanently, thereby relieving Congress of annual legislative 
battles about abortion restrictions in appropriation bills.
  Third, the Unborn Children's Civil Rights Act proposes to end 
indirect Federal funding for abortions by one, prohibiting 
discrimination, at all federally funded institutions, against citizens 
who as a matter of conscience object to abortion and two, curtailing 
attorney's fees in abortion-related cases.
  Fourth, this legislation proposes that appeals to the Supreme Court 
be provided as a right if and when any lower Federal court declares 
restrictions on abortion unconstitutional, thus effectively assuring 
Supreme Court reconsideration of the abortion issue.

[[Page S405]]

  Mr. President, it has become fashionable today for America's courts 
to discard the Constitution in order to create rights and protect 
freedoms founded upon mankind's depraved nature instead of God's 
eternal and moral truths.
  Yet, never has a court handed down such a misguided decision than 
when it created the right of a woman to choose to terminate the life of 
her child. Roe versus Wade has no foundation whatsoever in the text or 
history of the Constitution. It was a callous invention. Justice White 
said it best in his dissent: Roe, he declared, was an exercise in raw 
judicial power.
  Why has this Supreme Court's exercise in raw judicial power been 
allowed to stand? Why has Congress stood idly by for 24 years while 
4,000 unborn babies are deliberately, intentionally destroyed every day 
as a result of legalized abortion?
  The answer is simple, Mr. President. Even though Roe versus Wade was 
and is an unconstitutional decision, Congress has been unwilling to 
exercise its powers to check and balance a Supreme Court that 
deliberately allows the destruction of the most defenseless, most 
innocent humanity imaginable.
  So, Mr. President, Roe versus Wade still stands; millions of children 
continue to be deprived of their right to live, to love, and to be 
loved. It is not a failure of the U.S. Constitution. It is a failure of 
both the Supreme Court and the Congress for 24 years to overturn Roe 
versus Wade.
                                 ______
                                 
      By Mr. HELMS (for himself, Mr. DeWine, Mr. Hatch, Mr. Nickles, 
        Mr. Abraham, and Mr. Faircloth):
  S. 43. A bill to throttle criminal use of guns; read twice and placed 
on the calendar


                     THROTTLE CRIMINAL USE OF GUNS

  Mr. HELMS. Mr. President, on December 6, 1995, the U.S. Supreme Court 
handed down an opinion that has undermined the prosecution of literally 
hundreds of violent and drug trafficking criminals. There could not 
have been a worse time to go soft on criminals, but when the Supreme 
Court's decision was announced, hardened convicts across America were 
overjoyed by the prospect of prison doors swinging open for them.
  Sure enough, since the Court's decision just over 1 year ago, 
hundreds of criminals have indeed been set free.
  The bill I am introducing today will correct the Supreme Court's 
blunder, and it will crack down on gun-toting thugs who commit all 
manner of unspeakable crimes. I am advised that my bill is being 
numbered S. 43, and it provides that a 5-year mandatory minimum 
sentence shall be imposed upon any criminal possessing a gun during and 
in relation to the commission of a violent or drug trafficking crime. 
If the criminal fires the weapon, the mandatory penalty is elevated to 
10 years. If there is a killing during the crime, the punishment is 
life imprisonment or the death penalty.
  This is just common sense, Mr. President; violent felons who possess 
firearms are demonstrably more dangerous than those who do not. This 
legislation, of course, does not apply to anyone lawfully possessing a 
gun.
  Current Federal law provides that a person who, during a Federal 
crime of violence or drug trafficking crime, uses or carries a firearm 
shall be sentenced to 5 years in prison. That law has been used 
effectively by Federal prosecutors across the country to add 5 
additional years to the prison sentences of criminals who use or carry 
firearms.
  But along came the Supreme Court's unwise decision thwarting 
prosecutors' effective use of this statute. The Court, in Bailey versus 
United States, interpreted the law to require that a violent felon 
actively employ a firearm as a precondition of receiving an additional 
5-year sentence. The Court held that the firearm must be brandished, 
fired or otherwise actively used; so if a criminal merely possesses a 
firearm, but doesn't fire or otherwise use it, he escapes the 
additional 5 year penalty.
  Someone put it this way: As a result of the Court's decision, any 
thug who hides a gun under the back seat of his car, or who stashes a 
gun with his drugs, may now get off with a slap on the wrist. The fact 
is, Mr. President, that firearms are the tools of the trade of most 
drug traffickers. Weapons clearly facilitate the criminal transactions 
and embolden violent thugs to commit their crimes.
  Mr. President, this Supreme Court decision poses serious problems for 
law enforcement. It has weakened the Federal criminal law and has 
already led to the early release of hundreds of violent criminals.
  After the word got out about the Bailey decision, prisoners 
frantically began preparing and filing motions to get out of jail as 
fast as they could write. Prosecutors were inundated with petitions 
from criminals. One example is a man named Lancelot Martin, who ran a 
Haitian drug trafficking operation out of Raleigh, my hometown, the 
capital city of North Carolina. Martin used the U.S. Postal Service to 
receive and sell drugs. Police seized his drugs and recovered a 9 mm 
semiautomatic pistol that Martin used to protect his drug business.
  Lancelot Martin was convicted of drug trafficking charges and 
received a 5-year sentence for using the gun. But on March 11 of last 
year, years before his sentence expired, Martin walked free, simply 
because while his gun and a hefty supply of drugs were found--the gun 
was not actively employed at the time he was caught.
  So, Mr. President, this bill will ensure that future criminals 
possessing guns, like Lancelot Martin, serve real time when they 
possess a gun in furtherance of a violent or drug trafficking crime.
  The Supreme Court, recognizing the consequences of its decision, 
issued this invitation to us: ``Had Congress intended possession alone 
to trigger liability * * * it easily could have so provided.'' That, 
Mr. President, is precisely the intent of this legislation--to make 
clear that possession alone does indeed trigger liability.
  Mr. President, a modified version of this legislation passed the 
Senate last year, only to be blocked in the House of Representatives. 
This bill is a necessary and appropriate response to the Supreme 
Court's judicial limitation of the mandatory penalty for gun-toting 
criminals. According to Sentencing Commission statistics, more than 
9,000 armed violent felons were convicted from April 1991, through 
October 1995. In North Carolina alone, this statute was used to help 
imprison over 800 violent criminals. We must strengthen law 
enforcement's ability to use this strong anticrime provision.
  Fighting crime is, and must be, a prime concern in America. It has 
been estimated that in the United States one violent crime is committed 
every 16 seconds. We must fight back with the most severe punishment 
possible for those who terrorize law-abiding citizens. Enactment of 
this legislation is a necessary step toward recommitting our Government 
and our citizens to a real honest-to-God war on crime.
  Mr. ABRAHAM. Mr. President, I rise to cosponsor Senator Helms' bill 
to amend section 924 of title 18 of the United States Code. This bill 
would ensure that stiff, mandatory sentences are imposed on criminals 
who possess firearms while committing a crime of violence or drug 
trafficking offense.
  As currently written, title 18 of section 924(c) already mandates 
that a sentence of 5 years or more be imposed on any defendant who uses 
or carries a firearm while committing a crime of violence or drug 
trafficking offense. Over the past several years, however, courts have 
struggled with the issue of whether a defendant uses a weapon for 
purposes of section 924(c) if he technically possesses the weapon but 
does not actually employ it in committing the underlying offense.
  This issue was recently taken up by the Supreme Court in the case of 
Bailey versus United States. Hewing closely to the ordinary meaning of 
``use,'' the Court unanimously held that ``use'' in section 924(c) 
signifies ``an active employment of the firearm by the defendant.'' 
After observing that the term ``possess'' is frequently used elsewhere 
in Federal gun-crime statutes, the Court reasoned that, ``[h]ad 
Congress intended possession alone to trigger liability under section 
924(c)(1), it easily could have so provided.''
  The bill I cosponsor today does so provide, as it would amend section 
924(c)(1) to apply to any defendant who ``uses, carries, or possesses'' 
a firearm while committing a crime of violence or drug trafficking 
offense. This is a worthwhile change. Any crime becomes far more 
dangerous when committed by a criminal who controls a firearm.

[[Page S406]]

Such a criminal should not be rewarded if, in a particular case, it 
turns out that he has no need actually to employ the weapon. The fact 
that he so augmented the danger attending his crime is reason enough to 
impose the stiff sentences set forth in section 924.
  Thus, in short, this bill closes a dangerous loophole in current law. 
I applaud the Senator from North Carolina for his leadership on this 
issue, and look forward to the bill's speedy enactment.
                                 ______
                                 
      By Mr. HELMS:
  S. 44. A bill to make it a violation of a right secured by the 
Constitution and laws of the United States to perform an abortion with 
the knowledge that the abortion is being performed solely because of 
the gender of the fetus; read twice and placed on the calendar.


                      Civil Rights of Infants Act

  Mr. HELMS. Mr. President, the distinguished Senator from New 
Hampshire, Mr. Robert Smith, introduced legislation in the 104th 
Congress prohibiting the destruction of helpless, unborn babies by a 
procedure called partial-birth abortions.
  Congress heeded the outcry of the American people against this 
shameful abuse of the most innocent humans imaginable; the Partial-
Birth Abortion Ban Act was passed by both the House and the Senate only 
to have it vetoed by President Clinton.
  Mr. President, another stalwart Senator of New Hampshire, Mr. 
Humphrey brought to the attention of the Senate in 1989 incredibly 
brutal practice in America--abortions performed solely because 
prospective mothers prefer a child of a gender from the babies in their 
womb.
  Senator Humphrey, in the 1989 debate called attention to the New York 
Times article published Christmas morning the year before. It was 
titled ``Fetal Sex Test Used as Step to Abortion.'' Sadly, Senator 
Humphrey's remarks and subsequent legislation were met with general 
disinterest among those who sanctimoniously defend what they regard as 
a woman's right to destroy her unborn child. Those holding such views 
never discuss an unborn child's right to live, to love and be loved.
  Mr. President, it was typical for The New York Times, that the Times 
article which Senator Humphrey deplored began as follows:

       In a major change in medical attitudes and practices, many 
     doctors are providing prenatal diagnoses to pregnant women 
     who want to abort a fetus on the basis of the gender of the 
     unborn child.
       Geneticists say that the reasons for this change in 
     attitude are an increased availability of diagnostic 
     technologies, a growing disinclination of doctors to be 
     paternalistic, deciding for patients what is best, and an 
     increasing tendency for patients to ask for the tests. Many 
     geneticists and ethicists say they are disturbed by the 
     trend.

  Mr. President, this rhetorical horseradish is simply another 
measurement of how far the moral and spiritual priorities of America 
have fallen. Professor George Annas of the Boston University School of 
Medicine was quoted as saying:

       I think the [medical] profession should set limits and I 
     think most people would be outraged, and properly so, at the 
     notion that you would have an abortion because you don't want 
     a boy or you don't want a girl. If you are worried about a 
     woman's right to an abortion, the easiest way to lose it is 
     not set any limits on this technology.

  Mr. President, how sad it is that any mother in a civilized society 
would be willing to destroy the unborn female child she is carrying 
simply because she happens to prefer a male child--or vice-versa. But 
believe it. It is happening without the Government of the United States 
lifting an eyebrow, let alone a finger.
  And that, Mr. President, is why I am again offering legislation to 
limit this incredibly inhumane practice.

  As I mentioned at the outset of my remarks, the 104th Congress acted 
on legislation to outlaw the brutal killings of unborn babies subjected 
to partial-birth abortions. I pray the 105th Congress will take action 
to end another callous cruelty against the unborn--gender-selection 
abortions.
  Specifically, the legislation I have sent to the desk proposes to 
amend title 42 of the United States Code governing civil rights. Anyone 
who administers an abortion for the purpose of choosing the gender of 
the infant will protect unborn children as title 42 presently protects 
any other citizen who is a victim of discrimination.
  Mr. President, the American people are clearly opposed to this 
practice. A Boston Globe poll reports that 93 percent of the American 
people reject the taking of life as a means of gender selection. 
Another poll conducted by Newsweek/Gallup showed that four out of every 
five Americans oppose gender selection abortions.
  Even radical feminists cannot ignore the absurdity of denying a child 
the right to life simply because the parents happened to prefer a child 
of the opposite gender. The Associated Press reported on August 22, 
1996, that the platform adopted by last year's U.N. women's conference 
in Beijing included a provision condemning sex-selection abortions.
  Of course, feminists proclaim that gender selection abortions are 
atrocities in China--or in India where a survey was taken 7 years ago 
which revealed that of 8,000 abortions, 7,999 were female.
  Now, Mr. President, I do not believe--even for a minute--that the 
pro-abortion crowd and its amen corner in Congress would want to see 
action on this legislation. I deliberately stated that the feminists in 
Beijing--led by the American coalition--could not ignore this cruel 
practice. But lip service is all that will be paid to this violent 
practice by most of those who call themselves pro-choice.
  Just as they did during debate on the Partial-Birth Abortion Ban Act, 
I suspect NOW and NARAL supporters in the Senate will do their best to 
stop the Civil Rights of Infants Act. Cries will go up and the charge 
will be made that the Senate is somehow trying to take away the freedom 
of American women. In the meantime, the freedoms of life and liberty 
are being denied to thousands of unborn children.
  Nonetheless, those of us who support the rights of the unborn must do 
our best. Hopefully, this 105th Congress will take early action to 
fulfill the desires of the overwhelming majority of the American people 
who rightfully believe it is immoral to destroy unborn babies simply 
because the mother demands freedom-of-gender choice.
                                 ______
                                 
      By Mr. HELMS:
  S. 45. A bill to amend title X of the Public Health Service Act to 
permit family planning projects to offer adoption services; read twice 
and placed on the calendar.


                 federal adoption services act of 1997

  Mr. HELMS. Mr. President, there's a significant question about the 
use of the American taxpayers' money.
  Should State and local health departments, hospitals, and other 
family planning organizations funded under title X of the Public Health 
Services Act, be specifically allowed to offer adoption services to 
pregnant women?
  The answer, Mr. President, is: Absolutely.
  And Congress should be unmistakably clear in expressing our judgment 
that public and private health facilities can and should offer adoption 
services.
  The vast majority of the American people agree. Many polls have shown 
that people approve of their tax dollars being used by clinics to 
promote and encourage adoptions instead of the heinous destruction of 
unborn children.
  Statistics emphasize the merit of the proposal that clinics and 
agencies receiving title X funding should explicitly be authorized to 
offer adoption services. The National Council for Adoption asserts that 
an estimated 2 million couples are today hopefully and prayerfully 
waiting to adopt a child. Yet, 1.5 million babies are refused the right 
to live every year.
  Mr. President, if every abortion in this country could be prevented 
this year there would still be 500,000 couples ready and waiting to 
adopt children. Small wonder that adoption is called ``the loving 
option.''
  But it is even more tragic, Mr. President, that women with unplanned 
or unwanted pregnancies are unaware of the wonderful opportunities 
available to their child through adoption. These women, states Jeff 
Rosenberg, formerly of the National Council for Adoption, ``are not 
hearing about adoption, and thus [are] not considering it as a 
possibility. Young pregnant women are frequently not told by counselors 
and social workers that adoption is an alternative.''
  With this in mind, I offer today the Federal Adoption Services Act of 
1997,

[[Page S407]]

a bill that proposes to amend title X of the Public Health Services Act 
to permit federally-funded planning services to provide adoption 
services based on two factors: No. 1, the needs of the community in 
which the clinic is located, and No. 2, the ability of an individual 
clinic to provide such services.
  Mr. President, those familiar with the many Senate debates of the 
past regarding title X will recall the excessive emphasis placed on 
preventing and/or spacing of pregnancies, and limiting the size of the 
American family.
  I hope that this year, we can refocus this debate, emphasizing the 
need to affirm life rather than preventing or terminating it.
  Sure, the radical feminists and other pro-abortionists will voice 
their hysterical objections. So before they raise their voices, let's 
make clear what this legislation will not do. For example:
  No woman will be threatened or cajoled into giving up her child for 
adoption. Family planning clinics will not be required to provide 
adoption services. Rather, this legislation will make it clear that 
Federal policy will allow, or even encourage adoption as a means of 
family planning. Women who use title X services--one-third of whom are 
teenagers--will be in a better position to make informed, compassionate 
judgments about the unborn children they are carrying.
  Mr. President, I contend that it is not the responsibility of 
civilized society to protect the rights of the most innocent and most 
helpless human beings imaginable. Furthermore, shouldn't we do our best 
to provide couples willing to love and care for these children an 
opportunity to do so? That question, Mr. President, answers itself--in 
the affirmative.
                                 ______
                                 
      By Mr. HELMS:
  S. 46. A bill to amend the Civil Rights Act of 1964 to make 
preferential treatment an unlawful employment practice, and for other 
purposes; read twice and placed on the calendar.


                  civil rights restoration act of 1997

  Mr. HELMS. Mr. President, I send to the desk legislation I first 
submitted in amendment form on June 25, 1991--which I subsequently 
introduced as a bill in both the 103d and 104th Congresses. But as I 
introduce once more the Civil Rights Restoration Act, I recall that 
similar antidiscrimination legislation passed this body long before 
1973, when I first became a Member of the Senate.
  Thirty-three years ago, Congress passed the historic Civil Rights Act 
of 1964. The intent of that legislation was to prohibit discrimination 
based on race in a broad variety of circumstances, including hiring 
practices. Proponents of the Civil Rights Act proclaimed that there was 
nothing in the bill that would require any quotas or preferential 
treatment.
  Well, three decades later, the Federal Government's quota 
establishment--aided and abetted by an activist Federal judiciary--have 
so perverted the plain language and intent of the Civil Rights Act that 
it is unrecognizable. My proposal today is intended to ensure that all 
civil rights laws are consistent with the goal of a color-blind 
society.
  Specifically, this legislation prevents Federal agencies, and the 
Federal courts, from interpreting title VII of the Civil Rights Act of 
1964 to allow an employer to grant preferential treatment in employment 
to any group or individual on account of race.
  This proposal prohibits the use of racial quotas once and for all. 
During the past several years, almost every Member of the Senate--and 
the President of the United States--have proclaimed that they are 
opposed to quotas. This bill will give Senators an opportunity to 
reinforce their statements by voting in a rollcall vote against quotas.
  Mr. President, this legislation emphasizes that from here on out, 
employers must hire on a race neutral basis. They can reach out into 
the community to the disadvantaged and they can even have businesses 
with 80 or 90 percent minority workforces as long as the motivating 
factor in employment is not race.
  This bill clarifies section 703(j) of title VII of the Civil Rights 
Act of 1964 to make it consistent with the intent of its authors, 
Hubert Humphrey and Everett Dirksen. Let me state it for the Record:

       It shall be an unlawful employment practice for any entity 
     that is an employer, employment agency, labor organization, 
     or joint labor-management committee subject to this title to 
     grant preferential treatment to any individual or group with 
     respect to selection for, discharge from, compensation for, 
     or the terms, conditions, or privileges of, employment or 
     union membership, on the basis of the race, color, religion, 
     sex, or national origin of such individual or group, for any 
     person, except as provided in subsection (e) or paragraph 
     (2).
       It shall not be an unlawful employment practice for an 
     entity described in paragraph (1) to recruit individuals of 
     an underrepresented race, color, religion, sex, or national 
     origin, to expand the applicant pool of the individuals 
     seeking employment or union membership with the entity.
  Specifically, this bill proposes to make part (j) of section 703 of 
the 1964 Civil Rights Act consistent with subsections (a) and (d) of 
that section. It contains the identical language used in those 
subsections to make preferential treatment on the basis of race--that 
is, quotas--an unlawful employment practice.
  Mr. President, I want to be clear that this legislation does not make 
outreach programs an unlawful employment practice. Under language 
suggested years ago by the distinguished Senator from Kansas, Bob Dole, 
a company can recruit and hire in the inner city, prefer people who are 
disadvantaged, create literacy programs, recruit in the schools, 
establish day care programs, and expand its labor pool in the poorest 
sections of the community. In other words, expansion of the employee 
pool is specifically provided for under this act.
  Mr. President, this legislation is necessary because in the 33 years 
since the passage of the Civil Rights Act, the Federal Government and 
the courts have combined to corrupt the spirit of the act as enumerated 
by both Hubert Humphrey and Everett Dirksen, who made clear that they 
were unalterably opposed to racial quotas. Yet in spite of the clear 
intent of Congress, businesses large and small must adhere to hiring 
quotas in order to keep the all-powerful Federal Government off their 
backs.
  Several times before, I have directed the attention of Senators to 
the Daniel Lamp Co., a small Chicago lamp factory harassed by 
investigators from the Equal Employment Opportunity Commission. The CBS 
news program, ``60 Minutes,'' did a story several years back that 
exposed the mentality of the quota-enforcing bureaucrats at the EEOC to 
the Nation.
  The Daniel Lamp Co. was a small, struggling business which employed 
28 people when ``60 Minutes'' began its investigation--8 of whom were 
black and 18 of whom were Hispanic. But this obviously 
nondiscriminatory hiring practice was simply not enough for the EEOC. 
According to the ``60 Minutes'' reporter, Morley Safer, the EEOC told 
the owner of the Daniel Lamp Co. that ``based on other larger 
companies' personnel, Daniel Lamp should employ 8.45 blacks.'' In other 
words, this small company--which had never had over 30 people on its 
payroll--had failed to meet the Federal Government's hiring quotas.
  The Daniel Lamp Co., which was justifiably proud of its mostly 
minority workforce, decided to stand up to the EEOC. For their 
troubles, they were forced to pay a fine of $148,000, meet the quota 
set by the agency, and spend $10,000 on newspaper advertisements to 
tell other job applicants that they might have been discriminated 
against--and to please contact the Daniel Lamp Co. for a potential 
financial windfall.
  Yet through all of this outrageous conduct, the EEOC continued to 
insist that the agency does not set hiring quotas. And although one 
would have reasonably expected that ``60 Minutes'' exposure of the 
Daniel Lamp Co.'s predicament would embarrass the Federal Government's 
quota establishment into mending its ways, it is still business as 
usual among the bureaucrats.
  For example, on November 21, 1996, my office received an unsolicited 
facsimile transmission from the Department of Labor's Office of Federal 
Contract Compliance Program [OFCCP]. For those unfamiliar with the 
OFCCP, this is the branch of the Department of Labor that engages in 
race and gender nose-counting for private businesses who have contracts 
with the federal government.

[[Page S408]]

  This facsimile was titled ``OFCCP Egregious Discrimination Cases.'' 
Curious as to what constituted egregious in the eyes of the Labor 
Department bureaucrats, I reviewed this document--and one particular 
case caught my eye.
  During June 1993, OFCCP investigators conducted a so-called 
compliance review of the San Diego Marriott and Marina. In the course 
of their walk-through, the OFCCP officers believed they did not see 
enough African-American women in visible jobs to satisfy their notion 
of an acceptable workplace.
  This unscientific observation prompted a massive investigation of the 
San Diego Marriott's hiring practices. After a year-long inquiry--paid 
for by the American taxpayer, I might add--the OFCCP uncovered only 
this unremarkable revelation: that of the hotel's 1,579 employees, 950 
were minorities and/or women, including 101 African-Americans.
  Instead of being satisfied that over 60 percent of the workforce were 
minorities or women, the OFCCP found this an egregious case of race 
discrimination--because not enough black women were employed to suit 
their idea of diversity. In the view of the OFCCP, a 60 percent 
minority workforce is insufficient unless the ``right'' kind of 
minorities are represented. Mr. President, if that is not a quota, I 
don't know what is.
  In any event, rather than trying to fight the Department of Labor, 
the San Diego Marriott settled to the tune of $627,000. And Mr. 
President, the Marriott Corporation could at least afford such an 
extravagant settlement. Thousands of small businesses across the 
country would be bankrupt by such a fine--and all it would take is one 
Federal bureaucrat failing to see what he or she considers the right 
kind of faces in the workplace.
  Well, this bill is designed to put an end to all this nonsense 
bandied about by the Federal Government's power-hungry quota 
establishment.
  Mr. President, as I have said at outset, this legislation should be 
familiar to students of history. This legislation will bring our civil 
rights laws full circle, putting America back on the course that 
Everett Dirksen and Hubert Humphrey envisioned when they sponsored the 
Civil Rights Act of 1964.
  Speaking of Hubert Humphrey, Mr. President--he was a man admired by 
all of us who served with him. Senator Humphrey was one of the 
principal authors of the Civil Rights Act of 1964. He hated the idea of 
quotas and preferential treatment based on race. Senator Humphrey stood 
right here on the floor of this chamber and said in the strongest terms 
possible that the Act could not possibly be interpreted to permit 
quotas:

       ``if there is any language [in the Civil Rights Act of 
     1964] which provides that any employer will have to hire on 
     the basis of percentages or quotas related to color, race, or 
     religion or national origin, I will start eating the pages 
     one after another because it is not there.''

  Those words have become so familiar to us during the course of our 
debates regarding this issue, that they perhaps need a little added 
emphasis. The authors of the Civil Rights Act explicitly stated that 
the bill was not to be interpreted to require any quotas or percentage-
based hiring.
  Well, Mr. President, tell that to the Daniel Lamp Company. Tell that 
to the San Diego Marriot. Tell that to all the policemen, firemen, or 
small businessmen across this country who have found that, in the 
United States of America, merit and achievement is sometimes not good 
enough.
  Mr. President, after 30 years, it is obvious that the social 
experiment known as affirmative action has outlived its usefulness. It 
is time for the Congress to return the civil rights laws to their 
original intent of preventing discrimination, and restore the 
principles upon which our country was built--personal responsibility, 
self-reliance, and hard work. The Civil Rights Restoration Act aims to 
do just that.
  Mr. President, I ask unanimous consent that a March 20, 1995 article 
by Paul Craig Roberts and Lawrence M. Stratton, Jr. in National Review 
be printed in the Record.
  There being no objection, the article was ordered to be printed in 
the Record, as follows:

               [From the National Review, March 20, 1995]

                     How We Got Quotas--Color Code

         (By Paul Craig Roberts and Lawrence M. Stratton, Jr.)

       Bureaucrats and judges have turned the 1964 Civil Rights 
     Act on its head, creating a system of preferences based on 
     race and sex. Can we restore equality before the law?
       Forty years after Brown v. Board of Education, the civil-
     rights movement has strayed far from the color-blind 
     principles of Martin Luther King Jr., Public outrage over 
     preferential treatment for ``protected minorities'' has taken 
     the place of guilt over segregation. Americans who supported 
     desegration and equal rights are astonished to find 
     themselves governed by quotas, which were prohibited by the 
     Civil Rights Act of 1964.
       In California momentum is building for a 1996 initiative, 
     modeled on the 1964 Civil Rights Act, that would amend the 
     state's constitution to prohibit the use of quotas by state 
     institutions. Polls indicate that the initiative's objective 
     of ending affirmative action is enormously popular, even in 
     traditionally liberal bastions such as Berkeley and San 
     Francisco. Citizens in other states are organizing to place 
     similar measures on the ballot. The prospects for such 
     measures are bright: surveys find that some 80 per cent of 
     Americans oppose affirmative action in employment and 
     education.
       The hostility to race and gender preferments reflects a 
     general sense that reverse discrimination violates 
     fundamental norms of justice and fair play. Thomas Wood, a 
     co-drafter of the California initiative and executive 
     director of the California Association of Scholars, says he 
     has been denied a teaching job because he is a white male: 
     ``I was told by a member of a search committee at a 
     university, `You'd walk into this job if you were the right 
     gender.' '' Glynn Custred, a California State University 
     anthropology professor, says he decided to join Wood in 
     drafting the initiative because he was concerned about the 
     destructive impact racial quotas were having on higher 
     education, where ``diversity'' overshadows academic merit.
       The California initiative has drawn support from across the 
     political spectrum. Charles Geshekter, a teacher of African 
     history at Chico State University and a supporter of the 
     initiative, wrote in the August 14 Chico Enterprise Record: 
     ``As a liberal Democrat, I despise those who advocate 
     preferential treatment based on genitalia or skin color. 
     Having taught university classes on the history of European 
     racism toward Africa for 25 years, I am appalled to watch 
     sexist and racist demands for equality of outcomes erode the 
     principle of affirmative equality of opportunity.'' 
     University of California Regent Ward Connerly, a black 
     businessman who supports the initiative, lamented in the 
     August 10 Sacramento Bee that ``we have institutionalized 
     this preferential treatment.''


                    The Pervasiveness of Preferences

       Opposition to quotas was initially unfocused, because their 
     impact was not widely felt. The public was aware of a few 
     celebrated cases, but they seemed to be the exception rather 
     than the rule. This is no longer the case. Preferential 
     treatment based on race and sex pervades private and public 
     employment, university admissions and hiring, and the 
     allocation of government contracts, broadcast licenses, and 
     research grants. Consider a few examples:
       A 1989 survey by Fortune magazine found that only 14 per 
     cent of Fortune 500 companies hired employees based on talent 
     and merit alone; 18 per cent admitted that they had racial 
     quotas, while 54 per cent used the euphemism ``goals.''
       --A Defense Department memo cited on the November 18 
     broadcast of ABC's 20/20 declares, ``In the future, special 
     permission will be required for the promotion of all white 
     men without disabilities.''
       --The Federal Aviation Administration officially recognizes 
     the Council of African American Employees, the National Asian 
     Pacific American Association, the Gay, Lesbian, or Bisexual 
     Employees group, and the Native American/Alaska Native 
     Coalition, granting them access to bulletin boards, 
     photocopiers, electronic mail, voice mail, and rooms in 
     government buildings for meetings on government time. By 
     contrast, the Coalition of Federal White Aviation Employees 
     has been seeking recognition from the FAA since 1992 without 
     success; FAA employees are even forbidden to read the group's 
     literature.
       --In the 1994 case Hapwood v. State of Texas, U.S. District 
     Court Judge Sam Sparks found that the constitutional rights 
     of four white law-school applicants had been violated by 
     quota policies at the University of Texas. However, he 
     awarded them each only $1 in damages and refused to order 
     them admitted ahead of protected minorities with 
     substantially lower scores.
       A case that came before the U.S. Supreme Court in January 
     shows even more clearly how preferential policies have warped 
     basic concepts of fairness. Randy Pech, owner of Adarand 
     Constructors, lost in the bidding for a guard-rail 
     construction project in Colorado's San Juan National Forest 
     because of his skin color. Pech put in the lowest bid. 
     However, the prime contractor was eligible for a bounty of 
     $10,000 in taxpayers' money from the U.S. Department of 
     Transportation for hiring minority-owned subcontractors, and 
     the bounty was greater than the difference in the bids 
     submitted by Pech and his competitor, a Hispanic-owned firm.

[[Page S409]]

       Pech filed a discrimination lawsuit. When it reached the 
     Supreme Court, U.S. Solicitor General Drew S. Days III argued 
     that Pech had no standing to sue, even though the U.S. 
     Government had paid the prime contractor $10,000 to 
     discriminate against him. Whatever the technical merits of 
     the solicitor general's argument, it reveals the system of 
     racial preferments that today passes for civil rights. 
     ``Protected minorities'' have standing to sue without any 
     requirement of showing that they themselves have ever 
     suffered from an act of discrimination. Today's college-aged 
     protected minorities have never suffered from legal 
     discrimination, yet U.S. policy assumes they are victims and 
     provides remedies in the form of preferments. In contrast, 
     victims of reverse discrimination have no remedy and no legal 
     standing.
       The political repercussions of this double standard are by 
     no means restricted to California. In November's 
     congressional elections, white males deserted the Democratic 
     Party in droves, voting Republican by a margin of 63 per cent 
     to 37 per cent. The Wall Street Journal has identified 
     ``angry white males'' as an important new political group.
       But more is at stake than the plight of white males and the 
     relative fortunes of political parties. At issue is equality 
     before the law and the democratic process itself. As freedom 
     of conscience, goodwill, and persuasion are supplanted by 
     regulatory and judicial coercion, privilege reappears in open 
     defiance of Justice John Marshall Harlan's dictum: ``There is 
     no caste here. Our Constitution is color-blind.''
       Color-blindness was the guiding principle of the 1964 Civil 
     Rights Act. The basic act was full of language prohibiting 
     quotas, and various amendments to it defined discrimination 
     as an intentional act, insulated professionally developed 
     employment tests from attack for disproportionately screening 
     out racial minorities, and restricted the Equal Employment 
     Opportunity Commission (EEOC) from issuing any substantive 
     interpretive regulations. Senator Hubert H. Humphrey (D., 
     Minn.), the chief sponsor of the act, confidently declared 
     that if anyone could find ``any language which provides that 
     an employer will have to hire on the basis of percentage or 
     quota related to color, race, religion, or national origin, I 
     will start eating the pages one after another, because it is 
     not in there.'' In less than a decade, federal bureaucrats 
     and judges had cast aside Congress's rejection of 
     preferential treatment for minorities and stuffed the pages 
     of the 1964 Civil Rights Act down Hubert Humphrey's throat.


                      two models of discrimination

       The Civil Rights Act of 1964 undertook to put millions of 
     employer decisions through a government filter. Such a 
     massive intrusion into private life had not previously 
     occurred in a free society. Congress assumed that the EEOC, 
     the agency created by the act to run the filter, would be 
     like the state Fair Employment Practice (FEP) commissions 
     that had been created in some Northern states after World War 
     II.
       Civil-rights activists regarded these commissions, many of 
     which had more power than the EEOC, as ineffective. As 
     University of Chicago economist Gary Becker observed, 
     however, there was an explanation for the paucity of 
     enforcement actions by the FEP commissions: discrimination 
     doesn't pay. In his 1957 book, The Economics of 
     Discrimination, Becker showed that racial discrimination is 
     costly to those who practice it and therefore sets in motion 
     forces that inexorably reduce it. Meritorious employees who 
     are underpaid and underutilized because of their race will 
     move to firms where they get paid according to their 
     contributions. An employer who hires a less qualified 
     white because of prejudice against blacks will 
     disadvantage himself in competition against those who hire 
     the best employees they can find.
       Indeed, scholars who studied the cases handled by FEP 
     commissions found that the complainant's problem was usually 
     his job qualifications, not his race. Sociologist Leon 
     Mayhew, who studied employment-discrimination complaints 
     filed with the Massachusetts FEP commission from 1946 to 
     1962, found that most complaints were based on ``mere 
     suspicion'' and usually resulted in a finding that the 
     employer had not discriminated. He pointed out that most 
     complainants were poor and lacked job skills. Thus, ordinary, 
     profit-oriented business decisions ``regularly produced 
     experiences that could be interpreted as discrimination.'' 
     This phenomenon ``permits Negroes to blame discrimination for 
     their troubles. Hence, some complaints represent a projection 
     of one's own deficiencies onto the outside world.''
       This argument did not appeal to those who wanted to achieve 
     racial integration through government policy. Activists such 
     as Rutgers law professor Alfred W. Blumrosen, who as the 
     EEOC's first compliance chief became the de facto head of the 
     commission in its formative years, rejected the complaint-
     based, ``retail'' model of FEP enforcement and envisioned a 
     ``wholesale'' model attacking the entrenched legacy of 
     discrimination. In 1965 Blumrosen wrote in the Rutgers Law 
     Review that FEP commissions focused too much on individual 
     acts of discrimination and ``did not remedy the broader 
     social problems'' by reducing the disparity between black and 
     white unemployment. Seeking to redefine discrimination in 
     terms of statistical disparity, he dismissed other 
     explanations of economic differences between blacks and 
     whites, such as education and illegitimacy, as harmful 
     ``attempt[s] to shift focus.'' Blumrosen disdained the Civil 
     Rights Act's definition of discrimination as an intentional 
     act, preferring a definition that Congress had rejected. In 
     his 1971 book, Black Employment and the Law, he wrote:``
       ``If discrimination is narrowly defined, for example, by 
     requiring an evil intent to injure minorities, then it will 
     be difficult to find that it exists. If it does not exist, 
     then the plight of racial and ethnic minorities must be 
     attributable to some more generalized failures in society, in 
     the fields of basic education, housing, family relations, and 
     the like. The search for efforts to improve the condition of 
     minorities must then focus in these general and difficult 
     areas, and the answers can come only gradually as basic 
     institutions, attitudes, customs, and practices are changed. 
     We thus would have before us generations of time before the 
     effects of subjugation of minorities are dissipated.
       ``But if discrimination is broadly defined, as, for 
     example, by including all conduct which adversely affects 
     minority group employment opportunities . . . then the 
     prospects for rapid improvement in minority employment 
     opportunities are greatly increased. Industrial relations 
     systems are flexible; they are in control of defined 
     individuals and institutions; they can be altered either by 
     negotiation or by law. If discrimination exists within these 
     institutions, the solution lies within our immediate grasp. 
     It is not embedded in the complications of fundamental 
     sociology but can be sharply influenced by intelligent, 
     effective, and aggressive legal action.
       ``This is the optimistic view of the racial problem in our 
     nation. This view finds discrimination at every turn where 
     minorities are adversely affected by institutional decisions, 
     which are subject to legal regulation. In this view, we are 
     in control of our own history. The destruction of our society 
     over the race question is not inevitable.''


                           blumrosen's agenda

       Blumrosen figured that a redefinition of discrimination to 
     include anything that yielded statistical disparities between 
     blacks and whites would force employers to give preferential 
     treatment to blacks in pursuit of proportional 
     representation, so as to avoid liability in class-action 
     suits. He set out to ``liberally construe'' Title VII of the 
     Civil Rights Act, which prohibited discrimination in 
     employment, in order to advance ``the needs of the minorities 
     for whom the statute had been adopted.'' By promoting quotas, 
     he could ``maximize the effect of the statute on employment 
     discrimination without going back to the Congress for more 
     substantive legislation.''
       Blumrosen's EEOC colleagues kidded him that he was working 
     on a textbook entitled Blumrosen on Loopholes. He took pride 
     in his reputation for ``free and easy ways with statutory 
     construction.'' He later praised the agency for being like 
     ``the proverbial bumble bee'' that flies ``in defiance of the 
     laws governing its operation.'' Blumrosen's strategy was 
     based on his bet that ``most of the problems confronting the 
     EEOC could be solved by creative interpretation of Title VII 
     which would be upheld by the courts, partly out of deference 
     to the administrators.'' History has proved Blumrosen right.
       As inside-the-Beltway lore expresses it, ``Personnel is 
     policy.'' Blumrosen had a free hand because Franklin Delano 
     Roosevelt Jr., the EEOC's first chairman, spent most of his 
     time yachting. Staffers jokingly changed the lyrics of the 
     song ``Anchors Aweigh'' and sang ``Franklin's Away'' during 
     his frequent absences. Roosevelt resigned before a year was 
     out, and his successors stayed little longer. The EEOC had 
     four chairmen in its first five years, which enhanced 
     Blumrosen's power.
       The White House Conference on Equal Employment Opportunity 
     in August 1965 indicated what was to come. Speaker after 
     speaker described ``deeply rooted patterns of 
     discrimination'' and ``under-representation'' of minorities 
     that the EEOC should counter in order to promote ``equal 
     employment opportunity.'' The conference report stressed on 
     its first page that the ``conferees were eager to move beyond 
     the letter of the law to a sympathetic discussion of those 
     affirmative actions required to make the legal requirement of 
     equal opportunity an operating reality.'' Another telling 
     line said that ``it is not enough to obey the technical 
     letter of the law; we must go a step beyond in order to 
     assure equal employment opportunity.'' One panel concluded 
     that ``it is possible that the letter of the law can be 
     obeyed to the fullest extent without eliminating 
     discrimination in hiring and promotion. For the legislative 
     intent of Title VII to be met, the law will have to be obeyed 
     in spirit as well as in letter.''
       The report noted that many panelists shared Blumrosen's 
     suspicion that if the EEOC limited its activities to 
     responding to complaints of discrimination, the agency would 
     never ``reach the extent of discriminatory patterns.'' 
     Blumrosen inserted a paragraph into the report suggesting 
     that the agency should initiate proceedings against employers 
     even in the absence of complaints of discrimination. 
     Underutilizers of minority workers could be identified by 
     using ``employer reports of the racial composition of the 
     work force as a sociological `radar net' to determine the 
     existence of patterns of discrimination.''
       Blumrosen succeeded in setting up a national reporting 
     system of racial employment statistics despite the Civil 
     Rights Act's

[[Page S410]]

     specific prohibition of such data collection. An amendment 
     introduced by Senator Everett Dirksen (R., Ill.), said 
     employers did not have to report statistics to the EEOC if 
     they were already reporting them to local or state FEP 
     commissions. Blumrosen later admitted that the requirement he 
     imposed on employers to report the racial composition of 
     their work forces was based on ``a reading of the statute 
     contrary to the plain meaning.'' But what was a mere statute?
       Columbia University law professor Michael Sovern predicted 
     that the EEOC would be called on the carpet for exceeding its 
     authority. In a study for the Twentieth Century Fund, Legal 
     Restraints on Racial Discrimination, he wrote that Title VII 
     ``cannot possibly be stretched to permit the Commission to 
     insist on the filing of reports'' and predicted that 
     Blumrosen would ``encounter resistance.'' But no resistance 
     materialized. As Hugh Davis Graham observed in The Civil 
     Rights Era, ``In 1965 Congress was distracted by debates over 
     voting rights and Vietnam and Watts and inflation and scores 
     of other issues more pressing than agency records.''
       After Blumrosen got his way in forcing employers to submit 
     reports, the agency developed the confidence to dispense with 
     other statutory restrictions on its mission. The EEOC saw the 
     reporting requirement as a ``calling card'' that ``gives 
     credibility to an otherwise weak statute.'' Blumrosen knew 
     that ``with the aid of a computer,'' the EEOC could now get 
     ``lists of employers who, prima facie, may be underutilizing 
     minority-group persons'' and eventually force them to engage 
     in preferential hiring of blacks.
       In mid 1965 Blumrosen sent EEOC investigators to Newport 
     News, Virginia, to solicit discrimination complaints against 
     the Newport News Shipbuilding & Dry Dock Company, one of the 
     world's largest shipyards, employing 22,000 workers. Knocking 
     on doors in black neighborhoods, the investigators found 41 
     complainants, later narrowed down to 4. Blumrosen then 
     successfully pressured the company, which received 75 per 
     cent of its business from Navy contracts, to promote 3,890 of 
     its 5,000 black workers, designate 100 blacks as supervisors, 
     and adopt a quota system in which the ratio of black to white 
     apprentices in a given year would match the region's ratio of 
     blacks to whites. One shipyard worker told Barron's that the 
     EEOC had done its worst to ``set black against white, labor 
     against management, and disconcert everybody.''
       Armed with the national reporting system's racial data and 
     the victory at Newport News, Blumrosen and his colleagues 
     decided to build a body of case law under Title VII to impose 
     minority-preference schemes on employers across the country. 
     The barrier to this strategy was Title VII itself. An 
     internal EEOC legal memorandum concluded: ``Under the literal 
     language of Title VII, the only actions required by a covered 
     employer are to past notices, and not to discriminate 
     subsequent to July 2, 1965. By the explicit terms of Section 
     703(j), an employer is not required to redress an imbalance 
     in his work force which is the result of past 
     discrimination.'' Fearing a storm over quotas like the one 
     that had occurred during the congressional debates on the 
     Civil Rights Act, the EEOC ruled out trying to amend the Act 
     itself. The memorandum instead urged the agency to rewrite 
     the statute on its own and influence the courts to embrace 
     the EEOC's ``affirmative theory of nondiscrimination,'' under 
     which compliance with Title VII requires that ``Negroes are 
     recruited, hired, transferred, and promoted in line with 
     their ability and numbers.''


                    The Assault on Employment Tests

       To implement the ``affirmative theory of non-
     discrimination,'' the EEOC decided to assault employment 
     tests that failed blacks at a higher rate than whites. 
     Commissioner Samuel Jackson told members of the NAACP that 
     the EEOC had decided to interpret Title VII as banning not 
     only racial discrimination per se but also employment 
     practices ``which prove to have a demonstrable racial 
     effect.'' EEOC lawyers formed an alliance with civil-rights 
     attorneys at the NAACP and began a litigation drive to 
     redefine discrimination in terms of statistical effects.
       Summer riots and Vietnam protests helped activists target 
     employment tests. The Kerner Commission's report on civil 
     disorders described employment tests as ``artificial barriers 
     to employment and promotion.'' The Kerner Commission blamed 
     these ``artificial barriers'' and the ``explosive mixture 
     which has been accumulating in our cities'' on racism and 
     concluded, ``Our nation is moving toward two societies, one 
     black, one white--separate and unequal.''
       The EEOC's chief psychologist, William H. Enneis, attacked 
     ``irrelevant and unreasonable standards for job applicants 
     and upgrading of employees, [which] pose serious threats to 
     our social and economic system. The results will be denial of 
     employment to qualified and trainable minorities and women.'' 
     Enneis said the EEOC would not ``stand idle in the face of 
     this challenge. The cult of credentialism is one of our 
     targets,'' to be fought ``in whatever form is occurs.''
       The EEOC issued guidelines in 1966 and 1970 designed to 
     abrogate the pro-testing amendment to the Civil Rights Act 
     introduced by Senator John Tower (R., Tex.) by defining the 
     phrase ``professionally developed ability tests'' as tests 
     that either passed blacks and whites at an equal rate or met 
     complex ``validation'' requirements for ``fairness'' and 
     ``utility.'' Under the validation requirements that Enneis 
     designed, employers had to prove that the tests measured 
     skills they needed. The objective was to make tests so 
     difficult to defend in court that employers would simply 
     abandon them and hire by racial quota. Enneis testified 
     before Congress in 1974 that he knew of only three or four 
     test-validation studies that satisfied his guidelines. As a 
     1971 Harvard Law Review survey of developments in employment 
     law deduced, the EEOC guidelines ``appear designed to scare 
     employers away from any objective standards which have a 
     differential impact on minority groups, because, applied 
     strictly, the testing requirements are impossible for many 
     employers to follow.'' As a result, the guidelines 
     ``encourage many employers to use a quota system of hiring.'' 
     An EEOC staffer told the Harvard Law Review that ``the anti-
     preferential-hiring provisions [of Title VII] are a big zero, 
     a nothing, a nullity. They don't mean anything at all to 
     us.''
       The EEOC's attack on tests gutted not only Senator Tower's 
     amendment but also the statutory definition of discrimination 
     as an intentional act. The commission was well aware that it 
     was treading on legal thin ice. A history of the EEOC during 
     the Johnson Administration, prepared by the EEOC for the 
     Johnson Library under the direction of Vice Chairman Luther 
     Holcomb, detailed the EEOC's strategy of redefining 
     discrimination and suggested that it was on a collision 
     course with the text and legislative intent of Title VII. The 
     history said the EEOC had rejected the ``traditional 
     meaning'' of discrimination as ``one of intent in the state 
     of mind of the actor'' in favor of a ``constructive proof of 
     discrimination'' that would ``disregard intent as crucial to 
     the finding of an unlawful employment practice'' and forbid 
     employment criteria that have a ``demonstrable racial effect 
     without clear and convincing business motive.''
       Noting that this redefinition would conflict with Senator 
     Dirksen's insertion of the word ``intentional'' into the 
     statute, the history said ``courts cannot assume as a matter 
     of statutory construction that Congress meant to accomplish 
     an empty act by the amendment'' defining discrimination as 
     intentional. The history predicted that ``the Commission and 
     the courts will be in disagreement as to the basis on which 
     they find an unlawful employment practice'' and conclude that 
     ``eventually this will call for the reconsideration of the 
     amendment by Congress or the reconsideration of its 
     interpretation by the Commission.''
       As things turned out neither the EEOC nor Congress had to 
     reconsider the meaning of discrimination, because the courts 
     also ignored the law. In the 1971 case Griggs v. Duke Power, 
     the Supreme Court accepted the EEOC's rewrite of the Civil 
     Rights Act. The opinion was written by Chief Justice Warren 
     Burger, President Richard Nixon's first appointee to the 
     Supreme Court. Coveting the fame of his predecessor, Earl 
     Warren, Chief Justice Burger told his clerks that he wanted 
     to ``confuse his detractors in the press'' by writing some 
     ``liberal opinions.''


                         blumrosen wins his bet

       When Burger declared that ``the administrative 
     interpretation of the Act by the enforcing agency is entitled 
     to great deference,'' Professor Blumrosen won his bet that 
     the EEOC's ``creative interpretation of Title VII would be 
     upheld by the courts, partly out of deference to the 
     administrators.'' Burger got the acclaim he coveted. 
     Blumrosen cheered the Chief Justice's opinion as a 
     ``sensitive, liberal interpretation of Title VII'' that ``has 
     the imprimatur of permanence.''
       In Griggs the Court ignored clear statutory language and 
     unambiguous legislative history. In fact, Griggs paralleled a 
     1964 Illinois case, Myart v. Motorola, that had troubled many 
     of the legislators who approved the Civil Rights Act. Myart 
     struck down Motorola Corporation's use of an employment test 
     that blacks failed at a higher rate than whites. The EEOC's 
     history for the Johnson Library noted that ``many members of 
     Congress were concerned about this issue because the court 
     order against Motorola was handed down during the debates. 
     The record establishes that the use of professionally 
     developed ability tests would not be considered 
     discriminatory.'' Nevertheless, the Supreme Court ruled that 
     Duke Power Company was discriminating against blacks by 
     requiring employees seeking promotions to have a high-school 
     diploma or a passing grade on intelligence and mechanical-
     comprehension tests.
       The Supreme Court agreed with the lower courts that Duke 
     Power had not adopted the requirement with any intention to 
     discriminate against blacks. Burger admitted that the 
     company's policy of financing two-thirds of the cost of adult 
     high-school education for its employees suggested good 
     intent. But the lack of a racist motive did not make any 
     difference to the Chief Justice. He decreed that the 
     ``absence of discriminatory intent does not redeem employment 
     procedures or testing mechanisms that operate as `built-in 
     headwinds' for minority groups.'' Burger was mistaken when he 
     wrote, ``Congress directed the thrust of the Act to the 
     consequences of employment practices, not simply the 
     motivation.'' It was precisely this misinterpretation of the 
     statute that the Dirksen Amendment was crafted to prevent.
       Burger viewed the promotion requirements as ``built-in-
     headwinds'' against blacks because blacks were less likely 
     than whites to have completed high school or to do well on 
     aptitude tests. He cited 1960 census statistics showing that 
     34 percent of white males in North Carolina had completed 
     high school,

[[Page S411]]

     compared to 12 percent of black males, and EEOC findings that 
     58 percent of whites passed the tests used by Duke Power, 
     compared to 6 percent of blacks. Blaming these disparities on 
     segregation, Burger said that ``under the Act, practices, 
     procedures, or tests neutral on their face, and even neutral 
     in terms of intent, cannot be maintained if they operate to 
     `freeze' the status quo of prior discriminatory employment 
     practices.'' Burger destroyed job testing when he declared, 
     ``The Act proscribes not only overt discrimination but also 
     practices that are fair in form, but discriminatory in 
     operation.''
       Burger's casuistry was to be given a name. In the 1976 book 
     Employment Discrimination Law, EEOC District Counsel Barbara 
     Lindemann Schlei and co-author Paul Grossman called the new 
     emphasis on consequences ``disparate impact'' analysis. One 
     year later, the Supreme Court used the phrase for the first 
     time in the case International Brotherhood of Teamsters v. 
     United States, which dealt with burdens of proof in Title VII 
     cases attacking union seniority systems. ``Proof of 
     discriminatory motive,'' the Court said, ``is not required 
     under a disparate-impact theory.'' Henceforth, any 
     requirement that had a disparate impact on the races, 
     regardless of intent or the reasonableness of the 
     requirement, constituted discrimination. In employment and 
     promotions, unequals had to be treated as equals. The same 
     was soon to follow in university admissions testing. Race-
     based privileges had found their way into law.
       In Griggs Chief Justice Burger said employers could escape 
     prima facie Title VII liability only if test requirements are 
     ``demonstrably a reasonable measure of job performance.'' 
     Pulling a phrase out of thin air, Burger said ``the 
     touchstone is business necessity. If an employment practice 
     which operates to exclude Negroes cannot be shown to be 
     related to job performance, the practice is prohibited.'' 
     Burger invented a statutory hook for his ruling by asserting, 
     falsely, that ``Congress has placed on the employer the 
     burden of showing that any given requirement must have a 
     manifest relationship to the employment in question.'' It was 
     precisely this heavyhanded intrusion into job requirements 
     that the Tower Amendment was designed to prevent.
       Burger's deference to the EEOC meant that the agency would 
     become the national arbiter of job tests. Following Griggs, 
     the agency immediately issued manuals warning employers that 
     unless they ``voluntarily'' increased their minority 
     statistics, they risked costly liability. Ultimately, it 
     became prohibitively expensive to use job tests unless they 
     were race-normed so that blacks could qualify with lower 
     scores.


                     the impact of disparate impact

       In a subsequent case interpreting Griggs, Justice Harry 
     Blackmun expressed his concern that the EEOC's guidelines 
     would lead to hiring based on race rather than merit. He 
     warned that ``a too-rigid application of the EEOC guidelines 
     will leave the employer little choice, save an impossibly 
     expensive and complex validation study, but to engage in a 
     subjective quota system of employment selection. This, of 
     course, is far from the intent of Title VII.''
       By then it was too late. Griggs had killed four birds with 
     one stone: Senator Tower's amendment on tests, Senator 
     Dirksen's amendment on intent, Senator Humphrey's guarantee 
     that the Civil Rights Act could not be used to induce quotas, 
     and the amendment introduced by Representative Emanuel Celler 
     (D., N.Y.) prohibiting the EEOC from issuing substantive 
     regulatory interpretations of Title VII. The EEOC wanted 
     quotas, and thanks to Griggs it would get them. ``At the EEOC 
     we believe in numbers,'' Chairman Clifford Alexander declared 
     in 1968. In pursuit of its goal, the agency assumed powers it 
     did not have. In 1972 Blumrosen boasted in the Michigan Law 
     Review that the EEOC's power to issue guidelines ``does not 
     flow from any congressional grant of authority.''
       When Burger created what would come to be known as 
     disparate-impact analysis he did not realize its quota 
     implications. He thought he was just attacking 
     ``credentialism.'' As the holder of a law degree from an 
     obscure night school in St. Paul, Minnesota, Burger may have 
     been thinking of himself when he wrote that ``history is 
     filled with examples of men and women who rendered highly 
     effective performance without the conventional badges of 
     accomplishment in terms of certificates, diplomas, or 
     degrees.'' Surrounded by Court colleagues and clerks with 
     prestigious Ivy League degrees, Burger might have tasted 
     credential discrimination. He thought that the Court could 
     take away the ``headwind'' of credentialism that blew against 
     blacks without creating a privileged position for minorities.
       Yet before Griggs, any employer who was so inclined could 
     take the measure of prospective employees and make bets on 
     people with obscure backgrounds who may not have had the 
     best chances in life. After Griggs, no employer could risk 
     hiring a white male from William Mitchell Law School in 
     St. Paul over a black from Harvard. Griggs made race a 
     critical factor in employment decisions. High-school 
     diplomas, arrest records, wage garnishments, dishonorable 
     military discharges, and grade-point averages all became 
     forbidden considerations in hiring decisions, because they 
     are criteria that could have a disparate impact on blacks. 
     Farmers have even been sued for asking prospective farm 
     hands whether they could use a hoe, on the grounds that 
     blacks have a greater propensity to back problems. 
     Perfectly sensible height and weight requirements for 
     prison guards and police officers have also been struck 
     down for having a disparate impact on women.
       The EEOC strategy that led to Griggs was not created in a 
     vacuum. Civil-rights activists needed a new cause, and 
     preferences that would enable blacks to attain equality of 
     result became the new goal. In January 1965, Playboy asked 
     Martin Luther King Jr., ``Do you feel it's fair to request a 
     multibillion-dollar program of preferential treatment for the 
     Negro, or for any other minority group?'' King replied, ``I 
     do indeed.'' In 1969, the U.S. Court of Appeals for the Fifth 
     Circuit, the same court that had initiated school busing in 
     the name of ``racial balance,'' cast aside the prohibition of 
     quotas in Section 703(j) of the Civil Rights Act by upholding 
     a court order that every other person admitted to a Louisiana 
     labor union must be black. Responding to the argument that 
     this order clearly violated Section 703(j), the three judge 
     panel simply wrote, ``We disagree.''
       President Johnson was the most prominent proponent of the 
     shift away from the color-blind ideal. At his commencement 
     speech at Howard University on June 4, 1965, Johnson said the 
     disappearance of legal segregation was not enough:
       ``You do not take a person who, for years, has been hobbled 
     by chains and liberate him, bring him up to the starting line 
     of a race, and then say, ``You are free to compete with all 
     the others,'' and still justly believe that you have been 
     completely fair.
       ``Thus it is not enough just to open the gates of 
     opportunity. All our citizens must have the ability to work 
     through those gates.
       ``This is the next and the more profound state of the 
     battle for civil rights. We seek not just freedom but 
     opportunity. We seek not just legal equity but human ability, 
     not just equality as a right and a theory but equality as a 
     fact and equality as a result.''
       To back up his speech with action, Johnson issued Executive 
     Order 11246, which put the phrase ``affirmative action'' into 
     common parlance. The order required all Federal Government 
     contractors and subcontractors to ``take affirmative action 
     to ensure that applicants are employed, and that employees 
     are treated during employment, without regard to their race, 
     creed, color, or national origin.''
       Johnson's equality-of-results rhetoric and his metaphor of 
     helping a hobbled runner have provided the main emotional 
     justification for ``affirmative action,'' but the quotas that 
     now web federal contractors under Executive Order 11246 were 
     not implemented by his Administration. Facing strong 
     opposition from the Department of Defense, labor unions, 
     members of Congress, and Comptroller General Elmer Staats, 
     Johnson's labor secretary, Willard Wirtz, dropped his plans 
     to impose quotas on federal construction projects in 
     Philadelphia.
       That task fell to George P. Shultz, Richard Nixon's labor 
     secretary. Just as Burger considered Griggs a blow against 
     credentialism, Shultz, a labor economist from the University 
     of Chicago, saw the Philadelphia Plan as a way of making an 
     end run around the Davis-Bacon Act, which inflated the cost 
     of federal construction contracts by setting wages at 
     ``prevailing union levels.'' Davis-Bacon meant non-union 
     contractors and laborers (many of whom were black) could not 
     get government contract work. Sensitive to charges that he 
     was hostile to civil rights, Nixon wrote in his memoirs that 
     he accepted Shultz's proposal to revive the Philadelphia Plan 
     in order to demonstrate to blacks ``that we do care.''
       On June 27, 1969, Assistant Secretary of Labor Arthur A. 
     Fletcher, a black former businessman who had been a 
     professional football player, announced the Philadelphia Plan 
     in the City of Brotherly Love. He said that while ``visible, 
     measurable goals to correct obvious imbalances are 
     essential,'' the plan did not involve ``rigid quotas.'' The 
     Congressional Quarterly disagreed with Fletcher's scholastic 
     distinction, calling the Philadelphia Plan a ``nonnegotiable 
     quota system.''
       Under the plan, the Labor Department's Office of Federal 
     Contract Compliance (OFCC) would assess conditions in the 
     five-county Philadelphia area and set a target percentage of 
     minorities to be employed in several construction trades, 
     with the aim of attaining a racially proportionate work 
     force. Potential federal contractors would have to submit 
     complex plans detailing goals and timetables for hiring 
     blacks within each trade to satisfy the OFCC's 
     ``utilization'' targets. Arthur Fletcher said the 
     Philadelphia Plan ``put economic flesh and bones on Dr. 
     King's dream.''
       In 1971 the U.S. Court of Appeals for the Third Circuit 
     accepted the Nixon Administration's argument that ``goals and 
     timetables'' were not quotas and that, even if they were, the 
     Civil Rights Act's ban on quotas applied to Title VII 
     remedies, not to executive orders. The Supreme Court avoided 
     the controversial quota issue by refusing to review the case. 
     Although the appeals court's ruling had no force outside the 
     Third Circuit, the Nixon Administration interpreted the 
     Supreme Court's lack of interest as a green light. As 
     Laurence H. Silberman, who was undersecretary of labor at the 
     time, later wrote, the Nixon Administration went on to spread 
     Philadelphia Plans ``across the country like Johnny 
     Appleseed.'' The Labor Department quickly issued Order #4, 
     which required all federal contractors to meet

[[Page S412]]

     ``goals and timetables'' to ``correct any identifiable 
     deficiencies'' of minorities in their work forces. The carrot 
     of government contracts and the stick of disparate-impact 
     liability under Griggs quickly established quotas. For many 
     corporate managers, hiring by the numbers was the only 
     protection against discrimination lawsuits and the loss of 
     lucrative government contracts. Contractors hired minorities 
     to guard against the sin of ``underutilization,'' and racial 
     proportionality became a precondition of government largesse. 
     Arthur Fletcher estimated that the new quota regime covered 
     ``from one-third to one-half of all U.S. workers.''
       The Section 703(j) prohibition of quotas in the Civil 
     Rights Act remained in the law but meant nothing. Reverse 
     discrimination was in. When the liberal William O. Douglas, 
     the only remaining member of the Brown Court, tried to get 
     his Supreme Court colleagues to review the case of a white 
     who was refused admission to the Arizona bar to make room for 
     blacks with lower bar-exam scores, he argued that ``racial 
     discrimination against a white was as unconstitutional as 
     racial discrimination against a black.'' Douglas failed to 
     persuade his fellow Justices. He reports in his autobiography 
     that Thurgood Marshall replied: ``You guys have been 
     practicing discrimination for years. Now it is our turn.''


                          THE SPREAD OF QUOTAS

       Although the phrase ``federal contractor'' conjures up 
     images of workers in hard hats busy with construction 
     projects or weapons systems, colleges and universities are 
     also federal contractors, receiving federal funds through 
     research grants and financial aid to students. Following the 
     Labor Department's lead, Nixon's Department of Health, 
     Education, and Welfare soon required similar ``goals and 
     timetables'' for faculty hiring. Before long the practice had 
     spread to student admissions as well.
       In 1974 Douglas tried to get the Court to address quotas in 
     this area. Marco DeFunis challenged the University of 
     Washington Law School's 20 per cent quota for blacks. The 
     school had rejected DeFunis though his GPA and test scores 
     surpassed those of 36 of the 37 admitted blacks. Using his 
     powers as a Circuit Justice, Douglas stayed the Washington 
     Supreme Court's ruling against DeFunis and ordered his 
     admission.
       By the time DeFunis's case came before the Supreme Court, 
     however, he was about to receive his degree. This let the 
     Court avoid the quota issue by declaring the case moot. 
     Douglas dissented on the mootness ruling and addressed the 
     case's merits. He viewed DeFunis just as he had Brown: 
     ``There is no superior person by constitutional standards. A 
     DeFunis who is white is entitled to no advantage by reason of 
     that fact; nor is he subject to any disability, no matter 
     what his race or color. Whatever his race, he had a 
     constitutional right to have his application consideration on 
     its individual merits in a racially neutral manner.''
       But time had passed Douglas by. In Douglas's mind, 
     discrimination was still connected with merit. DeFunis's 
     scores showed that he met a higher objective standard than 
     those admitted in his place. But by this time any standard 
     that had disparate impact was ipso facto discriminatory. In 
     the eyes of Douglas's colleagues, DeFunis was simply a 
     beneficiary of a discriminatory standard. Douglas, who had 
     supported the Griggs decision, obviously did not comprehend 
     its implications.
       The quota issue re-emerged in 1978, when Allan Bakke, a 
     white male refused admission to the University of California 
     Medical School, challenged the school's policy of reserving 
     16 per cent of its slots for minorities. Each of the accepted 
     minorities had academic credentials inferior to Bakke's. In a 
     156-page opinion with 167 footnotes, the Justices reached the 
     schizophrenic conclusion that Bakke should be admitted, but 
     that certain skin colors could nevertheless be considered 
     grounds for college admissions if the goal was to enhance 
     ``educational diversity.''
       A year later the Supreme Court ruled that companies could 
     ``voluntarily'' impose quotas on themselves to avoid 
     liability. Pressured by OFCC affirmative-action requirements 
     and the need to forestall Title VII liability under Griggs, 
     Kaiser Aluminum, like many other companies, had entered into 
     a quota agreement with its union, the United Steelworkers of 
     America, in 1974. The agreement stipulated that ``not less 
     than one minority employee will enter'' apprentice and craft 
     training programs ``for every nonminority employee'' until 
     the percentage of minority craft workers approximated the 
     percentage of minorities in the regions surrounding the 
     percentage of minorities in the regions surrounding each 
     Kaiser plant. Two seniority lists were drawn up, one white 
     and one black, and training openings were filled alternately 
     from the two lists.
       Brian Weber, a 32-year-old white blue-collar worker who had 
     ten years' seniority as an unskilled lab technician at Kaiser 
     Aluminum's plant in Gramercy, Louisiana, applied for a 
     training-program slot but was denied in favor of two blacks 
     with less seniority. After his union denied his grievance, 
     Weber wrote the local EEOC office requesting a copy of the 
     1964 Civil Rights Act. When the Civil Rights Act arrived in 
     the mail, Weber read it through and found that it said 
     ``exactly what I thought. Everyone should be treated the 
     same, regardless of race or sex.'' Encouraged by the 
     statute's words, he filed a class-action suit representing 
     his plant's white workers and won before district and 
     appellate courts.
       During Supreme Court oral arguments in United Steelworkers 
     v. Weber Justice Potter Stewart quipped that the Justices had 
     to determine whether employers may ``discriminate against 
     some white people.'' Justice William Brennan's answer, for a 
     5 to 2 majority, was an emphatic ``yes.'' Brennan said the 
     meaning of the 1964 Civil Rights Act could not be found in 
     its statutory language but resided in its spirit, which 
     Brennan had divined. He asserted that the Act's clear 
     statutory language and the Dirksen, Tower, and Celler 
     amendments conveyed a meaning that was the opposite of what 
     Congress had really intended. A literal reading of Title VII, 
     he said, would ``bring about an end completely at variance 
     with the purpose of the statute.'' In enacting the Civil 
     Rights Act, Brennan continued, ``Congress's primary concern'' 
     was with the plight of the Negro in our economy. Anything 
     that helped minorities was broadly consistent with this 
     purpose. This included racial quotas, as long as they were 
     voluntarily adopted by companies and not required by the 
     Federal Government under Title VII. Brennan denied that 
     Kaiser's plan would lead to quotas: ``The plan is a temporary 
     measure; it is not intended to maintain racial balance, but 
     simply to eliminate a manifest racial imbalance.''


                       burger has second thoughts

       Chief Justice Burger had created disparate-impact analysis 
     in his Griggs opinion without realizing its quota 
     implications. Now that quotas were upon him, he found himself 
     joining in dissent with Justice William Rehnquist. Brennan's 
     Weber opinion, they said, was ``Orwellian.'' In Griggs, the 
     Court had declared that ``discriminatory preference for any 
     group, minority or majority, is precisely and only what 
     Congress has proscribed.'' But eight years had passed, and 
     the Civil Rights Act had been fully reconstructed. Burger and 
     Rehnquist's alarm showed in their dissenting language: ``By a 
     tour de force reminiscent not of jurists such as Hale, 
     Holmes, and Hughes, but of escape artists such as Houdini, 
     the Court eludes clear statutory language, uncontradicted 
     legislative history, and uniform precedent in concluding that 
     employers are, after all, permitted to consider race in 
     making employment decisions.'' The Court ``introduces into 
     Title VII a tolerance for the very evil that the law was 
     intended to eradicate,'' Rehnquist said. Moreover, Brennan's 
     reading of Section 703(j) was ``outlandish'' in the light of 
     Title VII's other ``flat prohibitions'' against racial 
     discrimination and is ``totally belied by the Act's 
     legislative history.'' Rehnquist cited a congressional 
     interpretative memorandum clearly stating that ``Title VII 
     does not permit the ordering of racial quotas in businesses 
     or unions and does not permit interferences with seniority 
     rights of employees or union members.'' But Burger had set 
     the stage for Weber with Griggs, and it was the pot calling 
     the kettle black when he accused Brennan of amending the 
     Civil Rights Act ``to do precisely what both its sponsors and 
     its opponents agreed the statute was not intended to do.''
       Having ruled in Weber that reverse discrimination was 
     ``benign discrimination,'' the Supreme Court upheld other 
     quota schemes in subsequent cases. In the 1980 case Fullilove 
     v. Klutznick, the Court said a federal spending program 
     setting aside 10 per cent of public-works money for minority 
     businesses violated neither the Constitution's guarantee of 
     equal protection of the laws nor the 1964 Civil Rights Act.
       In the 1987 case Johnson v. Transportation Agency Santa 
     Clara County, the issue was the maleness rather than the 
     whiteness of white males. The Court ruled that job 
     discrimination against a white male in favor of a woman with 
     lower performance ratings was perfectly legal under Title 
     VII, even though the county's transportation agency had no 
     record of prior discrimination requiring remedies. Rehnquist, 
     Byron White, and Antonin Scalia didn't like the decision. 
     Scalia said, ``We effectively replace the goal of a 
     discrimination-free society with the quite incompatible goal 
     of proportionate representation by race and by sex in the 
     workplace.'' He noted that civil rights had become a cynical 
     numbers game played by politicians, lobbyists, corporate 
     executives, lawyers, and government bureaucrats.
       In 1989 there was a brief retrenchment when the Supreme 
     Court, with its Reagan appointees, confronted the quota 
     implications of Griggs and the decisions that had followed 
     it. In Wards Cove v. Atonio, the Court ruled that statistical 
     disparities were insufficient to establish a prima facie case 
     of discrimination. In this case, the racial minorities who 
     made up a majority of the unskilled work force at two Alaskan 
     salmon canneries brought a discrimination lawsuit based on 
     the fact that whites held a majority of skilled office 
     positions. The suit claimed that this constituted 
     underutilization of preferred minorities in office positions 
     and was evidence of racial discrimination. The majority 
     opinion, written by Justice White, rejected the 
     discrimination claim. White noted that:
       ``Any employer who had a segment of his work force that 
     was--for some reason--racially imbalanced, could be hauled 
     into court and forced to engage in the expensive and time-
     consuming task of defending the `business necessity' of the 
     methods used to select the other members of his work force. 
     The only practicable option for many employers will be to 
     adopt racial quotas, ensuring that no portion of his work 
     force deviates in racial composition from the other portions

[[Page S413]]

     thereof; this is a result that Congress expressly rejected in 
     drafting Title VII.''
       A week after Wards Cove, the Court ruled in Martin v. Wilks 
     that victims of reverse discrimination due to consent decrees 
     that imposed quotas had the right to challenge the decrees in 
     court. The Court noted that victims of reverse discrimination 
     found their rights affected by lawsuits to which they were 
     not parties. Citing a long-standing legal tradition, the 
     majority held that ``a person cannot be deprived of his legal 
     rights in a proceeding to which he is not a party.''
       These rulings caused an uproar among civil-rights 
     activists, who charged that the new Reagan Court was racist. 
     The illegal privileges that had evolved in the 18 years since 
     Griggs was decided had become a squatter's right, and 
     Congress and the Bush Administration were bullied into 
     enacting the new inequality into law. The 1991 Civil Rights 
     Act in effect repealed the 1964 Act by legalizing racial 
     preferences as the core of civil-rights law. The new Act was 
     designed to overturn the Wards Cove and Wilks rulings and to 
     codify the disparate-impact standard of Griggs.
       The statute also slammed shut the courthouse doors on white 
     male victims of reverse discrimination. If statistical 
     disparities or racial imbalance is proof of discrimination, 
     white males adversely affected by quotas can have no standing 
     in court. To give them standing would necessarily imperil the 
     quota remedies for racial imbalance. You cannot 
     simultaneously declare that anything short of proportional 
     racial representation is discrimination and recognize the 
     adverse impact of the ``remedy'' on white males. Under the 
     1991 Civil Rights Act, white makes have no grounds for 
     discrimination lawsuits until they are statistically 
     underrepresented in management and line positions. They have 
     no claims to be statistically represented as hirees, 
     trainees, and promotees until preferred minorities are 
     proportionately represented in management and line positions. 
     Indeed,under Brennan's interpretation of the Civil Rights 
     Act, which says that anything that helps preferred minorities 
     is broadly consistent with the law, the disparate-impact 
     standard could one day be ruled inapplicable to whites.
       The 1991 Civil Rights Act added the threat of compensatory 
     and punitive damages to the pressure for quotas. In 
     ``Understanding the 1991 Civil Rights Act,'' an article in 
     The Practical Lawyer, Irving M. Geslewitz recommended that 
     corporations apply cost-benefit analysis to determine whether 
     ``they are safer in hiring and promoting by numbers 
     reflecting the percentages in the surrounding community than 
     in risking disparate-impact lawsuits they are likely to 
     lose,'' To counter charges of ``hostile work environments,'' 
     company lawyers want to be able to tell juries that their 
     clients have many minority and women employees at all levels.
       The day after the Civil Rights Act of 1991 became law, a 
     New York Times article, ``Affirmative Action Plans Are Part 
     of Business Life,'' observed that quota policies are as 
     ``familiar to American businesses as tally sheets and bottom 
     lines.'' A 1991 Business Week article entitled ``Race in the 
     Workplace: Is Affirmative Action Working?'' reported that 
     affirmative action is ``deeply ingrained in American 
     corporation culture.
       . . . The machinery hums along, nearly automatically, at 
     the largest U.S. corporations. They have turned affirmative 
     action into a smoothly running assembly line, with phalanxes 
     of lawyers and affirmative-action managers.''
       The 1964 Civil Rights Act, which undertook to eliminate 
     race and sex from private employment decisions, has instead 
     been used to make race and sex the determining factors. 
     Reverse discrimination is now a fact of life. Indeed, in 
     strictly legal terms, the situation for white males today is 
     worse than the situation for blacks under Plessy v. 
     Ferguson's separate-but-equal doctrine. In practice, blacks 
     suffered unequal treatment under Plessy, but the decision 
     officially required equal treatment, Under today's civil-
     rights regime, by contrast, whites can be legally 
     discriminated against in university admissions, employment, 
     and the allocation of government contracts.
       In his famous dissent from Plessy, Justice John Marshall 
     Harlan worried that the Louisiana law requiring racial 
     segregation on public transportation would allow class 
     distinctions to enter the legal system, since blacks and 
     whites were economically as well as racially distinct. Harlan 
     was certain that he wanted no status-based distinctions in 
     the law. Our Constitution, he said, ``is color-blind, and 
     neither knows nor tolerates classes among citizens. In 
     respect of civil rights, all citizens are equal before the 
     law. The humblest is the peer of the most powerful.'' Today, 
     civil-rights activists reject Harlan's color-blind views. 
     Privilege before the law has replaced equality before the 
     law.
                                 ______
                                 
      By Mr. HELMS:
  S. 47. A bill to prohibit the executive branch of the Federal 
Government from establishing an additional class of individuals that is 
protected against discrimination in Federal employment, and for other 
purposes; read twice and placed on the calendar.


                         freedom of speech act

  Mr. HELMS. Mr. President, many readers of the Washington Times on 
December 31, 1996, were offended when they read an article, ``Postal 
Inspectors' Bias Code Seen as Silencing Anti-Gay Views.'' The article 
reported that the U.S. Postal Service's law enforcement branch had 
recently issued a new code of conduct forbidding employees from 
expressing their personal and religious beliefs regarding 
homosexuality--even during off-duty hours.
  When asked about the Postal Service's decision, Robert Maginnis, an 
analyst at the Family Research Council, asserted correctly that 
``People who have deeply-held moral beliefs * * * need not apply for 
the Federal jobs. Talk about discrimination! This is reverse 
discrimination of the worst kind.''
  Mr. Maginnis was right on target: Freedom of speech is not permitted 
to those who deplore the favoritism shown people who have the morals of 
alley cats. I recall the 1994 episode in which the Senate came to the 
defense of a faithful and longtime employee of the Department of 
Agriculture, Dr. Karl Mertz, whose freedom of speech was callously 
violated after he dared to stand up against sodomy. Dr. Mertz did so on 
his own time, when he opposed his government's giving special rights to 
homosexuals.
  Mr. President, during the incident involving Dr. Mertz, it because 
abundantly clear, at least to me, that the Clinton Administration had 
conducted and continues to conduct a concerted effort to give 
homosexuals special rights, privileges, and protections throughout the 
Federal agencies--rights not accorded to most other groups and 
individuals.
  The fact is, no other group in America is given special rights based 
on its sexual behavior. To grant special rights to homosexuals would be 
redundant--the 1964 Civil Rights Act already protects every American 
from discrimination.
  Moreover, the Senate, on September 10, 1996, defeated attempts by 
Senator Kennedy and others to amend the Civil Rights Act in order to 
extend special rights to employees based exclusively on the employees' 
sexual preferences.
  Mr. President, after Dr. Mertz's plight was brought to light in 1994, 
my office began to hear from Federal Government employees throughout 
Washington and the country who were personally concerned about the 
Administration's attempts to defend and promote special rights for 
homosexuals in the workplace.
  And we continue to hear from them. These are not hate-filled or mean-
spirited; they are understandably disturbed by the government's 
attempts to sanction and protect a lifestyle they--and many Americans--
regard as immoral.
  Mr. President, let's look at statements issued by three of the 
Administration's cabinet members regarding efforts by the Clinton 
Administration to confer special rights and protections upon 
homosexuals and lesbians.
  On April 15, 1993, then-Secretary of Agriculture, Mike Espy, issued a 
Civil Rights Policy Statement in which he stated that the USDA would 
``create a work environment free of discrimination and harassment based 
on gender or sexual orientation.''
  On December 6, 1993, the Secretary of Health and Human Services, 
Donna Shalala, issued her agency's directive to celebrate cultural 
``diversity'' in a workplace free of discrimination against gays and 
lesbians.
  On August 30, 1994, Henry Cisneros, the Secretary of the Department 
of Housing and Urban Development, likewise informed all HUD employees 
that his department would not tolerate discrimination on the basis of 
sexual orientation.
  In fact, Mr. President, Leonard Hirsch, president of Gay, Lesbian and 
Bisexual Employees of the Federal Government (GLOBE), told the 
Washington Times that every Cabinet-level department, excluding the 
Pentagon, now has rules barring discrimination based on sexual 
orientation.
  Which brings us to the issue of whether the Federal Government 
intends to expand the definition of discrimination to include 
suppression of the constitutional rights of its employees to voice 
personal and religious beliefs regarding homosexuality. The fact is, it 
is already happening.

  To the delight of the homosexual community, Federal employees are 
required to leave their moral and spiritual views at home every morning 
since Federal agencies and departments have unilaterally adopted a 
policy to treat homosexuals as a special

[[Page S414]]

class protected under various titles of the Civil Rights Act of 1964.
  Congress must not remain silent as the executive branch creates 
special protections for homosexuals without regard to the 
constitutional right of freedom of speech enjoyed by all Federal 
employees. That is the purpose of the legislation I offer today.
  Under this bill, no Federal department or agency shall implement or 
enforce any policy creating a special class of individuals in Federal 
employment discrimination law. This bill will also prevent the Federal 
government from trampling the first amendment rights of Federal 
employees to express their moral and spiritual values in the workplace.
  Finally, this bill will turn back the tide of the homosexual 
community in its efforts to force Americans to accept, and even 
legitimize, moral perversion.
  Mr. President, I ask unanimous consent that the text of this 
legislation be printed in the Record.
                                 ______
                                 
      By Mr. HELMS:
  S. 48. A bill to abolish the National Endowment for the Arts and the 
National Council on the Arts; read twice placed on the calendar.


       the national endowment or the arts termination act of 1997

  Mr. HELMS. Mr. President, something more than 7 years ago, I first 
reported to the Senate some evidence that a war was then being waged 
against America's standards of decency by some self-proclaimed 
``artists'' funded by the national Endowment for the Arts.
  When I came to the Senate floor that day, July 26, 1989, and 
suggested that Senators should examine some examples of the material 
that the taxpayers were being required to subsidize, and that I had an 
amendment to put an end to it, the distinguished manager of the bill 
took one look and said, ``We'' take your amendment.''
  And that's when the battle began. Since that time some of the know-
it-all media have tried in vain to make a silk purse out of the NEA's 
sow's ear. They failed miserably to persuade the American people that 
such so-called ``art'' deserved the taxpayers' money allocated to the 
arrogant artists whose minds belonged in the sewer.
  The names of these self-proclaimed ``artists'' consist of a wide 
range of curious individuals who have no regard for decency--Annie 
Sprinkle, Holly Hughes, and Karen Finley performing their live sex 
acts; Andres Serrano sticking a crucifix in a jar filled with his 
urine, taking a picture of it, and choosing for its title a mockery of 
Jesus Christ. Then there was Robert Mapplethorpe, who became noted for 
his filthy homosexual photographs; Joel-Peter Witken who used bodies of 
dead men and women to produce stomach-churning photographs; and many 
others.
  From burning the American flag to flouting their own bodies and those 
of others, such depravity knows no bounds. The only religiously-
oriented ``art'' funded by the NEA were scurrilous attacks on the 
Catholic church or blasphemous insults to the deity of Jesus Christ.
  More recently, The Washington Times, in an article last June, 
reported that the National Endowment for the Arts had, in 1995, awarded 
$31,500 to a lesbian film director for her production of the film 
titled, ``Watermelon Woman''. In her description of the film to the 
NEA, the film's director boasted that with the NEA's support, she would 
``be one of the first African American lesbian film makers who promotes 
our rarely seen lifestyles.''
  Mr. President, I will not waste the Senate's time further detailing 
the outrageous abuse of Federal tax dollars by the National Endowment 
for the Arts. But it continues, despite the efforts by those in 
Congress to reform the agency. Sadly, the real travesty is found in the 
efforts of a few misguided souls to defend requiring the American 
taxpayers to finance the attempted to glorify perversion and 
immorality.
  When I came to the Senate floor that day in 1989, I told Senators 
that the arts community and the media--because they balked at any 
restriction on Federal funding--had left Congress with two choices: 
First, absolutely no Federal presence in the arts; or second, granting 
artists the absolute freedom to use tax dollars as they wish, 
regardless of how vulgar, blasphemous, or despicable their works may 
be. I said at the time that if we indeed must make this choice, then 
the Federal Government should get out of the arts. But, I felt then 
that Congress could make another choice--to clean up the NEA, and 
merely prevent the use of Federal funds to support the creation or 
production of vulgar or sacrilegious works.

  Well, Mr. President, as Paul Harvey says, now you know the rest of 
the story. For more than 7 years, I offered numerous amendments to put 
an end to the taxpayer-subsidized obscenity I've detailed today. But 
without fail, every year, the American people are shocked to hear of 
another instance in which the NEA has given its blessing--and the 
taxpayers' money--to an organization or individual determined to cross 
the lines of decency and morality.
  The last card was played out, Mr. President, when a liberal Federal 
appeals court, on November 5, 1996, usurped the right of Congress to 
put any semblance of restrictions on the way the NEA uses the money 
granted to it by Congress. The U.S. 9th Circuit Court thumbed its nose 
at Congress--and the American people--when it upheld the right of so-
called ``artists'' such as Karen Finley and Holly Hughes to continue to 
be subsidized for their decadent acts.
  Mr. President, no more choices or compromises remain. I have 
concluded, as have so many Americans, that the only way Congress can 
stop the irresponsible use of the taxpayers' money by the NEA is to 
abolish it.
  Moreover, there is much to be said for the priority to confront the 
existing $5.3 trillion Federal debt and the effect that it will have on 
the futures of today's young people. The sky will not fall if the 
Congress votes to privatize the NEA as the arts already swim in an 
ocean of private funds--more than $9 billion annually. Bruce Fein wrote 
in his editorial, ``Dollars for Depravity,'' that ``NEA funds are but a 
tiny fraction of national art expenditures. Thus, a denial of an NEA 
grant is far from tantamount to a professional death sentence.''
  For these reasons, I today introduce The National Endowment for the 
Arts Termination Act of 1997. The bill mirrors the legislation offered 
in the House of Representatives this year by Phil Crane, Sam Johnson, 
and Charlie Norwood.
  This bill finally alleviates the burden, shouldered by the American 
taxpayers, of allocating money every year to an agency whose mission 
has been sorely mistreated. The strings will be cut and the Federal 
government will no longer be in the business of propping up ``artists'' 
such as Robert Mapplethorpe and Andres Serrano. Furthermore, Congress 
will rid itself of the annual fight to defend the cultural high ground 
against a group of people who are in a lifelong crusade to destroy the 
Judeo-Christian foundations of this country.
  Mr. President, this bill is the only solution to end the 
irresponsible use of the taxpayers' money by this agency. Efforts to 
reform it have failed. It is time to put the National Endowment for the 
Arts to rest.
  Mr. President, I ask unanimous consent that the text of this bill be 
printed in the Record.
                                 ______
                                 
      By Mr. STEVENS (for himself and Mr. Murkowski):
  S. 49. A bill to amend the wetlands regulatory program under the 
Federal Water Pollution Control Act to provide credit for the low 
wetlands loss rate in Alaska and recognize the significant extent of 
wetlands conservation in Alaska, to protect Alaskan property owners, 
and to ease the burden on overly regulated Alaskan cities, boroughs, 
municipalities, and villages; to the Committee on Environment and 
Public Works.


                  the alaska wetlands conservation act

  Mr. STEVENS. Mr. President, I am pleased to introduce the Alaska 
Wetlands Conservation Act, a bill to conform wetlands protection to the 
unique conditions found throughout Alaska.

  My State contains more wetlands than all other States combined. Since 
1780 we have developed less than 1/10 of one percent of those wetlands. 
According to the United States Fish and Wildlife Service, about 170.2 
million acres of wetlands existed in Alaska in the 1780's

[[Page S415]]

and about 170 million acres exist today. That represents a negligible 
loss rate over a period of 217 years. Furthermore almost ninety percent 
of our wetlands are publicly owned, protected by strict land use 
designations that guarantee these wetlands will remain intact 
permanently.
  We Alaskans have substantially conserved our wetlands. Unfortunately 
Federal policies established to protect and restore wetlands in the 
southern forty-eight States do not recognize our unique circumstances 
nor do these policies provide an appropriate level of flexibility in 
managing the roughly one percent of land available for private or 
commercial development in Alaska.
  My bill continues to require Alaskans who apply for discharge permits 
under section 404 of the Clean Water Act to avoid or minimize adverse 
impacts on wetlands, but it would eliminate requirements to mitigate 
for unavoidable impacts. It also removes the burden for an applicant to 
prove that no alternative sites are available. Most of Alaska's 
communities are surrounded by literally millions of acres of wetland. 
These areas are made unaccessible under the law for mitigation purposes 
since they are already protected. In Alaska, mitigation makes no sense 
except to extort compensatory concessions from applicants which would 
otherwise not be justified.
  The threat of mitigation sends a chilling message to potential 
investors by artificially raising the costs of doing business in 
Alaska. In turn, this contributes to unemployment and weakening the 
economic self sufficiency of our far flung communities. In the long 
run, the current program wastes taxpayer money in an ill advised 
attempt to protect abundant wetlands that are already more than 
adequately protected in Alaska. The resources at risk in Alaska are not 
our wetlands, they are our people.
  The blind application of legislation written to protect wetlands 
elsewhere inhibits reasonable growth by our Native villages and local 
governments. In effect, the section 404 program has a life threatening 
choke hold on Native Alaskans. It is difficult to place a stake in the 
ground in Alaska without impacting a wetland, let alone to build 
critical infrastructure. Compounding the problem, we have recently seen 
the Administration begin to phase out nationwide permits. This makes it 
increasingly difficult to address the huge task facing our local and 
State officials in providing safe drinking water, sanitation systems, 
electric power and other critical services to far flung Alaskan 
communities. Without this bill, the Federal wetlands bureaucracy simply 
lacks the authority to apply common sense.
  Mr. President, many rural Alaskans are trapped living under third 
world conditions by well-meaning outsiders and bureaucrats narrowly 
focused on environmental protection. Unfortunately for Alaska, in this 
case the problem is larger than protecting our over abundance of 
wetlands. Wetlands policies conflict with other laws which were passed 
to promote the economic self sufficiency of Alaskans. My bill would 
require approval of permit applications with reasonable safeguards for 
``economic base lands'' meaning those lands conveyed under the Alaska 
Native Claims Settlement Act or Alaska Statehood Act, both acts 
intended to provide the means for Alaskans to achieve economic self 
sufficiency.
  The Alaska Wetlands Conservation Act is a common sense approach to 
Alaska's circumstances. It maintains flexibility to protect wetlands 
without hurting people. With respect to existing activities related to 
airport safety, logging, mining, ice pads and roads, and snow removal 
or storage, the bill prevents Alaskans from having to obtain section 
404 permits to continue those activities. The bill would also require 
the Army Corps of Engineers to approve general wetlands permits with 
reasonable safeguards for specific categories of activities if the 
general permit is requested by the State of Alaska.
  There has been negligible benefit to the environment in Alaska as a 
result of the expansive wetlands regulations issued by bureaucrats 
inside the beltway. On the other hand, the harm caused by overzealous 
Federal wetlands police is documented in many examples of bureaucratic 
delay, expense and irrational decision making. Ask the Mayor of Juneau 
how the Federal Government handled that city's application for a 
general permit. It is a national disgrace simply because laws intended 
to protect scarce wetlands elsewhere were strictly applied in an area 
of abundance. This bill restores rational decision making authority to 
those closest to the wetlands situation of Alaska. I encourage my 
colleagues in the Senate and the House to act expeditiously on my 
proposed remedy.
                                 ______
                                 
      By Mr. FEINGOLD:
  S. 51. A bill to amend the Internal Revenue Code of 1986 to eliminate 
the percentage depletion allowance for certain minerals; to the 
Committee on Finance.


                    depletion allowances legislation

  Mr. FEINGOLD. Mr. President, I am pleased to introduce legislation to 
eliminate percentage depletion allowances for four mined substances--
asbestos, lead, mercury, and uranium--from the Federal tax code. This 
measure is based on language passed as part of the Energy Policy Act of 
1992 by the other body during the 102d Congress.
  Analysis by the Joint Committee on Taxation on the similar 
legislation that passed the House estimated that, under that bill, 
income to the Federal treasury from the elimination of percentage 
depletion allowances in just these four mined commodities would total 
$83 million over 5 years, $20 million in this year alone. These savings 
are calculated as the excess amount of federal revenues above what 
would be collected if depletion allowances were limited to the actual 
costs in capital investments.
  These four allowances are only a few of the percentage depletion 
allowances contained in the tax code for extracted fuel, minerals, 
metal and other mined commodities--with a combined value, according to 
1994 estimates by the Joint Committee on Taxation, of $4.8 billion.
  Mr. President, unlike depreciation or cost depletion, the ability to 
use so-called percentage depletion allows companies to deduct far more 
than their actual costs. The result is a generous loophole for the 
company, and an expensive subsidy for the taxpayer.
  Historically, percentage depletion allowances were placed in the tax 
code to reduce the effective tax rates in the mineral and extraction 
industries far below tax rates on other industries, providing 
incentives to increase investment, exploration and output. However, 
unlike cost depletion or even accelerated depreciation, percentage 
depletion also makes it possible to recover more than the amount of the 
original investment. As noted in the Budget Committee's report on tax 
expenditures, this makes percentage depletion essentially a mineral 
production subsidy.
  There are two methods of calculating a deduction to allow a mining 
companies to recover the costs of their capital investment: cost 
depletion, and percentage depletion. Cost depletion allows for the 
recovery of the actual capital investment over the period which the 
reserve produces income. Using cost depletion, a company deducts a 
portion of their original capital investment minus any previous 
deductions, in an amount that is equal to the fraction of the remaining 
recoverable reserves. Under this method, the total deductions cannot 
exceed the original capital investment.
  However, under percentage depletion, the deduction for recovery of a 
company's investment is a fixed percentage of ``gross income''--namely, 
sales revenue--from the sale of the mineral. According to the Budget 
Committee's summary of tax expenditures, under this method, total 
deductions typically exceed the capital that the company invested.
  Mr. President, given the need to reduce the deficit and balance the 
budget, there is just as clear a need to review the spending done 
through the tax code as there is to scrutinize discretionary spending 
and entitlement programs. All of these forms of spending must be asked 
to justify themselves, and be weighed against each other in seeking to 
reach the broader goal of a balanced budget.
  In the case of these particular tax expenditures, we must decide who 
should bear the costs of exploration, development, and production of 
natural resources: all taxpayers, or the users and producers of the 
resource. The current

[[Page S416]]

tax break provided to the users and producers of these resources 
increases pressure on the budget deficit, and shifts a greater tax 
burden onto other businesses and individuals to compensate for the 
special treatment provided to the few.
  Mr. President, the measure I am introducing is straightforward. It 
eliminates the percentage depletion allowance for asbestos, lead, 
mercury, and uranium while continuing to allow companies to recover 
reasonable cost depletion.
  Even as a production subsidy, the percentage depletion tax loophole 
is inefficient. As the Budget Committee summary of tax expenditures 
notes, it encourages excessive development of existing properties 
rather than the exploration of new ones.
  Moreover, Mr. President, the four commodities covered by my bill are 
among some of the most environmentally adverse. The percentage 
depletion allowance makes a mockery of conservation efforts. The 
subsidy effectively encourages mining regardless of the true economic 
value of the resource. The effects of such mines on U.S. lands, both 
public and private, has been significant--with tailings piles, scarred 
earth, toxic by-products, and disturbed habitats to prove it.
  Ironically, the more toxic the commodity, the greater the percentage 
depletion received by the producer. Mercury, lead, uranium, and 
asbestos receive the highest percentage depletion allowance, while less 
toxic substances receive lower rates.
  Mr. President, particularly in the case of the four commodities 
covered by my bill, these tax breaks create absurd contradictions in 
government policy. While Federal public health and environmental 
agencies are struggling to come to grips with a vast children's health 
crisis caused by lead poisoning, spending millions each year to prevent 
lead poisoning, test young people, and research solutions, the tax code 
is providing a subsidy for lead production--a subsidy that is not 
provided for the lead recycling industry.

  Asbestos, too, has posed massive public health problems, and it is 
indefensible that this commodity, the use of which the Federal 
Government will effectively ban before the year 2000, continues to 
receive a massive tax subsidy.
  Mr. President, the time has come for the Federal Government to get 
out of the business of subsidizing business in ways it can no longer 
afford--both financially and for the health of its citizens. This 
legislation is one step in that direction.
  Mr. President, in 1992, I developed an 82+ plan to eliminate the 
Federal deficit and have continued to work on implementation of the 
elements of that plan since that time. Elimination of special tax 
preferences for mining companies was part of that 82+ point plan. Just 
as we must cut direct spending programs, if we are to balance that 
budget, we must also curtail these special taxpayer subsidies to 
particular industries that can no longer be justified.
  Finally, Mr. President, in conclusion I want to pay tribute to 
several elected officials from Milwaukee, Mayor John Norquist and 
Milwaukee Alderman Michael Murphy, who have brought to my attention the 
incongruity of the federal government continuing to provide taxpayer 
subsidies for the production of toxic substances like lead while our 
inner cities are struggling to remove lead-based paint from older homes 
and buildings where children may be exposed to this hazardous material. 
I deeply appreciate their support and encouragement for my efforts in 
this area.
  Mr. President, I ask unanimous consent that a copy of the legislation 
be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 51

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

     SECTION 1. CERTAIN MINERALS NOT ELIGIBLE FOR PERCENTAGE 
                   DEPLETION.

       (a) In General.--Section 613(b)(1) of the Internal Revenue 
     Code of 1986 (relating to percentage depletion rates) is 
     amended--
       (A) in subparagraph (A), by striking ``and uranium''; and
       (B) in subparagraph (B), by striking ``asbestos,'', 
     ``lead,'', and ``mercury,''.
       (b) Conforming Amendments.--
       (1) Section 613(b)(3)(A) of the Internal Revenue Code of 
     1986 is amended by inserting ``other than lead, mercury, or 
     uranium'' after ``metal mines''.
       (2) Section 613(b)(4) of such Code is amended by striking 
     ``asbestos (if paragraph (1)(B) does not apply),''.
       (3) Section 613(b)(7) of such Code is amended by striking 
     ``or'' at the end of subparagraph (B), by striking the period 
     at the end of subparagraph (C) and inserting ``, or'', and by 
     inserting after subparagraph (C) the following:
       ``(D) mercury, uranium, lead, and asbestos.''
       (4) Section 613(c)(4)(D) of such Code is amended by 
     striking ``lead,'' and ``uranium,''.
       (c) Effective Date.--The amendments made by this section 
     apply to taxable years beginning after December 31, 1996.
                                 ______
                                 
      By Mr. FEINGOLD:
  S. 52. A bill to amend the Agricultural Adjustment Act to prohibit 
the Secretary of Agriculture from basing minimum prices for Class I 
milk on the distance or transportation costs from any location that is 
not within a marketing area, except under certain circumstances, and 
for other purposes; to the Committee on Agriculture, Nutrition, and 
Forestry.
                                 ______
                                 
      By Mr. FEINGOLD (for himself and Mr. Kohl):
  S. 55. A bill to amend the Dairy Production Stabilization Act of 1983 
to prohibit bloc voting by cooperative associations of milk producers 
in connection with the program, and for other purposes; to the 
Committee on Agriculture, Nutrition, and Forestry.
  S. 56. A bill to amend the Dairy Production Stabilization Act of 1983 
to ensure that all persons who benefit from the dairy promotion and 
research program contribute to the cost of the program, and for other 
purposes; to the Committee on Agriculture, Nutrition, and Forestry.


                   domestic dairy policy legislation

  Mr. FEINGOLD. Mr. President, today I rise to introduce three bills 
which attempt to rectify three different problems with domestic dairy 
policy. My State of Wisconsin is home to more than 26,000 dairy 
farmers. Over the past 4 years during the more than 288 listening 
sessions I've held in Wisconsin counties, I have heard from many of 
those dairy farmers on the issues addressed by the legislation I am 
introducing today.
  The first bill I am introducing today, if enacted, will be a first 
step towards rectifying the inequities in the Federal Milk Marketing 
Order system. The Federal Milk Marketing Order system, created 60 years 
ago, establishes minimum prices for milk paid to producers throughout 
various marketing areas in the United States.
  My legislation is very simple. It identifies the single most 
inequitable and injurious provision in the current system, and corrects 
it. That provision--known as single basing point pricing--is USDA's 
practice of basing prices for fluid milk--Class I milk--in all 
marketing areas east of the Rocky Mountains on the distance from Eau 
Claire, WI, when there is little economic justification for doing so.
  In general, the price for fluid milk increases at a rate of 21 cents 
per 100 miles from Eau Claire, WI. Fluid milk prices, as a result, are 
$2.98 cents higher in Florida than in Wisconsin, more than $2 higher in 
New England, and more than $1 higher in Texas.
  While this system has been around since 1937, the practice of basing 
fluid milk price differentials on the distance from Eau Claire was 
formalized in the 1960's, when arguably the Upper Midwest was the 
primary reserve for additional supplies of milk. The idea was to 
encourage local supplies of fluid milks in areas of the country that 
did not traditionally produce enough fluid milk to meet their own 
needs. At that time, this was important because our transportation 
infrastructure made long distance bulk shipments of milk difficult. 
Thus, the only way to ensure consumers a fresh local supply of fluid 
milk was to provide dairy farmers in those distant regions with a milk 
price high enough to encourage local production. Mr. President, the 
system worked too well. Ultimately, it has worked to the disadvantage 
of the Upper Midwest, and in particular, Wisconsin dairy farmers.
  The artificially inflated Class I prices have provided production 
incentives beyond those needed to ensure a local supply of fluid milk 
in some regions, leading to an increase in manufactured products in 
those marketing orders. Those manufactured products directly compete 
with Wisconsin's processed

[[Page S417]]

products, eroding our markets and driving national prices down.
  Under the provisions of the 1996 farm bill, the U.S. Department of 
Agriculture is currently undergoing an informal rulemaking process to 
consolidate the number of Federal Milk Marketing Orders from 32 to 10. 
USDA is also looking at how to set prices for milk in those 
consolidated orders. By statute USDA is prohibited from basing the new 
prices on the structure of the existing milk differentials set by the 
1985 farm bill. The reforms must be completed by spring, 1999. 
Secretary of Agriculture Dan Glickman will no doubt be pressured by 
many supporters of the status quo to maintain the overall price 
structure that has discriminated against Wisconsin farmers for so many 
years. I will do everything I can to prevent that from happening. 
Wisconsin farmers need real Class I price reform that removes the 
artificial competitive advantages provided to other regions to other 
regions of the country and allows Upper Midwest farmers to compete on a 
level playing field.

  The legislation that I am introducing today identifies the one change 
that is absolutely necessary in any outcome--the elimination of single 
basing point pricing. It prohibits the Secretary of Agriculture from 
using distance or transportation costs from any location as the basis 
for pricing milk, unless significant quantities of milk are actually 
transported from that location into the recipient market. The Secretary 
will have to comply with the statutory requirement that supply and 
demand factors be considered as specified in the Agricultural Marketing 
Agreement Act when setting milk prices in marketing orders.
  This legislation sends a very simple message to the Secretary of 
Agriculture--that among all the Class I pricing reform options from 
which the Secretary must choose, he should in no case select on option 
that either by intent or effect sets prices based on distance from a 
single location. I will work towards enactment of this legislation 
prior to the completion the proposed rule on Class I pricing reform.
  Mr. President, my next two bills address inequities to dairy 
producers throughout the country under the Dairy Promotion and Research 
Order--also known as the dairy checkoff. I am pleased to be joined by 
Senator Kohl today on these two very important bills.
  The National Dairy Promotion and Research Program collect roughly 
$225 million every year from dairy farmers each paying a mandatory 15 
cents for every hundred pounds of milk they produce. The program is 
designed to promote dairy products to consumers and to conduct research 
relating to milk processing and marketing.
  While 15 cents may appear to be a small amount of money, multiplied 
by all the milk marketed in this country, it adds up to thousands of 
dollars each year for the average producer. Given the magnitude of this 
program, it is critical that Congress take seriously the concerns 
producers have about their promotion program.
  Since participation in the checkoff is mandatory and producers are 
not allowed refunds, Congress required that producers vote in a 
referendum to approve the program after it was authorized. The problem 
is that Congress didn't provide for a fair and equitable voting process 
in the original act and it's time to correct our mistake. My bill does 
that by eliminating a process known as bloc voting by dairy 
cooperatives.
  Under current law, dairy cooperatives are allowed to cast votes in 
producer referenda en bloc for all of their farmer-members, either in 
favor of or against continuation of the National Dairy Board. While 
individual dissenters from the cooperative's position are allowed to 
vote individually, many farmers and producer groups claim the process 
stacks the deck against those seeking reform of the program.
  Mr. President, the problem bloc voting creates is best illustrated by 
the results of the August 1993 producer referendum on continuation of 
the National Dairy Promotion and Research Board, called for by a 
petition of 16,000 diary farmers. In that referendum, 59 dairy 
cooperatives voting en bloc, cast 49,000 votes in favor of the program. 
Seven thousand producers from those cooperatives went against co-op 
policy and voted individually against continuing the program.
  While virtually all of the votes in favor of the program were cast by 
cooperative bloc vote, nearly 100 percent of the votes in opposition 
were cast by individuals. Bloc voting allows cooperatives to cast votes 
for every indifferent or ambivalent producer in their membership, 
drowning out the voices of dissenting producers. It biases the 
referendum in favor of the Dairy Board's supporters, whose votes should 
not have greater weight than the dissenters.
  The inappropriate nature of bloc voting in Dairy Board referendum is 
even clearer given that none of the 17 other commodity promotion 
programs allow cooperatives to bloc vote despite the existence of 
marketing cooperatives for many of those commodities.

  Mr. President, it is time to give dairy farmers a fair voting process 
for their promotion program. I urge my colleagues to support this very 
important legislation.
  My last bill, Mr. President, provides equity to domestic producers 
who have been paying into the promotion program for over 10 years while 
importers have gotten a free ride. Since the National Dairy Promotion 
and Research Board conducts generic promotion and general product 
research, domestic farmers and importers alike benefit from these 
actions. The Dairy Promotion Program Equity Act requires that all dairy 
product importers contribute to the Dairy Promotion Program for all 
dairy products imported at the same rate as domestic dairy farmers. 
This is not an unusual proposal, Mr. President. Many of our largest 
generic promotion programs in agriculture already assess importers for 
their fair share of the program, including programs for pork, beef, and 
cotton.
  This legislation is particularly important in light of the passage of 
the General Agreement on Tariffs and Trade which will result in greater 
imports of dairy products over the next several years. An assessment of 
this type on importers would also be allowed under the GATT since our 
own milk producers are already paying the same assessment.
  We have put our own producers at a competitive disadvantage for far 
too long. It's high time importers paid for their fair share of the 
program.
  I am also pleased to be an original cosponsor of the National Dairy 
Promotion Board Reform Act introduced today by Senator Kohl. That bill 
further enhances producer representation on the National Dairy Board by 
providing for the direct election of National Dairy Board members, 
rather than appointment by the Secretary. That process will allow 
producers to elect members to the board that represent their views on 
promotion and eliminates the divisive impact of the political 
appointment process on the Dairy Board. Direct producer election of 
board members should also increase the accountability to their fellow 
dairy farmers.
  I believe that these bills together comprise a sound reform package 
for the National Dairy Promotion and Research Board by providing a 
stronger voice to dairy farmers. These reforms will create a stronger, 
more effective and more representative Dairy Board. I urge my 
colleagues to support this important legislation.
  Mr. President, I ask unanimous consent that the text of all three 
bills be printed in the Record.
  There being no objection, the bills were ordered to be printed in the 
Record, as follows:

                                 S. 52

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

     SECTION 1. LOCATION ADJUSTMENTS FOR MINIMUM PRICES FOR CLASS 
                   I MILK.

       Section 8c(5) of the Agricultural Adjustment Act (7 U.S.C. 
     608c(5)), reenacted with amendments by the Agricultural 
     Marketing Agreement Act of 1937, is amended--
       (1) in paragraph (A)--
       (A) in clause (3) of the second sentence, by inserting 
     after ``the locations'' the following: ``within a marketing 
     area subject to the order''; and
       (B) by striking the last 2 sentences and inserting the 
     following: ``Notwithstanding subsection (18) or any other 
     provision of law, when fixing minimum prices for milk of the 
     highest use classification in a marketing area subject to an 
     order under this subsection, the Secretary may not, directly 
     or indirectly, base the prices on the distance from, or all 
     or part of the costs incurred to transport milk to or from, 
     any location that

[[Page S418]]

     is not within the marketing area subject to the order, unless 
     milk from the location constitutes at least 50 percent of the 
     total supply of milk of the highest use classification in the 
     marketing area. The Secretary shall report to the Committee 
     on Agriculture of the House of Representatives and the 
     Committee on Agriculture, Nutrition, and Forestry of the 
     Senate on the criteria that are used as the basis for the 
     minimum prices referred to in the preceding sentence, 
     including a certification that the minimum prices are made in 
     accordance with the preceding sentence.''; and
       (2) in paragraph (B)(c), by inserting after ``the 
     locations'' the following: ``within a marketing area subject 
     to the order''.
                                                                    ____


                                 S. 55

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

     SECTION 1. PROHIBITION ON BLOC VOTING.

       Section 117 of the Dairy Production Stabilization Act of 
     1983 (7 U.S.C. 4508) is amended--
       (1) in the first sentence, by striking ``Secretary shall'' 
     and inserting ``Secretary shall not''; and
       (2) by striking the second through fifth sentences.
                                                                    ____


                                 S. 56

       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 ``Dairy Promotion Equity 
     Act''.

     SEC. 2. FUNDING OF DAIRY PROMOTION AND RESEARCH PROGRAM.

       (a) Declaration of Policy.--The first sentence of section 
     110(b) of the Dairy Production Stabilization Act of 1983 (7 
     U.S.C. 4501(b)) is amended--
       (1) by inserting after ``commercial use'' the following: 
     ``and on imported dairy products''; and
       (2) by striking ``products produced in'' and inserting 
     ``products produced in or imported into''.
       (b) Definitions.--Section 111 of the Dairy Production 
     Stabilization Act of 1983 (7 U.S.C. 4502) is amended--
       (1) in subsection (k), by striking ``and'' at the end;
       (2) in subsection (l), by striking the period at the end 
     and inserting a semicolon; and
       (3) by adding at the end the following:
       ``(m) the term `imported dairy product' means any dairy 
     product that is imported into the United States, including--
       ``(1) milk and cream and fresh and dried dairy products;
       ``(2) butter and butterfat mixtures;
       ``(3) cheese;
       ``(4) casein and mixtures; and
       ``(5) other dairy products; and
       ``(n) the term `importer' means a person that imports an 
     imported dairy product into the United States.''.
       (c) Funding.--
       (1) Representation on board.--Section 113(b) of the Dairy 
     Production Stabilization Act of 1983 (7 U.S.C. 4504(b)) is 
     amended--
       (A) by designating the first through ninth sentences as 
     paragraphs (1) through (5) and paragraphs (7) through (10), 
     respectively;
       (B) in paragraph (1) (as so designated), by striking 
     ``thirty-six'' and inserting ``38'';
       (C) in paragraph (2) (as so designated), by striking 
     ``Members'' and inserting ``Of the members of the Board, 36 
     members''; and
       (D) by inserting after paragraph (5) (as so designated) the 
     following:
       ``(6) Importers.--
       ``(A) In general.--Of the members of the Board, 2 members 
     shall be representatives of importers of imported dairy 
     products.
       ``(B) Appointment.--The importer representatives shall be 
     appointed by the Secretary from nominations submitted by 
     importers under such procedures as the Secretary determines 
     to be appropriate.''.
       (2) Assessment.--Section 113(g) of the Dairy Production 
     Stabilization Act of 1983 (7 U.S.C. 4504(g)) is amended--
       (A) by designating the first through fifth sentences as 
     paragraphs (1) through (5), respectively; and
       (B) by adding at the end of the following:
       ``(6) Importers.--
       ``(A) In general.--The order shall provide that each 
     importer of imported dairy products shall pay an assessment 
     to the Board in the manner prescribed by the order.
       ``(B) Rate.--The rate of assessment on imported dairy 
     products shall be determined in the same manner as the rate 
     of assessment per hundredweight or the equivalent of milk.
       ``(C) Value of products.--For the purpose of determining 
     the assessment on imports under subparagraph (B), the value 
     to be placed on imported dairy products shall be established 
     by the Secretary in a fair and equitable manner.''.
       (3) Records.--The first sentence of section 113(k) of the 
     Dairy Production Stabilization Act of 1983 (7 U.S.C. 4504(k)) 
     is amended by striking ``person receiving'' and inserting 
     ``importer of imported dairy products, each person 
     receiving''.
       (4) Referendum.--Section 116 of the Dairy Production 
     Stabilization Act of 1983 (7 U.S.C. 4507) is amended by 
     adding at the end the following:
       (d) Referendum on Dairy Promotion Equity Act.--
       ``(1) In general.--On the request of a representative group 
     comprising 10 percent or more of the number of producers 
     subject to the order, the Secretary shall--
       ``(A) conduct a referendum to determine whether the 
     producers favor suspension of the application of the 
     amendments made by section 2 of the Dairy Promotion Equity 
     Act; and
       ``(B) suspend the application of the amendments until the 
     results of the referendum are known.
       ``(2) Continuation of suspension.--The Secretary shall 
     continue the suspension of the application of the amendments 
     referred to in paragraph (1)(A) only if the Secretary 
     determines that suspension of the application of the 
     amendments is favored by a majority of the producers voting 
     in the referendum who, during a representative period (as 
     determined by the Secretary), have been engaged in the 
     production of milk for commercial use.''.

  By Mr. HATCH (for himself, Mr. Leahy, Mr. Thurmond, and Mr. 
Moynihan):
  S. 53. A bill to require the general application of the antitrust 
laws to major league baseball, and for other purposes; to the Committee 
on the Judiciary.


                       The Curt Flood Act of 1997

  Mr. HATCH. Mr. President, I am introducing today, along with Senators 
Leahy, Thurmond, and Moynihan, the Curt Flood Act of 1997, clarifying 
the applicability of antitrust law to major league baseball. This 
legislation, which is basically the same bill that was approved by the 
Judiciary Committee last Congress, marks what I hope will be the final 
chapter in a long and, at times, frustrating effort to correct a 
mistaken decision by the Supreme Court.
  As was true before, the bill simply makes clear that major league 
baseball, like all other professional sports, is subject to our 
Nation's antitrust laws, except with regard to team relocation, the 
minor leagues, and sports broadcasting. It overturns the Court's 
mistaken premise that baseball is not a business involved in interstate 
commerce, and it eliminates the unjustifiable legal precedent that 
individuals who play professional baseball should be treated 
differently from those who participate in other professional sports.
  In 1922, in Federal Baseball Club of Baltimore v. National League of 
Professional Baseball Clubs, 259 U.S. 200 (1922), the Supreme Court 
ruled that professional baseball was immune from the reach of the 
Federal antitrust laws because baseball was not a business in 
interstate commerce. Obviously, the Court at that time could not have 
imagined the modern game or a 1993 World Series where Canada's Toronto 
Blue Jays defeated the Philadelphia Phillies in games that were 
televised literally around the world.
  Fifty years after the Supreme Court's decision in Federal Baseball 
Club, the Court rendered its decision in Flood v. Kuhn, which 
repudiated the legal basis of its prior decision as an ``anomaly'' and 
``aberration confined to baseball'' but, because of its reluctance to 
overturn long-standing decisions, left the job of remedying its mistake 
to Congress.
  Unfortunately, Congress has been reluctant to follow the Court's 
instruction. In the past, it has been argued that this issue was not 
ripe, that it should not be considered too close to a labor dispute or, 
as was the case most recently, that it should not be discussed during a 
labor dispute. Fortunately, that now infamous dispute, which has done 
so much to tarnish the game, is resolved. The time has come to pass 
this legislation.
  Moreover, for the first time, the primary impediment to passage has 
been eliminated. In the new collective bargaining agreement the owners 
have pledged to work with the players to pass legislation that makes 
clear that professional baseball is subject to the antitrust laws with 
regard to labor relations.
  It is our hope that this year, Congress will finally rectify the 
Court's mistake and make clear once and for all that baseball no longer 
has any claim to antitrust immunity. It has been 25 years since Curt 
Flood jeopardized his career by unsuccessfully challenging baseball's 
reserve clause, a suit which resulted in the unfortunate decision 
mentioned above.
  Yesterday, Curt Flood tragically died of throat cancer at the age of 
59. The hearts of baseball fans all over the country go out to Mr. 
Flood's family. I join these fans in expressing my deepest regrets to 
the Flood family, and let me suggest today that the time has come to 
finish what Curt Flood so courageously began.
  Let me emphasize that our bill does not impose a big government 
solution

[[Page S419]]

to baseball's problems. On the contrary, it would get government out of 
the way by eliminating a serious government-made obstacle to resolution 
of the labor difficulties in baseball. Baseball's antitrust immunity 
has distorted labor relations in major league baseball and has 
sheltered baseball from the market forces that have allowed the other 
professional sports, such as football and basketball, to thrive.
  I should note that comparable legislation has been introduced in the 
other body by Mr. Conyers of Michigan, the ranking member of the House 
Judiciary Committee, whose bill bears Mr. Flood's number.
  Mr. President, I ask unanimous consent that the full text of our bill 
be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 53

       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 ``Curt Flood Act of 1997''.

     SEC. 2. APPLICATION OF THE ANTITRUST LAWS TO PROFESSIONAL 
                   MAJOR LEAGUE BASEBALL.

       The Clayton Act (15 U.S.C. 12 et seq.) is amended by adding 
     at the end the following new section:
       ``Sec. 27. (a) Subject to subsection (b), the antitrust 
     laws shall apply to the business of professional major league 
     baseball.
       ``(b) Nothing in this section shall be construed to 
     affect--
       ``(1) the applicability or nonapplicability of the 
     antitrust laws to the amateur draft of professional baseball, 
     the minor league reserve clause, the agreement between 
     professional major league baseball teams and teams of the 
     National Association of Baseball, commonly known as the 
     `Professional Baseball Agreement', or any other matter 
     relating to the minor leagues;
       ``(2) the applicability or nonapplicability of the 
     antitrust laws to any restraint by professional baseball on 
     franchise relocation; or
       ``(3) the application of Public Law 87-331 (15 U.S.C. 1291 
     et seq.) (commonly known as the `Sports Broadcasting Act of 
     1961').''.

  Mr. THURMOND. Mr. President, I rise today in support of the Curt 
Flood Act of 1997, which I am cosponsoring with Senator Hatch, Senator 
Leahy, and others. Our legislation would repeal the antitrust exemption 
which shields major league baseball from the antitrust laws that apply 
to all other sports and unregulated businesses in our Nation. This bill 
is virtually identical to S. 627 in the last Congress which was the 
result of discussions between myself and Senators Hatch and Leahy 
following the February 1995 hearing I chaired on this important issue. 
The bill is a compromise which has been carefully drafted to ensure 
that it achieves its purpose without imposing any unnecessary hardship 
on major league baseball.
  It is fitting that this bill is named after Curt Flood, who died 
yesterday, for the Supreme Court denied Mr. Flood the relief he sought 
by upholding the antitrust exemption which we now seek to change. In 
his 1972 Supreme Court case, Mr. Flood challenged baseball's reserve 
clause which bound players to teams for their entire careers. Although 
unsuccessful because of the judicially-created antitrust exemption, Mr. 
Flood's selfless actions paved the way for the success of other players 
through arbitration. It is now time for us to resolve the antitrust 
exemption.
  The bill we are introducing today eliminates baseball's antitrust 
exemption, with two exceptions. The legislation maintains the status 
quo for franchise location, and for the relationship with the minor 
leagues. It is important to protect the existing minor league 
relationships in order to avoid disruption of the more than 170 minor 
league teams which exist throughout our Nation. Continuing to shield 
franchise relocation decisions from the antitrust laws resolves the 
uncertainty facing team owners in other professional sports.
  Mr. President, it is my belief that the Congress should repeal the 
court-imposed antitrust exemption and restore baseball to the same 
level playing field as other professional sports and unregulated 
businesses. In the last Congress, we were successful in passing S. 627 
in the Antitrust, Business Rights, and Competition Subcommittee and in 
the Committee on the Judiciary. In this Congress we should make a 
concerted effort to enact the Curt Flood Act.
  Mr. LEAHY. Mr. President, I join today in introducing the Curt Flood 
Act of 1997. Like the earlier version of this legislation that I 
sponsored in the last Congress, this bill is intended to cut back on 
the unjustified, judicially created exemption from the antitrust laws. 
In my view no one is or should be above the law.
  Last Congress for the first time in our history, the Senate Judiciary 
Committee favorably reported language designed to cut back baseball's 
judicially mandated and aberrational antitrust exemption. We did so 
with the support of the Clinton administration and a bipartisan 
coalition of Senators. This bill reflects that language.
  The Senate refused to consider the measure over the last 2 years. In 
part that may be explained by the opposition from major league baseball 
team owners and perhaps by a feeling among some that we should not 
legislate during a time in which there was a labor-management impasse. 
Both those concerns have now been removed with the recent, 5-year 
agreement between the major league baseball team owners and the Major 
League Baseball Players Association. Indeed, a provision in that 
agreement calls for the owners to lobby Congress in support of the 
repeal of the antitrust exemption, at least to the extent it relates to 
labor-management relations.
  It is time to build on the progress we made last year and long past 
time for the Senate to act. Congress may not be able to solve every 
problem or heal baseball's self-inflicted wounds, but we can do this: 
We can pass legislation that will declare that professional baseball 
can no longer operate above the law.
  Our antitrust laws protect competition and benefit consumers. We are 
faced with an anomalous situation where the Federal antitrust laws have 
not applied to certain major league baseball functions and operations 
for over 70 years.
  I hope that we will, at long last, take up the issue of major leagues 
baseball's antitrust exemption. The burden of proof is on those who 
seek to justify this exemption from the law. No other business or 
professional or amateur sport is possessed of the exemption from law 
that major league baseball has enjoyed and abused.
  One of the players who testified at our hearings last Congress asked 
a most perceptive question: If baseball were coming to Congress today 
to ask us to provide a statutory exemption, would such a bill be 
passed? I believe the answer to that question is a resounding no.
  In addition, there is and has been no independent commissioner who 
could look out for the best interests of baseball and its fans. Despite 
repeated assurances, there has been no action to restore a strong, 
independent commissioner to oversee the game and it has suffered the 
consequences. It is only now beginning to emerge from a 4-year struggle 
without a labor-management agreement. I see that the owners last week 
authorized their executive committee to begin a search for a new 
commissioner. In my view baseball would be well served by making a 
serious commitment to a strong, independent commissioner. Neither fans 
nor Congress will be inspired by delay, drift or lack of direction.
  In Vermont when I was growing up virtually everyone was a Red Sox 
fan. Now loyalties are split among teams and among various sports. We 
have a successful minor league team, the Vermont Expos, the champions 
of the New York-Penn League last season. We also have businesses and 
jobs that depend on baseball and fans who have been hurt by its 
shortsightedness and mismanagement over the past several years. There 
is a strong public interest in baseball and it reverberates throughout 
the country.
  I am concerned about the interests of the public and, in particular, 
the interests of baseball fans. To reiterate the words of baseball's 
last commissioner, Fay Vincent: ``Baseball is more than ownership of an 
ordinary business. Owners have a duty to take into consideration that 
they own a part of America's national pastime--in trust. This trust 
sometimes requires putting self-interest second.'' Baseball's fans feel 
that this trust had been violated over the last several years.
  It is the public that is being shortchanged by the policies and 
practices of major league baseball and by disregard for the interests 
of the fans. I

[[Page S420]]

look forward to moving ahead thoughtfully to reconsider major league 
baseball's exemption from legal requirements to which all other 
businesses must conform their behavior. Since the multi-billion dollar 
businesses that have grown from what was once our national pastime are 
now being run accordingly to a financial bottom line, a healthy 
injection of competition may be just what is needed.
  I want to be reassured, for example, that the minor league teams will 
not be abandoned or exploited by major league owners and that the 
negotiations concerning the Professional Baseball Agreement proceed to 
a fair conclusion without being skewed by some notion of antitrust 
exemption. I want to consider whether there are measures we in Congress 
might take to strengthen the hands of cities, taxpayers and fans 
against the extortionate demands for new stadiums at public expense. I 
want to revisit the issues of antitrust immunity in connection with 
sports broadcasting rights and restrictions on viewers' access to 
programming imposed by major league owners. If I had my way, we would 
make progress in clarifying each of these matters.
  In an effort to act expeditiously, I am cosponsoring this consensus 
measure. I look forward to our prompt hearings, Committee and Senate 
consideration and to working with others to forge a legal framework in 
which the public will be better served.
  I am delighted and encouraged that the ranking Democratic member of 
the House Judiciary Committee, Rep. John Conyers, Jr., also acted on 
the first day of legislative activity in the House to introduce H.R. 
21, companion baseball antitrust legislation based on what we reported 
last Congress. It is right and fitting that he chose Curt Flood's 
number for this bill.
  Mr. Flood passed away yesterday. His contributions to the game of 
baseball went well beyond his all star play and outstanding statistics. 
He was a critical part of championship teams during his years 
patrolling center field for the St. Louis Cardinals in the late 50's 
and 60's. He was an outstanding hitter, fielder and all around player 
in an era of great players.
  His part in baseball history has even more to do with his resolve to 
stand up for what he knew was the right thing and his legal challenge 
to the reserve clause, which had bound players to teams for life. He 
was the plaintiff who sacrificed his career and a place in baseball's 
Hall of Fame by taking the matter all the way to the United States 
Supreme Court where, in 1972, the Court challenged Congress to correct 
the aberration that baseball's antitrust immunity represents in our 
law. There would be no more fitting tribute to Curt Flood's courage 
than for this Congress finally to answer that 25-year-old call to 
action. I hope that we will do so without further delay.
  Mr. MOYNIHAN. Mr. President, I am pleased to be an original cosponsor 
of the Curt Flood Act of 1997, a bill drafted by the distinguished 
chairman of the Judiciary Committee, Senator Hatch.
  This bill is designed to be a partial repeal of major league 
baseball's antitrust exemption. It would leave the exemption in place 
as it pertains to minor league baseball and the ability of major league 
baseball to control the relocation of franchises.
  In 1922, the Supreme Court of the United States, in Federal Baseball 
Club v. National League, held that ``exhibitions of base ball'' were 
not interstate commerce and thus were exempt from the antitrust laws. 
Fifty years later, in Flood v. Kuhn in 1972, the Court concluded that 
the antitrust exemption was an ``anomaly'' and an ``aberration confined 
to baseball'' and that ``profession baseball is a business and it is 
engaged in interstate commerce.'' Even so, the Court refused to reverse 
its 1922 decision in Federal Baseball. Justice Blackmun, delivering the 
opinion of the Court in Food, wrote:

       If there is any inconsistency or illogic in all this, it is 
     an inconsistency and illogic of long standing that is to be 
     remedied by the Congress and not by this Court.

  This decision clearly laid responsibility for baseball's antitrust 
exemption on Congress. It also explicitly recognized baseball's 
evolution into a major industry. Clearly, baseball is a business 
engaged in interstate commerce, and should be subject to the antitrust 
laws to the same extent that all other businesses are. So now, in 1997, 
on the 75th anniversary of Federal Baseball, the time has come for 
Congress to act.
  On the first day of the 104th Congress, I introduced my own 
legislation on the subject. My bill, S. 15, the National Pastime 
Preservation Act of 1995, would have applied the antitrust laws to 
major league baseball without the exceptions suggested by my friend 
from Utah.
  At this time, I am pleased to support any efforts that will provide a 
more level playing field for baseball's labor negotiations and that 
should help to prevent future strikes like the one we experienced in 
1994 and 1995 from interrupting the fans enjoyment of the game of 
baseball itself. While I am happy that both the owners and the players 
agreed to support this limited repeal of baseball's antitrust 
exemption, it is important to keep in mind that the players and owners 
do not write the labor laws, Congress does.
  It is most appropriate that this bill has been named in honor of Curt 
Flood, the man responsible for the second significant challenge to 
baseball's antitrust immunity. Curt Flood was a battler. Sadly, he lost 
a different battle yesterday, to throat cancer. He was only 59.
  Mr. Flood hit over .300 six times playing for the St. Louis Cardinals 
and he finished his 15-year career with a lifetime batting average of 
.293. he was also a seven-time Gold Glove winner, a three-time all-
star, and he helped lead the cardinals to their World Series titles in 
1964 and 1967.
  After the 1969 season, however, at the age of 32, Curt Flood was 
traded to the Phillies. Mr. Flood did not want to move. St. Louis was 
his home (he had played for the Cardinals for 11 years) and he was 
concerned about the racial politics in Philadelphia at the time. He 
sent a letter to Commissioner Bowie Kuhn asking him to nullify the 
trade, but his request was denied. It was in response to this denial 
that Mr. Flood initiated his historic suit challenging baseball's 
antitrust exemption.
  Curt Flood put his career on the line by sitting out the 1970 season 
as he challenged baseballs' reserve clause--rules that prohibited 
players from choosing which teams they wished to play for. While he 
resumed playing in 1971 after St. Louis and Philadelphia made a deal 
with the Washington Senators, the year off hurt Mr. Flood. his level of 
play was not the same and he retired after playing only 13 games for 
the Senators. The head of the players' union, Don Fehr, called Mr. 
Flood ``a man of quiet dignity.'' He added, ``Curt Flood conducted his 
life in a way that set an example for all who had the privilege to know 
him. When it came time to take a stand, at great personal risk and 
sacrifice, he proudly stood firm for what he believe was right.''
  I thank my friend from Utah for inviting me to cosponsor this 
legislation, and hope other Senators agree with us that the time has 
come to act.
                                 ______
                                 
      By Mr. HATCH (for himself, Mrs. Feinstein, Mr. D'Amato, Mr. 
        Harkin, and Mr. Reid):
  S. 54. A bill to reduce interstate street gang and organized crime 
activity, and for other purposes; to the Committee on the Judiciary.


                 the federal gang violence act of 1997

  Mr. HATCH. Mr. President, I rise today to introduce the Federal Gang 
Violence Act. I am pleased to be joined in this important effort by 
Senator Feinstein, as well as by Senators D'Amato, Harkin, and Reid.
  Gang violence in many of our communities is reaching frightening 
levels. Last year, my hometown of Salt Lake City was shocked by a 
particularly awful example. Asipeli Mohi, a 17-year-old Utahn, was 
tried and convicted of the gang-related beating and shooting death of 
another teenager, Aaron Chapman. Why was Aaron Chapman murdered? He was 
wearing red, apparently the color of a rival gang. Ironically, Mr. 
Chapman was on his way home from attending an anti-gang benefit concert 
when he was killed. Before committing this murder, the killer had 
racked up a record of five felonies and fifteen misdemeanors in 
juvenile court. Sadly, this example of senseless gang violence is not 
an isolated incident in my State or elsewhere. It is a scene replayed 
with disturbing frequency.
  Gang violence is now common even in places where this would have been 
unthinkable several years ago. Indeed,

[[Page S421]]

many people find it hard to believe that Salt Lake City or Ogden could 
have such a problem--gangs, they think, are a problem in cities like 
New York, Chicago, and Los Angeles, but not in our smaller cities.
  However, reality is much grimmer. Since 1992, gang activity in Salt 
Lake City has increased tremendously. For instance, the number of 
identified gangs has increased fifty-five percent, from 185 to 288, and 
the number of gang members has increased 146 percent, from 1,438 to 
3,545.
  The number of gang-related crimes has increased a staggering 196 
percent, from 1,741 in 1992 to 5,158 in the first eleven months of 
1996. In 1995, there were 174 gang-related drive-by shootings, and in 
the first eleven months of 1996, this dismaying statistic increased to 
207.
  Our problem is severe. Moreover, there is a significant role the 
federal government can play in fighting this battle. I am not one to 
advocate the unbridled extension of federal jurisdiction. Indeed, I 
often think that we have federalized too many crimes. However, in the 
case of criminal street gangs, which increasingly are moving interstate 
to commit crimes, there is a very proper role for the federal 
government to play.

  This bill will strengthen the coordinated, cooperative response of 
federal, state, and local law enforcement to criminal street gangs by 
providing more flexibility to the federal partners in this effort. It 
provides the federal prosecutorial tools needed to combat gang 
violence. Violent crimes committed by youth continue to be the fastest 
growing type of crime. Indeed, even as the general crime rate has 
leveled off, or even declined slightly over the last couple of years, 
violent youth crime, much of it committed by gangs, has increased. As 
my colleagues know, the sophistication and the interstate nature of 
these gangs has increased as well.
  This bill puts teeth into the federal gang statute, by adding tough 
penalties based on the existing Continuing Criminal Enterprise statute 
in title 21 [21 U.S.C. 848]. Federal prosecutors will be able to charge 
gang leaders or members under this section if they engage in two or 
more criminal gang offenses.
  These offenses include violent crimes, serious drug crimes, drug 
money laundering, extortion, and obstruction of justice--all offenses 
commonly committed by gangs.
  Our bill adds a one to ten year sentence for the recruitment of 
persons into a gang. Importantly, there are even tougher penalties for 
recruiting a minor into a gang, including a four year mandatory minimum 
sentence.
  The bill adds the use of a minor in a crime to the list of offenses 
for which a person can be prosecuted under the federal racketeering 
laws, known as RICO.
  It enhances the penalties for transferring a handgun to a minor, 
knowing that it will be used in a crime of violence, and adds a new 
federal sentencing enhancement for the use of body armor in the 
commission of a federal crime.
  Finally, the legislation we introduce today adds serious juvenile 
drug offenses to the list of predicates under the federal Armed Career 
Criminal Act, and authorizes $20 million over five years to hire 
federal prosecutors to crack down on criminal gangs.
  Mr. President, these are common sense, needed provisions. They're 
tough. We need to get tough with gangs who recruit kids with the lure 
of easy money and glamour. This legislation is not a panacea for our 
youth violence crisis. But it is a large and critical step in 
addressing this issue. I look forward to working with my colleagues on 
this bill, and urge their support.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 54

       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 ``Federal Gang Violence Act''.

     SEC. 2. 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 3 of this 
     Act.
       (b) Amendment of Sentencing Guidelines.--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, 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. 3. 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. 4. INTERSTATE AND FOREIGN TRAVEL OR TRANSPORTATION IN 
                   AID OF CRIMINAL STREET GANGS.

       (a) Travel Act Amendments.--

[[Page S422]]

       (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 3 of this Act; 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. 5. 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
       ``(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. 6. 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. 7. 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. 8. 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. 9. 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 3 of this Act).
                                 ______
                                 
      By Mr. FEINGOLD (for himself and Mr. Reid):

[[Page S423]]

  S. 57. A bill to amend the Federal Election Campaign Act of 1971 to 
provide for a voluntary system of spending limits and partial public 
financing of Senate primary and general election campaigns, to limit 
contributions by multicandidate political committees, to limit soft 
money of political party committees, and for other purposes; to the 
Committee on Rules and Administration.


         The senate campaign financing and spending reform act

  Mr. FEINGOLD. Mr. President, I rise today to introduce the proposed 
Senate Campaign Financing and Spending Reform Act of 1997, legislation 
that would provide public financing for Senate elections.
  The need for comprehensive campaign finance reform is unquestionable. 
Each election year continues to set new records for campaign spending 
by federal candidates, with 1996 campaign expenditures expected to 
surpass $1.6 billion. This explosion in campaign spending has alienated 
the American people from the election process, discouraged thousands of 
qualified yet underfunded candidates from seeking public office, and 
heightened public disgust with the ways of Washington to levels not 
seen since the dark days of Watergate.
  I have long believed that we need to sever the nexus between money 
and politics, and end as a prerequisite for elected office a 
candidate's ability to raise and spend millions of dollars. The most 
straight forward way to achieve that result is through a system of 
public financing.
  The legislation I am introducing today, which I also introduced at 
the outset of the 104th Congress, would provide qualified candidates 
with the means to run a credible, competitive and issue-based campaign 
without having to raise the average $5 million it takes to win a Senate 
election.
  This bill will establish voluntary spending limits based on each 
state's individual voting age population. With the cooperation of the 
candidates, this will finally curtail the skyrocketing spending that 
has plagued political campaigns in recent years. Just as important, 
these spending limits will allow members of Congress to focus on their 
duties and responsibilities as elected officials rather than spending 
substantial amounts of time raising money. For those candidates that do 
abide by the spending limits, there will be matching funds in the 
primary election for contributions under $250, once a candidate has 
raised 15 percent of that state's spending limit in contributions of 
$250 or less, half of which must come from within the candidate's 
state. There will be a 100 percent match for contributions under $100, 
and a 50 percent match for contributions between $101 and $250.
  These provisions, along with only providing matching funds for in-
state contributions, will encourage candidates to focus on smaller 
contributions from their home states. I believe this focus upon raising 
money within our home states is critical. General election candidates 
will become eligible for public financing benefits equal to the general 
election spending limit for their state.
  In addition to agreeing to limit their overall campaign spending, 
candidates who receive the public benefits must agree to not spend more 
than $25,000 of their own money.
  Opponents of campaign finance reform have often suggested that 
voluntary spending limits are unconstitutional. That is unfounded. In 
fact, in the landmark Supreme Court decision in Buckley v. Valeo, the 
Court noted that ``Congress may engage in public financing of election 
campaigns and may condition acceptance of public funds on an agreement 
by the candidate to abide by specified expenditure limitations. Just as 
a candidate may voluntarily limit the size of the contributions he 
chooses to accept, he may decide to forego private fundraising and 
accept public funding.''

  The legislation also bans so-called ``soft money'' that has allowed 
corporations, labor unions, and wealth individuals to contribute 
unlimited funds, up to millions of dollars, to the political parties 
outside the scope of Federal election law. The legislation restricts 
Political Action Committee (PAC) contributions to Federal candidates, 
prohibits lawmakers from sending out franked mass mailings during the 
calendar year of an election, bars lobbyists from contributing to 
elected officials they have lobbied in a 12-month period, and codifies 
a recent ruling by the Federal Election Commission that bars candidates 
from using campaign funds for personal purposes, such as mortgage 
payments, country club memberships, and vacations.
  Public financing of campaigns will give challengers a legitimate 
opportunity to run a competitive campaign, will allow incumbents to 
focus on their legislative responsibilities, and will help to 
extinguish public perceptions that the United States Congress is under 
the control of the Washington special interests.
  Public support for this sort of reform is strong. According to a 
recent poll by the Mellman Group, 59 percent of the American people--
the highest level since Watergate--support full public financing for 
congressional campaigns. Just 29 percent of the American people oppose 
this proposal. The Mellman Group even found two out of every three 
self-described Republicans supported public financing. A Gallup poll 
found similar results, finding 64 percent overall support for a public 
financing system.
  And perhaps most revealing, a very recent Wall Street Journal/NBC 
News poll found 92 percent of the American people simply believe too 
much money is spent in Federal elections.
  I have no illusions that a public financing proposal would win 
approval in the 105th Congress. I believe that one day those who have 
opposed public financing will finally get the message the voters are 
trying to send us and there will be wider support within the Congress 
for this approach to cleaning up election campaigns.
  In the meantime, I do believe there are meaningful reforms that can 
be considered and enacted with bipartisan support. That is why I have 
joined with a number of my colleagues on both sides of the aisle, 
including Senators McCain, Thompson, Wellstone and others in co-
authoring the first bipartisan campaign finance reform proposal offered 
in a decade.
  That legislation, strongly supported by President Clinton, Common 
Cause, and numerous grassroots organizations and newspapers nationwide, 
would begin the process of fundamentally changing and reducing the role 
of money in our political system. It also encourages candidates to 
limit their campaign spending, but instead of offering direct public 
financing it provides substantial discounts on broadcast media and 
postage rates to candidates who agree to limit their overall spending, 
who agree to limit their own personal spending, and who agree to raise 
60 percent of their campaign funds from their home States. I look 
forward to working with my colleagues on passing such meaningful 
reform, and will press for action in the first 100 days of this new 
Congress.
  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. 57

       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 ``Senate 
     Campaign Financing and Spending Reform Act''.
       (b) Table of Contents.--

Sec. 1. Short title; table of contents.
Sec. 2. Findings and eclarations of the Senate.

          TITLE I--CONTROL OF CONGRESSIONAL CAMPAIGN SPENDING

  Subtitle A--Senate Election Campaign Expenditure Limits and Benefits

Sec. 101. Senate expenditure limits and benefits.
Sec. 102. Political action committees.
Sec. 103. Reporting requirements.
Sec. 104. Disclosure by candidates other than eligible Senate 
              candidates.

                     Subtitle B--General Provisions

Sec. 131. Broadcast rates and preemption.
Sec. 132. Extension of reduced third-class mailing rates to eligible 
              senate candidates.
Sec. 133. Campaign advertising amendments.
Sec. 134. Definitions.
Sec. 135. Provisions relating to franked mass mailings.

                   TITLE II--INDEPENDENT EXPENDITURES

Sec. 201. Definitions.
Sec. 202. Reporting requirements for certain independent expenditures.

[[Page S424]]

                        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 Party Committees

Sec. 311. Soft money of political party committees.
Sec. 312. Reporting requirements.

                        TITLE IV--CONTRIBUTIONS

Sec. 401. Contributions through intermediaries and conduits; 
              prohibition on 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. Limited exclusion of advances by campaign workers from the 
              definition of the term ``contribution''.

                    TITLE V--REPORTING REQUIREMENTS

Sec. 501. Change in certain reporting from a calendar year basis to an 
              election cycle basis.
Sec. 502. Personal and consulting services.
Sec. 503. Contributions of $50 or more.
Sec. 504. Computerized indices of contributions.

                 TITLE VI--FEDERAL ELECTION COMMISSION

Sec. 601. Use of candidates' names.
Sec. 602. Reporting requirements.
Sec. 603. Provisions relating to the general counsel of the Commission.
Sec. 604. Penalties.
Sec. 605. Random audits.
Sec. 606. Prohibition of false representation to solicit contributions.
Sec. 607. Regulations relating to use of non-Federal money.
Sec. 608. Filing of reports using computers and facsimile machines.

                        TITLE VII--MISCELLANEOUS

Sec. 701. Prohibition of leadership committees.
Sec. 702. Polling data contributed to candidates.
Sec. 703. Restrictions on use of campaign funds for personal purposes.

              TITLE VIII--EFFECTIVE DATES; AUTHORIZATIONS

Sec. 801. Effective date.
Sec. 802. Severability.
Sec. 803. Expedited review of constitutional issues.

     SEC. 2. FINDINGS AND DECLARATIONS OF THE SENATE.

       (a) Necessity for Spending Limits.--The Senate finds and 
     declares that--
       (1) the current system of campaign finance has led to 
     public perceptions that political contributions and their 
     solicitation have unduly influenced the official conduct of 
     elected officials;
       (2) permitting candidates for Federal office to raise and 
     spend unlimited amounts of money constitutes a fundamental 
     flaw in the current system of campaign finance, and has 
     undermined public respect for the Senate as an institution;
       (3) the failure to limit campaign expenditures has caused 
     individuals elected to the Senate to spend an increasing 
     proportion of their time in office as elected officials 
     raising funds, interfering with the ability of the Senate to 
     carry out its constitutional responsibilities;
       (4) the failure to limit campaign expenditures has damaged 
     the Senate as an institution, due to the time lost to raising 
     funds for campaigns; and
       (5) to prevent the appearance of undue influence and to 
     restore public trust in the Senate as an institution, it is 
     necessary to limit campaign expenditures, through a system 
     which provides public benefits to candidates who agree to 
     limit campaign expenditures.
       (b) Necessity for Attributing Cooperative Expenditures to 
     Candidates.--The Senate finds and declares that--
       (1) public confidence and trust in the system of campaign 
     finance would be undermined should any candidate be able to 
     circumvent a system of caps on expenditures through 
     cooperative expenditures with outside individuals, groups, or 
     organizations;
       (2) cooperative expenditures by candidates with outside 
     individuals, groups, or organizations would severely 
     undermine the effectiveness of caps on campaign expenditures, 
     unless they are included within such caps; and
       (3) to maintain the integrity of the system of campaign 
     finance, expenditures by any individual, group, or 
     organization that have been made in cooperation with any 
     candidate, authorized committee, or agent of any candidate 
     must be attributed to that candidate's cap on campaign 
     expenditures.
          TITLE I--CONTROL OF CONGRESSIONAL CAMPAIGN SPENDING
  Subtitle A--Senate Election Campaign Expenditure Limits and Benefits

     SEC. 101. SENATE EXPENDITURE LIMITS AND BENEFITS.

       (a) Amendment of FECA.--Federal Election Campaign Act of 
     1971 (2 U.S.C. 431 et seq.) is amended by adding at the end 
     the following:
    ``TITLE V--EXPENDITURE 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(c).
       ``(3) Expenditure.--The term `expenditure' has the meaning 
     given in paragraph (9) of section 301, excluding subparagraph 
     (B)(ii) of that paragraph.
       ``(4) Fund.--The term `Fund' means the Senate Election 
     Campaign Fund established by section 509.
       ``(5) 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).
       ``(6) Personal funds expenditure limit.--The term `personal 
     funds expenditure limit' means the limit stated in section 
     503(a).
       ``(7) 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).
       ``(8) 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 certification 
     and declaration under subsection (b) and is in compliance 
     with the representations made in the certification and 
     declaration; and
       ``(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.
       ``(b) Primary 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 pending of perjury, that the 
     candidate has met the threshold contribution requirement of 
     subsection (e); and
       ``(B) a declaration that the candidate and the candidate's 
     authorized committees--
       ``(i)(I) will not exceed the primary election expenditure 
     limit or runoff election expenditure limits; and
       ``(II) will accept only an amount of contributions for the 
     primary election and any runoff election that does not exceed 
     the primary election expenditure limit and, if there is a 
     runoff election, the runoff election expenditure limit;
       ``(ii)(I) will not exceed the primary and runoff election 
     multicandidate political committee contribution limits of 
     subsection (f); and
       ``(II) will accept only an amount of contributions for the 
     primary election and any runoff election from multicandidate 
     political committees that does not exceed those limits;
       ``(iii) will not accept contributions for the primary or 
     runoff election that would cause the candidate to exceed the 
     limitation on contributions from out-of-State residents under 
     subsection (g);
       ``(iv) will not exceed the personal funds expenditure 
     limit; and
       ``(v) will not exceed the general election expenditure 
     limit.
       ``(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) did not exceed the primary election expenditure limit 
     or runoff election expenditure limit;
       ``(II) did not accept contributions for the primary 
     election or runoff election in excess of the primary election 
     expenditure limit or runoff election expenditure limit, 
     reduced by any amounts transferred to the current election 
     cycle from a preceding election cycle;
       ``(III) did not accept contributions for the primary or 
     runoff election in excess of the multicandidate political 
     committee contribution limits under subsection (f);
       ``(IV) did not accept contributions for the primary 
     election or runoff election that caused the candidate to 
     exceed the limitation on contributions from out-of-State 
     residents under subsection (g); and

       ``(ii) 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--

[[Page S425]]

       ``(i) except as otherwise provided by this title, will not 
     make expenditures that exceed the general election 
     expenditure limit;
       ``(ii) except as otherwise provided by this title, will not 
     accept any contribution for the general election to the 
     extent that the contribution--

       ``(I) would cause the aggregate amount of contributions to 
     exceed the sum of the amount of the general election 
     expenditure limit, 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) would cause the candidate to exceed the limitation 
     on contributions from out-of-State residents under subsection 
     (g);
       ``(III) would be in violation of section 315;

       ``(iii) 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;
       ``(vi) will furnish campaign records, evidence of 
     contributions, and other appropriate information to the 
     Commission; and
       ``(v) 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.
       ``(2) Deadline for filing declaration and certification.--
     The declaration and 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 Election 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;
       ``(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, for purposes of 
     subsection (d)(1) and section 503(b)(3), 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 Requirement.--
       ``(1) In general.--The requirement of this subsection is 
     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 the lesser 
     of--
       ``(A) 10 percent of the general election expenditure limit; 
     or
       ``(B) $250,000.
       ``(2) Definitions.--In this section and subsections (b) and 
     (c) of section 504:
       ``(A) Allowable contribution.--
       ``(i) In general.--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.
       ``(ii) Exclusions.--The term `allowable contribution' does 
     not include--

       ``(I) a contribution from any individual during the 
     applicable period to the extent that the aggregate amount of 
     such contributions from the individual exceeds $250; or
       ``(II) a contribution from an individual residing outside 
     the candidate's State to the extent that acceptance of the 
     contribution would bring a candidate out of compliance with 
     subsection (g).

       ``(iii) Applicability.--Items subclauses (I) and (II) of 
     clause (ii) shall not apply for purposes of section 504(a).
       ``(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 and declaration 
     under subsection (c) is filed by the candidate; or
       ``(II) for purposes of subsection (a) of section 503, 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.
       ``(f) Multicandidate Political Committee Contribution 
     Limits.--The requirements of this subsection are met if the 
     candidate and the candidate's authorized committees have 
     accepted from multicandidate political committees allowable 
     contributions that do not exceed--
       ``(1) during the primary election period, an amount equal 
     to 20 percent of the primary election spending limit; and
       ``(2) during the runoff election period, an amount equal to 
     20 percent of the runoff election spending limit.
       ``(g) Limitation on Out-of-State Contributions.--
       ``(1) Requirements.--The requirements of this subsection 
     are met if at least 50 percent of the total amount of 
     contributions accepted by the candidate and the candidate's 
     authorized committees are from individuals who are legal 
     residents of the candidate's State.
       ``(2) Personal funds.--For purposes of paragraph (1), 
     amounts consisting of funds from sources described in section 
     503(a) shall be treated as contributions from individuals 
     residing outside the candidate's State.
       ``(3) Time for determination.--A determination whether the 
     requirements of paragraph (1) are met shall be made each time 
     a candidate is required to file a report under section 304 
     and shall be made on an aggregate basis.

     ``SEC. 503. LIMITS 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) $950,000; 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) `80 cents' for `30 cents' in subclause (I); and
       ``(B) `70 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) 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.
       ``(d) Expenditures.--For purposes of this title, the term 
     `expenditure' has the meaning given such term by section 
     301(9), except that in determining any expenditures made by, 
     or on behalf of, a candidate or a candidate's authorized 
     committees, section 301(9)(B) shall be applied without regard 
     to clause (ii) or (vi).
       ``(e) Expenditures in Response to Independent 
     Expenditures..--If an eligible Senate candidate is notified 
     by the Commission under section 304(c)(4) that independent 
     expenditures totaling $10,000 or more have been made in the 
     same election in favor of another candidate or against the 
     eligible candidate, the eligible candidate shall be permitted 
     to spend an amount equal to the amount of the independent 
     expenditures, and any such expenditures shall not be subject 
     to any limit applicable under this title to the eligible 
     candidate for the election.

     ``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;

[[Page S426]]

       ``(2) the mailing rates provided in section 3626(e) of 
     title 39, United States Code; and
       ``(3) payments in an amount equal to--
       ``(A) the public financing amount determined under 
     subsection (b);
       ``(B) the excess expenditure amount determined under 
     subsection (c); and
       ``(C) the independent expenditure amount determined under 
     subsection (d).
       ``(b) Public Financing Amount.--
       ``(1) Determination.--The public financing amount is--
       ``(A) in the case of an eligible candidate who is a major 
     party candidate and has met the threshold requirement of 
     section 502(e)--
       ``(i)(I) during the primary election period, the public 
     financing an amount equal to 100 percent of the amount of 
     contributions received during that period from individuals 
     residing in the candidate's State in the aggregate amount of 
     $100 or less; plus
       ``(II) an amount equal to 50 percent of the amount of 
     contributions received during that period from individuals 
     residing in the candidate's State in the aggregate amount of 
     more than $100 but less than $251, up to 50 percent of the 
     primary election expenditure limit; reduced by
       ``(III) the threshold requirement under section 502(e);
       (ii)(I) during the runoff election period, an amount equal 
     to 100 percent of the amount of contributions received during 
     that period from individuals residing in the candidate's 
     State in the aggregate amount of $100 or less; plus
       ``(II) an amount equal to 50 percent of the amount of 
     contributions received during that period from individuals 
     residing in the candidate's State in the aggregate amount of 
     more than $100 but less than $251, up to 10 percent of the 
     general election expenditure limit; and
       ``(III) during the general election period, an amount equal 
     to the general election expenditure limit; and
       ``(B) in the case of an eligible candidate who is not a 
     major party candidate and who has met the threshold 
     requirement of section 502(e)--
       ``(i)(I) during the primary election period, an amount 
     equal to 100 percent of the amount of contributions received 
     during that period from individuals residing in the 
     candidate's State in the aggregate amount of $100 or less; 
     plus
       ``(II) an amount equal to 50 percent of the amount of 
     contributions received during that period from individuals 
     residing in the candidate's State in the aggregate amount of 
     more than $100 but less than $251, up to 50 percent of the 
     primary election expenditure limit; reduced by
       ``(III) the threshold requirement under section 502(e);
       ``(ii)(I) during the runoff election period, an amount 
     equal to 100 percent of the amount of contributions received 
     during that period from individuals residing in the 
     candidate's State in the aggregate amount of $100 or less; 
     plus,
       ``(II) an amount equal to 50 percent of the amount of 
     contributions received during that period from individuals 
     residing in the candidate's State in the aggregate amount of 
     more than $100 but less than $251, up to 10 percent of the 
     general election expenditure limit; and
       ``(iii)(I) during the general election period, an amount 
     equal to 100 percent of the amount of contributions received 
     during that period from individuals residing in the 
     candidate's State in the aggregate amount of $100 or less, 
     plus;
       ``(II) an amount equal to 50 percent of the amount of 
     contributions received during that period from individuals 
     residing in the candidate's State in the aggregate amount of 
     more than $100 but less than $251, up to 50 percent of the 
     general election expenditure limit.
       ``(c) 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.
       ``(d) 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(c) with respect to the general election 
     period and are certified by the Commission under section 
     304(c).
       ``(e) 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)(3) that are allocable 
     to the independent expenditure or excess expenditure amounts 
     described in subsections (c) and (d) 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 excess opponent 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)(B)(iv).--
       ``(A) A candidate who receives benefits under this section 
     may accept a contribution for the general election without 
     regard to section 502(c)(1)(B)(iv) 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)(3) 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)(3) shall not be used--
       ``(A) except as provided in subparagraph (D), 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 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 7 business days 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

[[Page S427]]

     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 10 percent of all 
     candidates for the office of United States 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. If the Commission 
     selects a candidate, the Commission shall examine and audit 
     the campaign accounts of all other candidates in the general 
     election for the office the selected candidate is seeking.
       ``(2) 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 may have 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 benefit.
       ``(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, 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 sum of 3 times the 
     amount of the excess expenditures plus an additional amount 
     determined by the Commission.
       ``(g) Unexpended Funds.--
       ``(1) 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 any 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.
       ``(2) Repayment.--At the end of the 120-day period, any 
     unexpended funds received under this title shall be promptly 
     repaid.
       ``(h) 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.
       ``(i) Deposits.--The Secretary shall deposit all payments 
     received under this section into the Senate Election Campaign 
     Fund.

     ``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;
       ``(C) the amount of repayments, if any, required under 
     section 506 and the reason why each repayment was required; 
     and
       ``(D) the balance in the senate Election Campaign Fund, and 
     the balance in any account maintained by the Fund.
       ``(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. PAYMENTS TO ELIGIBLE CANDIDATES.

       ``(a) Senate Election Campaign Fund.--
       ``(1) Establishment of Campaign Fund.-- There is 
     established on the books of the Treasury of the United States 
     a special fund to be known as the `Senate Election Campaign 
     Fund'.
       ``(2) Appropriations.--
       (A) In general.--There are appropriated to the Fund for 
     each fiscal year, out of amounts in the general fund of the 
     Treasury not otherwise appropriated, amounts equal to--
       ``(i) any contributions by persons which are specifically 
     designated as being made to the Fund;
       ``(ii) amounts collected under section 506(i); and
       ``(iii) any other amounts that may be appropriated to or 
     deposited into the Fund under this title.
       ``(B) Transfers.--The Secretary of the Treasury shall, from 
     time to time, transfer to the Fund an amount not in excess of 
     the amounts described in subparagraph (A).
       ``(C) Fiscal year.--Amounts in the Fund shall remain 
     available without fiscal year limitation.
       ``(3) Use of Fund.--Amounts in the Fund shall be available 
     only for the purposes of--
       ``(A) making payments required under this title; and
       ``(B) making expenditures in connection with the 
     administration of the Fund.
       ``(4) Fund account.--The Secretary shall maintain such 
     accounts in the Fund as may be required by this title or 
     which the Secretary determines to be necessary to carry out 
     the provisions of this title.
       ``(b) Payments on Certification.--On receipt of a 
     certification from the Commission under section 505, except 
     as provided in subsection (c), the Secretary shall, subject 
     to

[[Page S428]]

     the availability of appropriations, promptly pay the amount 
     certified by the Commission to the candidate out of the 
     Senate Election Campaign Fund.
       ``(c) 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 the monies in 
     the Senate Election Campaign Fund are not, or may not be, 
     sufficient to satisfy the full entitlement of all eligible 
     candidates, the Secretary shall withhold from the amount of 
     the payment any amount that 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 monies in the Senate Election Campaign Fund 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 
     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 that there 
     will be insufficient funds under subparagraph (A) 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)(B)(iv) 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)(B)(iv) 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, 1998.
       (2) Applicability to contributions and expenditures.--For 
     purposes of any expenditure or contribution limit imposed by 
     the amendment made by subsection (b)--
       (A) no expenditure made before January 1, 1999, 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, 1999, 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, 1999, 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.
       (d) Provisions To Facilitate Voluntary Contributions to 
     Senate Election Campaign Fund.--
       (1) General Rule.--Part VIII of subchapter A of chapter 61 
     of the Internal Revenue Code of 1986 (relating to returns and 
     records) is amended by adding at the end the following:

   ``Subpart B--Designation of Additional Amounts to Senate Election 
                             Campaign Fund

``Sec. 6097. Designation of additional amounts.

     ``SEC. 6097. DESIGNATION OF ADDITIONAL AMOUNTS.

       ``(a) General Rule.--Every individual (other than a 
     nonresident alien) who files an income tax return for any 
     taxable year may designate an additional amount equal to $5 
     ($10 in the case of a joint return) to be paid over to the 
     Senate Election Campaign Fund.
       ``(b) Manner and Time of Designation.--A designation under 
     subsection (a) may be made for any taxable year only at the 
     time of filing the income tax return for the taxable year. 
     Such designation shall be made on the page bearing the 
     taxpayer's signature.
       ``(c) Treatment of Additional Amounts.--Any additional 
     amount designated under subsection (a) for any taxable year 
     shall, for all purposes of law, be treated as an additional 
     income tax imposed by chapter 1 for such taxable year.
       ``(d) Income Tax Return.--For purposes of this section, the 
     term `income tax return' means the return of the tax imposed 
     by chapter 1.''.
       (2) Conforming amendments.--(A) Part VIII of subchapter A 
     of chapter 61 of such Code is amended by striking the heading 
     and inserting:

     ``PART VIII--DESIGNATION OF AMOUNTS TO ELECTION CAMPAIGN FUNDS

``Subpart A. Presidential Election Campaign Fund.
``Subpart B. Designation of additional amounts to Senate Election 
              Campaign Fund.

          ``Subpart A--Presidential Election Campaign Fund''.

       (B) The table of parts for subchapter A of chapter 61 of 
     such Code is amended by striking the item relating to part 
     VIII and inserting:

``Part VIII. Designation of amounts to election campaign funds.''
       (3) Effective date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1998.

     SEC. 102. POLITICAL ACTION COMMITTEES.

       (a) Limitations on Multicandidate Political Committee 
     Contributions to Candidates.--Section 315(a)(2) of the 
     Federal Election Campaign Act of 1971 (2 U.S.C. 441a(a)(2)) 
     is amended--
       (1) by striking ``(2) No multicandidate'' and inserting the 
     following:
       ``(2) Multicandidate political committees.--
       ``(A) In general.--No multicandidate'';
       (2) in subparagraph (A) by striking ``$5,000'' and 
     inserting ``$1,000'';
       (3) by redesignating subparagraphs (A), (B), and (C) as 
     clauses (i), (ii), and (iii), respectively; and
       (4) by adding at the end the following:
       ``(B) Contributions to candidates.-- Notwithstanding 
     subparagraph (A)(i) it shall be unlawful for a multicandidate 
     political committee to make a contribution to a candidate for 
     election, or nomination for election, to the Senate or an 
     authorized committee of a Senate candidate, or for a Senate 
     candidate to accept a contribution, to the extent that the 
     making or accepting of the contribution would cause the 
     amount of contributions received by the candidate and the 
     candidate's authorized committees from multicandidate 
     political committees to exceed the lesser of--
       ``(i) $825,000; or
       ``(ii) 20 percent of the primary election expenditure 
     limit, runoff election expenditure limit, or general election 
     expenditure limit (as those terms are defined in section 501) 
     that is applicable (or, if the candidate were an eligible 
     Senate candidate (as defined in section 501) would be 
     applicable) to the candidate.''.
       (b) Indexing.--The $825,000 amount under subparagraph (B) 
     shall be increased as of the beginning of each calendar year 
     based on the increase in the price index determined under 
     section 315(c) of the Federal Election Campaign Act of 1971 
     (2 U.S.C. 441a(c)), except that for purposes of subparagraph 
     (B), the base period shall be the calendar year 1996.
       (c) Return of excess.--A candidate or authorized committee 
     that receives a contribution from a multicandidate political 
     committee in excess of the amount allowed under subparagraph 
     (B) shall return the amount of the excess contribution to the 
     contributor.
       (d) Limitations on Multicandidate Committee Contributions 
     to Political Committees.--Paragraphs (1)(C) and (2)(A)(iii) 
     of section 315(a) of the Federal Election Campaign Act of 
     1971 (2 U.S.C. 441a(a)), as amended by subsection (a), are 
     amended by striking ``$5,000'' and inserting ``$1,000''.
       (e) 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, 1998.
       (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, 1999; 
     or
       (B) a contribution made to, or received by, a candidate on 
     or after January 1, 1999, 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, 
     1999; over
       (ii) the aggregate amount of such contributions made to or 
     received by the candidate before January 1, 1999.

     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

[[Page S429]]

     provided in section 502(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 
     24 hours after aggregate contributions have been received or 
     aggregate expenditures have been made or obligated to be made 
     in that amount (or, if later, within 24 hours 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 24 
     hours 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 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 24 hours 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 24 hours 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 24 hours after 
     expenditures have been made or loans incurred in excess of 
     the personal funds expenditure limit.
       ``(2) Notification of eligible senate candidates.--Within 
     24 hours 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 
     24 hours after making a determination under subparagraph (A), 
     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.
       ``(d) 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.
       ``(e) 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 (whenever a 24 hour 
     response is required of the Commission) 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 133) is amended by adding 
     at the end the following:
       ``(f) 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.'.''.
                     Subtitle B--General Provisions

     SEC. 131. 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'';
       (B) by striking ``sixty'' and inserting ``45''; and
       (C) 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.--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 general election 
     period (as defined in section 301 of that Act) shall not 
     exceed 50 percent of the lowest charge described in paragraph 
     (1)(A).
       (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 
     (e) and (f), 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.''.
       ``(d) Time for Legally Qualified Senate Candidates.--In the 
     case of a legally qualified candidate for the United States 
     Senate, a licensee shall provide broadcast time without 
     regard to the rates charged for the time.''.

     SEC. 132. EXTENSION OF REDUCED THIRD-CLASS MAILING RATES TO 
                   ELIGIBLE SENATE CANDIDATES.

       Section 3626(e) of title 39, United States Code, is 
     amended--
       (1) in paragraph (2)(A)--
       (A) by striking ``and the National'' and inserting ``the 
     National''; and
       (B) by striking ``Committee;'' and inserting ``Committee, 
     and, subject to paragraph (3), the principal campaign 
     committee of an eligible House of Representatives or Senate 
     candidate;'';
       (2) in paragraph (2)(B), by striking ``and'' after the 
     semicolon;
       (3) in paragraph (2)(C), by striking the period and 
     inserting ``; and'';
       (4) by adding after paragraph (2)(C) the following new 
     subparagraph:

[[Page S430]]

       ``(D) The terms `eligible Senate candidate' and `principal 
     campaign committee' have the meanings given those terms in 
     section 301 of the Federal Election Campaign Act of 1971.''; 
     and
       (5) by adding after paragraph (2) the following paragraph:
       ``(3) The rate made available under this subsection with 
     respect to an eligible Senate candidate shall apply only to--
       ``(A) the general election period (as defined in section 
     301 of the Federal Election Campaign Act of 1971); and
       ``(B) that number of pieces of mail equal to the number of 
     individuals in the voting age population (as certified under 
     section 315(e) of such Act) of the congressional district or 
     State, whichever is applicable.''.

     SEC. 133. 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. 134. 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; but
       ``(B) does not include an open primary election.
       ``(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 under State law 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.''.
       ``(29) The term `lobbyist' means--
       ``(A) a person required to register under the Lobbying 
     Disclosure Act of 1995 (2 U.S.C. 1601 et seq.) or the Foreign 
     Agents Registration Act of 1938 (22 U.S.C. 611 et seq.); and
       ``(B) a person who receives compensation in return for 
     having contact with Congress on any legislative matter.''.
       (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. 135. PROVISIONS RELATING TO FRANKED MASS MAILINGS.

       (a) Mass Mailings of Senators.--Section 3210(a)(6) of title 
     39, United States Code, is amended--
       (1) in subparagraph (A), by striking ``It is the intent of 
     Congress that a Member of, or a Member-elect to, Congress'' 
     and inserting ``A Member of, or Member-elect to, the House''; 
     and
       (2) in subparagraph (C)--
       (A) by striking ``if such mass mailing is postmarked fewer 
     than 60 days immediately before the date'' and inserting ``if 
     such mass mailing is postmarked during the calendar year''; 
     and
       (B) by inserting ``or reelection'' before the period.
       (b) Mass Mailings of House Members.--Section 3210 of title 
     39, United States Code, is amended--
       (1) in subsection (a)(7) by striking ``, except that--'' 
     and all that follows through the end of subparagraph (B) and 
     inserting a period; and
       (2) in subsection (d)(1) by striking ``delivery--'' and all 
     that follows through the end of subparagraph (B) and 
     inserting ``delivery within that area constituting the 
     congressional district or State from which the Member was 
     elected.''.
       (c) Prohibition on Use of Official Funds.--The Committee on 
     House Administration of the House of Representatives may not 
     approve any payment, nor may a Member of the House of 
     Representatives make any expenditure from, any allowance of 
     the House of Representatives or any other official funds if 
     any portion of the payment or expenditure is for any cost 
     related to a mass mailing by a Member of the House of 
     Representatives outside the congressional district of the 
     Member.
                   TITLE II--INDEPENDENT EXPENDITURES

     SEC. 201. DEFINITIONS.

       (a) Independent Expenditure; Express Advocacy.--Section 301 
     of the Federal Election Campaign Act of 1971 (2 U.S.C. 431) 
     is amended by striking paragraphs (17) and (18) and inserting 
     the following:
       ``(17) Independent expenditure.--
       ``(A) In general.--The term `independent expenditure' means 
     an expenditure for an advertisement or other communication 
     that--
       ``(i) contains express advocacy; and
       ``(ii) is made without the participation or cooperation of, 
     or without the consultation of, a candidate or a candidate's 
     representative.
       ``(B) Exclusions.--The term `independent expenditure' does 
     not include the following:

[[Page S431]]

       ``(i) An expenditure made by--

       ``(I) an authorized committee of a candidate; or
       ``(II) a political committee of a political party.

       ``(ii) An expenditure if there is any arrangement, 
     coordination, or direction with respect to the expenditure 
     between the candidate or the candidate's representative and 
     the person making the expenditure.
       ``(iii) An expenditure if, in the same election cycle, the 
     person making the expenditure--

       ``(I) is or has been authorized to raise or expend funds on 
     behalf of the candidate or the candidate's authorized 
     committees; or
       ``(II) is serving or has served as a member, employee, or 
     agent of the candidate's authorized committees in an 
     executive or policymaking position.

       ``(iv) An expenditure if the person making the expenditure 
     has played a significant role in advising or counseling the 
     candidate or the candidate's agents at any time on the 
     candidate's plans, projects, or needs relating to the 
     candidate's pursuit of nomination for election, or election, 
     to Federal office, in the same election cycle, including any 
     advice relating to the candidate's decision to seek Federal 
     office.
       ``(v) An expenditure if the person making the expenditure 
     retains the professional services of any individual or other 
     person also providing services in the same election cycle to 
     the candidate in connection with the candidate's pursuit of 
     nomination for election, or election, to Federal office, 
     including any services relating to the candidate's decision 
     to seek Federal office.
       ``(C) Definitions.--For purposes of subparagraph (B)--
       ``(i) the person making the expenditure includes any 
     officer, director, employee, or agent of a person; and
       ``(ii) the term `professional service' includes any service 
     (other than legal and accounting services for purposes of 
     ensuring compliance with this title) in support of a 
     candidate's pursuit of nomination for election, or election, 
     to Federal office.
       ``(18) Express advocacy.--
       ``(A) In general.--The term `express advocacy' means a 
     communication that is taken as a whole and with limited 
     reference to external events, makes an expression of support 
     for or opposition to a specific candidate, to a specific 
     group of candidates, or to candidates of a particular 
     political party.
       ``(B) Expression of support for or opposition to.--In 
     subparagraph (A), the term `expression of support for or 
     opposition to' includes a suggestion to take action with 
     respect to an election, such as to vote for or against, make 
     contributions to, or participate in campaign activity, or to 
     refrain from taking action.''.
       ``(C) Voting records.--The term `express advocacy' does not 
     include the publication and distribution of a communication 
     that is limited to providing information about votes by 
     elected officials on legislative matters and that does not 
     expressly advocate the election or defeat of a clearly 
     identified candidate.''.
       (b) Contribution Definition Amendment.--Section 301(8)(A) 
     of the Federal Election Campaign Act of 1971 (2 U.S.C. 
     431(8)(A)) is amended--
       (1) by striking ``or'' at the end of clause (i);
       (2) by striking the period at the end of clause (ii) and 
     inserting ``; or''; and
       (3) by adding at the end the following:
       ``(iii) any payment or other transaction referred to in 
     paragraph (17)(A)(i) that is excluded from the meaning of 
     `independent expenditure' under paragraph (17)(B).''.

     SEC. 202. REPORTING REQUIREMENTS FOR CERTAIN INDEPENDENT 
                   EXPENDITURES.

       (a) In General.--Section 304 of the Federal Election 
     Campaign Act of 1971 (2 U.S.C. 434) is amended by adding at 
     the end the following:
       ``(d) Time for Reporting Certain Expenditures.--
       ``(1) Expenditures aggregating $1,000.--
       ``(A) Initial report.--A person (including a political 
     committee) 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.
       ``(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 $1,000 are made with 
     respect to the same election as that to which the initial 
     report relates.
       ``(2) Expenditures aggregating $10,000.--
       ``(A) Initial report.--A person (including a political 
     committee) 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 Commission; 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 to candidates.--In the case of an 
     election for United States Senator, not later than 48 hours 
     after receipt of a report under this subsection, the 
     Commission shall transmit a copy of the report to each 
     eligible 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) Determinations by the Commission.--
       ``(A) In general.--The Commission may, upon a request of a 
     candidate or on its own initiative, make its own 
     determination that a person, including a political committee, 
     has made, or has incurred obligations to make, independent 
     expenditures with respect to any candidate in any Federal 
     election that in the aggregate exceed the applicable amounts 
     under paragraph (1) or (2).
       ``(B) Notification.--In the case of a United States 
     Senator, the Commission shall notify each candidate in the 
     election of the making of the determination within 2 business 
     days after making the determination.
       ``(C) Time to comply with request for determination.--A 
     determination made at the request of a candidate shall be 
     made with 48 hours of the request.
       ``(6) Notification of an allowable increase in independent 
     expenditure limit.--When independent expenditures totaling in 
     the aggregate $10,000 have been made in the same election in 
     favor of another candidate or against an eligible Senate 
     candidate, the Commission shall, within 2 business days, 
     notify the eligible candidate that such candidate is entitled 
     to an increase under section 503(e) in the candidate's 
     applicable election limit in an amount equal to the amount of 
     such independent expenditures.''.
                        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 Party Committees

     SEC. 311. SOFT MONEY OF POLITICAL 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.) is amended by adding at the end the following:

     ``SEC. 324. SOFT MONEY OF POLITICAL PARTY COMMITTEES.

       ``(a) National Committees.--A national committee of a 
     political party and the congressional campaign committees of 
     a political party (including a national congressional 
     campaign committee of a political party, an entity that is 
     established, financed, maintained, or controlled by the 
     national committee, a national congressional campaign 
     committee of a political party, and an officer or agent of 
     any such party or entity but not including an entity 
     regulated under subsection (b)) shall not solicit or accept 
     an amount or spend any funds, or solicit or accept a transfer 
     from another political committee, that is not subject to the 
     limitations, prohibitions, and reporting requirements of this 
     Act.
       ``(b) State, District, and Local Committees.--
       ``(1) In general.--Any amount that is expended or disbursed 
     by a State, district, or

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     local committee of a political party (including an entity 
     that is established, financed, maintained, or controlled by a 
     State, district, or local committee of a political party and 
     an agent or officer of any such committee or entity) during a 
     calendar year in which a Federal election is held, for any 
     activity that might affect the outcome of a Federal election, 
     including any voter registration or get-out-the-vote 
     activity, any generic campaign activity, and any 
     communication that identifies a candidate (regardless of 
     whether a candidate for State or local office is also 
     mentioned or identified) shall be made from funds subject to 
     the limitations, prohibitions, and reporting requirements of 
     this Act.
       ``(2) Activity excluded from paragraph (1).--
       ``(A) In general.--Paragraph (1) shall not apply to an 
     expenditure or disbursement made by a State, district, or 
     local committee of a political party for--
       ``(i) a contribution to a candidate for State or local 
     office if the contribution is not designated or otherwise 
     earmarked to pay for an activity described in paragraph (1);
       ``(ii) the costs of a State, district, or local political 
     convention;
       ``(iii) the non-Federal share of a State, district, or 
     local party committee's administrative and overhead expenses 
     (but not including the compensation in any month of any 
     individual who spends more than 20 percent of the 
     individual's time on activity during the month that may 
     affect the outcome of a Federal election) except that for 
     purposes of this paragraph, the non-Federal share of a party 
     committee's administrative and overhead expenses shall be 
     determined by applying the ratio of the non-Federal 
     disbursements to the total Federal expenditures and non-
     Federal disbursements made by the committee during the 
     previous presidential election year to the committee's 
     administrative and overhead expenses in the election year in 
     question;
       ``(iv) the costs of grassroots campaign materials, 
     including buttons, bumper stickers, and yard signs that name 
     or depict only a candidate for State or local office; and
       (v) the cost of any campaign activity conducted solely on 
     behalf of a clearly identified candidate for State or local 
     office, if the candidate activity is not an activity 
     described in paragraph (1).
       ``(B) Fundraising costs.--Any amount spent by a national, 
     State, district, or local committee, by an entity that is 
     established, financed, maintained or controlled by a State, 
     district, or local committee of a political party, or by an 
     agent or officer of any such committee or entity to raise 
     funds that are used, in whole or in part, in connection with 
     an activity described in paragraph (1) shall be made from 
     funds subject to the limitations, prohibitions, and reporting 
     requirements of this Act.
       ``(c) Tax-exempt organizations.--No national, State, 
     district, or local committee of a political party shall 
     solicit any funds for or make any donations to an 
     organization that is exempt from Federal taxation under 
     section 501(c) of the Internal Revenue Code of 1986.
       ``(d) Candidates.--
       ``(1) In general.--Except as provided in paragraph (2), no 
     candidate, individual holding Federal office, or agent of a 
     candidate or individual holding Federal office may--
       ``(A) solicit or receive funds in connection with an 
     election for Federal office unless the funds are subject to 
     the limitations, prohibitions, and reporting requirements of 
     this Act; or
       ``(B) solicit or receive funds that are to be expended in 
     connection with any election for other than a Federal 
     election unless the funds--
       ``(i) are not in excess of the amounts permitted with 
     respect to contributions to candidates and political 
     committees under section 315(a) (1) and (2); and
       ``(ii) are not from sources prohibited by this Act from 
     making contributions with respect to an election for Federal 
     office.
       ``(2) Exception.--Paragraph (1) does not apply to the 
     solicitation or receipt of funds by an individual who is a 
     candidate for a State or local office if the solicitation or 
     receipt of funds is permitted under State law for the 
     individual's State or local campaign committee.''.

     SEC. 312. REPORTING REQUIREMENTS.

       (a) Reporting Requirements.--Section 304 of the Federal 
     Election Campaign Act of 1971 (2 U.S.C. 434) is amended by 
     adding at the end the following:
       ``(d) 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 324 
     applies.--A political committee (not described in paragraph 
     (1)) to which section 324 applies shall report all receipts 
     and disbursements.
       ``(3) Transfers.--A political committee to which section 
     324 applies shall--
       ``(A) include in a report under paragraph (1) or (2) the 
     amount of any transfer described in section 324(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:
       ``(f) 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--
       (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 expenditures'' and 
     inserting ``operating expenses, and the election to which the 
     operating expense relates''.
                        TITLE IV--CONTRIBUTIONS

     SEC. 401. CONTRIBUTIONS THROUGH INTERMEDIARIES AND CONDUITS; 
                   PROHIBITION ON CERTAIN CONTRIBUTIONS BY 
                   LOBBYISTS.

       (a) Contributions Through Intermediaries and Conduits.--
     Section 315(a)(8) of FECA (2 U.S.C. 441a(a)(8)) is amended by 
     striking paragraph (8) and inserting the following:
       ``(8) Intermediaries and conduits.--
       ``(A) Definitions.--In this paragraph:
       ``(i) Acting on behalf of the entity.--The term `acting on 
     behalf of the entity' means soliciting one or more 
     contributions--

       ``(I) in the name of an entity;
       ``(II) using other than incidental resources of an entity; 
     or
       ``(III) by directing a significant portion of the 
     solicitations to other officers, employees, agents, or 
     members of an entity or their spouses, or by soliciting a 
     significant portion of the other officers, employees, agents, 
     or members of an entity or their spouses.

       ``(ii) Bundler.--The term `bundler' means an intermediary 
     or conduit that is any of the following persons or entities:

       ``(I) A political committee (other than the authorized 
     campaign committee of the candidate that receives 
     contributions as described in subparagraph (B) or (C)).
       ``(II) Any officer, employee or agent of a political 
     committee described in subclause (I).
       ``(III) An entity.
       ``(IV) Any officer, employee, or agent of an entity who is 
     acting on behalf of the entity.
       ``(V) A person required to be listed as a lobbyist on a 
     registration or other report filed pursuant to the Lobbying 
     Disclosure Act of 1995 (2 U.S.C. 1601 et seq.) or any 
     successor law that requires reporting on the activities of a 
     person who is a lobbyist or foreign agent.

       ``(iii) Deliver.--The term `deliver' means to deliver 
     contributions to a candidate by any method of delivery used 
     or suggested by a bundler that communicates to the candidate 
     (or to the person who receives the contributions on behalf of 
     the candidate) that the bundler collected the contributions 
     for the candidate, including such methods as--

       ``(I) personal delivery;
       ``(II) United States mail or similar services;
       ``(III) messenger service; and
       ``(IV) collection at an event or reception.

       ``(iv) Entity.--The term `entity' means a corporation, 
     labor organization, or partnership.
       ``(B) Treatment as contributions from persons by whom 
     made.--

[[Page S433]]

       ``(i) In general.--For purposes of the limitations imposed 
     by this section, all contributions made by a person, either 
     directly or indirectly, on behalf of a candidate, including 
     contributions that are in any way earmarked or otherwise 
     directed through an intermediary or conduit to the candidate, 
     shall be treated as contributions from the person to the 
     candidate.
       ``(ii) Reporting.--The intermediary or conduit through 
     which a contribution is made shall report the name of the 
     original contributor and the intended recipient of the 
     contribution to the Commission and to the intended recipient.
       ``(C) Treatment as contributions from the bundler.--
     Contributions that a bundler delivers to a candidate, agent 
     of the candidate, or the candidate's authorized committee 
     shall be treated as contributions from the bundler to the 
     candidate as well as from the original contributor.
       ``(D) No limitation on or prohibition of certain 
     activities.--This subsection does not--
       ``(i) limit fundraising efforts for the benefit of a 
     candidate that are conducted by another candidate or Federal 
     officeholder; or
       ``(ii) prohibit any individual described in subparagraph 
     (A)(ii)(IV) from soliciting, collecting, or delivering a 
     contribution to a candidate, agent of the candidate, or the 
     candidate's authorized committee if the individual is not 
     acting on behalf of the entity.''.
       (b) 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 or 
     solicit contributions for or on behalf of--
       ``(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) Solicitation of contributions.--If a lobbyist advises 
     or otherwise suggests to a client of the lobbyist (including 
     a client that is the lobbyist's regular employer), or to a 
     political committee that is funded or administered by such a 
     client, that the client or political committee should make a 
     contribution to or solicit a contribution for or on behalf 
     of--
       ``(A) a member of Congress or candidate for Congress, the 
     making or soliciting of such a contribution is prohibited if 
     the lobbyist has made a lobbying contact with the member of 
     Congress within the preceding 12 months; or
       ``(B) an authorized committee of the President or Vice 
     President, the making or soliciting of such a contribution 
     shall be unlawful if the lobbyist has made a lobbying contact 
     with a covered executive branch official within the preceding 
     12 months.
       ``(4) 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(c)) 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 such individual 
     described in paragraph (1) is the dependent of another 
     individual and the individual's spouse, a the contribution 
     described in paragraph (1) shall be allocated among such 
     individuals in the manner determined by them.''.

     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)) is amended by adding at the end the 
     following:
       ``(9) 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, exceeds would cause the 
     total amount of contributions to exceed a limitation on 
     contributions to a candidate under this section.''.

     SEC. 404. LIMITED EXCLUSION OF ADVANCES BY CAMPAIGN WORKERS 
                   FROM THE DEFINITION OF THE TERM 
                   ``CONTRIBUTION''.

       Section 301(8)(B) of the Federal Election Campaign Act of 
     1971 (2 U.S.C. 431(8)(B)) is amended--
       (1) in clause (xiii), by striking ``and'' after the 
     semicolon at the end;
       (2) in clause (xiv), by striking the period at the end and 
     inserting: ``; and''; and
       (3) by adding at the end the following new clause:
       ``(xv) any advance voluntarily made on behalf of an 
     authorized committee of a candidate by an individual in the 
     normal course of such individual's responsibilities as a 
     volunteer for, or employee of, the committee, if the advance 
     is reimbursed by the committee within 10 days after the date 
     on which the advance is made, and the value of advances on 
     behalf of a committee does not exceed $500 with respect to an 
     election.''.
                    TITLE V--REPORTING REQUIREMENTS

     SEC. 501. CHANGE IN CERTAIN REPORTING FROM A CALENDAR YEAR 
                   BASIS TO AN ELECTION CYCLE BASIS.

       Paragraphs (2) through (7) of section 304(b) of Federal 
     Election Campaign Act of 1971 (2 U.S.C. 434(b)(2)-(7)) are 
     amended by inserting after ``calendar year'' each place it 
     appears the following: ``(election cycle, in the case of an 
     authorized committee of a candidate for Federal office)''.

     SEC. 502. PERSONAL AND CONSULTING SERVICES.

       Section 304(b)(5)(A) of Federal Election Campaign Act of 
     1971 (2 U.S.C. 434(b)(5)(A)) is amended by adding before the 
     semicolon at the end the following: ``, except that if a 
     person to whom an expenditure is made is merely providing 
     personal or consulting services and is in turn making 
     expenditures to other persons (not including employees) who 
     provide goods or services to the candidate or his or her 
     authorized committees, the name and address of such other 
     person, together with the date, amount and purpose of such 
     expenditure shall also be disclosed''.

     SEC. 503. CONTRIBUTIONS OF $50 OR MORE.

       Section 304(b)(2)(A) of Federal Election Campaign Act of 
     1971 (2 U.S.C. 434(b)2)(A)) is amended by inserting ``, 
     including the name and address of each person who makes 
     contributions aggregating at least $50 but not more than $200 
     during the calendar year'' after ``political committees''.

     SEC. 504. COMPUTERIZED INDICES OF CONTRIBUTIONS.

       Section 311(a) of Federal Election Campaign Act of 1971 (2 
     U.S.C. 438(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 adding at the end the following new paragraph:
       ``(11) maintain computerized indices of contributions of 
     $50 or more.''.
                 TITLE VI--FEDERAL ELECTION COMMISSION

     SEC. 601. USE OF CANDIDATES' NAMES.

       Section 302(e)(4) of Federal Election Campaign Act of 1971 
     (2 U.S.C. 432(e)(4)) is amended to read as follows:
       ``(4) Name of political committee.--
       (A) Authorized committee.--The name of each authorized 
     committee shall include the name of the candidate who 
     authorized the committee under paragraph (1).
       ``(B) Unauthorized committee.--A political committee that 
     is not an authorized committee shall not include the name of 
     any candidate in its name or use the name of any candidate in 
     any activity on behalf of such committee in such a context as 
     to suggest that the committee is an authorized committee of 
     the candidate or that the use of the candidate's name has 
     been authorized by the candidate.''.

     SEC. 602. REPORTING REQUIREMENTS.

       (a) Option To File Monthly Reports--Section 304(a)(2) of 
     Federal Election Campaign Act of 1971 (2 U.S.C. 434(a)(2)) is 
     amended--
       (1) in subparagraph (A) by striking ``and'' at the end;
       (2) in subparagraph (B) by striking the period at the end 
     and inserting ``; and''; and
       (3) by inserting the following new subparagraph at the end:
       ``(C) in lieu of the reports required by subparagraphs (A) 
     and (B), the treasurer may file monthly reports in all 
     calendar years,

[[Page S434]]

     which shall be filed no later than the 15th day after the 
     last day of the month and shall be complete as of the last 
     day of the month, except that, in lieu of filing the reports 
     otherwise due in November and December of any year in which a 
     regularly scheduled general election is held, a pre-primary 
     election report and a pre-general election report shall be 
     filed in accordance with subparagraph (A)(i), a post-general 
     election report shall be filed in accordance with 
     subparagraph (A)(ii), and a year end report shall be filed no 
     later than January 31 of the following calendar year.''.
       (b) Filing Date.--Section 304(a)(4)(B) of Federal Election 
     Campaign Act of 1971 (2 U.S.C. 434(a)(4)(B)) is amended by 
     striking ``20th'' and inserting ``15th''.

     SEC. 603. PROVISIONS RELATING TO THE GENERAL COUNSEL OF THE 
                   COMMISSION.

       (a) Vacancy in the Office of General Counsel.--Section 
     306(f) of Federal Election Campaign Act of 1971 (2 U.S.C. 
     437c(f)) is amended by adding at the end the following:
       ``(5) Vacancy.--In the event of a vacancy in the office of 
     general counsel, the next highest ranking enforcement 
     official in the general counsel's office shall serve as 
     acting general counsel with full powers of the general 
     counsel until a successor is appointed.''.
       (b) Pay of the General Counsel.--Section 306(f)(1) of 
     Federal Election Campaign Act of 1971 (2 U.S.C. 437c(f)(1)) 
     is amended--
       (1) by inserting ``and the general counsel'' after ``staff 
     director'' in the second sentence; and
       (2) by striking the third sentence.

     SEC. 604. PENALTIES.

       (a) Penalties Prescribed in Conciliation Agreements.--
       (1) Civil penalty for violation of Act.--Section 
     309(a)(5)(A) of Federal Election Campaign Act of 1971 (2 
     U.S.C. 437g(a)(5)(A)) is amended by striking ``which does not 
     exceed the greater of $5,000 or an amount equal to any 
     contribution or expenditure involved in such violation'' and 
     inserting ``which is--
       ``(i) not less than 50 percent of all contributions and 
     expenditures involved in the violation (or such lesser amount 
     as the Commission provides if necessary to ensure that the 
     penalty is not unjustly disproportionate to the violation); 
     and
       ``(ii) not greater than all contributions and expenditures 
     involved in the violation''.
       (2) Penalty for knowing and willful violation of Act.--
     Section 309(a)(5)(B) of Federal Election Campaign Act of 1971 
     (2 U.S.C. 437g(a)(5)(B)) is amended by striking ``which does 
     not exceed the greater of $10,000 or an amount equal to 200 
     percent of any contribution or expenditure involved in such 
     violation'' and inserting ``which is--
       ``(i) not less than all contributions and expenditures 
     involved in the violation; and
       ``(ii) not greater than 150 percent of all contributions 
     and expenditures involved in the violation''.
       (b) Penalties When Violations Are Adjudicated in Court.--
       (1) Commission proceedings instituted for an order.--
     Section 309(a)(6)(A) of Federal Election Campaign Act of 1971 
     (2 U.S.C. 437g(a)(6)(A)) is amended by striking all that 
     follows ``appropriate order'' and inserting ``, including an 
     order for a civil penalty in the amount determined under 
     subparagraph (A) or (B) in the district court of the United 
     States for the district in which the defendant resides, 
     transacts business, or may be found.''.
       (2) Court orders.--Section 309(a)(6)(B) of Federal Election 
     Campaign Act of 1971 (2 U.S.C. 437g(a)(6)(B)) is amended by 
     striking all that follows ``other order'' and inserting ``, 
     including an order for a civil penalty which is--
       ``(i) not less than all contributions and expenditures 
     involved in the violation; and
       ``(ii) not greater than 200 percent of all contributions 
     and expenditures involved in the violation;

     upon a proper showing that the person involved has committed, 
     or is about to commit (if the relief sought is a permanent or 
     temporary injunction or a restraining order), a violation of 
     this Act or chapter 95 of chapter 96 of the Internal Revenue 
     Code of 1986.''.
       (3) Knowing and willful violation penalty.--Section 
     309(a)(6)(C) of Federal Election Campaign Act of 1971 (29 
     U.S.C. 437g(6)(C)) is amended by striking ``a civil penalty'' 
     and all that follows and inserting ``a civil penalty which 
     is--''
       ``(i) not less than 200 percent of all contributions and 
     expenditures involved in the violation; and
       ``(ii) not greater than 250 percent of all contributions 
     and expenditures involved in the violation.''.

     SEC. 605. RANDOM AUDITS.

       Section 311(b) of 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 new paragraph:
       ``(2) Random audits.--
       ``(A) In general.--Notwithstanding paragraph (1), the 
     Commission may from time to time conduct random audits and 
     investigations to ensure voluntary compliance with this Act.
       ``(B) Selection of subjects.--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.
       ``(C) Applicability.--This paragraph does not apply to an 
     authorized committee of an eligible Senate candidate subject 
     to audit under section 505(a) or an authorized committee of 
     an eligible House of Representatives candidate subject to 
     audit under section 605(a).''.

     SEC. 606. PROHIBITION OF FALSE REPRESENTATION TO SOLICIT 
                   CONTRIBUTIONS.

       Section 322 of Federal Election Campaign Act of 1971 (2 
     U.S.C. 441h) is amended--
       (1) by inserting after ``Sec. 322.'' the following: 
     ``(a)''; and
       (2) by adding at the end the following:
       ``(b) False Solicitation of Contributions.--No person shall 
     solicit contributions by falsely representing himself as a 
     candidate or as a representative of a candidate, a political 
     committee, or a political party.''.

     SEC. 607. REGULATIONS RELATING TO USE OF NON-FEDERAL MONEY.

       Section 306 of Federal Election Campaign Act of 1971 (2 
     U.S.C. 437c) is amended by adding at the end the following:
       ``(g) Regulations.--The Commission shall promulgate 
     regulations to prohibit devices or arrangements which have 
     the purpose or effect of undermining or evading the 
     provisions of this Act restricting the use of non-Federal 
     money to affect Federal elections.''.

     SEC. 608. 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 new paragraph:
       ``(6)(A) The Commission, in consultation with the Secretary 
     of the Senate, may prescribe regulations under which persons 
     required to file designations, statements, and reports under 
     this Act--

       ``(i) are required to maintain and file them 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
       ``(ii) may maintain and file them in that manner if not 
     required to do so under regulations prescribed under clause 
     (i).

       ``(B) The Commission, in consultation with the Secretary of 
     the Senate, shall prescribe regulations which allow persons 
     to file designations, statements, and reports required by 
     this Act through the use of facsimile machines.
       ``(C) In prescribing regulations under this paragraph, the 
     Commission shall provide methods (other than requiring a 
     signature on the document being filed) for verifying 
     designations, statements, and reports covered by the 
     regulations. 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) The Secretary of the Senate and the Clerk of the 
     House of Representatives shall ensure that any computer or 
     other system that they may develop and maintain to receive 
     designations, statements, and reports in the forms required 
     or permitted under this paragraph is compatible with any such 
     system that the Commission may develop and maintain.''.
                        TITLE VII--MISCELLANEOUS

     SEC. 701. PROHIBITION OF LEADERSHIP COMMITTEES.

       (a) Definitions.--Section 301 of the Federal Election 
     Campaign Act of 1971 (2 U.S.C. 431) is amended by adding at 
     the end the following:
       (b) Prohibition.--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 for Federal office 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.
       ``(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.

[[Page S435]]

       ``(ii) Disbursement at the end of 1 year.--At the end of 
     that period the political committee shall disburse all funds 
     by 1 or more of the following means:

       ``(I) Making contributions 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 United States 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 candidates or non-Federal candidates.''.

     SEC. 702. POLLING DATA CONTRIBUTED TO CANDIDATES.

       Section 301(8) of Federal Election Campaign Act of 1971 (2 
     U.S.C. 431(8)), as amended by section 314(b), is amended by 
     inserting at the end the following:
       ``(D) Valuation of polling data as a contribution.--A 
     contribution of polling data to a candidate shall be valued 
     at the fair market value of the data on the date the poll was 
     completed, depreciated at a rate not more than 1 percent per 
     day from such date to the date on which the contribution was 
     made.''.

     SEC. 703. RESTRICTIONS ON USE OF CAMPAIGN FUNDS FOR PERSONAL 
                   PURPOSES.

       (a) Restrictions on Use of Campaign Funds.--Title III of 
     Federal Election Campaign Act of 1971 (2 U.S.C. 431 et seq.) 
     (as amended by section 311) is amended by adding at the end 
     the following:

     ``SEC. 325. RESTRICTIONS ON USE OF CAMPAIGN FUNDS FOR 
                   PERSONAL PURPOSES.

       ``(a) Definitions.--In this section:
       ``(1) Campaign expense.--The term `campaign expense' means 
     an expense that is attributable solely to a bona fide 
     campaign purpose.
       ``(2) Inherently personal purposes.--The term `inherently 
     personal purpose' means a purpose that, by its nature, 
     confers a personal benefit, including a home mortgage, rent, 
     or utility payment, clothing purchase, noncampaign automobile 
     expense, country club membership, vacation, or trip of a 
     noncampaign nature, household food items, tuition payment, 
     admission to a sporting event, concert, theater or other form 
     of entertainment not associated with a campaign, dues, fees, 
     or contributions to a health club or recreational facility, 
     and any other inherently personal living expense as 
     determined under the regulations promulgated pursuant to 
     section 301(b) of the Senate Campaign Financing and Spending 
     Reform Act.
       ``(b) Permitted and Prohibited Uses.--An individual who 
     receives contributions as a candidate for Federal office--
       ``(1) shall use the contributions only for legitimate and 
     verifiable campaign expenses; and
       ``(2) shall not use the contributions for any inherently 
     personal purpose.''.
       (b) Regulation.--Not later than 90 days after the date of 
     enactment of this Act, the Federal Election Commission shall 
     issue a regulation consistent with this Act to implement 
     subsection (a). The regulation shall apply to all 
     contributions possessed by an individual on the date of 
     enactment of this Act.
              TITLE VIII--EFFECTIVE DATES; AUTHORIZATIONS

     SEC. 801. EFFECTIVE DATE.

       Except as otherwise provided in this Act and the amendments 
     made by this Act shall take effect on the date of the 
     enactment of this Act but shall not apply with respect to 
     activities in connection with any election occurring before 
     January 1, 1999.

     SEC. 802. 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. 803. 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 
     it 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.
                                 ______
                                 
      By Mr. FEINGOLD.
  S. 58. A bill to modify the estate recovery provisions of the 
medicaid program to give States the option to recover the costs of home 
and community-based services for individuals over age 55; to the 
Committee on Finance.


                   MEDICAID BENEFICIARIES LEGISLATION

  Mr. FEINGOLD. Mr. President, I am pleased to introduce legislation 
today to eliminate the current mandate on States to place liens on the 
homes and estates of older Medicaid beneficiaries receiving home and 
community-based long-term care services, and to provide more than 
adequate funding for that change by establishing a certificate of need 
process to regulate the growth of federally funded nursing home beds.
  This legislation modifies the estate recovery provisions of OBRA 93 
to clarify that States may pursue recovery of the cost of Medicaid home 
and community-based long-term care services from the estate of 
beneficiaries, but that States are not required to do so.
  Mr. President, slowing the growth of rising Medicaid costs is central 
to easing pressure on both Federal and State budgets, and addressing 
the long-term care portion of those Medicaid budgets is a key to 
containing those costs. Meaningful reform of our long-term care system 
is the ultimate solution to this problem, and I will introduce long-
term care reform legislation in the near future that will outline the 
path we need to follow--helping States provide flexible, consumer-
oriented and consumer-directed home and community-based long-term care 
services.
  In the meantime, however, we can take a few important steps down the 
path toward long-term care reform by repealing the cumbersome mandate 
on States that they recover the cost of some services by imposing liens 
on the homes and estates of seniors using home and community-based 
long-term care services.
  Mr. President, in the past, States have had the option of recovering 
payments for those services from the estates of beneficiaries, but in 
some cases, at least, have chosen not to do so. In Wisconsin, estate 
recovery for home and community-based long-term care services was 
implemented briefly in 1991, but was terminated because of the 
significant problems experienced with the home and Medicaid waiver 
programs. Many cases were documented where individuals needing long-
term care refused community-based care because of their fear of estate 
recovery or the placement of a lien on their homes.
  One case in southwestern Wisconsin involved an older woman who was 
suffering from congestive heart failure, phlebitis, severe arthritis, 
and who had difficulty just being able to move. She was being screened 
for the Medicaid version of Wisconsin's model home and community-based 
long-term care program, the Community Options Program, when the 
caseworker told her of the new law, and that a lien would be put on the 
estate of the program's clients. The caseworker reported that the older 
woman began to sob, and told the caseworker that she had worked hard 
all her life and paid taxes and could not understand why the things she 
had worked for so hard would be taken from her family after her death.

  When asked if she would like to receive services, the client refused. 
As frail as this client was, the social worker noted that she preferred 
to chance being on her own rather than endanger her meager estate by 
using Medicaid funded services.
  In northeastern Wisconsin, a 96-year-old woman was being care for by 
her 73-year-old widowed daughter in their home. The family was 
receiving some Medicaid long-term care services, including respite 
services for the elderly caregiver daughter, but the family 
discontinued all services when they heard of the new law because the 
older daughter needed to count on the home for security in her own old 
age.
  A 72-year-old man, who had 4 by-pass surgeries and was paralyzed on 
one side, and his 66-year-old wife, who had 3 by-pass surgeries and 
rheumatoid arthritis, both needed some assistance to be able to live 
together at home. But when Medicaid was suggested, they refused because 
of the new law.
  Mr. President, these examples are not unusual. Nor were many of the 
individuals and families who refused help protecting vast estates. For 
many, the estates being put at risk were modest at best. A couple in 
the Green Bay area of Wisconsin who lived in a mobile home and had less 
than $20,000 in life savings told the local benefit specialist that 
they would refuse Medicaid funded services rather than risk not leaving 
their small estate to their family members.
  Leaving even a small bequest to a loved-one is a fundamental and 
deeply felt need of many seniors. Even the most modest home can 
represent a lifetime's work, and many are willing to forego medical 
care they know they need to be able to leave a small legacy.
  Mr. President, while the vision of this mandate on States from inside 
the

[[Page S436]]

Washington beltway may appear simple, the estate recovery requirements 
are not so simple for program administrators. States, counties, and 
nonprofit agencies, administrators of Medicaid services, are ill-
equipped to be real estate agents.
  Further, divestment concerns in the Medicaid Program, already a 
problem, could continue to grow as pressure to utilize existing 
loopholes increases with estate recovery mandated in this way. Worse, 
as the Coalition of Wisconsin Aging Groups has pointed out, children 
who feel ``entitled to inheritance'' might force transfers, 
constituting elder abuse in some cases.
  Too, Mr. President, there is a very real question of age 
discrimination with the estate recovery provisions of OBRA 93. Only 
individuals over age 55 are subject to estate recovery. Such age-based 
distinctions border on age discrimination and ought to be minimized.
  Mr. President, because I am committed to reducing the deficit and 
balancing the budget, I firmly believe we must find offsetting spending 
cuts to fully fund legislative proposals, even when we might disagree 
with the cost estimates for those proposals. For that reason, I have 
included provisions in this measure that have been scored by the 
Congressional Budget Office to more than offset the officially 
estimated loss in savings from the estate recovery mandate. 
Nevertheless, while this bill includes offsetting cuts to fund the 
proposed change, I also believe that the savings ascribed to the 
existing mandate are questionable.
  Prior to enacting estate recovery in Wisconsin, officials estimated 
$13.4 million a year could be recovered by the liens. Real collections 
fell far short. For fiscal year 1992, the State only realized a 
reported $1 million in collections. And for the period of January to 
July of 1993, even after officials lowered their estimates, only $2.2 
million was realized of an expected $3.8 million in collections.
  In addition to lower than expected collections, the refusal to accept 
home and community-based long-term care because of the prospect of a 
lien on the estate could lead to the earlier and more costly need for 
institutional care. Such a result would not only undercut the 
questionable savings from the program, but would be directly contrary 
to the Medicaid home and community-based waiver program,which is 
intended precisely to keep people out of institutions and in their own 
homes and communities.
  The brief experience we had in Wisconsin led the State to limit 
estate recovery to nursing home care and related services, where, as a 
practical matter, the potential for estate recovery and liens on homes 
are much less of a barrier to services. Indeed, just as we should 
provide financial incentives to individuals to use more cost-effective 
care, so too should we consider financial disincentives for more costly 
alternatives. A recent study in Wisconsin showed that two Medicaid 
waiver programs saved $17.6 million in 1992 by providing home and 
community-based alternatives to institutional care.
  In that context, retaining the more expansive institutional care 
alternatives in the estate recovery mandate makes good sense, and my 
legislation would not change that portion of the law. But it does not 
make sense to jeopardize a program that has produced many more times 
the savings in lowered institutional costs than even the overly 
optimistic estimates suggest could be recovered from the estates of 
those receiving home and community-based long-term care.

  All in all, the estate recovery provisions of OBRA 93 are likely to 
produce more expensive utilization of Medicaid services, may cause an 
administrative nightmare for State and local government, could 
aggravate the divestment problem, may result in increased elder abuse, 
and could well constitute age discrimination.
  Though many long-term care experts maintain that mandating estate 
recovery for home and community-based long-term care services will only 
lead to increased utilization of more expensive institutional 
alternatives, and thus increased cost to Federal taxpayers, the CBO 
estimated a revenue loss of $20 million in the first year and $260 
million over 5 years for this proposal.
  As I noted above, it is important to act responsibly to fund that 
formal cost estimate with offsetting spending cuts. The additional 
savings I firmly believe will be generated beyond the scored amounts 
would then help reduce our Federal budget deficit. This measure 
includes a provision that more than offsets the official scored revenue 
loss from eliminating the estate recovery mandate. That provision 
regulates the growth in the number of nursing home beds eligible for 
Federal funding through Medicaid, Medicare, or other Federal programs 
by requiring providers to obtain a certificate of need [CON] to operate 
additional beds.
  For any specified area, States would issue a CON only if the ratio of 
the number of nursing home beds to the population that is likely to 
need them falls below guidelines set by the State and subject to 
Federal approval.
  This approach allows new nursing home beds to operate where there is 
a demonstrated need, while limiting the potential burden on the 
taxpayer where no such need has been established. CBO has estimated 
that the proposed regulation of nursing home bed growth would generate 
savings of $35 million in the first year, and $625 million over 5 
years, more than offsetting the CBO estimates for removing the State 
mandate on estate recoveries sought in this bill. The net fiscal effect 
of this proposal would be to generate about $15 million in savings in 
the first year, and $365 million over 5 years.
  Slowing the growth of nursing home beds is critical to reforming the 
current long-term care system. In Wisconsin, limiting nursing home bed 
growth has been part of the success of the long-term care reforms 
initiated in the early 1980's. While the rest of the country 
experienced a 46-percent increase in Medicaid nursing home bed use 
between 1980 and 1993, Wisconsin saw Medicaid nursing home bed use 
decline by 15 percent.
  The certificate of need provision is far more modest than the 
absolute cap on nursing home beds adopted in Wisconsin, and recognizes 
that there needs to be some flexibility to recognize the differences of 
long-term care services among States. It is also consistent with the 
kind of long-term care reform I will be proposing as separate 
legislation.
  Certainly, our ability to reform long-term care will depend not only 
on establishing a consumer-oriented, consumer-directed home and 
community-based services that are available to the severely disabled of 
all ages, but also on establishing a more balanced and cost-effective 
allocation of public support of long-term care services by eliminating 
the current bias toward institutional care.
  Mr. President, taken together, the change in the estate recovery 
provisions and the slowing of nursing home bed growth, these two 
provisions will help shift the current distorted Federal long-term care 
policy away from the institutional bias that currently exists and 
toward a more balanced approach that emphasizes home and community-
based services.
  That is the direction that we will need to take if we are to achieve 
significant long-term care reform.
  Mr. President, I ask unanimous consent that the text of the 
legislation be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 58

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

     SECTION 1. MEDICAID ESTATE RECOVERIES.

       Section 1917(b)(1)(B) of the Social Security Act (42 U.S.C. 
     1396p(b)(1)(B)) is amended by striking ``consisting of--'' 
     and all that follows through the period and inserting the 
     following: ``consisting of--
       ``(i) nursing facility services and related hospital and 
     prescription drug services; and
       ``(ii) at the option of the State, any additional items or 
     services under the State plan.''.

     SEC. 2. REQUIRING STATES TO REGULATE GROWTH IN THE NUMBER OF 
                   NURSING FACILITY BEDS.

       (a) In General.--A nursing facility shall not receive 
     reimbursement under the medicare program under title XVIII of 
     the Social Security Act, the medicaid program under title XIX 
     of such Act, or any other Federal program for services 
     furnished with respect to any beds first operated by such 
     facility on or after the date of the enactment of this Act 
     unless a certificate of need is issued by the State with 
     respect to such beds.
       (b) Issuance of Certificate.--A certificate of need may be 
     issued by a State with respect to a geographic area only if 
     the ratio of

[[Page S437]]

     the number of nursing facility beds in such area to the total 
     population in such area that is likely to need such beds is 
     below the ratio included in guidelines that are established 
     by the State and approved by the Secretary of Health and 
     Human Services under subsection (c).
       (c) Approval of Guidelines.--The Secretary of Health and 
     Human Services shall promulgate regulations under which 
     States may submit proposed guidelines for the issuance of 
     certificates of need under subsection (b) for review and 
     approval.
       (d) Definition of Nursing Facility.--In this section, the 
     term ``nursing facility'' has the meaning given the terms--
       (1) ``skilled nursing facility'', under the medicare 
     program under title XVIII of the Social Security Act; and
       (2) ``nursing facility'', under the medicaid program under 
     title XIX of such Act.
                                 ______
                                 
      By Mr. FEINGOLD (for himself and Mr. Kohl):
  S. 59. A bill to terminate the Extremely Low Frequency Communication 
System of the Navy; to the Committee on Armed Services.


 extremely low frequency communication system termination and deficit 
                         reduction act of 1997

  Mr. FEINGOLD. Mr. President, today I am introducing legislation for 
myself and Senator Kohl, which we offered during the 103d and 104th 
Congress to terminate the Extremely Low Frequency Communications 
System, located in Clam Lake, WI, and Republic, MI.
  This project has been opposed by residents of Wisconsin since its 
inception, but for years we were told that the national security 
considerations of the cold war outweighed our concerns about this 
installation in our State. As we continue our efforts to reduce the 
Federal budget deficit and as the Department of Defense continues to 
struggle to meet a tighter budget, it is clear that Project ELF should 
be closed down. If enacted, my legislation would save $9 to $20 million 
a year.
  Project ELF was developed in the late 1970's as an added protection 
against the Soviet naval nuclear deployment. It is an electromagnetic 
messenger system--otherwise known as a bell ringer--used primarily to 
tell a deeply submerged Trident submarine that it needs to surface to 
retrieve a message. Because it communicates through very primitive 
pulses, called phonetic-letter-spelled-out [PLSO] messages, ELF's 
radiowaves transmit very limited messages.
  With the end of the cold war, Project ELF becomes harder and harder 
to justify. Trident submarines no longer need to take that extra 
precaution against Soviet nuclear forces. They can now surface on a 
regular basis with less danger of detection or attack. They can also 
receive more complicated messages through very low frequency [VLF] 
radiowaves or lengthier messages through satellite systems, if it can 
be done more cheaply.
  Not only do Wisconsinites think the mission of Project ELF is 
unnecessary and anachronistic, but they are also concerned about 
possible environmental and public health hazards associated with it. 
While I have heard some ELF supporters say there is no apparent 
environmental impact of Project ELF, we can only conclude that we do 
not know that--in fact, we do not know much about its impact at all.
  The Navy itself had yet to conclude definitively that operating 
Project ELF is safe for the residents living near the site. It you are 
a resident in Clam Lake, that is unsettling information. For example, 
in 1992, a Swedish study found that children exposed to relatively weak 
magnetic fields from powerlines develop leukemia at almost four times 
the expected rate. We also know that in 1984, a U.S. district court 
ruling on State of Wisconsin versus Weinberger ordered Project ELF to 
be shut down because the Navy paid inadequate attention to the system's 
possible health effects and violated the National Environmental Policy 
Act. That decision was overturned on appeal, however, in a ruling that 
claimed national security interests at the time prevailed over 
environmental concerns. More recent studies of the impact of 
electromagnetic fields in general still leave unanswered questions and 
concerns.
  During the 103d Congress, I worked with the Senator from Georgia, 
Senator Nunn to include an amendment in the National Defense 
Authorization Act for fiscal year 1994 requiring a report by the 
Secretary of Defense on the benefits and costs of continued operation 
of Project ELF. The report issued by DOD was particularly disappointing 
because it basically argued that because Project ELF may have a purpose 
during the cold war, it should continue to operate after the cold war 
as part of the complete complement of command and control links 
configured for the cold war.
  Did Project ELF play a role in helping to minimize the Soviet threat? 
Perhaps. Did it do so at risk to the community? Perhaps. Does it 
continue to play a vital security role to the Nation? No.
  Most of us in Wisconsin don't want it anymore. Many of my 
constituents have opposed Project ELF since its inception. Congressman 
David Obey has consistently sought to terminate Project ELF, and in 
fact, we have him to thank in part for getting ELF scaled down from the 
large-scale project first conceived by the Carter administration. I 
look forward to continue working with him on this issue in the 105th 
Congress.
  As we take up the budget for fiscal year 1998, the Department of 
Defense and the Armed Services Committee will again be searching for 
programs that have outlived their intended purpose. I hope they will 
seriously consider zeroing out the ELF transmitter system, as I propose 
in this bill, and save the taxpayers $9 to $20 million a year. Given 
both its apparently diminished strategic value and potential 
environmental and public health hazards, Project ELF is a perfect 
target for termination.
  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. 59

       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 ``Extremely Low Frequency 
     Communication System Termination and Deficit Reduction Act of 
     1997''.

     SEC. 2. PROHIBITION OF FURTHER FUNDING OF THE EXTREMELY LOW 
                   FREQUENCY COMMUNICATION SYSTEM.

       (a) Prohibition on Use of Funds.--Except as provided in 
     subsection (b), funds appropriated on or after the date of 
     enactment of this Act to or for the use of the Department of 
     Defense may not be obligated or expended for the Extremely 
     Low Frequency Communication System of the Navy.
       (b) Limited Exception for Termination Costs.--Subsection 
     (a) does not apply to expenditures solely for termination of 
     the Extremely Low Frequency Communication System.
                                 ______
                                 
      By Mr. LOTT:
  S. 61. A bill to amend title 46, United States Code, to extend 
eligibility for veterans' burial benefits, funeral benefits, and 
related benefits for veterans of certain service in the United States 
merchant marine during World War II; to the Committee on Veterans 
Affairs.


               the merchant mariners fairness act of 1997

  Mr. LOTT. Mr. President, today, it is my pleasure to introduce the 
Merchant Mariners Fairness Act. My bill would grant veterans status to 
American merchant mariners who have been denied this status.
  In 1988, the Secretary of the Air Force decided, for the purposes of 
granting veterans benefits to merchant seamen, that the cut-off date 
for service would be August 15, 1945, V-J Day, rather than December 31, 
1946, when hostilities were declared officially ended. My bill would 
correct the 1988 decision and extend veterans benefits to merchant 
mariners who served from August 15, 1945 to December 31, 1946. It would 
extend eligibility for burial benefits and related veterans benefits 
for certain members of the U.S. Merchant Marine during World War II.
  I urge my distinguished colleagues to join me in supporting this 
important legislation.
                                 ______
                                 
      By Mr. CRAIG (for himself and Mr. Kempthorne):
  S. 62. A bill to prohibit further extension of establishment of any 
national monument in Idaho without full public participation and an 
express Act of Congress, and for other purposes; to the Committee on 
Energy and National Resources.


                    THE IDAHO PROTECTION ACT OF 1997

  Mr. CRAIG. Mr. President, I rise today to introduce legislation that 
has been forced by recent events. I am talking about President 
Clinton's proclamation of last fall declaring nearly

[[Page S438]]

two million acres of southern Utah a national monument.
  After the President's announcement, Senator Kempthorne and I 
introduced the Idaho Protection Act of 1996. That bill would have 
required that the public and the Congress be included before a national 
monument could be established in Idaho.
  When we introduced that bill, I was immediately approached by other 
Senators seeking the same protection. What we see unfolding before us 
in Utah ought to frighten all of us. Without including Utah's Governor, 
Senators, congressional delegation, the State legislature, county 
commissioners, or the people of Utah--President Clinton set off-limits 
forever approximately 1.7 million acres of Utah.
  Under the 1906 Antiquities Act, President Clinton has the unilateral 
authority to create a national monument where none existed before. And 
if he can do it in the State of Utah, he can do it in Idaho. In fact, 
since 1906, the law has been used some 66 times to set lands aside. I 
would note--with very few exceptions, these declarations occurred 
before enactment of the National Environmental Policy Act of 1969 which 
recognized the need for public involvement in such issues and mandated 
public comment periods before such decisions are made.
  Just as 64 percent of the land in Utah is owned by the Federal 
Government, 62 percent of Idaho is owned by Uncle Sam. What the 
President has done in Utah, without public input, he could also do in 
Idaho or any or the States where the Federal Government has a presence.
  With Senator Kempthorne as a cosponsor, I am once again introducing 
the Idaho Protection Act. This bill would simply require that the 
public and the Congress be fully involved and give approval before such 
a unilateral Presidential declaration of a new national monument could 
be imposed on Idaho.
  The President's action in Utah has been a wake-up call to people 
across America. While we all want to preserve what is best in our 
States, people everywhere understand that much of their economic future 
is tied up in what happens on their public lands.
  In the West, where public lands dominate the landscape, issues such 
as grazing, timber harvesting, water use, and recreation access have 
all come under attack by this administration seemingly bent upon 
kowtowing to a segment of our population that wants these uses kicked 
off our public lands.
  Everyone wants public lands decisions to be made in an open and 
inclusive process. No one wants the President, acting alone, to 
unilaterally lock up enormous parts of any State. We certainly don't 
work that way in the West. There is a recognition that with common 
sense, a balance can be struck that allows jobs to grow and families to 
put down roots while at the same time protecting America's great 
natural resources.
  In my view, the President's actions are beyond the pale and for that 
reason--to protect others from suffering a similar fate, I am 
cosponsoring this bill.
                                 ______
                                 
      By Mr. FEINGOLD:
  S. 63. A bill to amend certain Federal civil rights statutes to 
prevent the involuntary application of arbitration to claims that arise 
from unlawful employment discrimination based on race, color, religion, 
sex, national origin, age, or disability, and for other purposes; to 
the Committee on Labor and Human Resources.


           THE CIVIL RIGHTS PROCEDURES PROTECTION ACT OF 1997

  Mr. FEINGOLD. Mr. President, I rise today to introduce the Civil 
Rights Procedures Protection Act of 1997. The 105th Congress will mark 
the third successive Congress that I have introduced this legislation. 
Very simply Mr. President, this legislation addresses the rapidly 
growing and, in my opinion, troubling practice of employers 
conditioning employment or professional advancement upon their 
employees willingness to submit claims of discrimination or harassment 
to arbitration, rather than pursuing them in the courts. In other 
words, employees raising claims of harassment or discrimination by 
their employers must submit the adjudication of those claims to 
arbitration, irrespective of what other remedies may exist under the 
laws of this Nation.
  To address the growing incidents of compulsory arbitration, the Civil 
Rights Procedures Protection Act of 1997 amends seven civil rights 
statutes to ensure that those statutes remain effective when claims of 
this nature arise. Specifically, this legislation affects claims raised 
under Title VII of the Civil Rights Act of 1965, Section 505 of the 
Rehabilitation Act of 1973, the Americans with Disabilities Act, 
Section 1977 of the Revised Statutes, the Equal Pay Act, the Family and 
Medical Leave Act and the Federal Arbitration Act (FAA). In the context 
of the Federal Arbitration Act, the protections of this legislation are 
extended to claims of unlawful discrimination arising under State or 
local law and other Federal laws that prohibit job discrimination.
  Mr. President, I want to be clear that this legislation is in no way 
intended to bar the use of arbitration, conciliation, mediation or any 
other form of adjudication short of litigation in resolving these 
claims. I have long been and will continue to be a strong supporter of 
``voluntary'' forms of alternative dispute resolution. The key, 
however, is that the practices targeted by this bill are not voluntary. 
Rather they are imposed upon working men and women and are mandatory. 
Furthermore, the ability to be promoted, or in some cases, to be hired 
in the first place, is often conditioned upon the employee accepting 
this type of mandatory arbitration. Mandatory arbitration allows 
employers to tell all current and prospective employees in effect, `if 
you want to work for us, you will have to check your rights as a 
working American citizen at the door.' In short, working men and women 
all across this country are faced with the tenuous choice of either 
accepting these mandatory limitations on their right to redress in the 
face of discrimination or placing at risk employment opportunities or 
professional advancement. These requirements have been referred to 
recently as ``front door'' contracts; that is, they require an employee 
to surrender certain rights up front in order to ``get in the front 
door.'' As a nation which values work as well as deplores 
discrimination, we should not allow this situation to continue.
  As I noted Mr. President, today marks the third successive Congress 
in which this important legislation has been introduced. Given that 
much of the rhetoric coming out of Washington and this body in recent 
months, certainly during the most recent elections, dealt with helping 
working families, it is my hope that this legislation will receive 
consideration in the coming months. The practice of mandatory 
arbitration should be stopped now--if people are being discriminated 
against, they should retain all avenues of redress provided for in the 
laws of this Nation. This bill will help restore integrity in relations 
between hard working employees and their employers, but more 
importantly, it will ensure that the civil rights laws which we pass, 
will continue to protect all Americans.
  Mr. President, I ask unanimous consent that the text of the 
legislation be printed in the Record at the conclusion of my remarks.
  Mr. President, I also ask unanimous consent that a newspaper article 
from the September 24, 1996 edition of the Boston Globe, entitled, ``A 
cautionary tale about signing away right to sue,'' be placed in the 
Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                 S. 63

       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 ``Civil Rights Procedures 
     Protection Act of 1997''.

     SEC. 2. AMENDMENT TO TITLE VII OF THE CIVIL RIGHTS ACT OF 
                   1964.

       Title VII of the Civil Rights Act of 1964 (42 U.S.C. 2000e 
     et seq.) is amended by adding at the end the following new 
     section:


                 ``exclusivity of powers and procedures

       ``Sec. 719. Notwithstanding any Federal statute of general 
     applicability that would modify any of the powers and 
     procedures expressly applicable to a claim arising under this 
     title, such powers and procedures shall be the exclusive 
     powers and procedures applicable to such claim unless after 
     such claim arises the claimant voluntarily enters into an 
     agreement to resolve such claim through arbitration or 
     another procedure.''.

[[Page S439]]

     SEC. 3. AMENDMENT TO THE AGE DISCRIMINATION IN EMPLOYMENT ACT 
                   OF 1967.

       The Age Discrimination in Employment Act of 1967 (29 U.S.C. 
     621 et seq.) is amended--
       (1) by redesignating sections 16 and 17 as sections 17 and 
     18, respectively; and
       (2) by inserting after section 15 the following new section 
     16:


                 ``exclusivity of powers and procedures

       ``Sec. 16. Notwithstanding any Federal statute of general 
     applicability that would modify any of the powers and 
     procedures expressly applicable to a right or claim arising 
     under this Act, such powers and procedures shall be the 
     exclusive powers and procedures applicable to such right or 
     such claim unless after such right or such claim arises the 
     claimant voluntarily enters into an agreement to resolve such 
     right or such claim through arbitration or another 
     procedure.''.

     SEC. 4. AMENDMENT TO THE REHABILITATION ACT OF 1973.

       Section 505 of the Rehabilitation Act of 1973 (29 U.S.C. 
     795) is amended by adding at the end the following new 
     subsection:
       ``(c) Notwithstanding any Federal statute of general 
     applicability that would modify any of the procedures 
     expressly applicable to a claim based on right under section 
     501, such procedures shall be the exclusive procedures 
     applicable to such claim unless after such claim arises the 
     claimant voluntarily enters into an agreement to resolve such 
     claim through arbitration or another procedure.''.

     SEC. 5. AMENDMENT TO THE AMERICANS WITH DISABILITIES ACT OF 
                   1990.

       Section 107 of the Americans with Disabilities Act of 1990 
     (42 U.S.C. 12117) is amended by adding at the end the 
     following new subsection:
       ``(c) Notwithstanding any Federal statute of general 
     applicability that would modify any of the powers and 
     procedures expressly applicable to a claim based on a 
     violation described in subsection (a), such powers and 
     procedures shall be the exclusive powers and procedures 
     applicable to such claim unless after such claim arises the 
     claimant voluntarily enters into an agreement to resolve such 
     claim through arbitration or another procedure.''.

     SEC. 6. AMENDMENT TO SECTION 1977 OF THE REVISED STATUTES OF 
                   THE UNITED STATES.

       Section 1977 of the Revised Statutes (42 U.S.C. 1981) is 
     amended by adding at the end the following new subsection:
       ``(d) Notwithstanding any Federal statute of general 
     applicability that would modify any of the procedures 
     expressly applicable to a right to make and enforce a 
     contract of employment under this section, such procedures 
     shall be the exclusive procedures applicable to a claim based 
     on such right unless after such claim arises the claimant 
     voluntarily enters into an agreement to resolve such claim 
     through arbitration or another procedure.''.

     SEC. 7. AMENDMENT TO THE EQUAL PAY REQUIREMENT UNDER THE FAIR 
                   LABOR STANDARDS ACT OF 1938.

       Section 6(d) of the Fair Labor Standards Act of 1938 (29 
     U.S.C. 206(d)) is amended by adding at the end the following 
     new paragraph:
       ``(5) Notwithstanding any Federal statute of general 
     applicability that would modify any of the powers or 
     procedures expressly applicable to a claim based on violation 
     of this subsection, such powers and procedures shall be the 
     exclusive procedures applicable to such claim unless after 
     such claim arises the claimant voluntarily enters into an 
     agreement to resolve such claim through arbitration or 
     another procedure.''.

     SEC. 8. AMENDMENT TO THE FAMILY AND MEDICAL LEAVE ACT OF 
                   1993.

       Title IV of the Family and Medical Leave Act of 1993 (29 
     U.S.C. 2601 et seq.) is amended by adding at the end the 
     following new section:

     ``SEC. 406. EXCLUSIVITY OF REMEDIES.

       ``Notwithstanding any Federal statute of general 
     applicability that would modify any of the procedures 
     expressly applicable to a claim based on a right provided 
     under this Act or under an amendment made by this Act, such 
     procedures shall be the exclusive procedures applicable to 
     such claim unless after such claim arises the claimant 
     voluntarily enters into an agreement to resolve such claim 
     through arbitration or another procedure.''.

     SEC. 9. AMENDMENT TO TITLE 9 OF THE UNITED STATES CODE.

       Section 14 of title 9, United States Code, is amended--
       (1) by inserting ``(a)'' before ``This''; and
       (2) by adding at the end the following new subsection:
       ``(b) This chapter shall not apply with respect to a claim 
     of unlawful discrimination in employment if such claim arises 
     from discrimination based on race, color, religion, sex, 
     national origin, age, or disability.''.

     SEC. 10. APPLICATION OF AMENDMENTS.

       The amendments made by this Act shall apply with respect to 
     claims arising on and after the date of the enactment of this 
     Act.

                [From the Boston Globe, Sept. 24, 1996]

     A Cautionary Tale About Signing Away Right To Sue; on the Job

                          (By Diane E. Lewis)

       Jane Lajoie thought she had an open-and-shut discrimination 
     case against her employer. Instead, she now has a cautionary 
     tale for the growing number of American workers whose 
     employers have asked them to sign away their rights to have 
     employment complaints brought before a jury.
       Lajoie's story begins in 1987 when, after receiving an MBA, 
     she joined Fidelity Management Research Corp. as a data 
     analyst for the publishing group's Mutual Fund Guide. Over 
     the next seven years, she took on more responsibilities, 
     rising to managing editor and then publisher of the guide.
       But the Marlborough woman says there was a dark cloud over 
     what should have been a successful career: She was convinced 
     that she was not being compensated fairly, that men in 
     comparable posts had more prestigious titles and were getting 
     a lot more money for the same work. And she voiced her 
     concerns.
       Lajoie, 51, alleges that not long after she spoke up, a 
     company lawyer asked her to register as a principle with the 
     New York Stock Exchange and the National Association of 
     Securities Dealers. Lajoie says she agreed, think she was 
     required to register. She admits that she didn't read the 
     fine print.
       Today, Lajoie claims she was tricked into signing a so-
     called U-4 securities arbitration form stating that any 
     dispute or claim against her employer must be submitted to 
     private arbitration. In a lawsuit filed in Norfolk Superior 
     Court, she alleges that she was replaced by a younger woman 
     and then fired after she signed the form.
       Fidelity denies discriminating against Lajoie. ``There was 
     no discrimination. She was compensated properly and fairly. 
     She was also replaced by another woman,'' said attorney 
     Wilfred Benoit Jr., who represents the Boston firm.
       As for trickery, Benoit asserted: ``Jane Lajoie was not 
     tricked into signing anything. She signed a U-4 application 
     as a principal in the securities industry and, as far as we 
     know, she understood what it was.''
       Thus far, two Massachusetts courts have upheld Fidelity's 
     right to arbitration, and an arbitration hearing is expected 
     this year. The dispute may or may not end there.
       Attorney Nancy Shilepsky, who represents Lajoie, says the 
     Massachusetts Court of Appeals has acknowledged that her 
     client may have good grounds for an appeal. But the court 
     also ruled the Lajoie must arbitrate first and then, if 
     unhappy with the findings, appeal.
       For employers, mandatory arbitration has been a boon. Not 
     only does it limit lengthy and expensive court battles, but 
     it also reduces the kind of publicity that can seriously 
     damage a company's image. In the five years since the US 
     Supreme Court ruled that U-4s were legal, scores of companies 
     have sought to have sexual harassment, age, gender and other 
     discrimination claims moved from courts to the system of 
     private justice known as binding arbitration. In the 
     securities industry alone, about 500,000 Wall Street 
     employees are legally bound by arbitration agreements.
       Not surprisingly, the American Arbitration Association 
     reports that employment arbitration claims increased 70 
     percent between 1994 and 1995.
       Criticism has kept pace with the trend. Both the Equal 
     Employment Opportunity Commission and the National Labor 
     Relations Board have denounced the increased use of mandatory 
     arbitration forms. The National Employment Lawyers 
     Association has an ongoing campaign against the agreements.
       The critics argue that the agreements are generally signed 
     at the time of hiring or in the course of a policy change at 
     a company--times when workers are concerned about making a 
     good first impression or are probably not focused on the 
     consequences of compliance.
       Last year, the EEOC succeeded in enjoining an employer from 
     requiring workers to sign mandatory arbitration forms and 
     from firing those workers who refused.
       This spring, the NLRB took a similar stand when it issued a 
     complaint against a luggage maker that fired an employee for 
     refusing to sign a form stating that all workplace disputes 
     would have to be arbitrated.
       ``Nobody should be forced to use an employer's private 
     justice system,'' says Lewis Maltby, director of workplace 
     rights at the American Civil Liberties Union in New York.
       Maltby, who sits on the board of the American Arbitration 
     Association, concedes that there are times when employees may 
     be better off arbitrating a dispute than taking the matter to 
     a backlogged court or a beleaguered government agency.
       In Boston, the Massachusetts Commission Against 
     Discrimination is hoping arbitration will help reduce a two-
     year backlog of cases. For those who opt for binding 
     arbitration, the dispute would be heard within 30 days after 
     filing and decided in 60 days. Decisions would be binding on 
     both sides.
       Still, MCAD Commissioner Michael Duffy has drawn the line: 
     His program will not mediate any cases stemming from 
     mandatory arbitration agreements.
       ``We're not against arbitration or mediation,'' said Duffy. 
     ``We think it's fine when all parties agree. But problems 
     arise when employees are told they must do it or are made to 
     feel they could lose a job, and then they wind up giving up 
     their right to a jury trial.''
       In the meantime, he and others advise what consumer 
     advocates have been telling the public for years: Read the 
     fine print before signing on the bottom line.
                                 ______
                                 
      By Mr. LUGAR:
  S. 64. A bill to state the national missile defense policy of the 
United

[[Page S440]]

States; to the Committee on Armed Services.


          the defend the united states of america act of 1997

  Mr. LUGAR. Mr. President, as we commence the 105th Congress and take 
up, as we surely will, issues with regard to national missile defense 
and theater missile defense, a key question is whether continued 
adherence to the ABM Treaty, in its original or a modified form, is 
compatible with the kind of missile defense we need.

  Is this an ``either/or'' choice?
  I hold the view that the ABM Treaty does have, or can be made to 
have, sufficient flexibility or elasticity to accommodate certain kinds 
of national missile or theater missile defense systems. By the same 
token, I reject the notion that we can only achieve the types of 
theater missile defense or national missile defense we need by outright 
abrogation of the ABM Treaty.
  I am struck more by the commonality than the differences between the 
prevailing views of some of my Republican colleagues in the Senate and 
views in the Administration on this subject. Much of the difference has 
to do with timing, stemming in part from different assessments of the 
intelligence information on the ballistic missile threat facing the 
country. Ultimately, responsible policy makers must come to grips with 
the management of the risk entailed by the threat and how much money we 
are willing to spend, in a tight budget situation, for various levels 
of missile defense to counter that threat.
  At this point in our debates, there seems to be general agreement 
that we are not trying to protect the U.S. against a massive nuclear 
strike from a reconstituted Soviet Union or even a general exchange 
with Russia. Nor, for that matter, are we talking about protection 
against a deliberate, massive Chinese nuclear attack on the United 
States.
  A consensus between the prevailing positions on the Hill and that of 
the administration comes closer if there is an acceptance that this 
range of Russian or Chinese threats are beyond our technological and 
financial means in the near term and that our objective is one of 
defending America against a Third World, long-range ballistic missile 
capability from a regime not subject to any rational laws of 
deterrence.
  It is the prospect that rogue states will at some point obtain 
strategic ballistic missiles - ICBMs - that can reach American shores 
which propels us to consider the deployment of a national missile 
defense. A second prospect involves an unauthorized or accidental 
launch of an ICBM from Russia or China.
  The kind of national missile defense system promoted both on the Hill 
and in the administration would not be capable of defending against 
thousands of warheads being launched against the United States. Rather, 
both sides are talking about a system capable of defending against the 
much smaller and relatively unsophisticated ICBM threat that a rogue 
nation or terrorist group could mount anytime in the foreseeable future 
as well as one capable of shooting down an unauthorized or accidentally 
launched missile.
  The critical difference between many of the plans offered on the Hill 
and those proposed by the administration has to do with timing. Some 
Congressional proposals would require selection of a missile defense 
system to be made within a year, with deployment to begin within three 
years. The administration has argued for the need to develop a system, 
assess the threat in three years, and make a deployment decision 
accordingly.
  It is the difference between the various plans over timing on system 
selection and deployment that holds practical implications for existing 
and potential arms control agreements--START II, the ABM Treaty, START 
III?--as well as the potential effectiveness of the system deployed. 
The more immediate the commitment to deploy a national defense system, 
the greater the risk of a Russian rejection of the START II Treaty and 
of an outright American rejection of the original ABM Treaty.
  Second, differences over timing have been linked to the issue of the 
effectiveness of the system deployed by the United States. The 
administration has argued that selection of a system within the next 
year or so will limit the options to build a system that is better 
matched to the threat, and that the real choice between various 
Congressional plans and that of the administration is between building 
an advanced system to defeat an actual threat and a less capable system 
to defeat a hypothetical threat.
  Mr. President, is there a middle ground--one that satisfies neither 
the administration nor various Congressional proponents fully but that 
does move us in the direction of providing the American people with a 
limited national defense system against the most urgent ballistic 
missile threats? I believe there is, and this legislation is an attempt 
to chart it.
  Mr. President, I sense a greater willingness in both branches to try 
to come together in the interest of providing the American people with 
some form of limited, national defense system against the most urgent 
form of ballistic missile threat --to seek to bridge gaps rather than 
score debating points.
  Moreover, with the passage of time, the differences over preferred 
dates of system selection and deployment have narrowed.
  With that in mind, and with a felt need to change the terms of 
reference of previous ballistic missile defense debates by focusing on 
areas of commonality between the administration's position and the 
various congressional plans, I offer this legislation as one of the 
starting points for a more constructive exchange on the subject of 
national missile defense.
  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:

  Defend the United States of America Act of 1997--Section-by-Section 
                                Analysis


                             i. short title

       This act may be cited as the ``Defend the United States of 
     America Act of 1997''.


                              ii. findings

       Describes the linkages between U.S. missile defenses, the 
     ABM Treaty, and continued Russian adherences to other arms 
     reduction treaties like START I and START II.
       Describes the newly-emerging threats posed by other kinds 
     of weapons of mass destruction than nuclear weapons, and 
     other delivery means than long-range ballistic missiles.
       Hearings over the last two years have shown the pervasive 
     threat to the U.S. from chemical, biological, and 
     radiological weapons, and the relative unpreparedness of U.S. 
     governments at all levels to cope with such terrorist 
     incidents.
       Restates what DoD and Congress have learned about major 
     weapons system development, which emphasis on the necessity 
     for thorough testing and careful systems cost-effectiveness 
     analysis prior to a commitment to deployment.


                  iii. national missile defense policy

       Development for deployment not later than 2003 of a 
     National Missile Defense system designed to defend against 
     accidental, unauthorized, and limited attacks.
       The initial National Missile Defense system to be developed 
     and deployed at the former Safeguard ABM site in compliance 
     with the ABM Treaty, and to consist of:
       Fixed, guard-based battle management radars;
       Up to 100 ground-based interceptor missiles;
       Space based adjuncts allowed by the ABM Treaty; and
       Large phased array radars on the periphery of the U.S., 
     facing outward, as necessary.
       A requirement for a Presidential recommendation in 2000 on 
     whether or not to deploy the developed system, and a set of 
     criteria that should be used by the Congress in 2000 to aid 
     in making a deployment decision. The criteria include:
       The threat, as it exists in 2000 and is projected over the 
     next several years;
       The projected cost and effectiveness of the system, based 
     on development and testing results;
       The projected cost and effectiveness of the National 
     Missile Defense system if deployment were deferred for one to 
     three years, while additional development occurs;
       Arms control factors; and
       Where the U.S. stands in preparedness for, and defenses 
     against, all the other nuclear, chemical and biological 
     threats to the U.S.
       The establishment of provisions to give the 106th Congress 
     a vote on whether or not to authorize deployment of the 
     system, as a privileged motion under expedited procedures.
       This is a process that has been used by previous Congresses 
     to insure an up-or-down vote in both Houses on the B-2 
     bomber, the MX missile, and on B-52s.
       In sum, this section establishes a process whereby Congress 
     will vote in 2000 on whether or not to deploy whatever 
     National Missile Defense system may be ready to begin 
     deployment at that time, and with better information than we 
     have today.

[[Page S441]]

        IV. national missile defense vs. arms control agreements

       A statement that it is the United States' legal right to 
     deploy such a National Missile Defense system, and that such 
     a deployment does not threaten Russian or Chinese deterrent 
     capabilities.
       A direction to the President to seek both further 
     cooperation with Russia on a variety of Theater Missile 
     Defense issues, and the relaxation of the ABM Treaty to allow 
     both sides to have two National Missile Defense sites.
       This would greatly increase the effectiveness of our 
     National Missile Defense systems against Third World missile 
     attacks aimed at targets on our distant borders, while not 
     posing a threat to Russia's deterrent.
       This section also contains a provision requiring the 
     President, if the ballistic missile threat to the U.S. 
     exceeds that which the initial National Missile Defense 
     system is capable of handling, to consult with the Congress 
     regarding the exercise of our right to withdraw from the ABM 
     Treaty under Article XV.


           V. DOD to continue R&D on national missile defense

       Directs the Secretary of Defense to continue a research and 
     development program on advanced National Missile Defense 
     technologies while the initial site is developed and 
     deployed; this program would be conducted in full compliance 
     with the ABM Treaty.


           VI. U.S. policy toward other WMD delivery threats

       Sets forth U.S. policy on reducing the threat to the U.S. 
     from weapons of mass destruction and associated delivery 
     systems. It further directs the Administration to develop a 
     balanced comprehensive plan for reducing the threat to the 
     U.S. from all weapons of mass destruction and all delivery 
     means.


VII. presidential and congressional review of U.S. defenses against all 
                          types of WMD attack

       Requires a review, following the initial deployment of a 
     National Missile Defense, by the President and the Congress 
     to determine the future course of U.S. defenses against all 
     types of weapons of mass destruction.


                      VIII. reporting requirements

       Administration reporting requirements to Congress.


                         IX. legal definitions

       The legal definitions of the treaties mentioned in the 
     bill.
                                 ______
                                 
      By Mr. HATCH:
  S. 65. A bill to amend the Internal Revenue Code of 1986 to ensure 
that members of tax-exempt organizations are notified of the portion of 
their dues used for political and lobbying activities, and for other 
purposes; to the Committee on Finance.


       membership dues disclosure and deductibility legislation.

  Mr. HATCH. Mr. President, for many years, Congress has recognized 
that private institutions can often provide better service in certain 
areas than the government. In this regard, membership organizations 
that serve various public needs are given tax-exempt treatment. 
However, some tax-exempt membership organizations are involved in 
political and lobbying activities. These activities may or may not meet 
with the approval of those who pay dues and certainly should not be 
subsidized by the taxpayers.

  Today, I am introducing legislation that is designed to rectify this 
problem. My bill is very simple. It requires tax-exempt membership 
organizations to disclose to their members these political activities 
and organizational resources spent on them. In addition, this bill will 
give the members of these tax-exempt organizations the opportunity to 
deduct the nonpolitical portion of their dues for income tax purposes 
without regard to the so-called ``two percent limitation.''
  First, let me discuss the issue of full disclosure.
  Mr. President, in the Omnibus Budget Reconciliation Act of 1993, 
Congress disallowed a deduction for expenses relating to lobbying and 
political activities. Lobbying is no longer a legitimate deductible 
expense for American businesses. Since tax-exempt organizations 
generally do not pay any income tax, the law was amended to further 
disallow an individual taxpayer a tax deduction for the portion of 
annual dues paid to a tax-exempt organization that is attributable to 
any lobbying or political activities of the organization. To assist 
association members in knowing what portion is and what portion is not 
deductible when paying their dues, the law requires organizations to 
annually disclose to the IRS and to the individual members the amount 
of money spent on political activities by the organization.
  However, certain exceptions to the disclosure rules are provided in 
the tax code and an organization is not required to disclose such 
information if (1) political activities do not exceed $2,000 a year; 
(2) the organization elects to pay a proxy tax on the nondeductible 
portion in order to avoid providing disclosure; or (3) substantially 
all of the individual members do not deduct their annual dues payments 
on their tax returns as itemized deductions.
  In 1995, the IRS put forth an interpretation of this third exception 
and explained what they believe Congress meant by substantially all 
dues are not deductible. In Revenue Procedure 95-35, the IRS let all 
but three categories of tax-exempt organizations off the hook from the 
disclosure rules. The three that must comply are: section 501(c)(4) 
organizations that are not veterans organizations, 501(c)(5) 
agricultural and horticultural organizations, and 501(c)(6) 
organizations.
  Interestingly, Mr. President, the IRS choose to grant labor unions, 
which are also 501(c)(5) organizations, a complete exemption from the 
lobbying disclosure rules. Thus, unions do not have to inform their 
members how much of their dues are used for political purposes.
  I am sure that my colleagues see the obvious problems in this. It is 
simply not fair that the IRS would treat a labor union preferentially. 
Why are unions exempt and not, for example, farm cooperatives?
  Mr. President, it seems to me that the Clinton administration has 
twisted the law to favor their friends in union leadership at the 
expense of the right to know for the rank and file. Let me reiterate 
this point: the law says clearly that tax-exempt organizations must 
disclose their political and lobbying activities. It is only the IRS 
interpretation that enables unions to duck this disclosure requirement 
and still benefit from tax-exempt status.
  Second, I find it outrageous that union leadership are able to coerce 
dues from workers in many states as a condition of employment. But, it 
adds insult to injury that those dues can be used for political 
purposes without the knowledge, let alone permission, of the rank and 
file.
  The Supreme Court, in 1988, in Beck v. Communication Workers of 
America, declared that workers were entitled to know how much of their 
dues were being directed to political uses and to receive a refund for 
that portion of dues paid. This seems like a simple common sense 
solution to this violation of free speech rights. However, in one of 
his first acts upon taking office in 1993, President Clinton rescinded 
the executive order enforcing this decision of the Supreme Court.
  Mr. President, in the Beck case, for example, it was found that only 
21 percent of the dues collected by the Communications Workers of 
America went for bargaining-related activities. This meant that Harry 
Beck, the former Maryland union shop steward who spent 13 years 
fighting his case in the courts, was entitled to get a substantial 
rebate of his dues, plus interest. Yet, this case is merely 
illustrative of a widespread injustice. Where is the fairness in 
requiring a worker to contribute to a political cause or a lobbying 
effort with which he or she does not agree?
  Forcing people to contribute portions of their earnings to political 
causes they oppose violates their First Amendment rights. In his Beck 
opinion, Justice William Brennen cited Thomas Jefferson's view that 
forcing people to finance opinions they disagree with was ``sinful and 
tyrannical.''
  Mr. President, it is often a requirement or a condition of employment 
for workers to be members of a labor union. Yet, this requirement is 
often very costly. Union dues can run from about $300 to over $1,000 a 
year. Now, I am the first to acknowledge that unions play an important 
role in employee-employer relations. I will wager that I am one of the 
few members of this body who was ever a member of a union. And, that 
experience, perhaps, is the reason I believe so strongly that the rank 
and file have rights that must be protected.
  Citizens of a free country ought to be free to spend their own money 
on the political causes and candidates they wish to support. In 1992, 
union officials admit to having spent at least $92 million on political 
contributions and expenses. In-kind contributions could be

[[Page S442]]

3 to 5 times that amount. In other words, organized labor may have 
actually spent from $300 million to $500 million on political 
activities in 1992. While some union members would approve of these 
expenditures, some definitely would not.
  But, I want to be absolutely clear that the bill I am introducing 
today does not affect any provision in the National Labor Relations 
Act, the ability of unions to establish closed or agency shops in any 
state where they are currently permitted, or the ability of unions to 
assess dues or collect fees. Those are debates for another day.
  Rather, this bill deals only with the obligation of labor unions, as 
tax exempt organizations, to disclose political and lobbying activities 
to their members. All union members deserve to know how their 
organizations spend their money. Moreover, because these are tax-exempt 
organizations, the taxpayers deserve to know what they are subsidizing.
  While union members are certainly capable of reading a headline like, 
``Union leaders commit $35 million to Democrats,'' they may wish to 
have a more comprehensive disclosure of political and lobbying activity 
financed with their dues--and I cannot blame them one bit.
  Mr. President, polling data suggests that union members would prefer 
that their unions not engage in partisan political campaign activities 
at all. But, by an overwhelming 84 percent to 9 percent margin, 
according to a survey by Luntz and Associates, union members want to 
force their union leaders to explain what happens to their dues. They 
simply want to know where the money is spent and why. This seems 
utterly reasonable and fair to me.
  Furthermore, only 19 percent of union members know that they can 
request a refund if they do not agree with an ideological position and/
or political position of their particular union. When told that they 
have the right to a refund, 20 percent say they would ``definitely'' 
request their money back, and another 20 percent would be ``very 
likely'' to request a refund.
  Mr. President, let me turn to the issue of deductibility.
  Currently, an individual union member may deduct his union dues only 
if the amount exceed two percent of his or her adjusted gross income 
[AGI]. For all intents and purposes, this means that union dues and 
fees are not deductible at all for most workers, even if such dues and 
fees are required as a condition of employment.
  I believe that union dues and fees, especially to the extent that so 
many workers are forced to pay them, ought to be fully deductible for 
those who itemize deductions. Therefore, I am proposing this bill to 
remove the two percent threshold and to permit union members and fee 
payers to deduct that portion of their dues and fees that is not used 
for political or lobbying activities. This conforms union dues and fees 
with all other sorts of business expenses and contributions to tax-
exempt organizations.
  Moreover, this deduction is a form of tax break that could put real 
money back in the pockets of American workers.
  Mr. President, to summarize, if my bill is enacted into law, tax-
exempt organizations would be required--really required--to disclose to 
their members the amount of their political and lobbying activities. It 
goes further by allowing full deductibility of membership dues to the 
extent they are used for nonpolitical or lobbying activities.
  Mr President, this proposal is a step in the direction of campaign 
finance reform. One important objective of campaign finance reform 
should be to return political power to individual citizens and to 
diminish the influence of large organizational special interests.
  Well, Mr. President, knowledge has always been power. To return power 
to individual voters, they need to know where their dollars are going. 
If my bill is passed, workers will no longer be in the dark about their 
dues. At the same time they will be getting a tax break and possibly an 
increase in their take-home pay. I believe this is the fair and honest 
thing to do. I urge all my colleagues to support and cosponsor this 
bill.
                                 ______
                                 
      By Mr. HATCH (for himself, Mr. Lieberman, Mr. Grassley, and Mr. 
        Breaux):
  S. 66. A bill to amend the Internal Revenue Code of 1986 to encourage 
capital formation through reductions in taxes on capital gains, and for 
other purposes; to the Committee on Finance.


                   THE CAPITAL FORMATION ACT OF 1997

  Mr. HATCH. Mr. President, I am pleased to be joined by Senators 
Lieberman, Grassley, and Breaux in introducing the Capital Formation 
Act of 1997.
  Mr. President, reducing the high rate on capital gains has long been 
a priority of mine. During the last Congress, I joined my good friend, 
the chairman of the House Ways and Means Committee, Bill Archer, in 
sponsoring the Archer-Hatch capital gains bill. Then later in the 
session Senator Lieberman and I offered a bipartisan capital gains tax 
reduction bill. The Hatch/Lieberman bill, S. 959, contained the same 50 
percent deduction for capital gains as well as an enhanced incentive 
for investments in newly issued stock of small corporations. This 
measure was supported by 45 senators, and we were pleased that its 
provisions were included in the Balanced Budget Act of 1995.
  The bill we are introducing today is substantially the same. Our bill 
combines two important elements of capital gains relief with a broad 
based tax cut and a targeted incentive to give an extra push for newly 
formed or expanding small businesses. Like the capital gains measure 
that passed the House and Senate during the last Congress, our bill 
would allow individual taxpayers to deduct 50 percent of any net 
capital gain. This means that the top capital gains tax rate for 
individuals would be 19.8 percent. Also, it grants a 25-percent maximum 
capital gains tax rate for corporations. Our bill also includes an 
important provision that would allow homeowners who sell their personal 
residences at a loss to take a capital gains deduction.
  A provision that is not in our bill is a provision for indexing 
assets. Many of our Senate colleagues have expressed concern that 
indexing capital assets would result in undue complexity and possibly 
lead to a resurgence of tax shelters. While I continue to support the 
concept of indexing capital assets to prevent the taxation of 
inflationary gains, I believe even more strongly that capital gains tax 
relief is essential for our long-term economic growth. Therefore, in an 
effort to streamline this bill and expedite its passage, we have 
omitted the indexing provisions. I hope that some form of indexing can 
be developed that will achieve the goals of indexing without adding 
undue complexity or the potential for abuse.
  In addition to the broad-based provisions listed above, our bill also 
includes some extra capital gains incentives targeted to individuals 
and corporations who are willing to invest in small businesses. We see 
this add-on as an inducement for investors to provide the capital 
needed to help small businesses get established and to expand.
  Mr. President, this additional targeted incentive works as follows: 
If an investor buys newly issued stock of a qualified small business, 
which is defined as one with up to $100 million in assets, and holds 
that stock for three or more years, he or she can deduct 75 percent of 
the gain on the sale of that stock, rather than just the 50 percent 
deduction provided for other capital gains.
  In addition, any time after the end of the 3 year period, if the 
investor decides to sell the stock of one qualified small business and 
invest in another qualified small business, he or she can completely 
defer the gain on the sale of the first stock and not pay taxes on the 
gain until the second stock is sold. In essence, the investor is 
allowed to roll over the gain into the new stock until he or she sells 
the stock and cashes out the assets. We think that this additional 
incentive will make a tremendous amount of capital available for new 
and expanding small businesses in this country.
  In particular, these special incentives should really make a 
difference in the electronics, biotechnology, and other high tech 
industries that are so important to our economy and to our future. The 
software and medical device industries in Utah are perfect examples of 
how these industries have transformed our economy. While these

[[Page S443]]

provisions are not limited to high tech companies by any means, these 
are the types of businesses that are most likely to use them because it 
is so hard to attract capital for these higher risk ventures. In 
addition, many start-up companies have large research and development 
needs. With the uncertainty of the R&E tax credit, this bill will give 
investors an incentive to fund high risk research companies that may be 
a Novell or Thiokol of tomorrow.
  Mr. President, our economy is becoming more connected to the global 
marketplace every day. And, it is vital for us to realize that capital 
flows across national boundaries very rapidly. Therefore, we need to be 
concerned with how our trading partners tax capital and investment 
income.
  Unfortunately, the U.S. has the highest tax rate on individual 
capital gains of all of the G-7 nations, except the U.K. And, even in 
the U.K., individuals can take advantage of indexing to alleviate 
capital gains caused solely by inflation. For example, Germany totally 
exempts long-term capital gains on securities. In Japan, investors pay 
the lesser of 1 percent of the sales price or 20 percent of the net 
gain. I think it is no coincidence, Mr. President, that Germany's 
saving rate is twice ours, and Japan's is three times as high as ours. 
In order to stay competitive in the world, it is vital that our tax 
laws provide the proper incentive to attract the capital we need here 
in the U.S.
  We are aware that some of the opponents of capital gains tax 
reductions have asserted that such changes would inordinately benefit 
the wealthy, leaving little or no tax relief for the lower and middle 
income classes. Nothing could be further from the truth. In fact, 
capital gains taxation affects every homeowner, every employee who 
participates in a stock purchase plan, or every senior citizen who 
relies on income from mutual funds for their basic needs during 
retirement. A capital gains tax cut is for everybody.
  It is interesting to note how the current treatment of capital gains 
only gives preferential treatment to those taxpayers whose incomes lie 
in the highest tax brackets. Under the Capital Formation Act of 1997, 
the benefits will tilt decidedly toward the middle-income taxpayer. A 
married couple with $30,000 in taxable income who sells a capital asset 
would, under our bill, pay only a 7.5-percent tax on the capital gain. 
Further, this bill would slash the taxes retired seniors pay when they 
sell the assets they have accumulated for income during retirement.
  I also believe there is a misperception about the term ``capital 
asset.'' We tend to think of capital assets as something only wealthy 
persons have. In fact, a capital asset is a savings account--which we 
should all have--a piece of land, a savings bond, some stock your 
grandmother gave you, a mutual fund share, your house, your farm, your 
1964 Mustang convertible, or any number of things that have monetary 
worth. It is misleading to imply that only ``the wealthy'' would 
benefit from this bill.
  I want to elaborate on this point, Mr. President. Current law already 
provides a sizeable differential between ordinary income tax rates and 
capital gains tax rates for upper income taxpayers. The wealthiest 
among us pay up to 39.6 percent on ordinary income but only 28 percent 
on capital gains. We certainly believe that income tax rates are too 
high. And, for middle-income taxpayers in the 28 percent income tax 
bracket, there is no difference between their capital gains rate and 
their ordinary income rate. Thus, current law provides no tax incentive 
for middle income taxpayers to invest assets that may have capital 
gains. Our bill would correct this problem and give the largest 
percentage rate reduction to the lowest income taxpayers. For example, 
the rate for high income earners would change from 28 percent to 19.8 
percent--a 8.2 percentage point reduction. Whereas, a middle income 
taxpayer--who is getting no benefit under current law--would be taxed 
at 14 percent--a 14 percentage point reduction.
  Frankly, Mr. President, the introduction of a bipartisan capital 
gains bill couldn't come at a better time than now. Congress is in the 
midst of formulating a plan to balance the federal budget. The elements 
of this plan will have consequences far beyond this year or even beyond 
2002 when we hope to achieve our balanced budget goal. Crucial to the 
achievement of a balanced budget is the underlying growth and strength 
of our economy. Small changes in the behavior of the economy can make 
or break our ability to put our fiscal house in order. Thus, especially 
now, we can ill afford to have our economy slow down and create an 
increased fear of future job insecurity. Both Republicans and Democrats 
alike can agree that the creation of new and secure jobs is imperative 
for a vibrant and growing economy.
  This is where a reduction of the capital gains rate can be so 
important. By stimulating the economy and spurring job creation, a cut 
in the capital gains rate can stave off the downturn that may be on its 
way.
  Many Americans have expressed concern about the wisdom of a tax 
reduction while we are trying to balance the budget. However, Mr. 
President, we see this bill as a change that will help us balance the 
budget. The evidence clearly shows that a cut in the capital gains tax 
rate will increase, not decrease, revenue to the Treasury. During the 
period from 1978 to 1985, the tax rate on capital gains was cut from 
almost 50 percent to 20 percent. Over this same period, however, tax 
receipts increased from $9.1 billion to $26.5 billion. The opposite 
occurred after the 1986 Tax Reform Act raised the capital gains tax 
rate. The higher rate resulted in less revenue.
  Mr. President, the capital gains tax is really a tax on realizing the 
American dream. For those Americans who have planted seeds in small or 
large companies, family farms, or other investments, and who have been 
fortunate enough and worked hard enough to see them grow, the capital 
gains tax is a tax on success. It is an additional tax on the reward 
for taking risks. The American dream is not dead; it's just that we 
have been taxing it away.
  I urge my colleagues on both sides of the aisle to take a close look 
at this bill. We believe it offers a solid plan to help us achieve our 
goal of a brighter future for our children and grandchildren. When it 
comes down to it, jobs, economic growth, and entrepreneurship are not 
partisan issues. They are American issues.
  I ask unanimous consent that the text and a summary of the bill be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                 S. 66

       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 ``Capital 
     Formation Act of 1997''.
       (b) Reference to 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--CAPITAL GAINS REFORM
     Subtitle A--Capital Gains Deduction for Taxpayers Other Than 
                              Corporations

     SEC. 101. CAPITAL GAINS DEDUCTION.

       (a) In General.--Part I of subchapter P of chapter 1 
     (relating to treatment of capital gains) is amended by 
     redesignating section 1202 as section 1203 and by inserting 
     after section 1201 the following:

     ``SEC. 1202. CAPITAL GAINS DEDUCTION.

       ``(a) General Rule.--If for any taxable year a taxpayer 
     other than a corporation has a net capital gain, 50 percent 
     of such gain shall be a deduction from gross income.
       ``(b) Estates and Trusts.--In the case of an estate or 
     trust, the deduction shall be computed by excluding the 
     portion (if any) of the gains for the taxable year from sales 
     or exchanges of capital assets which, under sections 652 and 
     662 (relating to inclusions of amounts in gross income of 
     beneficiaries of trusts), is includible by the income 
     beneficiaries as gain derived from the sale or exchange of 
     capital assets.
       ``(c) Coordination With Treatment of Capital Gain Under 
     Limitation on Investment Interest.--For purposes of this 
     section, the net capital gain for any taxable year shall be 
     reduced (but not below zero) by the amount which the taxpayer 
     takes into account as investment income under section 
     163(d)(4)(B)(iii).
       ``(d) Transitional Rule.--
       ``(1) In general.--In the case of a taxable year which 
     includes January 1, 1997--
       ``(A) the amount taken into account as the net capital gain 
     under subsection (a) shall not exceed the net capital gain 
     determined by only taking into account gains and losses 
     properly taken into account for the portion of the taxable 
     year on or after January 1, 1997, and

[[Page S444]]

       ``(B) if the net capital gain for such year exceeds the 
     amount taken into account under subsection (a), the rate of 
     tax imposed by section 1 on such excess shall not exceed 28 
     percent.
       ``(2) Special rules for pass-thru entities.--
       ``(A) In general.--In applying paragraph (1) with respect 
     to any pass-thru entity, the determination of when gains and 
     losses are properly taken into account shall be made at the 
     entity level.
       ``(B) Pass-thru entity defined.--For purposes of 
     subparagraph (A), the term `pass-thru entity' means--
       ``(i) a regulated investment company,
       ``(ii) a real estate investment trust,
       ``(iii) an S corporation,
       ``(iv) a partnership,
       ``(v) an estate or trust, and
       ``(vi) a common trust fund.''.
       (b) Deduction Allowable in Computing Adjusted Gross 
     Income.--Section 62(a) is amended by inserting after 
     paragraph (15) the following:
       ``(16) Long-term capital gains.--The deduction allowed by 
     section 1202.''.
       (c) Conforming Amendments.--
       (1) Section 1 is amended by striking subsection (h).
       (2) Section 170(e)(1) is amended by striking ``the amount 
     of gain'' in the material following subparagraph (B)(ii) and 
     inserting ``50 percent (\25/35\ in the case of a corporation) 
     of the amount of gain''.
       (3) Section 172(d)(2)(B) is amended to read as follows:
       ``(B) the deduction under section 1202 and the exclusion 
     under section 1203 shall not be allowed.''.
       (4) The last sentence of section 453A(c)(3) is amended by 
     striking all that follows ``long-term capital gain,'' and 
     inserting ``the maximum rate on net capital gain under 
     section 1201 or the deduction under section 1202 (whichever 
     is appropriate) shall be taken into account.''.
       (5) Section 642(c)(4) 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 from the sale or exchange of capital assets held for 
     more than 1 year or gain described in section 1203(a), proper 
     adjustment shall be made for any deduction allowable to the 
     estate or trust under section 1202 (relating to deduction for 
     excess of capital gains over capital losses) or for the 
     exclusion allowable to the estate or trust under section 1203 
     (relating to exclusion for gain from certain small business 
     stock). In the case of a trust, the deduction allowed by this 
     subsection shall be subject to section 681 (relating to 
     unrelated business income).''.
       (6) The last sentence of section 643(a)(3) is amended to 
     read as follows: ``The deduction under section 1202 (relating 
     to deduction of excess of capital gains over capital losses) 
     and the exclusion under section 1203 (relating to exclusion 
     for gain from certain small business stock) shall not be 
     taken into account.''.
       (7) Section 643(a)(6)(C) is amended by inserting ``(i)'' 
     before ``there shall'' and by inserting before the period ``, 
     and (ii) the deduction under section 1202 (relating to 
     capital gains deduction) and the exclusion under section 1203 
     (relating to exclusion for gain from certain small business 
     stock) shall not be taken into account''.
       (8) Section 691(c)(4) is amended by striking ``sections 
     1(h), 1201, 1202, and 1211'' and inserting ``sections 1201, 
     1202, 1203, and 1211''.
       (9) The second sentence of section 871(a)(2) is amended by 
     inserting ``or 1203'' after ``section 1202''.
       (10)(A) Section 904(b)(2) is amended by striking 
     subparagraph (A), by redesignating subparagraph (B) as 
     subparagraph (A), and by inserting after subparagraph (A) (as 
     so redesignated) the following:
       ``(B) Other taxpayers.--In the case of a taxpayer other 
     than a corporation, taxable income from sources outside the 
     United States shall include gain from the sale or exchange of 
     capital assets only to the extent of foreign source capital 
     gain net income.''.
       (B) Section 904(b)(2)(A), as so redesignated, is amended--
       (i) by striking all that precedes clause (i) and inserting 
     the following:
       ``(A) Corporations.--In the case of a corporation--'', and
       (ii) by striking in clause (i) ``in lieu of applying 
     subparagraph (A),''.
       (C) Section 904(b)(3) is amended by striking subparagraphs 
     (D) and (E) and inserting the following:
       ``(D) Rate differential portion.--The rate differential 
     portion of foreign source net capital gain, net capital gain, 
     or the excess of net capital gain from sources within the 
     United States over net capital gain, as the case may be, is 
     the same proportion of such amount as the excess of the 
     highest rate of tax specified in section 11(b) over the 
     alternative rate of tax under section 1201(a) bears to the 
     highest rate of tax specified in section 11(b).''.
       (D) Section 593(b)(2)(D)(v) is amended--
       (i) by striking ``if there is a capital gain rate 
     differential (as defined in section 904(b)(3)(D)) for the 
     taxable year,''; and
       (ii) by striking ``section 904(b)(3)(E)'' and inserting 
     ``section 904(b)(3)(D)''.
       (11) The last sentence of section 1044(d) is amended by 
     striking ``1202'' and inserting ``1203''.
       (12)(A) Section 1211(b)(2) is amended to read as follows:
       ``(2) the sum of--
       ``(A) the excess of the net short-term capital loss over 
     the net long-term capital gain, and
       ``(B) one-half of the excess of the net long-term capital 
     loss over the net short-term capital gain.''.
       (B) So much of section 1212(b)(2) as precedes subparagraph 
     (B) thereof is amended to read as follows:
       ``(2) Special rules.--
       ``(A) Adjustments.--
       ``(i) For purposes of determining the excess referred to in 
     paragraph (1)(A), there shall be treated as short-term 
     capital gain in the taxable year an amount equal to the 
     lesser of--

       ``(I) the amount allowed for the taxable year under 
     paragraph (1) or (2) of section 1211(b), or
       ``(II) the adjusted taxable income for such taxable year.

       ``(ii) For purposes of determining the excess referred to 
     in paragraph (1)(B), there shall be treated as short-term 
     capital gain in the taxable year an amount equal to the sum 
     of--

       ``(I) the amount allowed for the taxable year under 
     paragraph (1) or (2) of section 1211(b) or the adjusted 
     taxable income for such taxable year, whichever is the least, 
     plus
       ``(II) the excess of the amount described in subclause (I) 
     over the net short-term capital loss (determined without 
     regard to this subsection) for such year.''.

       (C) Section 1212(b) is amended by adding at the end the 
     following:
       ``(3) Transitional rule.--In the case of any amount which, 
     under this subsection and section 1211(b) (as in effect for 
     taxable years beginning before January 1, 1998), is treated 
     as a capital loss in the first taxable year beginning after 
     December 31, 1997, paragraph (2) and section 1211(b) (as so 
     in effect) shall apply (and paragraph (2) and section 1211(b) 
     as in effect for taxable years beginning after December 31, 
     1997, shall not apply) to the extent such amount exceeds the 
     total of any capital gain net income (determined without 
     regard to this subsection) for taxable years beginning after 
     December 31, 1997.''.
       (13) Section 1402(i)(1) is amended by inserting ``, and the 
     deduction provided by section 1202 and the exclusion provided 
     by section 1203 shall not apply'' before the period at the 
     end thereof.
       (14) Section 1445(e) is amended--
       (A) in paragraph (1), by striking ``35 percent (or, to the 
     extent provided in regulations, 28 percent)'' and inserting 
     ``25 percent (or, to the extent provided in regulations, 19.8 
     percent)''; and
       (B) in paragraph (2), by striking ``35 percent'' and 
     inserting ``25 percent''.
       (15)(A) The second sentence of section 7518(g)(6)(A) is 
     amended--
       (i) by striking ``during a taxable year to which section 
     1(h) or 1201(a) applies''; and
       (ii) by striking ``28 percent (34 percent'' and inserting 
     ``19.8 percent (25 percent''.
       (B) The second sentence of section 607(h)(6)(A) of the 
     Merchant Marine Act, 1936 is amended--
       (i) by striking ``during a taxable year to which section 
     1(h) or 1201(a) of such Code applies''; and
       (ii) by striking ``28 percent (34 percent'' and inserting 
     ``19.8 percent (25 percent''.
       (16) The table of sections for part I of subchapter P of 
     chapter 1 is amended by striking the item relating to section 
     1202 and by inserting after the item relating to section 1201 
     the following:

``Sec. 1202. Capital gains deduction.
``Sec. 1203.  50-percent exclusion for gain from certain small business 
              stock.''.

       (e) Effective Dates.--
       (1) In general.--Except as otherwise provided in this 
     subsection, the amendments made by this section apply to 
     taxable years ending after December 31, 1996.
       (2) Contributions.--The amendment made by subsection (c)(2) 
     applies to contributions on or after January 1, 1997.
       (3) Use of long-term losses.--The amendments made by 
     subsection (c)(12) apply to taxable years beginning after 
     December 31, 1997.
       (4) Withholding.--The amendments made by subsection (c)(14) 
     apply only to amounts paid after the date of enactment of 
     this Act.
          Subtitle B--Capital Gains Reduction for Corporations

     SEC. 111. REDUCTION OF ALTERNATIVE CAPITAL GAIN TAX FOR 
                   CORPORATIONS.

       (a) In General.--Section 1201 is amended to read as 
     follows:

     ``SEC. 1201. ALTERNATIVE TAX FOR CORPORATIONS.

       ``(a) General Rule.--If for any taxable year a corporation 
     has a net capital gain, then, in lieu of the tax imposed by 
     sections 11, 511, and 831 (whichever is applicable), there is 
     hereby imposed a tax (if such tax is less than the tax 
     imposed by such sections) which shall consist of the sum of--
       ``(1) a tax computed on the taxable income reduced by the 
     amount of the net capital gain, at the rates and in the 
     manner as if this subsection had not been enacted, plus
       ``(2) a tax of 25 percent of the net capital gain.
       ``(b) Transitional Rule.--
       ``(1) In general.--In the case of any taxable year ending 
     after December 31, 1996, and beginning before January 1, 
     1998, in applying subsection (a), net capital gain for such 
     taxable year shall not exceed such net capital

[[Page S445]]

     gain determined by taking into account only gain or loss 
     properly taken into account for the portion of the taxable 
     year after December 31, 1996.
       ``(2) Special rule for pass-thru entities.--Section 
     1202(d)(2) shall apply for purposes of paragraph (1).
       ``(c) Cross References.--

  ``For computation of the alternative tax--
  ``(1) in the case of life insurance companies, see section 801(a)(2),
  ``(2) in the case of regulated investment companies and their 
shareholders, see section 852(b)(3)(A) and (D), and
  ``(3) in the case of real estate investment trusts, see section 
857(b)(3)(A).''.

       (b) Conforming Amendment.--Section 852(b)(3)(D)(iii) is 
     amended by striking ``65 percent'' and inserting ``75 
     percent''.
       (c) Effective Date.--The amendments made by this section 
     apply to taxable years ending after December 31, 1996.
  Subtitle C--Capital Loss Deduction Allowed With Respect to Sale or 
                    Exchange of Principal Residence

     SEC. 121. CAPITAL LOSS DEDUCTION ALLOWED WITH RESPECT TO SALE 
                   OR EXCHANGE OF PRINCIPAL RESIDENCE.

       (a) In General.--Section 165(c) (relating to limitation on 
     losses of individuals) is amended by striking ``and'' at the 
     end of paragraph (2), by striking the period at the end of 
     paragraph (3) and inserting ``; and'', and by adding at the 
     end the following:
       ``(4) losses arising from the sale or exchange of the 
     principal residence (within the meaning of section 1034) of 
     the taxpayer.''.
       (b) Effective Date.--The amendments made by subsection (a) 
     apply to sales and exchanges after December 31, 1996, in 
     taxable years ending after such date.
             TITLE II--SMALL BUSINESS VENTURE CAPITAL STOCK

     SEC. 201. MODIFICATIONS TO EXCLUSION OF GAIN ON CERTAIN SMALL 
                   BUSINESS STOCK.

       (a) Increase in Exclusion Percentage.--
       (1) In general.--Section 1203(a), as redesignated by 
     section 101, is amended--
       (A) by striking ``50 percent'' and inserting ``75 
     percent''; and
       (B) in the heading, by striking ``50-Percent'' and 
     inserting ``Partial''.
       (2) Conforming amendments.--
       (A) Section 1203, as so redesignated, is amended by adding 
     at the end the following:
       ``(l) Cross Reference.--

  ``For treatment of eligible gain not excluded under subsection (a), 
see sections 1201 and 1202.''.

       (B) The heading for section 1203, as so redesignated, is 
     amended by striking ``50-Percent'' and inserting ``Partial''.
       (C) The table of sections for part I of subchapter P of 
     chapter 1, as amended by section 101(d), is amended by 
     striking ``50-percent'' in the item relating to section 1203 
     and inserting ``Partial''.
       (b) Reduction in Holding Period.--Subsection (a) of section 
     1202 is amended by striking ``5 years'' and inserting ``3 
     years''.
       (c) Exclusion Available to Corporations.--
       (1) In general.--Section 1203(a), as redesignated by 
     section 101, is amended by striking ``other than a 
     corporation''.
       (2) Conforming amendment.--Section 1203(c), as so 
     redesignated, is amended by adding at the end the following:
       ``(4) Stock held among members of controlled group not 
     eligible.--Stock of a member of a parent-subsidiary 
     controlled group (as defined in subsection (d)(3)) shall not 
     be treated as qualified small business stock while held by 
     another member of such group.''.
       (d) Repeal of Minimum Tax Preference.--
       (1) In general.--Section 57(a) is amended by striking 
     paragraph (7).
       (2) Conforming amendment.--Section 53(d)(1)(B)(ii)(II) is 
     amended by striking ``, (5), and (7)'' and inserting ``and 
     (5)''.
       (e) Stock of Larger Businesses Eligible for Exclusion.--
       (1) In general.--Section 1203(d)(1), as redesignated by 
     section 101, is amended by striking ``$50,000,000'' each 
     place it appears and inserting ``$100,000,000''.
       (2) Inflation adjustment.--Section 1203(d), as so 
     redesignated, is amended by adding at the end the following:
       ``(4) Inflation adjustment of asset limitation.--In the 
     case of stock issued in any calendar year after 1998, 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 1997' 
     for `calendar year 1992' in subparagraph (B) thereof.

     If any amount as adjusted under the preceding sentence is not 
     a multiple of $10,000, such amount shall be rounded to the 
     nearest multiple of $10,000.''.
       (f) Repeal of Per-Issuer Limitation.--Section 1203, as 
     redesignated by section 101, is amended by striking 
     subsection (b).
       (g) Other Modifications.--
       (1) Repeal of working capital limitation.--Section 
     1203(e)(6), as redesignated by section 101, is amended--
       (A) in subparagraph (B), by striking ``2 years'' and 
     inserting ``5 years''; and
       (B) by striking the last sentence.
       (2) Exception from redemption rules where business 
     purpose.--Section 1203(c)(3), as so redesignated, is amended 
     by adding at the end the following:
       ``(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 limitations of this section.''.
       (h) Qualified Trade or Business.--Section 1203(e)(3), as 
     redesignated by section 101, is amended by inserting ``and'' 
     at the end of subparagraph (C), by striking ``, and'' at the 
     end of subparagraph (D) and inserting a period, and by 
     striking subparagraph (E).
       (i) Effective Dates.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section apply to stock issued after 
     the date of enactment of this Act.
       (2) Special rule.--The amendments made by subsections (a), 
     (c), (e), and (f) apply to stock issued after August 10, 
     1993.

     SEC. 202. ROLLOVER OF GAIN FROM SALE OF QUALIFIED STOCK.

       (a) In General.--Part III of subchapter O of chapter 1 is 
     amended by adding at the end the following:

     ``SEC. 1045. ROLLOVER OF GAIN FROM QUALIFIED SMALL BUSINESS 
                   STOCK TO ANOTHER QUALIFIED SMALL BUSINESS 
                   STOCK.

       ``(a) Nonrecognition of Gain.--In the case of any sale of 
     qualified small business stock with respect to which the 
     taxpayer elects the application of this section, eligible 
     gain from such sale shall be recognized only to the extent 
     that the amount realized on such sale exceeds--
       ``(1) the cost of any qualified small business stock 
     purchased by the taxpayer during the 60-day 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 title.
       ``(b) Definitions and Special Rules.--For purposes of this 
     section--
       ``(1) Qualified small business stock.--The term `qualified 
     small business stock' has the meaning given such term by 
     section 1203(c).
       ``(2) Eligible gain.--The term `eligible gain' means any 
     gain from the sale or exchange of qualified small business 
     stock held for more than 5 years.
       ``(3) Purchase.--A taxpayer shall be treated as having 
     purchased any property if, but for paragraph (4), the 
     unadjusted basis of such property in the hands of the 
     taxpayer would be its cost (within the meaning of section 
     1012).
       ``(4) 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 qualified small business 
     stock which is purchased by the taxpayer during the 60-day 
     period described in subsection (a).
       ``(c) Special Rules for Treatment of Replacement Stock.--
       ``(1) Holding period for accrued gain.--For purposes of 
     this chapter, gain from the disposition of any replacement 
     qualified small business stock shall be treated as gain from 
     the sale or exchange of qualified small business stock held 
     more than 5 years to the extent that the amount of such gain 
     does not exceed the amount of the reduction in the basis of 
     such stock by reason of subsection (b)(4).
       ``(2) Tacking of holding period for purposes of deferral.--
     Solely for purposes of applying this section, if any 
     replacement qualified small business stock is disposed of 
     before the taxpayer has held such stock for more than 5 
     years, gain from such stock shall be treated eligible gain 
     for purposes of subsection (a).
       ``(3) Replacement qualified small business stock.--For 
     purposes of this subsection, the term `replacement qualified 
     small business stock' means any qualified small business 
     stock the basis of which was reduced under subsection 
     (b)(4).''.
       (b) Conforming Amendments.--
       (1) Section 1016(a)(23) is amended--
       (A) by striking ``or 1044'' and inserting ``, 1044, or 
     1045''; and
       (B) by striking ``or 1044(d)'' and inserting ``, 1044(d), 
     or 1045(b)(4)''.
       (2) The table of sections for part III of subchapter O of 
     chapter 1 is amended by adding at the end the following:

``Sec. 1045. Rollover of gain from qualified small business stock to 
              another qualified small business stock.''.

       (c) Effective Date.--The amendments made by this section 
     apply to stock sold or exchanged after the date of enactment 
     of this Act.
                                                                    ____



                SUMMARY OF CAPITAL FORMATION ACT OF 1997

       The Capital Formation Act of 1997 would reduce the tax rate 
     on capital gains and encourage investment in new and growing 
     business enterprises through the following provisions:
       I. Broad-Based Tax Relief:
       (1) Individual taxpayers would be allowed a deduction of 50 
     percent of any net capital gain. The top effective rate on 
     capital gains would thus be 19.8 percent.
       (2) Corporations would have a maximum capital gains tax 
     rate of 25 percent.

[[Page S446]]

       (3) Capital loss treatment would be allowed with respect to 
     the sale of a taxpayer's principal residence.
       (4) Indexing of capital assets would not be included.
       (5) Would be effective for taxable years ending after 
     December 31, 1996.
       II. Targeted Incentives to Invest in Small Business 
     Enterprises:
       (1) Provides an exclusion of 75 percent of capital gains 
     from the sale of investments in qualified small business 
     stock held for more than three years.
       (2) Allows 100 percent deferral of capital gains tax, after 
     the three year period, if proceeds from the sale of qualified 
     small business stock are rolled over within 60 days into 
     another qualified small business stock. Gains accrued after 
     the rollover would qualify for a 50 percent deduction if held 
     for more than one year, 75 percent exclusion if held for more 
     than another three years, or, at any time, could be rolled 
     over yet again into another qualified small business stock 
     for 100 percent deferral.
       (3) Would be effective upon date of enactment.
       Example: A taxpayer buys qualified small business stock in 
     1997 for $10,000. She sells the stock in 2001 for $20,000. 
     She would be allowed to exclude 75 percent of the gain, or 
     $7,500, and then deduct 50 percent of the remaining gain of 
     $2,500. Thus, she would pay tax on only $1,250. Or, if she 
     chose to roll over the $20,000 proceed from the sale into 
     another qualified small business stock within 60 days, she 
     would defer all tax until she ultimately sold the second 
     stock.
       Qualified small business stock is defined as newly issued 
     stock of corporations with up to $100 million in assets and 
     is an expansion of the current law targeted small business 
     capital gains exclusion added by the 1993 tax act. The 
     changes in the targeted small business stock incentive from 
     current law would include:
       (1) Allow corporations to participate.
       (2) Remove the current law per-issuer limitation.
       (3) Expand the working capital limitation.

  Mr. LIEBERMAN. Mr. President, I am proud to join Senator Hatch is 
introducing this important capital gains legislation today.
  This bill is nearly identical to S. 959, legislation that I 
introduced with Senator Hatch in the last Congress. Ultimately that 
bill had over 40 cosponsors. A variation of that bill was included in 
the broader budget and tax bill which was approved by the Congress in 
1995 but failed to become law. In addition, a version of S. 959 was 
included in the Centrist Coalition budget, a budget which was crafted 
by a group of 22 Senators evenly divided between Republicans and 
Democrats. That package was offered on the floor of the Senate in May 
of 1996 and received a very respectable 46 votes.
  The capital gains bill we are introducing today contains a broad-
based capital gains cut which would allow individuals to deduct 50 
percent of their capital gains and a corporate rate of 25 percent. It 
also has a targeted provision which provides a ``sweetener'' for 
investments in qualified small businesses. In addition, it allows 
taxpayers to deduct losses on the sale of a principal residence, 
something which is very important in places like my home state of 
Connecticut as well as in California and Texas.
  This bill gives people at all income levels a reason to put their 
money in places where that money will help businesses start and grow 
and that means more jobs for Americans and more economic prosperity for 
our country. The benefits of this capital gains cut will not flow just 
to people of wealth. Anyone who has stock, who has money invested in a 
mutual fund, who owns a home, who has a stock option plan at work, has 
a stake in capital gains tax relief. This means millions and millions 
of middle-class American families stand to benefit from this 
legislation. I often cite data on employee stock options and stock 
purchase plans in talking about stakeholders in a capital gains cut. A 
recent count showed that over three hundred American companies with 
over seven million workers offered these plans. Each of those workers 
and their spouses and their children stand to gain from this 
legislation.
  This capital gains bill rewards those people who are willing to 
invest their money and not spend it. It rewards people who put their 
money in places where it will add to our national pool of savings. 
Businesses can draw on this pool of savings to meet their capital 
needs, expand their businesses and hire more workers. The 1995 Nobel 
Prize winner in Economics, Robert Lucas, had this to say about capital 
gains taxes in the fall of 1995: ``When I left graduate school in 1963, 
I believed that the single most desirable change in the U.S. tax 
structure would be the taxation of gains as ordinary income. I now 
believe that neither capital gains nor any of the income from capital 
should be taxed at all.'' Professor Lucas went on to say that his 
analysis shows that even under conservative assumptions, eliminating 
capital gains taxes would increase available capital in this country by 
about 35 percent. While we reduce not eliminate the tax on capital in 
this country, we hope you will consider joining us in cosponsoring this 
important legislation.
  I would also like to point out that this bill contains a targeted 
sweetener for investments in qualified small businesses. This is an 
attempt to promote investments in small businesses, the firms that are 
driving job creation in our economy. We expect these provisions to be 
very helpful to the kinds of small businesses we need for our future, 
the high technology companies that will be the source of new jobs in 
the next century. The bill provides a 75 percent exclusion of capital 
gains from sales of investment in qualified small business stock held 
more than three years. In addition, it allows a 100 percent deferral of 
capital gains, after the three year period, if proceeds from the sale 
of qualified small business stock are rolled over within 60 days into 
another qualified small business stock. If the taxpayer continues to 
roll into qualified stock, and holds that stock for at least a year, 
this deferral could continue indefinitely.
  Before I go any further, I must give credit where credit is due. The 
targeted provisions of this legislation build on the fine work of 
Senator Dale Bumpers, who has been a leader in providing incentives for 
start-up businesses to attract capital. He worked mightily to have a 
targeted incentive piece included in the 1993 reconciliation bill and 
he succeeded. The legislation we are introducing today builds on, and 
we hope, improves, on that targeted incentive.
  I would also like to note that I am also joining Minority Leader 
Daschle today as a cosponsor of his Targeted Investment Incentive and 
Economic Growth Act of 1997. That proposal contains a capital gains 
rollover provision which contains features of a targeted rollover piece 
I introduced in the last Congress, S. 1053, as well as features from 
the targeted section of the bill I am introducing with Senator Hatch 
today. Senator Daschle's legislation is also very helpful insofar as he 
improves upon the targeted capital gains bill we passed in 1993, much 
in the same way the broader capital gains bill being introduced today 
does.
  I am also delighted that Senator Daschle's bill incorporates a 
version of a bill I introduced in June of 1993, The Equity Expansion 
Act of 1993. That bill created a preferred type of stock options for 
companies willing to offer stock options to a wide cross section of 
their employees. Under current law, taxpayers are taxed on a stock 
option when they exercise their right to buy stock, not when they sell 
that stock. The perverse effect of taxing this paper gain is that many 
people feel compelled to sell their stock when they exercise their 
option to buy it in order to pay the tax. The Equity Expansion Act 
began with the premise that we ought to encourage people to hold their 
investment in their company. It changed the taxable event from the date 
of exercise to the date of sale for a new class of stock options known 
as performance-based stock options [PSOs]. Under my bill, as under the 
bill being introduced by the Minority Leader, in order to qualify for 
this new class of stock options, at least half of a company's stock 
options would have to go to non-highly compensated employees.
  In addition, 50 percent of any capital gain on these PSO's would be 
exempt from tax if they are held by the taxpayer for more than two 
years. I hope this will prove a powerful incentive for employees to buy 
and hold the investments they are making in their company.
  In closing, I applaud both Senator Hatch and Minority Leader Daschle, 
in their efforts to promote economic growth by changing the way we tax 
investment in this country. They have done yeoman's work on this issue 
and I hope that we will be able to move forward in a bipartisan way to 
make these incentives a reality in the very near future.
                                 ______
                                 
      By Ms. SNOWE:

[[Page S447]]

  S. 67. A bill to amend the Public Health Service Act to extend the 
program of research on breast cancer; to the Committee on Labor and 
Human Resources.


            the breast cancer research extension act of 1997

  Ms. SNOWE. Mr. President, I am extremely pleased that one of the 
first resolutions introduced in the 105th Congress by the Republican 
leadership will significantly increase biomedical research funding at 
NIH. I truly believe that this is a momentous occasion which will reap 
enormous benefits for all Americans. Building on this, I rise to 
introduce legislation which authorizes increased funding for breast 
cancer research.

  Over the past six years, Congress has demonstrated an increased 
commitment to the fight against breast cancer. Back in 1991, less than 
$100 million dollars was spent on breast cancer research. Since then, 
Congress has steadily increased this allocation. These increases have 
stimulated new and exciting research that has begun to unravel the 
mysteries of this devastating disease and is moving us closer to a 
cure. Today, we must send a message through our authorization level to 
scientists and research policy makers that we are committed to 
continued funding for this important research.
  This increase in funding is necessary because breast cancer has 
reached crisis levels in America. In 1997, it is estimated that 180,200 
new cases of breast cancer will be diagnosed in this country, and 
43,900 women will die from this disease. Breast cancer is the most 
common form of cancer and the second leading cause of cancer deaths 
among American women. Today, over 2.6 million American women are living 
with this disease. In my home state of Maine, it is the most commonly-
diagnosed cancer among women, representing more than 30 percent of all 
new cancers in Maine women.
  In addition to these enormous human costs, breast cancer also exacts 
a heavy financial toll--over $6 billion of our health care dollars are 
spent on breast cancer annually.
  Today, however, there is cause for hope. Recent scientific progress 
made in the fight to conquer breast cancer is encouraging. Researchers 
have isolated the genes responsible for inherited breast cancer, and 
are beginning to understand the mechanism of the cancer cell itself. It 
is imperative that we capitalize upon these advances by continuing to 
support the scientists investigating this disease and their innovative 
research.
  For this reason, my bill increases the FY98 funding authorization 
level for breast cancer research to $590 million. This level represents 
the funding level scientists believe is necessary to make progress 
against this disease. This increased funding will contribute 
substantially toward solving the mysteries surrounding breast cancer. 
Our continued investment will save countless lives and health care 
dollars, and prevent undue suffering in millions of American women and 
families.
  On behalf of the 2.6 million women living with breast cancer, I urge 
my colleagues to support this important bill.
                                 ______
                                 
      By Mr. KYL:
  S. 68. A bill to establish a commission to study the impact on voter 
turnout of making the deadline for filing Federal income tax returns 
conform to the date of Federal elections; to the Committee on Rules and 
Administration.


           THE VOTER TURNOUT ENHANCEMENT STUDY COMMISSION ACT

  Mr. KYL. Mr. President, I rise today to introduce the Voter Turnout 
Enhancement Study (VoTES) Commission Act, a bill designed to promote 
fiscal responsibility while helping to motivate more Americans to get 
to the polls on Election Day.
  Mr. President, there are far too many people who, for one reason or 
another, choose not to exercise their right to vote. Although the 
reasons for their non-participation are undoubtedly varied, I suspect 
that it comes down to a perception that the choices they will make on 
the ballot will not make enough of a difference. One person, explaining 
why she chose not to participate in last November's election, told the 
Tucson Citizen that ``it doesn't make any difference in my life who's 
president.'' This is a common enough sentiment that the election last 
fall posted one of the lowest voter turnout rates this century.
  The ``Motor Voter'' bill that President Clinton championed a few 
years ago as a way to get out the vote apparently had little effect, 
other than to impose additional costs and mandates on state and local 
governments and their taxpayers. Although the bill did help increase 
voter registration, it did little, if anything, to motivate people to 
get to the polls. Like the woman in Tucson, too many people did not 
believe they had enough of a stake in the outcome of the election to 
take the time to vote.
  Of course, people do have a stake in the outcome of every election. 
For one thing, the candidates chosen determine how much and for what 
purpose citizens are taxed. Most people I hear from say that is one 
area where the majority of those elected in the past failed to heed 
their concerns; they say their taxes are far too high.
  One survey, which was published in Reader's Digest last year, found 
that more than two-thirds of Americans felt their own taxes were ``too 
high.'' According to the poll, the maximum tax burden that Americans 
think a family of four should bear is 25 percent of its total income, 
even if the family's income is $200,000 per year.
  But the government takes far more than that. The average family--
whose income is not $200,000, but something far less than that--now 
pays nearly 40 percent of its income in taxes. That is more than it 
spends on food, clothing, and shelter combined. People around the 
country are reacting to that heavy burden. The new faces in the House 
and Senate in recent years have been those of people pledging to oppose 
tax increases and support tax cuts. President Clinton won reelection, 
promising to support tax cuts. In some cases, people around the country 
have also placed limits on how much their state governments can tax 
them. But advocates of tax cuts, and tax limits themselves, can only 
achieve their purpose if people are willing to go to the polls to 
support them.
  With that in mind, one way to demonstrate to people that their 
choices at the polls have a real effect on their lives would be to move 
the deadline for filing income tax returns to Election Day. That would 
give people a reason to vote by focusing their attention on the role of 
government--and how much it actually takes from them in taxes--on the 
day of the year that they have the greatest opportunity to influence 
change. Moving Tax Day to Election Day would probably result in more 
voter turnout and more change in Washington than anything else we could 
do. And of course, maximizing voter turnout is the best way to ensure 
that government officials heed the will of the people and make sound 
public policy.
  The bill I am introducing today would provide for a thoughtful and 
thorough analysis of a change in the tax-filing deadline from April to 
November, its potential effect on voter turnout, as well as any 
economic impact it might have. The bill explicitly requires that an 
independent commission conduct a cost-benefit analysis--a requirement 
that Congress would be wise to impose routinely on legislative 
initiatives to separate the good ideas from the bad, and save taxpayers 
a lot of money in the process. A number of other cost-limiting 
provisions have been included to protect taxpayers' interests.
  While just about every day of the year is celebrated by special 
interest groups around the country for the government largesse they 
receive, the taxpayers--the silent majority--have only one day of the 
year to focus on what that largesse means to them--how much it costs 
them--and that is Tax Day. I believe that it ought to coincide with 
Election Day.
  I invite my colleagues to join me as cosponsors of this initiative, 
and 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. 68

       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 ``Voter Turnout Enhancement 
     Study Commission Act''.

[[Page S448]]

     SECTION 2. FINDINGS.

       (a) Findings.--The Congress finds that:
       (1) The right of citizens of the United States to vote is a 
     fundamental right.
       (2) It is the duty of federal, state, and local governments 
     to promote the exercise of that right to vote to the greatest 
     extent possible.
       (3) The power to tax is a power that citizens of the United 
     States only guardedly vest in their elected representatives 
     to the federal, state, and local governments.
       (4) The only regular contacts most Americans have with 
     their government are the filing of their personal income tax 
     returns and their participation in federal, state, and local 
     elections.
       (5) About 14 million individual income tax returns were 
     filed in 1996, but only about 92 million Americans cast votes 
     in that year's presidential election.

     SECTION 3. ESTABLISHMENT OF COMMISSION.

       (a) Establishment.--There is established a commission to be 
     known as the Voter Turnout Enhancement Study Commission 
     (hereafter in this Act referred to as the `Commission').
       (b) Membership.--
       (1) Composition.--The Commission shall be composed of nine 
     members of whom--
       (A) 3 shall be appointed by the President;
       (B) 3 shall be appointed by the Majority Leader of the 
     Senate, and
       (C) 3 shall be appointed by the Speaker of the House of 
     Representatives.
       (c) Period of Appointment, Vacancies.--Members shall be 
     appointed no later than 30 days after the date of the 
     enactment of this Act, and serve for the life of the 
     Commission. Any vacancy in the Commission shall not affect 
     its powers, but shall be filled in the same manner as the 
     original appointment.
       (d) Compensation.--
       (1) Rates of pay.--Except as provided in paragraph (2), 
     members of the Commission shall serve without pay.
       (2) Travel expenses.--Each member of the Commission shall 
     receive travel expenses, include per diem in lieu of 
     subsistence, in accordance with sections 5702 and 5703 of 
     title 5, United States Code.
       (e) Initial Meeting.--No later than 30 days after the date 
     on which all members of the Commission have been appointed, 
     the Commission shall hold its first meeting.
       (f) Meetings.--After the initial meeting, the Commission 
     shall meet at the call of the Chairman.
       (g) Quorum.--A majority of the members of the Commission 
     shall constitute a quorum, but a lesser number of members may 
     hold hearings.
       (h) Chairman and Vice Chairman.--The Commission shall 
     select a Chairman and Vice Chairman from among its members.

     SECTION 4. DUTIES OF THE COMMISSION.

       (a) Study.--
       (1) In general.--The Commission shall conduct a thorough 
     study of all matters relating to the propriety of conforming 
     the annual filing date for federal income tax returns with 
     the date for holding biennial federal elections.
       (2) Matters studied.--The matters studied by the Commission 
     shall include:
       (A) whether establishment of a single date on which 
     individuals can fulfill their obligations of citizenship as 
     both electors and taxpayers would increase participation in 
     federal, state, and local elections; and
       (B) a cost-benefit analysis of any change in tax filing 
     deadlines.
       (b) Report.--No later than 12 months after the date of the 
     enactment of this Act, the Commission shall submit a report 
     to the President and the Congress which shall contain a 
     detailed statement of the findings and conclusions of the 
     Commission, together with its recommendations for such 
     legislation and administrative actions as it considers 
     appropriate.

     SECTION 5. POWERS OF THE COMMISSION.

       (a) Hearings.--The Commission may hold such hearings, sit 
     and act at such times and places, take such testimony, and 
     receive such information as the Commission considers 
     advisable to carry out the purposes of this Act.
       (b) Information To Be Gathered.--The Commission shall 
     obtain information from sources as it deems appropriate, 
     including, but not limited to, taxpayers and their 
     representatives, Governors, state and federal election 
     officials, and the Commissioner of the Internal Revenue 
     Service.

     SECTION 6. TERMINATION OF THE COMMISSION.

       The Commission shall terminate upon the submission of the 
     report under section 4.

     SECTION 7. AUTHORIZATION OF APPROPRIATIONS

       There is authorized to be appropriated such sums as may be 
     necessary to carry out the purposes of this Act.
                                 ______
                                 
      By Mr. KYL:
  S. 69. A bill to amend the Internal Revenue Code of 1986 to allow a 
one-time election of the interest rate to be used to determine present 
value for purposes of pension cash-out restrictions, and for other 
purposes; to the Committee on Finance.


          the retirement protection act amendment act of 1997

  Mr. KYL. Mr. President, today I am introducing the Retirement 
Protection Act Amendments of 1997, a bill that will make a small but 
very important change in the pension-related provisions of the 1994 
Uruguay Round Agreements Act.
  Mr. President, the 1994 trade act made some very significant changes 
in pension law, including a modification in the interest rate used to 
calculate lump-sum distributions from defined benefit pension plans. 
The act required such plans to use the interest rate on 30-year 
Treasury securities, a rate that is proving too volatile for many 
retirement plans, particularly small plans.
  Bruce Tempkin, an actuary and small business pension specialist at 
Louis Kravitz & Associates, described the effect of the change this 
way: ``it is similar to taking out a variable-rate mortgage with no 
cap.'' You could find yourself getting ready to retire and expecting a 
lump-sum distribution of a given amount, but being told that you will 
actually get a third less because the government just mandated an 
interest-rate change. That is not only unfair, it discourages people 
from participating in private pension plans at the very time we need to 
be encouraging more such planning.
  Recognizing the problem created by the 1994 law, legislators included 
language in the Small Business Job Protection Act last year to delay 
the effective date of the change for plans adopted and in effect before 
December 8, 1995. While I supported that delay, it is, at best, only a 
temporary solution.
  The bill I am introducing today proposes a permanent solution. It 
would give plans a one-time option to choose a fixed interest rate 
between five percent and eight percent instead of the floating 30-year 
Treasury rate. That will make it easier for employers to plan for the 
required contributions, and for employers and employees alike to 
understand what their lump-sum benefits will ultimately be.
  Mr. President, I invite my colleagues to join me as cosponsors of 
this initiative.
  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. 69

       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 Protection Act 
     Amendments of 1997''.

     SECTION 2. INTEREST RATE FOR DETERMINATION OF PRESENT VALUE 
                   FOR PURPOSES OF PENSION CASH-OUT RESTRICTIONS.

       (a) In General.--Subclause (II) of section 417(e)(3)(A)(ii) 
     of the Internal Revenue Code of 1986 (relating to 
     determination of present value) is amended by inserting ``, 
     or, at the irrevocable election of the plan, an annual 
     interest rate specified in the plan, which may not be less 
     than 5 percent nor more than 8 percent'' after ``prescribe''.
       (b) Conforming Amendment.--Subclause (II) of section 
     205(g)(3)(A)(ii) of the Employee Retirement Income Security 
     Act of 1974 (29 U.S.C. 1055(g)(3)(A)(ii)) is amended by 
     inserting ``, or, at the irrevocable election of the plan, an 
     annual interest rate specified in the plan, which may not be 
     less than 5 percent nor more than 8 percent'' after 
     ``perscribe''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect as if included in the enactment of the 
     amendments made by section 767 of the Uruguay Round 
     Agreements Act.
                                 ______
                                 
      By Mrs. BOXER (for herself, Mr. Chafee, Mr. Reed, and Mr. 
        Durbin):
  S. 70. A bill to apply the same quality and safety standards to 
domestically manufactured handguns that are currently applied to 
imported handguns; to the Committee on the Judiciary.


                   the american handgun standards act

  Mrs. BOXER. Mr. President, today I am to introducing the American 
Handgun Standards Act, a bill to require that handguns made in the 
United States meet the same quality and safety standards currently 
required of imported handguns. I am joined in this effort by Senators 
John Chafee, Jack Reed, and Dick Durbin.
  This bill is aimed at junk guns--the cheap, unsafe, and easily 
concealable handguns that are the criminals' clear favorite. Under our 
bill, junk guns will no longer be allowed to be manufactured or sold in 
the United States of America.
  Nearly 30 years ago, Congress thought it had solved the problem of 
junk guns. Following the assassination of Senator Robert Kennedy, 
Congress passed the Gun Control Act of 1968, which banned the 
importation of junk

[[Page S449]]

guns. At the time, virtually all junk guns were imported, so 
restricting their domestic manufacture was not considered necessary.
  To implement the new law, a quality and safety test was designed to 
measure a gun's suitability for import. Any foreign-made firearm that 
fails this test is, by definition, a junk gun, and it cannot be 
imported into the United States. This bill would require that all 
handguns made in the United States pass this common sense quality and 
safety test.
  The Gun Control Act of 1968 created a junk gun double standard. 
Imported handguns were subjected to rigorous quality and safety 
standards, but guns made in the United States were left totally 
unregulated. Even toy guns are subject to quality and safety standards, 
but real handguns made in the United States are not required to meet 
even one.
  The need for strong action is clear. Gunshots are now the leading 
cause of death among children in California. A child dies from gunfire 
every 92 minutes in the United States. A total of 39,720 people died 
from gunshot wounds in 1994 and approximately 250,000 Americans were 
injured. If we were in a war with this many casualties, there would be 
protests in the streets to end it. Let us end now, end this junk gun 
war.
  For each person killed by gunfire, up to 8 are wounded. Many 
survivors of gun violence face debilitating injuries that require 
constant medical attention. The economic costs of gun violence are 
staggering. Direct medical costs alone cost Americans more than $20 
billion. When indirect costs, such as lost productivity, are 
considered, the total economic cost of gun injuries soars to over $120 
billion.
  I first introduced junk gun legislation less than a year ago. Since 
then, I have received support so strong that it has surpassed even my 
most optimistic hopes. More than two dozen California cities and 
counties have passed local ordinances banning junk gun sales, and my 
legislation has been endorsed by the California Police Chiefs 
Association and 36 individual police chiefs and sheriffs representing 
some of California's largest cities, including Los Angeles, San 
Francisco, San Jose and Sacramento.
  This legislation has generated such strong support in the law 
enforcement community because police know the danger of these junk guns 
first hand. They know that junk guns are the criminals' favorite 
firearms.
  Junk guns are 3.4 times as likely to be used in crimes as are other 
firearms. And newly compiled ATF data shows that in 1996, the three 
firearms most frequently traced at crime scenes were junk guns made in 
America.
  I ask unanimous consent that the full 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. 70

       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 ``American Handgun Standards 
     Act of 1997''.

     SEC. 2. FINDINGS.

       The Congress finds that--
       (1) the Gun Control Act of 1968 prohibited the importation 
     of handguns that failed to meet minimum quality and safety 
     standards;
       (2) the Gun Control Act of 1968 did not impose any quality 
     and safety standards on domestically produced handguns;
       (3) domestically produced handguns are specifically 
     exempted from oversight by the Consumer Product Safety 
     Commission and are not required to meet any quality and 
     safety standards;
       (4) each year--
       (A) gunshots kill more than 35,000 Americans and wound 
     approximately 250,000;
       (B) approximately 75,000 Americans are hospitalized for the 
     treatment of gunshot wounds;
       (C) Americans spend more than $20 billion for the medical 
     treatment of gunshot wounds; and
       (D) gun violence costs the United States economy a total of 
     $135 billion;
       (5) the disparate treatment of imported handguns and 
     domestically produced handguns has led to the creation of a 
     high-volume market for junk guns, defined as those handguns 
     that fail to meet the quality and safety standards required 
     of imported handguns;
       (6) traffic in junk guns constitutes a serious threat to 
     public welfare and to law enforcement officers;
       (7) junk guns are used disproportionately in the commission 
     of crimes; and
       (8) the domestic manufacture, transfer, and possession of 
     junk guns should be restricted.

     SEC. 3. DEFINITION OF JUNK GUN.

       Section 921(a) of title 18, United States Code, is amended 
     by adding at the end the following new paragraph:
       ``(33)(A) The term `junk gun' means any handgun that does 
     not meet the standard imposed on imported handguns as 
     described in section 925(d)(3), and any regulations issued 
     under such section.''.

     SEC. 4. RESTRICTION ON MANUFACTURE, TRANSFER, AND POSSESSION 
                   OF CERTAIN HANDGUNS.

       Section 922 of title 18, United States Code, is amended by 
     adding at the end the following new subsection:
       ``(y)(1) It shall be unlawful for a person to manufacture, 
     transfer, or possess a junk gun that has been shipped or 
     transported in interstate or foreign commerce.
       ``(2) Paragraph (1) shall not apply to--
       ``(A) the possession or transfer of a junk gun otherwise 
     lawfully possessed under Federal law on the date of the 
     enactment of the American Handgun Standards Act of 1997;
       ``(B) a firearm or replica of a firearm that has been 
     rendered permanently inoperative;
       ``(C)(i) the manufacture for, transfer to, or possession 
     by, the United States or a State or a department or agency of 
     the United States, or a State or a department, agency, or 
     political subdivision of a State, of a junk gun; or
       ``(ii) the transfer to, or possession by, a law enforcement 
     officer employed by an entity referred to in clause (i) of a 
     junk gun for law enforcement purposes (whether on or off-
     duty);
       ``(D) the transfer to, or possession by, a rail police 
     officer employed by a rail carrier and certified or 
     commissioned as a police officer under the laws of a State of 
     a junk gun for purposes of law enforcement (whether on or 
     off-duty); or
       ``(E) the manufacture, transfer, or possession of a junk 
     gun by a licensed manufacturer or licensed importer for the 
     purposes of testing or experimentation authorized by the 
     Secretary.''.
                                 ______
                                 
      By Mr. DASCHLE (for himself, Mr. Kerry, Mr. Leahy, Ms. Mikulski, 
        Mrs. Murray, Mr. Reid, Mr. Wyden, Mrs. Boxer, Ms. Moseley-
        Braun, Mr. Harkin, and Mr. Lautenberg):
  S. 71. A bill to amend the Fair Labor Standards Act of 1938 and the 
Civil Rights Act of 1964 to provide more effective remedies to victims 
of discrimination in the payment of wages on the basis of sex, and for 
other purposes; to the Committee on Labor and Human Resources.


                         paycheck fairness 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. 71

       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 Fairness Act''.

     SEC. 2. FINDINGS.

       Congress finds the following:
       (1) Women have entered the workforce in record numbers.
       (2) Even in the 1990s, women earn significantly lower pay 
     than men for work on jobs that require equal skill, effort, 
     and responsibility and that are performed under similar 
     working conditions.
       (3) The existence of such pay disparities--
       (A) depresses the wages of working families who rely on the 
     wages of all members of the family to make ends meet;
       (B) prevents the optimum utilization of available labor 
     resources;
       (C) has been spread and perpetuated, through commerce and 
     the channels and instrumentalities of commerce, among the 
     workers of the several States;
       (D) burdens commerce and the free flow of goods in 
     commerce;
       (E) constitutes an unfair method of competition in 
     commerce;
       (F) leads to labor disputes burdening and obstructing 
     commerce and the free flow of goods in commerce; and
       (G) interferes with the orderly and fair marketing of goods 
     in commerce.
       (4)(A) Artificial barriers to the elimination of 
     discrimination in the payment of wages on the basis of sex 
     continue to exist more than 3 decades after the enactment of 
     the Fair Labor Standards Act of 1938 (29 U.S.C. 201 et seq.) 
     and the Civil Rights Act of 1964 (42 U.S.C. 2000a et seq.).
       (B) Elimination of such barriers would have positive 
     effects, including--
       (i) providing a solution to problems in the economy created 
     by unfair pay disparities;
       (ii) substantially reducing the number of working women 
     earning unfairly low wages, thereby reducing the dependence 
     on public assistance; and
       (iii) promoting stable families by enabling all family 
     members to earn a fair rate of pay.
       (5) Only with increased information about the provisions 
     added by the Equal Pay Act of 1963 and generalized wage data, 
     along with more effective remedies, will women recognize and 
     enforce their rights to equal pay for

[[Page S450]]

     work on jobs that require equal skill, effort, and 
     responsibility and that are performed under similar working 
     conditions.
       (6) Certain employers have already made great strides in 
     eradicating unfair pay disparities in the workplace and their 
     achievements should be recognized.

     SEC. 3. ENHANCED ENFORCEMENT OF EQUAL PAY REQUIREMENTS.

       (a) Nonretaliation Provision.--Section 15(a)(3) of the Fair 
     Labor Standards Act of 1938 (29 U.S.C. 215(a)(3)) is 
     amended--
       (1) by striking ``or has'' each place it appears and 
     inserting ``has''; and
       (2) by inserting before the semicolon the following: ``, or 
     has inquired about, discussed, or otherwise disclosed the 
     wages of the employee or another employee''.
       (b) Enhanced Penalties.--Section 16(b) of such Act (29 
     U.S.C. 216(b)) is amended--
       (1) by inserting after the first sentence the following: 
     ``Any employer who violates section 6(d) shall additionally 
     be liable for such compensatory or punitive damages as may be 
     appropriate.'';
       (2) in the sentence beginning ``An action to'', by striking 
     ``either of the preceding sentences'' and inserting ``any of 
     the preceding sentences of this subsection'';
       (3) in the sentence beginning ``No employees shall'', by 
     striking ``No employees'' and inserting ``Except with respect 
     to class actions brought to enforce section 6(d), no 
     employee'';
       (4) by inserting after such sentence the following: 
     ``Notwithstanding any other provision of Federal law, any 
     action brought to enforce section 6(d) may be maintained as a 
     class action as provided by the Federal Rules of Civil 
     Procedure.''; and
       (5) in the sentence beginning ``The court in''--
       (A) by striking ``in such action'' and inserting ``in any 
     action brought to recover the liability prescribed in any of 
     the preceding sentences of this subsection''; and
       (B) by inserting before the period the following: ``, 
     including expert fees''.
       (c) Action by Secretary.--Section 16(c) of such Act (29 
     U.S.C. 216(c)) is amended--
       (1) in the first sentence--
       (A) by inserting ``or, in the case of a violation of 
     section 6(d), additional compensatory or punitive damages,'' 
     before ``and the agreement''; and
       (B) by inserting before the period the following: ``, or 
     such compensatory or punitive damages, as appropriate'';
       (2) in the second sentence, by inserting before the period 
     the following: `` and, in the case of a violation of section 
     6(d), additional compensatory or punitive damages'';
       (3) in the third sentence, by striking ``the first 
     sentence'' and inserting ``the first or second sentence''; 
     and
       (4) in the last sentence, by inserting after ``in the 
     complaint'' the following: ``or becomes a party plaintiff in 
     a class action brought to enforce section 6(d)''.

     SEC. 4. COLLECTION OF PAY INFORMATION BY THE EQUAL EMPLOYMENT 
                   OPPORTUNITY COMMISSION.

       Section 705 of the Civil Rights Act of 1964 (42 U.S.C. 
     2000e-4) is amended by adding at the end the following new 
     subsection:
       ``(l)(1) The Commission shall, by regulation, require each 
     employer who has 100 or more employees for each working day 
     in each of 20 or more calendar weeks in the current or 
     preceding calendar year to maintain payroll records and to 
     prepare and submit to the Commission reports containing 
     information from the records. The reports shall contain pay 
     information, analyzed by the race, sex, and national origin 
     of the employees. The reports shall not disclose the pay 
     information of an employee in a manner that permits the 
     identification of the employee.
       ``(2) The third through fifth sentences of section 709(c) 
     shall apply to employers, regulations, and records described 
     in paragraph (1) in the same manner and to the same extent as 
     the sentences apply to employers, regulations, and records 
     described in such section.''.

     SEC. 5. TRAINING.

       The Equal Employment Opportunity Commission, subject to the 
     availability of funds appropriated under section 8(b), shall 
     provide training to Commission employees and affected 
     individuals and entities on matters involving discrimination 
     in the payment of wages.

     SEC. 6. RESEARCH, EDUCATION, AND OUTREACH.

       The Secretary of Labor shall conduct studies and provide 
     information to employers, labor organizations, and the 
     general public concerning the means available to eliminate 
     pay disparities between men and women, including--
       (1) conducting and promoting research to develop the means 
     to correct expeditiously the conditions leading to the pay 
     disparities;
       (2) publishing and otherwise making available to employers, 
     labor organizations, professional associations, educational 
     institutions, the media, and the general public the findings 
     resulting from studies and other materials, relating to 
     eliminating the pay disparities;
       (3) sponsoring and assisting State and community 
     informational and educational programs;
       (4) providing information to employers, labor 
     organizations, professional associations, and other 
     interested persons on the means of eliminating the pay 
     disparities;
       (5) recognizing and promoting the achievements of 
     employers, labor organizations, and professional associations 
     that have worked to eliminate the pay disparities; and
       (6) convening a national summit to discuss, and consider 
     approaches for rectifying, the pay disparities.

     SEC. 7. ESTABLISHMENT OF THE NATIONAL AWARD FOR PAY EQUITY IN 
                   THE WORKPLACE.

       (a) In General.--There is established the Robert Reich 
     National Award for Pay Equity in the Workplace, which shall 
     be evidenced by a medal bearing the inscription ``Robert 
     Reich National Award for Pay Equity in the Workplace''. The 
     medal shall be of such design and materials, and bear such 
     additional inscriptions, as the Secretary may prescribe.
       (b) Criteria for Qualification.--To qualify to receive an 
     award under this section a business shall--
       (1) submit a written application to the Secretary, at such 
     time, in such manner, and containing such information as the 
     Secretary may require, including at a minimum information 
     that demonstrates that the business has made substantial 
     effort to eliminate pay disparities between men and women, 
     and deserves special recognition as a consequence; and
       (2) meet such additional requirements and specifications as 
     the Secretary determines to be appropriate.
       (c) Making and Presentation of Award.--
       (1) Award.--After receiving recommendations from the 
     Secretary, the President or the designated representative of 
     the President shall annually present the award described in 
     subsection (a) to businesses that meet the qualifications 
     described in subsection (b).
       (2) Presentation.--The President or the designated 
     representative of the President shall present the award with 
     such ceremonies as the President or the designated 
     representative of the President may determine to be 
     appropriate.
       (3) Publicity.--A business that receives an award under 
     this section may publicize the receipt of the award and use 
     the award in its advertising, if the business agrees to help 
     other United States businesses improve with respect to the 
     elimination of pay disparities between men and women.
       (d) Business.--For the purposes of this section, the term 
     ``business'' includes--
       (1)(A) a corporation, including a nonprofit corporation;
       (B) a partnership;
       (C) a professional association;
       (D) a labor organization; and
       (E) a business entity similar to an entity described in any 
     of subparagraphs (A) through (D);
       (2) an entity carrying out an education referral program, a 
     training program, such as an apprenticeship or management 
     training program, or a similar program; and
       (3) an entity carrying out a joint program, formed by a 
     combination of any entities described in paragraph (1) or 
     (2).

     SEC. 8. INCREASED RESOURCES FOR ENFORCEMENT AND EDUCATION.

       (a) General Resources.--There is authorized to be 
     appropriated to the Equal Employment Opportunity Commission, 
     for necessary expenses of the Commission in carrying out 
     title VII of the Civil Rights Act of 1964 (42 U.S.C. 2000e et 
     seq.), title I of the Americans with Disabilities Act of 1990 
     (42 U.S.C. 12111 et seq.), the Age Discrimination in 
     Employment Act of 1967 (29 U.S.C. 621 et seq.), and section 
     6(d) of the Fair Labor Standards Act of 1938 (29 U.S.C. 
     206(d)), $36,000,000, in addition to sums otherwise 
     appropriated for such expenses. Any amounts so appropriated 
     shall remain available until expended.
       (b) Targeted Resources.--There is authorized to be 
     appropriated to the Equal Employment Opportunity Commission 
     to carry out section 5, $500,000, in addition to sums 
     otherwise appropriated for providing training described in 
     such section. Any amounts so appropriated shall remain 
     available until expended.
       (c) Research, Education, Outreach, and National Award.--
     There is authorized to be appropriated to the Secretary of 
     Labor to carry out sections 6 and 7, $1,000,000. Any amounts 
     so appropriated shall remain available until expended.
                                 ______
                                 
      By Mr. KYL:
  S. 72. A bill to amend the Internal Revenue Code of 1986 to provide a 
reduction in the capital gain rates for all taxpayers, and for other 
purposes; to the Committee on Finance.
  S. 73. A bill to amend the Internal Revenue Code of 1986 to repeal 
the corporate alternative minimum tax; to the Committee on Finance.
  S. 74. A bill to amend the Internal Revenue Code of 1986 to limit the 
tax rate for certain small businesses, and for other purposes; to the 
Committee on Finance.


               AGENDA FOR ECONOMIC GROWTH AND OPPORTUNITY

  Mr. KYL. Mr. President, I rise today to introduce a series of bills 
aimed at improving our Nation's rate of economic growth, encouraging 
investment in small businesses, enhancing wages of American workers, 
and making our country more competitive in the global economy. The 
bills make up what I will call the Agenda for Economic Growth and 
Opportunity.
  Mr. President, it was just over 34 years ago that President John F. 
Kennedy made the following observation in his State of the Union 
message--an observation that someone could just as

[[Page S451]]

easily make about today's economy. He said, ``America has enjoyed 22 
months of uninterrupted economic recovery''. The current expansion, 
albeit one of the weakest this century, has gone on a little longer. 
``But'', President Kennedy went on to say, ``recovery is not enough. If 
we are to prevail in the long run, we must expand the long-run strength 
of our economy. We must move along the path to a higher rate of 
economic growth''.
  Economic growth. Tracking it is the domain of economists and 
statisticians, but what does it mean for the average American family, 
and why should policy-makers be so concerned about the slow rate of 
economic growth during the last 4 years?
  Slow growth means fewer job opportunities for young Americans just 
entering the work force and for those people seeking to free themselves 
from the welfare rolls. It means stagnant wages and salaries, and fewer 
opportunities for career advancement for those who do have jobs. It 
means less investment in new plant and equipment, and new technology--
things needed to enhance workers' productivity and ensure that American 
businesses can remain competitive in the global marketplace. It means 
less revenue for the U.S. Treasury, compared to what we could collect 
with higher rates of economic growth, for the critical programs serving 
the American people. And it means that interest rates are higher than 
they need to be because national debt as a share of Gross Domestic 
Product is higher. As a result, we all pay more for such things as home 
mortgages, college loans, and car loans.
  For most of the 20th century, our Nation enjoyed very strong rates of 
economic growth and the dividends that came with it. The 1920s saw 
annual economic growth above 5 percent. In the 1950s, it was above 6 
percent. Economic growth during the Kennedy and Johnson years averaged 
4.8 percent annually. During the decade before President Clinton took 
office, the economy grew at an average rate of 3.2 percent a year, 
according to data supplied by the Joint Economic Committee.
  The Clinton years, by contrast, have seen the economy grow at an 
average rate of only about 2.3 percent. What that means is that, while 
we may not exactly be hurting as a Nation, we are not becoming much 
better off, either. And we are certainly not leaving much of a legacy 
for our children and grandchildren to meet the needs of tomorrow.
  So what do we do to enhance economic growth--to ensure that jobs are 
available for those who want them, that families can earn better wages, 
and that American business maintains a dominant role in the global 
economy? Those are, after all, the goals of the agenda I am laying out 
today--an agenda for economic growth and opportunity for all Americans, 
for those struggling to make ends meet today, and for our children when 
they enter the work force tomorrow.
  Let me answer then, beginning with another quotation from John 
Kennedy:

       ``[I]t is increasingly clear--to those in Government, 
     business, and labor who are responsible for our economy's 
     success--that our obsolete tax system exerts too heavy a drag 
     on private purchasing power, profits, and employment. 
     Designed to check inflation in earlier years, it now checks 
     growth instead. It discourages extra effort and risk. It 
     distorts use of resources. It invites recurrent recessions, 
     depresses our Federal revenues, and causes chronic budget 
     deficits.''

  Mr. President, the agenda I am proposing attacks some of the most 
significant deficiencies in our Nation's Tax Code that are inhibiting 
savings and investment, and job creation--deficiencies that are 
preventing us from reaching our potential as a Nation. I do not make 
these proposals as a substitute for fundamental tax reform, which I 
believe is the ultimate solution to the problem. But fundamental tax 
reform is going to take some time to accomplish, maybe several years. 
What we need now are interim steps--things we can do quickly--to make 
sure our movement into the 21st century is based on the bedrock of a 
strong and growing economy.
  I believe these Tax Code changes will help strengthen the economy 
and, in turn, produce more revenue for the Federal Government to assist 
in deficit reduction. Still, I recognize that under existing budget 
rules which require static scoring of tax bills, there may be a need to 
find offsetting spending cuts. With that in mind, I am asking the Joint 
Committee on Taxation, as well as the respected Institute for Policy 
Innovation, to estimate the economic impact of these proposals, 
including the effect on federal revenues. Should the result of those 
analyses indicate that there will be some revenue loss--most likely 
because of rules requiring static scoring--my intention would be to 
propose some offsetting spending cuts.
  Mr. President, the cuts I would identify would come in so-called 
corporate welfare programs. In other words, in exchange for the 
targeted subsidies from corporate welfare programs, we would adopt 
broadly applicable tax incentives to support activities vetted by the 
free market. That is what free enterprise is all about.


                      THE CAPITAL GAINS REFORM ACT

  Mr. KYL. Mr. President, the first of the five tax-related bills I am 
introducing is based upon President John Kennedy's own growth package 
from three decades ago. Like the Kennedy plan, the legislation would 
reduce the percentage of long-term capital gains included in individual 
income subject to tax to 30 percent. It would reduce the alternative 
tax on the capital gains of corporations to 22 percent.
  I would note that Democratic President John Kennedy's plan called for 
a deeper capital gains tax cut than the Republican-controlled Congress 
proposed last year.
  There was a reason that John Kennedy called for a significant cut in 
the capital gains tax. ``The present tax treatment of capital gains and 
losses is both inequitable and a barrier to economic growth'', the 
President said. ``The tax on capital gains directly affects investment 
decisions, the mobility and flow of risk capital from static to more 
dynamic situations, the ease or difficulty experienced by new ventures 
in obtaining capital, and thereby the strength and potential for growth 
of the economy.''
  So, if we are concerned whether new jobs are being created, whether 
new technology is developed, whether workers have the tools they need 
to do a better, more efficient job, we should support measures that 
reduce the cost of capital to facilitate the achievement of all these 
things. Remember, for every employee, there is an employer who took 
risks, made investments, and created jobs. But that employer needed 
capital to start.
  Also remember that the capital gains tax represents a second tax on 
amounts saved and invested. As a result, individuals and businesses 
that save and invest end up paying more taxes over time than if all 
income is consumed and no saving takes place at all. To make matters 
even worse, the tax is applied to gains due solely to inflation.
  Mr. President, it may come as a surprise to some people, but 
experience shows that lower capital gains tax rates have a positive 
effect on federal revenues. The most impressive evidence, as noted in a 
recent report by the American Council for Capital Formation, can be 
found in the period from 1978 to 1985. During those years, the top 
marginal federal tax rate on capital gains was cut by almost 45 
percent--from 35 percent to 20 percent--but total individual capital 
gains tax receipts nearly tripled--from $9.1 billion to $26.5 billion 
annually.
  Research by experts at the prestigious National Bureau of Economic 
Research indicates that the maximizing capital gains tax rate--that is, 
the rate that would bring in the most Treasury revenue--is somewhere 
between nine and 21 percent. The bill I am introducing today would set 
an effective top rate on capital gains earned by individuals, by virtue 
of the 70 percent exclusion, at 11.88 percent.

  Mr. President, when capital gains tax rates are too high, people need 
only hold onto their assets to avoid the tax indefinitely. No sale, no 
tax. But that means less investment, fewer new businesses and new jobs, 
and--as historical records show--far less revenue to the Treasury than 
if capital gains taxes were set at a lower level. Just as the Target 
store down the street does not lose money on weekend sales--because 
volume more than makes up for lower prices--lower capital gains tax 
rates can encourage more economic activity and, in turn, produce more 
revenue for the government.
  Capital gains reform will help the Treasury. A capital gains tax 
reduction would help unlock a sizable share of the estimated $7 
trillion of capital that

[[Page S452]]

is left virtually unused because of high tax rates. More importantly, 
it will help the family that has a small plot of land it would like to 
sell, and the business that could expand, buy new equipment and create 
new jobs.
  And evidence shows that most of the benefits will go to Americans of 
modest means. A special U.S. Treasury study covering 1985 showed that 
nearly half of all capital gains that year were realized by taxpayers 
with wage and salary income of less than $50,000 a year. An update of 
the Treasury study by the Barents Group, a subsidiary of the public 
accounting firm of KPMG Peat Marwick, estimates that for 1995, middle-
income wage and salary earners making $50,000 or less in inflation-
adjusted dollars will continue to receive almost half of all capital 
gains.
  President Clinton recognized the importance of lessening the capital 
gains tax burden by proposing to eliminate the tax on most gains earned 
on the sale of a home. I would support the President's proposal, but I 
would also ask, if a capital gains tax cut is good for homeowners, is 
it not also good policy to apply a tax cut to other kinds of gains that 
help create new businesses and new jobs?
  I believe John Kennedy's plan was far superior--far more beneficial 
for the Nation's economy--than the very limited one Bill Clinton has 
proposed. That is why I encourage the Senate to take up the Capital 
Gains Reform Act, which is based on the Kennedy plan, and which I am 
introducing today.


                        CORPORATE TAX EQUITY ACT

  Mr. KYL. Mr. President, the second in this series of bills is the 
Corporate Tax Equity Act, a bill designed to help U.S. businesses make 
larger capital expenditures and thereby enhance productivity growth and 
job creation by repealing the corporate Alternative Minimum Tax (AMT).
  Mr. President, the original intent of the AMT was to make it harder 
for large, profitable corporations to avoid paying any federal income 
tax. But the way to have accomplished that objective was not, in my 
view, to impose an AMT, but to identify and correct the provisions of 
law that allowed large companies to inappropriately lower their federal 
tax liabilities to begin with. Ironically, the primary shelters 
corporations were using to minimize their tax liability--that is, the 
accelerated depreciation and safe harbor leasing of the old Tax Code--
were being corrected at the time the AMT was enacted.
  I would point out that the AMT is not a tax, per se. As indicated in 
an April 3, 1996 report by the Congressional Research Service, the AMT 
is merely intended to serve as a prepayment of the regular corporate 
income tax, not a permanent increase in overall corporate tax 
liability. What that means in practical terms is that businesses are 
forced to make interest-free loans to the federal government under the 
guise of the AMT. Corporations pay a tax for which they are not liable, 
but which they are able to apply toward their future regular tax 
liability.
  I would also point out that most of the corporations paying the AMT 
are relatively small. The General Accounting Office, in a 1995 report 
on the issue, found that, in most years between 1987 and 1992, more 
than 70 percent of corporations paying the AMT had less than $10 
million in assets.
  The AMT's effect on the economy, moreover, is disproportionate to the 
small amount of revenue raised, due in large part to its requirement 
that corporations calculate their tax liability under two separate but 
parallel income tax systems. Firms must calculate their AMT liability 
even if they end up paying the regular tax. At a minimum, that means 
that firms must maintain two sets of records for tax purposes.
  The compliance costs are substantial. In 1992, for example, while 
only about 28,000 corporations paid the AMT, more than 400,000 
corporations filed the AMT form, and an even greater--but unknown--
number of firms performed the calculations needed to determine their 
AMT liability. A 1993 analysis by the Joint Committee on Taxation found 
that the AMT added 16.9 percent to a corporation's total cost of 
complying with federal income tax laws.
  Mr. President, repealing the corporate AMT would help free up badly 
needed capital to assist in business expansion and job creation. 
According to a study by DRI/McGraw-Hill, repeal of the AMT would, over 
the 1996-2005 time period, increase fixed investment by a total of 7.9 
percent, raise Gross Domestic Product by 1.6 percent, and increase 
labor productivity by 1.6 percent. The study also projected repeal 
would produce an additional 100,000 jobs a year during the years 1998 
to 2002.


                SMALL BUSINESS INVESTMENT AND GROWTH ACT

  Mr. KYL. Mr. President, the third bill in this package is the Small 
Business Investment and Growth Act, which would ensure that small 
businesses do not pay a higher income tax rate than large corporations. 
Congressman Phil Crane of Illinois has promoted similar legislation in 
the House of Representatives.
  Mr. President, the 1990 and 1993 increases in the marginal income tax 
rates applicable to individuals put a tremendous strain on small 
businesses organized as S corporations, because they pay taxes at the 
individual rate. S corporations, facing 36 percent and 39.6 percent tax 
rates at the highest levels, are forced to compete against larger 
corporations, which pay a top rate of 34 percent.
  The bill I am introducing would establish 34 percent as the top rate 
that small businesses must pay. Taxable small business income would be 
limited to income from the trade or business of certain eligible small 
businesses, specifically excluding passive income. To benefit from the 
maximum 34 percent rate, businesses must reinvest their after-tax 
income into the business.
  The intent is to provide relief for those small businesses that 
invest income into their business operations, thereby creating new 
jobs. In fact, successful small manufacturers have been able to create 
three to four new jobs for every additional $100,000 they retain in the 
business.


                    FAMILY HERITAGE PRESERVATION ACT

  Mr. KYL. Mr. President, the fourth in the series of economic growth 
incentives is a bill to enhance the economic security of older 
Americans and small businesses around the country, a bill known as the 
Family Heritage Preservation Act. It would repeal the onerous Federal 
estate and gift tax, and the tax on generation-skipping transfers. A 
companion bill will be introduced in the House of Representatives by 
Congressman Chris Cox of California.
  Mr. President, most Americans know the importance of planning ahead 
for retirement. Sometimes that means buying a less expensive car, 
wearing clothes a little longer, or foregoing a vacation or two. But by 
doing with a little less during one's working years, people know they 
can enjoy a better and more secure life during retirement, and maybe 
even leave their children and grandchildren a little better off when 
they are gone.
  Savings not only create more personal security, they help create new 
opportunities for others, too. Savings are really investments that help 
others create new jobs in the community. They make our country more 
competitive. And ultimately they make a citizen's retirement more 
secure by providing a return on the money invested during his or her 
working years.
  So how does the government reward all of this thrift and careful 
planning? It imposes a hefty tax on the end result of such activity--up 
to 55 percent of a person's estate. The respected liberal Professor of 
Law at the University of Southern California, Edward J. McCaffrey, 
observed that ``polls and practices show that we like sin taxes, such 
as on alcohol and cigarettes.'' ``The estate tax,'' he went on to say, 
``is an anti-sin, or a virtue, tax. It is a tax on work and savings 
without consumption, on thrift, on long term savings. There is no 
reason even a liberal populace need support it.''
  At one time, the estate tax was required of only the wealthiest 
Americans. Now inflation, a nice house, and a good insurance policy can 
push people of even modest means into its grip. The estate tax is 
applied to all of the assets owned by an individual at the time of 
death. The tax rate, which starts at 37 percent, can quickly rise to a 
whopping 55 percent--the highest estate tax rate in the world.
  It is true that each person has a $600,000 exemption, but that does 
not provide as much relief as one might expect. Unless a couple goes 
through expensive estate planning so that trusts are written into their 
wills and at least $600,000 of the assets are owned by each spouse--
that is, not held jointly--the

[[Page S453]]

couple will end up with only one $600,000 exemption. Many people do not 
realize that literally every asset they own, including the face value 
of life insurance policies, all retirement plan assets, including 
Individual Retirement Accounts, is counted toward the $600,000 limit.
  As detrimental as the tax is for couples, it is even more harmful to 
small businesses, including those owned by women and minorities. The 
tax is imposed on a family business when it is least able to afford the 
payment--upon the death of the person with the greatest practical and 
institutional knowledge of that business's operations. It should come 
as no surprise then that a 1993 study by Prince and Associates--a 
Stratford, Connecticut research and consulting firm--found that nine 
out of 10 family businesses that failed within three years of the 
principal owner's death attributed their companies' demise to trouble 
paying estate taxes. Six out of 10 family-owned businesses fail to make 
it to the second generation. Nine out of 10 never make it to the third 
generation. The estate tax is a major reason why.
  Think of what that means to women and minority-owned businesses. 
Instead of passing a hard-earned and successful business on to the next 
generation, many families have to sell the company in order to pay the 
estate tax. The upward mobility of such families is stopped in its 
tracks. The proponents of this tax say they want to hinder 
``concentrations of wealth.'' What the tax really hinders is new 
American success stories.
  With that in mind, the 1995 White House Conference on Small Business 
identified the estate tax as one of small business's top concerns. 
Delegates to the conference voted overwhelming to endorse its repeal.
  Obviously, there is a great deal of peril to small businesses when 
they fail to plan ahead for estate taxes. So many small business owners 
try to find legal means of avoiding the tax or preparing for it, but 
that, too, comes at a significant cost. Some people simply slow the 
growth of their businesses to limit their estate tax burden. Of course, 
that means less investment in our communities and fewer jobs created. 
Others divert money they would have spent on new equipment or new hires 
to insurance policies designed to cover estate tax costs. Still others 
spend millions on lawyers, accountants, and other advisors for estate 
tax planning purposes. But that leaves fewer resources to invest in the 
company, start up new businesses, hire additional people, or pay better 
wages.
  The inefficiencies surrounding the tax can best be illustrated by the 
findings of a 1994 study published in the Seton Hall Law Review. That 
study found that compliance costs totalled a whopping $7.5 billion in 
1992, a year when the estate tax raised only $11 billion.
  The estate tax raises only about one percent of the federal 
government's annual revenue, but it consumes eight percent of each 
year's private savings. That is about $15 billion sidelined from the 
Nation's economy. Economists calculate that if the money paid in estate 
taxes since 1971 had been invested instead, total savings in 1991 would 
have been $399 billion higher, the economy would have been $46 billion 
larger, and we would have 262,000 more jobs. Obviously, the income and 
payroll taxes that would have been paid on these gains would have 
topped the amount collected by the government in estate taxes.
  There have been nine attempts to reform the estate tax during the 
last 50 years. Few would contend that it has been made any fairer or 
more efficient. The only thing that has really changed is that 
lobbyists and estate planners have gotten a little wealthier. Probably 
the best thing we could do is repeal the estate tax altogether. That is 
what I am proposing in the Family Heritage Preservation Act.
  Mr. President, the National Commission on Economic Growth and Tax 
Reform, which studied ways to make the tax code simpler, looked at the 
estate tax during the course of its deliberations just over a year ago. 
The Commission concluded that ``[i]t makes little sense and is patently 
unfair to impose extra taxes on people who choose to pass their assets 
on to their children and grandchildren instead of spending them 
lavishly on themselves.'' It went on to endorse repeal of the estate 
tax.


                       INVEST MORE IN AMERICA ACT

  Mr. KYL. Mr. President, the last in the series of bills that make up 
what I call the Agenda for Economic Growth and Opportunity is the 
Invest More in America Act, a bill that would allow small businesses to 
fully deduct the first $250,000 they invest in equipment in the year it 
is purchased. The bill is based on another recommendation made by the 
White House Conference on Small Business in 1995.
  Mr. President, Congress last year approved legislation to phase in an 
increase in the expensing limit to $25,000 by the year 2003. That is a 
step in the right direction, but it is not nearly enough.
  Businesses investing more than the annual expensing allowance must 
recover the cost of their investments over several years using the 
current depreciation system. Inflation, however, erodes the present 
value of their depreciation deductions taken in future years. Moreover, 
many businesses are required to make significant capital investments to 
comply with various government regulations, including environmental 
regulations, yet in many cases are unable to immediately expense such 
costs.
  The increased expensing allowance provided by the Invest More in 
America Act would spur additional investment in business assets and 
lead to increased productivity and more jobs.


                               CONCLUSION

  Mr. KYL. Mr. President, as I said at the beginning of my remarks, I 
am asking the Joint Tax Committee and the Institute for Policy 
Innovation to analyze the economic and revenue effects of this economic 
growth package. It is my intention that, if there is a revenue loss to 
the Treasury associated with it, the loss could at least partially be 
offset by reductions in corporate welfare spending.
  Mr. President, the Agenda for Economic Growth and Opportunity will 
help improve the standard of living for all Americans. It will help 
eliminate from the federal budget much of the largesse the government 
showers on a select group of business enterprises through corporate 
welfare.
  I invite my colleagues' support for this very important initiative.
                                 ______
                                 
      By Mr. BREAUX:
  S. 77. A bill to provide for one additional Federal judge for the 
middle district of Louisiana by transferring one Federal judge from the 
eastern district of Louisiana; to the Committee on the Judiciary.


                louisiana judicial districts legislation

  Mr. BREAUX. Mr. President, I rise today to offer legislation that 
will correct a serious inequity in Louisiana's judicial districts.
  My legislation adds an additional judge to the middle district of 
Louisiana, based in Baton Rouge. U.S. District Judges John Parker and 
Frank Polozola, the two Baton Rouge, judges, each have almost 2,000 
cased pending. The national average for federal judges is 400 cased 
pending. Case filings in the Middle District have totaled more than 
four times the national average. The Baton Rouge district also ranks 
first among the Nation's 97 federal court districts in total filings, 
civil filings, weighted filings and in the percent change in total 
filings last year.
  Louisiana's Middle District is composed of nine parishes. The state 
capital and many of the State's adult and juvenile prisons and forensic 
facilities are located in this district. The Court is regularly 
required to hear most of the litigation challenging the 
constitutionality of State laws and the actions of State agencies and 
officials. The District now has several reapportionment and election 
cases pending on the docket which generally require the immediate 
attention of the court. Additionally, because numerous chemical, oil, 
and industrial plants and hazardous waste sites are located in the 
Middle District, the Court has in the past and will continue to handle 
complex mass tort cases. One environmental case alone, involving over 
7,000 plaintiffs and numerous defendants, is being handled by a judge 
from another district because both of the Middle District's judges were 
recused.
  Since 1984, the Middle District has sought an additional judge 
because of its concern that its caseload would continue to rise despite 
the fact that its judges' termination rate exceeded that national 
average and ranked among the highest in numerical standing within the 
United States and the

[[Page S454]]

Fifth Circuit. Both the Judicial Conference and the Judicial Council of 
the Fifth Circuit have approved the Middle District's request for an 
additional judgeship after each biennial survey from 1984 through 1994.
  Mr. President, I know that my colleagues will agree with me that the 
clear solution to this obvious inequity is to assign an additional 
judge to Louisiana's Middle District. I look forward to the Senate's 
resolution of this important matter.
                                 ______
                                 
      By Mr. HATCH (for himself and Mr. Thomas):
  S. 78. A bill to provide a fair and balanced resolution to the 
problem of multiple imposition of punitive damages, and for other 
purposes; to the Committee on the Judiciary.


           the multiple punitive damages fairness act of 1997

  Mr. HATCH. Mr. President, I rise today to introduce legislation which 
will at last deal with one of the most unfair aspects of our civil 
justice system--the availability of multiple awards of punitive damages 
for the same wrongful act. I introduced identical legislation last 
Congress, in the form of S. 671, and I hope that we can move this bill 
in the 105th Congress.
  While there are countless abuses and excesses in our civil justice 
system, the fact that one defendant may face repeated punishment for 
the same conduct is one of the most egregious and unconscionable. This 
can happen in a variety of ways, but in any case is unjust and unfair. 
A defendant might, for example, be sued by a different plaintiff for 
essentially the same action, or might be sued by the same parties in a 
different state based on essentially the same conduct. The only 
effective means of addressing these problems is through a nationwide 
solution, which the legislation I introduce today would provide.
  Significantly, this legislation will not affect the compensatory 
damages that injured parties will be entitled to receive. Even in cases 
of multiple lawsuits based on the same conduct, under this legislation 
injured parties will be entitled to receive full compensatory damages 
when they are wrongfully harmed. My legislation deals only with 
punitive damages. Punitive damages are not intended to compensate 
injured plaintiffs or make them whole, but rather constitute punishment 
and an effort to deter future egregious misconduct. Punitive damages 
reform is not about shielding wrongdoers from liability, nor does such 
reform prevent victims of wrongdoing from being rightfully compensated 
for their damages. It is about ensuring that wrongdoers do not face 
excessive and unfair punishments.
  I certainly do not argue that a person or company that acts 
maliciously should not be subject to punitive damages. But it is 
neither just nor fair for a defendant to face the repeated imposition 
of punitive damages in several states for the same act or conduct, as 
our system currently permits. Exorbitant and out-of-control punitive 
damage awards also have the effect of punishing innocent people: 
employees, consumers, shareholders, and others who ultimately pay the 
price of these outrageous awards.
  This is not a hypothetical problem. Last Term, the Supreme Court 
considered a case, BMW v. Gore, in which a state court let stand a 
multimillion dollar punitive damage award against an automobile 
distributor who failed to inform a buyer that his new vehicle had been 
refinished to cure superficial paint damage. The defendant in that case 
could be exposed to thousands of claims based on the same conduct.
  The plaintiff, a purchaser of a $40,000 BMW automobile, learned nine 
months after his purchase that his vehicle might have been partially 
refinished. As a result of the discovery, he sued the automobile 
dealer, the North American distributor, and the manufacturer for fraud 
and breach of contract. He also sought an award for punitive damages. 
He won a ridiculously high award of punitive damages.
  At trial, the jury was allowed to assess damages for each of the 
partially refinished vehicles that had been sold throughout the United 
States over a period of ten years. As sought by the plaintiff's 
attorney, the jury returned a verdict of $4,000 in compensatory damages 
and $4,000,000 in punitive damages. On appeal to the state supreme 
court, the punitive damage award was reduced to $2 million, applicable 
to the North American distributor.
  On reviewing the BMW v. Gore case, the United States Supreme Court 
recognized that excessive punitive damages ``implicate the federal 
interest in preventing individual states from imposing undue burdens on 
interstate commerce.'' While that decision for the first time 
recognizes some outside limits on punitive damage awards, the Court's 
decision leaves ample room for legislative action. Legislative reforms 
are now--more than ever before--desperately needed to set up the 
appropriate boundaries.
  In the 5-4 decision, the Supreme Court held that the $2 million 
punitive damages award was grossly excessive and therefore violated the 
due process clause of the Fourteenth Amendment. The Court remanded the 
case, and the majority opinion set out three guideposts for assessing 
the excessiveness of a punitive damages award: the reprehensibility of 
the conduct being punished, the ratio between compensatory and punitive 
damages, and the difference between the punitive award and criminal or 
civil sanctions that could be imposed for comparable conduct.
  Unfortunately, even under the Supreme Court's decision, this same 
defendant can be sued again and again for punitive damages by every 
owner of a partially refinished vehicle. The company could still be 
sued for punitive damages for the same act in every other state in 
which it sold one of its vehicles. In fact, the very same plaintiffs' 
attorney who filed the BMW v. Gore case filed numerous similar lawsuits 
against BMW.
  Defendants and consumers are not the only ones hurt by excessive, 
multiple punitive damage awards. Ironically, other victims can be those 
the system is intended to benefit--the injured parties themselves. 
Funds that might otherwise be available to compensate later victims can 
be wiped out at any early stage by excessive punitive damage awards.
  The imposition of multiple punitive damage awards in different states 
for the same act is an issue that can be addressed only through federal 
legislation. If only one state limits such awards, other states still 
remain free to impose multiple punitive damages. The fact is that a 
federal response in this area is the only viable solution.
  This bill provides that response by generally prohibiting the award 
of multiple punitive damages. With one exception, the bill prevents 
courts from awarding punitive damages based on the same act or course 
of conduct for which punitive damages have already been awarded against 
the same defendant. Under the exception, an additional award of 
punitive damages may be permitted if the court determines that the 
claimant will offer new and substantial evidence of previously 
undiscovered, wrongful behavior on the part of the defendant. In those 
circumstances, the court must make specific findings of fact to support 
the award, must reduce the amount of punitive damages awarded by the 
amounts of prior punitive damages based on the same acts, and may not 
disclose to the jury the court's determination and action under the 
provisions. The provisions would not apply to any action brought under 
a federal or state statute that specifically mandates the amount of 
punitive damages to be awarded.
  This legislation is needed to correct a glaring injustice. I hope my 
colleagues will join me in supporting it, and I ask unanimous consent 
that the full 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. 78

       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 ``Multiple Punitive Damages 
     Fairness Act of 1997''.

     SEC. 2. DEFINITIONS.

       For purposes of this Act:
       (1) Claimant.--The term ``claimant'' means any person who 
     brings a civil action and any person on whose behalf such an 
     action is brought. If such an action is brought through or on 
     behalf of an estate, the term includes the claimant's 
     decedent. If such action is brought through or on behalf of a 
     minor or incompetent, the term includes the claimant's legal 
     guardian.
       (2) Harm.--The term ``harm'' means any legally cognizable 
     wrong or injury for which punitive damages may be imposed.

[[Page S455]]

       (3) Defendant.--The term ``defendant'' means any 
     individual, corporation, company, association, firm, 
     partnership, society, joint stock company, or any other 
     entity (including any governmental entity).
       (4) Punitive damages.--The term ``punitive damages'' means 
     damages awarded against any person or entity to punish or 
     deter such person or entity, or others, from engaging in 
     similar behavior in the future.
       (5) Specific findings of fact.--The term ``specific 
     findings of fact'' means findings in written form focusing on 
     specific behavior of a defendant.
       (6) State.--The term ``State'' means any State of the 
     United States, the District of Columbia, Puerto Rico, the 
     Northern Mariana Islands, the Virgin Islands, Guam, American 
     Samoa, and any other territory or possession of the United 
     States, or any political subdivision thereof.

     SEC. 3. MULTIPLE PUNITIVE DAMAGES FAIRNESS.

       (a) Findings.--The Congress finds the following:
       (1) Multiple or repetitive imposition of punitive damages 
     for harms arising out of a single act or course of conduct 
     may deprive a defendant of all the assets or insurance 
     coverage of the defendant, and may endanger the ability of 
     future claimants to receive compensation for basic out-of-
     pocket expenses and damages for pain and suffering.
       (2) The detrimental impact of multiple punitive damages 
     exists even in cases that are settled, rather than tried, 
     because the threat of punitive damages being awarded results 
     in a higher settlement than would ordinarily be obtained. To 
     the extent this premium exceeds what would otherwise be a 
     fair and reasonable settlement for compensatory damages, 
     assets that could be available for satisfaction of future 
     compensatory claims are dissipated.
       (3) Fundamental unfairness results when anyone is punished 
     repeatedly for what is essentially the same conduct.
       (4) Federal and State appellate and trial judges, and well-
     respected commentators, have expressed concern that multiple 
     imposition of punitive damages may violate constitutionally 
     protected due process rights.
       (5) Multiple imposition of punitive damages may be a 
     significant obstacle to comprehensive settlement negotiations 
     in repetitive litigation.
       (6) Limiting the imposition of multiple punitive damages 
     awards would facilitate resolution of mass tort claims 
     involving thousands of injured claimants.
       (7) Federal and State trial courts have not provided 
     adequate solutions to problems caused by the multiple 
     imposition of punitive damages because of a concern that such 
     courts lack the power or authority to prohibit subsequent 
     awards in other courts.
       (8) Individual State legislatures can create only a partial 
     remedy to address problems caused by the multiple imposition 
     of punitive damages, because each State lacks the power to 
     control the imposition of punitive damages in other States.
       (b) General Rule.--Except as provided in subsection (c), 
     punitive damages shall be prohibited in any civil action in 
     any State or Federal court in which such damages are sought 
     against a defendant based on the same act or course of 
     conduct for which punitive damages have already been sought 
     or awarded against such defendant.
       (c) Circumstances for Award.--If the court determines in a 
     pretrial hearing that the claimant will offer new and 
     substantial evidence of previously undiscovered, additional 
     wrongful behavior on the part of the defendant, other than 
     the injury to the claimant, the court may award punitive 
     damages in accordance with subsection (d).
       (d) Limitations on Award.--A court awarding punitive 
     damages pursuant to subsection (c) shall--
       (1) make specific findings of fact on the record to support 
     the award;
       (2) reduce the amount of the punitive portion of the damage 
     award by the sum of the amounts of punitive damages 
     previously paid by the defendant in prior actions based on 
     the same act or course of conduct; and
       (3) prohibit disclosure to the jury of the court's 
     determination and action under this subsection.
       (e) Applicability and Preemption.--
       (1) In general.--Except as provided in paragraph (3), this 
     section shall apply to--
       (A) any civil action brought on any theory where punitive 
     damages are sought based on the same act or course of conduct 
     for which punitive damages have already been sought or 
     awarded against the defendant; and
       (B) all civil actions in which the trial has not commenced 
     before the effective date of this Act.
       (2) Applicability.--Except as provided in paragraph (3), 
     this section shall apply to all civil actions in which the 
     trial has not commenced before the effective date of this 
     Act.
       (3) Nonapplicability.--This section shall not apply to any 
     civil action involving damages awarded under any Federal or 
     State statute that prescribes the precise amount of punitive 
     damages to be awarded.
       (4) Exception.--This section shall not preempt or supersede 
     any existing Federal or State law limiting or otherwise 
     restricting the recovery for punitive damages to the extent 
     that such law is inconsistent with the provisions of this 
     section.

     SEC. 4. EFFECT ON OTHER LAW.

       Nothing in this Act shall be construed to--
       (1) waive or affect any defense of sovereign immunity 
     asserted by any State under any law;
       (2) supersede any Federal law;
       (3) waive or affect any defense of sovereign immunity 
     asserted by the United States;
       (4) affect the applicability of any provision of chapter 97 
     of title 28, United States Code;
       (5) preempt State choice-of-law rules with respect to 
     claims brought by a foreign nation or a citizen of a foreign 
     nation;
       (6) affect the right of any court to transfer venue or to 
     apply the law of a foreign nation or to dismiss a claim of a 
     foreign nation or of a citizen of a foreign nation on the 
     ground of inconvenient forum; or
       (7) create a cause of action for punitive damages.
                                 ______
                                 
      By Mr. HATCH (for himself, Mr. Kyl, and Mr. Thomas):
  S. 79. A bill to provide a fair and balanced resolution to the 
problem of multiple imposition of punitive damages, and for the reform 
of the civil justice system; to the Committee on the Judiciary.


                 the civil justice fairness act of 1997

  Mr. HATCH. Mr. President, today I introduce the Civil Justice 
Fairness Act of 1997. Last Congress, I introduced a similar bill that, 
had it been enacted, would have granted significant relief from 
litigation abuses to individuals, consumers, small businesses and 
others. Unfortunately, given President Clinton's repeated vetoes of 
litigation reform measures in the 104th Congress, it was clear that we 
would be unable to enact more broad-reaching civil justice reform.
  This Congress, I urge my colleagues to revisit the important issue of 
litigation reform. Product liability reform remains badly needed, as do 
the more comprehensive reforms of the civil litigation system embodied 
in my civil justice reform bill, the Civil Justice Fairness Act of 
1997.
  Americans in Utah and every other State overwhelmingly agree that 
there is a crying need for reform of our civil justice system. They are 
sick and tired of the abuses of our system, and are fed up with million 
dollar awards for scratched paint jobs, spilled coffee, and other minor 
harms. The system fails to deliver justice in far too many cases. 
Success for plaintiffs can depend more on chance than the merits of the 
case, and defendants may find themselves forced to settle for 
significant sums in circumstances in which they have done little or no 
wrong, simply due to the high litigation costs involved in defending 
against a weak or frivolous lawsuit.
  I have gone through the litany of problems with our civil justice 
system time and time again. They continue to include excessive legal 
fees and costs, dilatory and sometimes abusive litigation practices, 
the increasing use of ``junk science'' as evidence, and the risk of 
unduly large punitive damage awards.
  The problems with our current civil justice system have resulted in 
several perverse effects. First, all too often the system fails to 
accomplish its most important function--to compensate deserving 
plaintiffs adequately. Second, it imposes unnecessarily high litigation 
costs on all parties. Those costs are passed along to consumers--in 
effect, to each and every American--in the form of higher prices for 
products and services we buy. Those costs can even harm our nation's 
competitiveness in the global economy.
  Congress must face these problems and enact meaningful legislation 
reforming our civil justice system. Reforms are needed to eliminate 
abuses and procedural problems in litigation, and to restore to the 
American people a civil justice system deserving of their trust, 
confidence and support. To achieve this goal, I am introducing civil 
justice reform legislation. This bill will correct some of the more 
serious abuses in our present civil justice system through a number of 
provisions.

  The legislation will address the problems of excessive punitive 
damage awards and of multiple punitive damage awards. We all know that 
punitive damage awards are out of control in this country. Further, the 
imposition of multiple punitive damages for the same wrongful act 
raises particular concerns about the fairness of punitive damages and 
their ability to serve the purposes of punishment and deterrence for 
which they are intended.
  The Supreme Court, legal scholars, practicing litigators, and others 
have acknowledged for years that punitive damages may raise serious 
constitutional issues. A decision from the U.S.

[[Page S456]]

Supreme Court last term finally held that in certain circumstances a 
punitive damage award may violate due process and provided guidance as 
to when that would occur.
  In the case, BMW versus Gore, the Supreme Court acknowledged that 
excessive punitive damages ``implicate the federal interest in 
preventing individual states from imposing undue burdens on interstate 
commerce.'' The decision for the fist time recognizes some outside 
limits on punitive damage awards. The Court's decision leaves plenty of 
room for legislative action, and legislative reforms are now needed 
more than ever to set up the appropriate boundaries.
  The decision also highlights some of the extreme abuses in our civil 
justice system. The BMW versus Gore case was brought by a doctor who 
had purchased a BMW automobile for $40,000 and later discovered that 
the car had been partially refinished prior to sale. He sued the 
manufacturer in Alabama State court on a theory of fraud, seeking 
compensatory and punitive damages. The jury found BMW liable for $4,000 
in compensatory damages and $4 million in punitive damages. On appeal, 
the Alabama Supreme Court reduced the punitive damages award to $2 
million--which still represents an astonishing award for such 
inconsequential harm.
  In its 5 to 4 decision, the Supreme Court held that the $2 million 
punitive damages award was grossly excessive and therefore violated the 
due process clause of the 14th amendment. The court remanded the case 
for further proceedings. The majority opinion set out three guideposts 
for courts to employ in assessing the constitutional excessiveness of a 
punitive damages award: the reprehensibility of the conduct being 
punished, the ratio between compensatory and punitive damages, and the 
difference between the punitive award and criminal or civil sanctions 
that could be imposed for comparable conduct.
  Justice Breyer, in a concurring opinion joined by Justices O'Connor 
and Souter, emphasized that, although constitutional due process 
protections generally cover purely procedural protections, the narrow 
circumstances of the case justified added protections to ensure that 
legal standards providing for discretion are adequately enforced so as 
to provide for the ``application of law, rather than a decisionmaker's 
caprice.'' Congress has a similar responsibility to ensure fairness in 
the litigation system and the application of law in that system. It is 
high time for Congress to provide specific guidance to courts on the 
appropriate level of damage awards, and to address other issues in the 
civil litigation system.

  The BMW case also illustrates the potential abuses of the system that 
can occur through the availability of multiple awards of punitive 
damages for essentially the same conduct. Under current law, the 
company can still, in every other state in which it sold one of its 
vehicles, be sued for punitive damages for the same act.
  Multiple punitive damage awards can hurt not only defendants but also 
injured parties. Funds that would otherwise be available to compensate 
later victims can be wiped out at any early stage by excessive punitive 
damage awards. A Federal response is critical: if only the one State 
limits such awards, other States still remain free to impose multiple 
punitive damages. An important provision in my bill limits these 
multiple punitive damage awards. I am also today introducing separate 
legislation that would deal only with the multiple punitive damages 
problem.
  In addition to reforming multiple punitive damage awards, my broad 
civil justice reform legislation addresses general abuses of punitive 
damages litigation. It includes a heightened standard of proof to 
ensure that punitive damages are awarded only if there is clear and 
convincing evidence that the harm suffered was the result of conduct 
either specifically intended to cause that harm, or carried out with 
conscious, flagrant indifference to the right or the safety of the 
claimant.
  The bill also provides that punitive damages may not be awarded 
against the seller of a drug or medical device that received pre-market 
approval from the Food and Drug Administration.
  Additionally, this legislation would allow a bifurcated trial, at the 
defendant's request, on the issue of punitive damages and limits the 
amount of the award to either $250,000 or three times the economic 
damages suffered by the claimant, whichever is greater. The bill 
provides a special limit in the cases of small business or individuals; 
in those cases, punitive damages will be limited to the lesser of 
$250,000 or three times economic damages.
  The legislation would also limit a defendant's joint liability for 
non-economic damages. In any civil case for personal injury, wrongful 
death, or based upon the principles of comparative fault, a defendant's 
liability for non-economic loss shall be several only and shall not be 
joint. The trier of fact will determine the proportional liability of 
each person, whether or not a party to the action, and enter separate 
judgments against each defendant.
  Another provision of this bill would shift costs and attorneys fees 
in circumstances in which a party has rejected a settlement offer, 
forcing the litigation to proceed, and then obtain a less favorable 
judgment. This provision encourages parties to act reasonably, rather 
than pursue lengthy and costly litigation. It allows a plaintiff or a 
defendant to be compensated for their reasonable attorneys fees and 
costs from the point at which the other party rejects a reasonable 
settlement offer.

  Another widely reported problem in our civil justice system is abuse 
in contingency fee cases. This bill encourages attorneys to disclose 
fully to clients the hours worked and fees paid in all contingency fee 
cases. The bill calls upon the Attorney General to draft model State 
legislation requiring such disclosure to clients. It also requires the 
Attorney General to study possible abuses in the area of contingency 
fees and, where such abuses are found, to draft model State legislation 
specifically addressing those problems.
  This legislation restricts the use of so-called ``junk science'' in 
the courtroom. This long overdue reform will improve the reliability of 
expert scientific evidence and permit juries to consider only 
scientific evidence that is objectively reliable.
  This legislation includes a provision for health care liability 
reform. It limits, in any health care liability action, the maximum 
amount of non-economic damages that may be awarded to a claimant of 
$250,000. This limit would apply regardless of the number of parties 
against whom the action is brought, and regardless of the number of 
claims or actions brought. To avoid prejudice to any parties, the jury 
would not be informed about the limitations on non-economic damages.
  This legislation would also establish a reasonable, uniform statute 
of limitations for the bringing of health care liability actions. 
Further, if damages for losses incurred after the date of judgment 
exceed $100,000, the Court shall allow the parties to have 60 days in 
which to negotiate an agreement providing for the payment of such 
damages in a lump sum, periodic payments, or a combination of both. If 
no agreement is reached, a defendant may elect to pay the damages on a 
periodic basis. Periodic payments for future damages would terminate in 
the event of the claimant's return to work, or upon the claimant's 
death. This is an exception for the portion of such payments allocable 
to future earnings, which shall be paid to any individual to whom the 
claimant owed a duty of support immediately prior to death, to the 
extent required by law at the time of the claimant's death.
  This legislation also allows states the freedom to experiment with 
alternative patient compensation systems based upon no-fault 
principles. The Secretary of Health and Human Services would award 
grants based on applications by interested states according to 
enumerated criteria and subject to enumerated reporting requirements. 
Persons or entities participating in such experimental systems may 
obtain from the Secretary a waiver from the provisions of this 
legislation for the duration of the experiment. The Secretary would 
collect information regarding these experiments and submit an annual 
report to Congress, including an assessment of the feasibility of 
implementing no-fault systems, and legislative recommendations, if any.
  I urge my colleagues to take a serious look at these problems within 
our civil justice system. I believe this bill

[[Page S457]]

addresses these issues in a common sense way, and I hope my colleagues 
will join me in supporting this legislation.
  I ask for unanimous consent that a section-by-section description of 
the bill be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

  Section-by-Section Description of The Civil Justice Fairness Act of 
                                  1997


                    title I--punitive damages reform

       Sec. 101. Definitions.--This section defines various terms 
     used in Title I of the bill.
       Sec. 102. Multiple Punitive Damages Fairness.--This section 
     generally prohibits the award of multiple punitive damages. 
     With one exception, it prevents courts from awarding punitive 
     damages based on the same act or course of conduct for which 
     punitive damages have already been awarded against the same 
     defendant. Under the exception, an additional award of 
     punitive damages may be permitted if the court determines in 
     a pretrial hearing that the claimant will offer new and 
     substantial evidence of previously undiscovered, additional 
     wrongful behavior on the part of the defendant, other than 
     injury to the claimant. In those circumstances, the court 
     must make specific findings of fact to support the award, 
     must reduce the amount of punitive damages awarded by the 
     amounts of prior punitive damages based on the same acts, and 
     may not disclose to the jury the court's determination and 
     action under the section. This section would not apply to any 
     action brought under a federal or state statute that 
     specifically mandates the amount of punitive damages to be 
     awarded.
       Sec. 103. Uniform Standards for Award of Punitive 
     Damages.--This section sets the following uniform standards 
     for the award of punitive damages in any State or Federal 
     Court action: (1) In general, punitive damages may be awarded 
     only if the claimant establishes by clear and convincing 
     evidence that the conduct causing the harm was either 
     specifically intended to cause harm or carried out with 
     conscious, flagrant indifference to the rights or the safety 
     of the claimant. (2) Punitive damages may not be awarded in 
     the absence of an award of compensatory damages exceeding 
     nominal damages. (3) Punitive damages may not be awarded 
     against a manufacturer or product seller of a drug or medical 
     device which was the subject of pre-market approval by the 
     Food and Drug Administration (FDA). This FDA exemption is not 
     applicable where a party has withheld or misrepresented 
     relevant information to the FDA. (4) Punitive damages may not 
     be pleaded in a complaint. Instead, a party must establish at 
     a pretrial hearing that it has a reasonable likelihood of 
     proving facts at trial sufficient to support an award of 
     punitive damages, and may then amend the pleading to include 
     a prayer for relief seeking punitive damages. (5) At the 
     defendant's request, the trier of fact shall consider in 
     separate proceedings whether punitive damages are warranted 
     and, if so, the amount of such damages. If a defendant 
     requests bifurcated proceedings, evidence relevant only to 
     the claim for punitive damages may not be introduced in the 
     proceeding on compensatory damages. Evidence of the 
     defendant's profits from his misconduct, if any, is 
     admissible, but evidence of the defendant's overall wealth is 
     inadmissible in the proceeding on punitive damages. (6) In 
     any civil action where the plaintiff seeks punitive 
     damages under this title, the amount awarded shall not 
     exceed three times the economic damages or $250,000, 
     whichever is greater. This provision shall be applied by 
     the court and shall not be disclosed to the jury. (7) A 
     special rule applies to small businesses and individuals. 
     In any action against an individual whose net worth does 
     not exceed $500,000, or a business or organization having 
     25 or fewer employees, punitive damages may not exceed the 
     lesser of $250,000 or 3 times the amount awarded for 
     economic loss.
       Sec. 104. Effect on Other Law.--This section specifies that 
     certain state and federal laws are not superseded or affected 
     by this legislation. Choice-of-law and forum nonconveniens 
     rules are similarly unaffected.


              title ii--joint and several liability reform

       Sec. 201. Several Liability for Non-Economic Loss.--This 
     section limits a defendant's joint liability for non-economic 
     damages. In any civil case, a defendant's liability for non-
     economic loss shall be several only and shall not be joint. 
     The trier of fact will determine the proportional liability 
     of each defendant and enter separate judgments against each 
     defendant.


                   title iii--civil procedural reform

       Sec. 301. Trial Lawyer Accountability.--This section 
     contains two major provisions. The first provides that it is 
     the sense of the Congress that each State should require 
     attorneys who enter into contingent fee agreements to 
     disclose to their clients the actual services performed and 
     hours expended in connection with such agreements. The second 
     provision directs the Attorney General to study and evaluate 
     contingent fee awards and their abuses in State and Federal 
     court; to develop model legislation to require attorneys who 
     enter into contingency fee agreements to disclose to clients 
     the actual services performed and hours expended, and to curb 
     abuses in contingency fee awards based on the study; and to 
     report the Attorney General's findings and recommendations to 
     Congress within one year of enactment.
       Sec. 302. Honesty in Evidence.--This section amends Federal 
     Rule of Evidence 702 to reform the rules regarding the use of 
     expert testimony. It clarifies that courts retain substantial 
     discretion to determine whether the testimony of an expert 
     witness that is premised on scientific, technical, or medical 
     knowledge is based on scientifically valid reasoning, is 
     sufficiently reliable, and is sufficiently established to 
     have gained general acceptance in the particular field in 
     which it belongs. The section follows the standard for 
     admissibility of expert testimony enunciated in Daubert v. 
     Merrell Dow Pharmaceuticals, Inc., 113 S. Ct. 2786 (1993). 
     It also mirrors the common law Frye rule that requires 
     that scientific evidence have ``general acceptance'' in 
     the relevant scientific community to be admissible. This 
     section further clarifies that expert witnesses have 
     expertise in the particular field on which they are 
     testifying. Finally, this section mandates that the 
     testimony of an expert retained on a contingency fee basis 
     is inadmissible.
       Sec. 303. Fair Shifting of Costs and Reasonable Attorney 
     Fees.--This section modifies Federal Rule of Civil Procedure 
     68 to allow either party, not just the defendant, to make a 
     written offer of settlement or to allow a judgment to be 
     entered against the offering party. It expands the time 
     period during which an offer can be made from 10 days before 
     trial to any time during the litigation. If within 21 days 
     the offer is accepted, a judgment may be entered by the 
     court. If, however, a final judgment is not more favorable to 
     an offeree than the offer, the offeree must pay attorney fees 
     and costs incurred after the time expired for acceptance of 
     the offer. Thus, this is not a true ``loser pays'' provision 
     where a loser pays the winner's attorney's fees, but rather a 
     narrower attorney fee and cost-shifting idea applicable only 
     when a party has made an offer of settlement or judgment. 
     This section also significantly expands the definition of 
     recoverable costs. Currently, costs are narrowly defined and 
     do not create enough of a financial incentive for a party to 
     make an offer that allows judgment to be entered. Finally, 
     this section also allows a party to make an offer of judgment 
     after liability has already been determined but before the 
     amount or extent has been adjudged.


                 title iv--health care liability reform

       Sec. 401. Definitions.--This section sets up definitions 
     for various terms used in Title IV of the bill.
       Sec. 402. Limitations on Noneconomic Damages.--In any 
     health care liability action the maximum amount of 
     noneconomic damages that may be awarded to a claimant is 
     $250,000. This limit shall apply regardless of the number of 
     parties against whom the action is brought, and regardless of 
     the number of claims or actions brought. The jury shall not 
     be informed about the limitations on non-economic damages.
       Sec. 403. Statute of Limitations.--This section provides a 
     reasonable uniform statute of limitations for health care 
     liability actions, with one exception for minors. The general 
     rule is that an action must be brought within two years from 
     the date the injury and its cause was or reasonably should 
     have been discovered, but in no event can an action be 
     brought more than six years after the alleged date of injury. 
     This section also allows an exception for young children. The 
     rule for children under six years of age is that an action 
     must be brought within two years from the date the injury 
     and its cause was or reasonably should have been 
     discovered, but in no event can an action be brought more 
     than six years after the alleged date of injury or the 
     date on which the child attains 12 years of age, whichever 
     is later.
       Sec. 404. Periodic Payment of Future Damages.--This section 
     allows for the periodic payment of large awards for losses 
     accruing in the future. If damages for losses incurred after 
     the date of judgment exceed $100,000, the court shall allow 
     the parties to have 60 days in which to negotiate an 
     agreement providing for the payment of such damages in a lump 
     sum, periodic installments, or a combination of both. If no 
     agreement is reached within those 60 days, a defendant may 
     elect to pay the damages on a periodic basis. The court will 
     determine the amount and periods for such payments, reducing 
     amounts to present value for purposes of determining the 
     funding obligations of the individual making the payments. 
     Periodic payments for future damages terminate in the event 
     of the claimant's recovery or return to work; or upon the 
     claimant's death, except for the portion of the payments 
     allocable to future earnings which shall be paid to any 
     individual to whom the claimant owed a duty of support 
     immediately prior to death to the extent required by law at 
     the time of death. Such payments shall expire upon the death 
     of the last person to whom a duty of support is owed or the 
     expiration of the obligation pursuant to the judgment for 
     periodic payments.
       Sec. 405. State No-Fault Demonstration Projects.--This 
     section allows states to experiment with alternative patient 
     compensation systems based upon no-fault principles. Grants 
     shall be awarded by the Secretary of Health and Human 
     Services based on applications made by interested states 
     according to enumerated criteria and subject to enumerated 
     reporting requirements. Persons or entities involved in the 
     demonstrations involved may obtain a waiver from the 
     Secretary from the provisions of this Title for

[[Page S458]]

     the duration of the experiment, which shall be not greater 
     than five years. The Secretary shall collect information 
     regarding these experiments and submit an annual report to 
     Congress including an assessment of the feasibility of 
     implementing no-fault systems and legislative 
     recommendations, if any.


                   title v--miscellaneous provisions

       Sec. 501. Federal Cause of Action Precluded.--This section 
     provides that the bill does not provide any new basis for 
     federal court jurisdiction. The resolution of punitive 
     damages claims is left to state courts or to federal courts 
     that currently have jurisdiction over those claims.
       Sec. 502. Effective Date.--This section states that the 
     bill, except as otherwise provided, shall be effective 30 
     days after the date of enactment and apply to all civil 
     actions commenced on or after such date, including those in 
     which the harm, or harm-causing conduct, predates the bill's 
     enactment.
                                 ______
                                 
      By Mr. KOHL:
  S. 80. A bill to amend the Internal Revenue Code of 1986 to provide 
for the rollover of gain from the sale of farm assets into an 
individual retirement account; to the Committee on Finance.


               family farm retirement equity act of 1997

  Mr. KOHL. Mr. President, I rise today to introduce the Family Farm 
Retirement Equity Act of 1995, a bill to help improve the retirement 
security of our nation's farmers.

  As we begin the 105th Congress, we can anticipate legislative action 
dealing with pension reform and the tax treatment of retirement 
savings. In his 1996 State of the Union address, President Clinton 
mentioned his concerns about the retirement security of farmers and 
ranchers, and many of us in Congress have sought to address this 
concern, as well.
  Last year, Congress passed the 1996 farm bill, bringing sweeping 
changes to the traditional farm support programs, and greatly affecting 
the income side of the average farmer's financial sheet. But it is 
equally important that we address the other side of the farmers' 
financial equation--the cost side. And some of the biggest costs that 
farmers face are the costs associated with retirement planning. In 
fact, those costs are sometimes so monumental that farmers reach 
retirement age without having made the appropriate provisions for their 
security.
  In the last Congress, efforts were made to address the financial 
concerns of retiring farmers and ranchers. In fact, the Senate version 
of the 1995 Budget Reconciliation Act included the legislation that I 
am reintroducing today, the Family Farm Retirement Equity Act. 
Unfortunately, that important provision did not survive the conference 
negotiations between House and Senate budget leaders. It is my hope 
that we will be able to revisit this matter this year, and address this 
growing concern in rural America.
  Farming is a highly capital-intensive business. To the extent that 
the average farmer reaps any profits from his or her farming operation, 
much of that income is directly reinvested into the farm. Rarely are 
there opportunities for farmers to put money aside in individual 
retirement accounts. Instead, farmers tend to rely on the sale of their 
accumulated capital assets, such as real estate, livestock, and 
machinery, in order to provide the income to sustain them during 
retirement. All too often, farmers are finding that the lump-sum 
payments of capital gains taxes levied on those assets leave little for 
retirement.
  The legislation that I am reintroducing today would provide retiring 
farmers the opportunity to rollover the proceeds from the sale of their 
farms into a tax-deferred retirement account. Instead of paying a large 
lump-sum capital gains tax at the point of sale, the income from the 
sale of a farm would be taxed only as it is withdrawn from the 
retirement account. Such a change in method of taxation would help 
prevent the financial distress that many farmers now face upon 
retirement.
  Another concern that I have about rural America is the diminishing 
interest of our younger rural citizens in continuing in farming. 
Because this legislation will facilitate the transition of our older 
farmers into a successful retirement, the Family Farm Retirement Equity 
Act will also pave the way for a more graceful transition of our 
younger farmers toward farm ownership. While low prices and low profits 
in farming will continue to take their toll on our younger farmers, I 
believe that this will be one tool we can use to make farming more 
viable for the next generation.
  This proposal is supported by farmers and farm organizations 
throughout the country. It has been endorsed by the American Farm 
Bureau Federation, the American Sheep Industry Association, the 
American Sugar Beet Association, the National Association of Wheat 
Growers, the National Cattleman's Beef Association, the National Corn 
Growers Association, National Pork Producers Council, and the 
Southwestern Peanut Growers Association.
  Further, I am very pleased that a modified version of this 
legislation has also been included in the Targeted Investment Incentive 
and Economic Growth Act of 1997, as introduced today by Minority Leader 
Daschle and other Senators. I look forward to swift action on that 
legislation, so that the working families and small businesses targeted 
for assistance can enjoy tax relief as soon as possible.
  I ask unanimous consent that the full text of the bill and a summary 
be included in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                 S. 80

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

     SECTION 1. SHORT TITLE; REFERENCE TO INTERNAL REVENUE CODE.

       (a) Short Title.--This Act may be cited as the ``Family 
     Farm Retirement Equity Act of 1997''.
       (b) Reference to Internal Revenue Code of 1986.--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.

     SEC. 2. 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 for any taxable year a taxpayer has 
     qualified net farm gain from the sale of qualified farm 
     assets, then, at the election of the taxpayer, such gain 
     shall be recognized only to the extent it 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) $500,000 ($250,000 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).

[[Page S459]]

       ``(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 
     dispositions of qualified farm assets.
       ``(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 striking ``or'' and 
     inserting ``an asset rollover account (within the meaning of 
     section 1034A), or''.
       (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.


               Family Farm Retirement Equity Act of 1997

  Allows retiring farmers to roll over up to $500,000 from the sale of 
their farm assets into a tax-deferred individual retirement account, 
called an Asset Rollover Account [ARA]. In this manner, they avoid 
paying lump-sum capital gains, and instead pay taxes only as they 
withdraw the funds from the retirement account.
  Each farmer would be allowed to rollover an amount equal to $10,000--
$20,000 for a couple--for each year that he or she was a ``qualified 
farmer,'' with a maximum contribution of $250,000--or $500,000 per farm 
couple.
  The maximum allowed contribution to the ARA would be reduced by any 
amount in excess of $100,000 that the qualified farmer and spouse 
already have in a separate IRA.
  A qualified farmer is a farmer who: For the 5-year period ending on 
the date of sale of the farm, was materially participating in the 
business of the farm. A farmer is determined to be materially 
participating in the farm operation if they meet the requirements of 
section 2032A individually, or jointly in the case of a couple, owns at 
least 50 percent of the farm asset during the 5-year period.
                                 ______
                                 
      By Mr. KOHL (for himself and Mr. Feingold):
  S. 81. A bill to amend the Dairy Production Stabilization Act of 1983 
to require that members of the National Dairy Promotion and Research 
Board be elected by milk producers and to prohibit bloc voting by 
cooperative associations of milk producers in the election of the 
producers, and for other purposes; to the Committee on Agriculture, 
Nutrition, and Forestry.


              national dairy promotion reform act of 1997

  Mr. KOHL. Mr. President, one of the basic tenets upon which this 
Nation was founded was that there should be no taxation without 
representation. But the dairy farmers of this nation know all too well 
that taxation without representation continues today. They live with 
that reality in their businesses every day.

  Dairy farmers are required to pay a 15 cent tax, in the form of an 
assessment, on every hundred pounds of milk that they sell. This tax 
goes to fund dairy promotion activities, such as those conducted by the 
National Dairy Promotion and Research Board, commonly known as the 
National Dairy Board. Yet these same farmers that pay hundreds, or in 
some cases thousands, of dollars every year for these mandatory 
promotion activities have no direct say over who represents them on 
that Board.
  In the summer of 1993, a national referendum was held giving dairy 
producers the opportunity to vote on whether or not the National Dairy 
Board should continue. The referendum was held after 16,000 dairy 
producers, more than 10 percent of dairy farmers nationwide, signed a 
petition to the Secretary of Agriculture calling for the referendum.
  Farmers signed this petition for a number of reasons. Some felt they 
could no longer afford the promotion assessment that is taken out of 
their milk checks every month. Others were frustrated with what they 
perceived to be a lack of clear benefits from the promotion activities. 
And still others were alarmed by certain promotion activities 
undertaken by the Board with which they did not agree. But overriding 
all of these concerns was the fact that dairy farmers have no direct 
power over the promotion activities which they fund from their own 
pockets.
  When the outcome of the referendum on continuing the National Dairy 
Board was announced, it had passed overwhelmingly. But because nearly 
90 percent of all votes cast in favor of continuing the Board were cast 
by bloc-voting cooperatives, there has been skepticism among dairy 
farmers about the validity of the vote.
  While I believe that dairy promotion activities are important for 
enhancing markets for dairy products, it matters more what dairy 
farmers believe. After all, they are the ones who pay hundreds or 
thousands of dollars every year for these promotion activities. And 
they are the ones who have no direct say over who represents them on 
that Board.
  It is for this reason that I rise today to reintroduce the National 
Dairy Promotion Reform Act of 1997.
  Some in the dairy industry have argued that this issue is dead, and 
that to reintroduce such legislation will only reopen old wounds. But I 
must respectfully disagree.
  The intent of this legislation is not to rehash the referendum 
debate, which was a contentious one. Instead, the intent is to look 
forward.

[[Page S460]]

  Farmers in my state have traditionally been strong supporters of the 
cooperative movement, because the cooperative business structure has 
given them the opportunity to be equal partners in the businesses that 
market their products and supply their farms. I have been a strong 
supporter of the cooperative movement for the same reason.
  But there is a growing dissention among farmers that I believe is 
dangerous to the long-term viability of agricultural cooperatives. As I 
talk to farmers around Wisconsin, I hear a growing concern that their 
voices are not being heard by their cooperatives. They frequently cite 
the 1993 National Dairy Board referendum as an example. The bill that I 
am reintroducing today seeks to address one small part of that concern, 
by giving dairy farmers a more direct role in the selection of their 
representatives on the National Dairy Board. Whereas current law 
requires that members of the National Dairy Board be appointed by the 
Secretary of Agriculture, this legislation would require that the Board 
be an elected body.
  Further, although the legislation would continue the right of farmer 
cooperatives to nominate individual members to be on the ballot, bloc 
voting by cooperatives would be prohibited for the purposes of the 
election itself. There are many issues for which the cooperatives can 
and should represent their members. But on this issue, farmers ought to 
speak for themselves.
  It is my hope that this legislation will help restore the confidence 
of the U.S. dairy farmer in dairy promotion. To achieve that 
confidence, farmers need to know that they have direct power over their 
representatives on the Board. This bill gives them that power.
  I welcome my colleague from Wisconsin, Senator Feingold, as an 
original cosponsor of this bill, and I am also pleased to join today as 
an original cosponsor of two pieces of legislation that he is 
introducing today, as well.
  Senator Feingold's two bills would make other needed improvements in 
the national dairy promotion program. Specifically, one bill would 
require that imported dairy products be subject to the same dairy 
promotion assessment as are paid on domestic dairy products today. The 
other would prohibit the practice of bloc voting by cooperatives for 
the purpose of any future farmer referenda regarding the National Dairy 
Board.
  I thank my colleague Senator Feingold for his efforts on these 
matters, and I believe that our three bills provide dairy promotion 
program reforms that are both complementary and necessary.
  I ask unanimous consent that the full text of the bill and summary be 
included in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                 S. 81

       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 Dairy Promotion 
     Reform Act of 1997''.

     SEC. 2. DAIRY VOTING REFORM.

       Section 113(b) of the Dairy Production Stabilization Act of 
     1983 (7 U.S.C. 4504(b)) is amended--
       (1) by designating the first and second sentences as 
     paragraphs (1) and (2), respectively;
       (2) by designating the third through fifth sentences as 
     paragraph (3);
       (3) by designating the sixth sentence as paragraph (4);
       (4) by designating the seventh and eighth sentences as 
     paragraph (5);
       (5) by designating the ninth sentence as paragraph (6);
       (6) in paragraph (1) (as so designated), by striking ``and 
     appointment'';
       (7) by striking paragraph (2) (as so designated) and 
     inserting the following:
       ``(2) Qualifications, nomination, and election of 
     members.--
       ``(A) Qualifications and election.--
       ``(i) In general.--Subject to clause (ii), each member of 
     the Board shall be a milk producer nominated in accordance 
     with subparagraph (B) and elected by a vote of producers 
     through a process established by the Secretary.
       ``(ii) Bloc voting.--In carrying out clause (i), the 
     Secretary shall not permit an organization certified under 
     section 114 to vote on behalf of the members of the 
     organization.
       ``(B) Nominations.--
       ``(i) Source.--Nominations shall be submitted by 
     organizations certified under section 114, or, if the 
     Secretary determines that a substantial number of milk 
     producers are not members of, or the interests of the 
     producers are not represented by, a certified organization, 
     from nominations submitted by the producers in the manner 
     authorized by the Secretary.
       ``(ii) Consultation with members.--In submitting 
     nominations, each certified organization shall demonstrate to 
     the satisfaction of the Secretary that the milk producers who 
     are members of the organization have been fully consulted in 
     the nomination process.'';
       (8) in the first sentence of paragraph (3) (as so 
     designated), by striking ``In making such appointments,'' and 
     inserting ``In establishing the process for the election of 
     members of the Board,''; and
       (9) in paragraph (4) (as so designated)--
       (A) by striking ``appointment'' and inserting ``election''; 
     and
       (B) by striking ``appointments'' and inserting 
     ``elections''.
                                                                    ____


              National Dairy Promotion Reform Act of 1997


                          Summary of the Bill

       The bill would amend the Dairy Production Stabilization Act 
     of 1983 to require that future members of the National Dairy 
     Board be elected directly by dairy producers, and not 
     appointed by the Secretary of Agriculture as they are 
     currently.
       The bill would also prohibit the practice of bloc voting of 
     members by producer cooperatives for the purposes of the 
     Board elections.
       However, cooperatives could continue to nominate members to 
     be on the ballot, as long as they adequately consult with 
     their membership in the nomination process.
       The explicit details of the election process would be 
     developed by the Secretary of Agriculture.
                                 ______
                                 
      By Mr. KOHL:
  S. 82. A bill to amend the Internal Revenue Code of 1986 to provide a 
credit against tax for employers who provide child care assistance for 
dependents of their employees, and for other purposes; to the Committee 
on Finance.


                     CHILD CARE INFRASTRUCTURE ACT

  Mr. KOHL. Mr. President, today I rise to introduce the Child Care 
Infrastructure Act. This legislation is designed to give incentives to 
private companies to get involved in the provision of quality child 
care. I introduced the bill as S. 2088 late last year, and I intend to 
make its passage this year one of my highest priorities.
  My bill responds to the challenges presented by the landmark welfare 
legislation enacted last Congress. And it responds to the fundamental 
changes in the American economy that have led to parents entering the 
work force in record numbers.
  The Child Care Infrastructure Act creates a tax credit for employers 
who get involved in increasing the supply of quality child care. The 
credit is limited to 50 percent of $150,000 per company per year. The 
credit will sunset after 3 years. The credit goes to employers who 
engage in activities like: Building and subsidizing an entire child 
care center on the site of a company or near it; participating, along 
with other businesses, in setting up and running a child care center 
jointly; contracting with a child care facility to provide a set number 
of places to employees--this gives existing centers the steady cash 
flow they need to survive, or it can give a startup center the steady 
income it needs to get off the ground; contracting with a resource and 
referral agency to provide services such as placement or the design of 
a network of local child care providers.
  This legislation responds to a great need, a great challenge, and a 
great opportunity. The need is to provide a safe and stimulating place 
for our youngest children to spend their time while their parents are 
at work. The challenge is to make the American workplace more 
productive by making it more responsive to the needs of the American 
family. And the opportunity is to take what we are learning about the 
importance of early childhood education and use it to help our children 
become the best educated adults of the 21st century.
  The need for quality child care is certainly apparent. As real wages 
have stagnated over the last decade, many families have adapted by 
having two wage earners per family. Also, over the same period, the 
number of children living in mother-only families has increased--in 
1950, 6 percent of all children lived in mother-only families; in 1994, 
that number was 24 percent. In my home State of Wisconsin, 67 percent 
of women with children under 6 years old are in the work force 
according to Children's Defense Fund. And in Milwaukee County, about 56 
percent of children under the age of 6 have both parents in

[[Page S461]]

the work force or their sole parent in the work force. That translates 
into about 67,600 children under the age of 6 in that county who right 
now are already in need of or in child care.
  With the passage of the welfare reform law, and the implementation of 
W-2, Wisconsin's welfare reform State plan, the need for child care 
will become even greater. A recent report done for the Community 
Coordinated Child Care of Milwaukee found that the implementation of W-
2 will lead to the need for over 8,000 new full-time child care slots 
in Milwaukee County alone.
  Wisconsin is not unique in facing this overwhelming shortage of child 
care slots. Across the Nation, States and communities are facing the 
same issue. Where are our youngest children going to spend the day 
while their parents are at work?
  This is not the sort of market shortage we can or should address 
haphazardly. There is nothing less at stake than the welfare of our 
children. Study after study has found the enormous importance of early 
childhood education and care--and by early education, the experts mean 
the education of 0 to 4 year olds. One University of Chicago researcher 
has claimed that intelligence appears to develop as much during the 
years 0 to 4 as it does from the years 4 to 18.
  If we are simply warehousing kids in these early years, we are going 
to not only hamper their ability to develop fulfilling and productive 
lives, but we are hurting ourselves. We are resigning ourselves to 
trying to solve educational and developmental problems--at great 
expense--for the rest of these children's lives.
  As obvious as this point may seem, the desperate need for quality 
early child care is not a problem that this Nation has addressed. As a 
Nation--and I mean Federal, State, local, and private resources--over 
the last 10 years, we have doubled our expenditures on educating 5 to 
25 year olds to $500 billion. Contrast that with the mere $4 billion we 
are spending on Head Start, and 95 percent of that is on children 3, 4, 
and 5 years old. Only $100 million out of $500 billion is spent on the 
period when the most significant development takes place--that's one-
fifth of one thousandth of what we spend on ages 5 through 25.
  Obviously, our investment in children has not kept up with what we 
now know about how children learn and develop in their earliest year.
  There is another reason to care about the supply of quality child 
care--especially for businesses to care about quality child care. 
Employees who are happy with their child care situations are better 
employees. They are more productive, have less absenteeism, and are 
more loyal to their company.
  Clearly, there is a shortage of quality child care, and equally 
clearly, there is a benefit to the private sector if they are involved 
in solving that shortage. The approach I take in my legislation is to 
try to encourage private businesses to undertake activities that would 
increase the supply of quality child care.
  The legislation gives flexibility to businesses that want to get 
involved in providing child care for their employee's dependents. 
Though the shortage of quality child care is definitely a national 
problem, it does have uniquely local solutions. What sort of child care 
infrastructure works best in a community is going to depend on the sort 
of work that community does--whether there are many part-time or odd 
hour shifts, whether the local economy has a few very large employers 
or a lot of small employers, or some mix. My legislation includes a tax 
incentive that would allow many different kinds of businesses to take 
advantage of it--and that would allow them to be as creative as 
possible.
  The 21st century economy will be one in which more of us are working, 
and more of us are trying to balance work and family. How well we 
adjust to that balance will determine how strong we are as an economy 
and as a Nation of families. My legislation is an attempt to encourage 
businesses to play an active role in this deeply important transition.
  In the 1950's, Federal, State, local governments, communities, and 
businesses banded together to build a highway system that is the most 
impressive in the world. Those roads allowed our economy to flourish 
and our people to move safely and quickly to work. In the 1990's, we 
need the same sort of national, comprehensive effort to build safe and 
affordable child care for our children. As more and more parents--of 
all income levels--move into the work force, they need access to 
quality child care just as much as their parents needed quality 
highways to drive to work. And if we are successful--and I plan to be 
successful--in the 21st century excellent child care will be as common 
as interstate highways.
  Child care is an investment that is good for children, good for 
business, good for our States, and good for the Nation. We need to 
involve every level of government--and private communities and private 
businesses--in building a child care infrastructure that is the best in 
the world. My legislation is a first, essential step toward this end.
  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. 82

       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 ``Child Care Infrastructure 
     Act of 1997''.

     SEC. 2. ALLOWANCE OF CREDIT FOR EMPLOYER EXPENSES FOR CHILD 
                   CARE ASSISTANCE.

       (a) In General.--Subpart D of part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 (relating to 
     business related credits) is amended by adding at the end the 
     following new section:

     ``SEC. 45D. EMPLOYER-PROVIDED CHILD CARE CREDIT.

       ``(a) In General.--For purposes of section 38, the 
     employer-provided child care credit determined under this 
     section for the taxable year is an amount equal to 50 percent 
     of the qualified child care expenditures of the taxpayer for 
     such taxable year.
       ``(b) Dollar Limitation.--The credit allowable under 
     subsection (a) for any taxable year shall not exceed 
     $150,000.
       ``(c) Definitions.--For purposes of this section--
       ``(1) Qualified child care expenditure.--The term 
     `qualified child care expenditure' means any amount paid or 
     incurred--
       ``(A) to acquire, construct, rehabilitate, or expand 
     property--
       ``(i) which is to be used as part of a qualified child care 
     facility of the taxpayer,
       ``(ii) with respect to which a deduction for depreciation 
     (or amortization in lieu of depreciation) is allowable, and
       ``(iii) which does not constitute part of the principal 
     residence (within the meaning of section 1034) of the 
     taxpayer or any employee of the taxpayer,
       ``(B) for the operating costs of a qualified child care 
     facility of the taxpayer, including costs related to the 
     training of employees, to scholarship programs, and to the 
     providing of increased compensation to employees with higher 
     levels of child care training,
       ``(C) under a contract with a qualified child care facility 
     to provide child care services to employees of the taxpayer, 
     or
       ``(D) under a contract to provide child care resource and 
     referral services to employees of the taxpayer.
       ``(2) Qualified child care facility.--
       ``(A) In general.--The term `qualified child care facility' 
     means a facility--
       ``(i) the principal use of which is to provide child care 
     assistance, and
       ``(ii) which meets the requirements of all applicable laws 
     and regulations of the State or local government in which it 
     is located, including, but not limited to, the licensing of 
     the facility as a child care facility.
     Clause (i) shall not apply to a facility which is the 
     principal residence (within the meaning of section 1034) of 
     the operator of the facility.
       ``(B) Special rules with respect to a taxpayer.--A facility 
     shall not be treated as a qualified child care facility with 
     respect to a taxpayer unless--
       ``(i) enrollment in the facility is open to employees of 
     the taxpayer during the taxable year,
       ``(ii) the facility is not the principal trade or business 
     of the taxpayer unless at least 30 percent of the enrollees 
     of such facility are dependents of employees of the taxpayer, 
     and
       ``(iii) the use of such facility (or the eligibility to use 
     such facility) does not discriminate in favor of employees of 
     the taxpayer who are highly compensated employees (within the 
     meaning of section 414(q)).
       ``(d) Recapture of Acquisition and Construction Credit.--
       ``(1) In general.--If, as of the close of any taxable year, 
     there is a recapture event with respect to any qualified 
     child care facility of the taxpayer, then the tax of the 
     taxpayer under this chapter for such taxable year shall be 
     increased by an amount equal to the product of--
       ``(A) the applicable recapture percentage, and
       ``(B) the aggregate decrease in the credits allowed under 
     section 38 for all prior taxable years which would have 
     resulted if the qualified child care expenditures of the 
     taxpayer

[[Page S462]]

     described in subsection (c)(1)(A) with respect to such 
     facility had been zero.
       ``(2) Applicable recapture percentage.--
       ``(A) In general.--For purposes of this subsection, the 
     applicable recapture percentage shall be determined from the 
     following table:

                                                         The applicable
                                                              recapture
                                    ``If the recapture evpercentage is:
    Years 1-3....................................................100   
    Year 4........................................................85   
    Year 5........................................................70   
    Year 6........................................................55   
    Year 7........................................................40   
    Year 8........................................................25   
    Years 9 and 10................................................10   
    Years 11 and thereafter........................................0.  
       ``(B) Years.--For purposes of subparagraph (A), year 1 
     shall begin on the first day of the taxable year in which the 
     qualified child care facility is placed in service by the 
     taxpayer.
       ``(3) Recapture event defined.--For purposes of this 
     subsection, the term `recapture event' means--
       ``(A) Cessation of operation.--The cessation of the 
     operation of the facility as a qualified child care facility.
       ``(B) Change in ownership.--
       ``(i) In general.--Except as provided in clause (ii), the 
     disposition of a taxpayer's interest in a qualified child 
     care facility with respect to which the credit described in 
     subsection (a) was allowable.
       ``(ii) Agreement to assume recapture liability.--Clause (i) 
     shall not apply if the person acquiring such interest in the 
     facility agrees in writing to assume the recapture liability 
     of the person disposing of such interest in effect 
     immediately before such disposition. In the event of such an 
     assumption, the person acquiring the interest in the facility 
     shall be treated as the taxpayer for purposes of assessing 
     any recapture liability (computed as if there had been no 
     change in ownership).
       ``(4) Special rules.--
       ``(A) Tax benefit rule.--The tax for the taxable year shall 
     be increased under paragraph (1) only with respect to credits 
     allowed by reason of this section which were used to reduce 
     tax liability. In the case of credits not so used to reduce 
     tax liability, the carryforwards and carrybacks under section 
     39 shall be appropriately adjusted.
       ``(B) No credits against tax.--Any increase in tax under 
     this subsection shall not be treated as a tax imposed by this 
     chapter for purposes of determining the amount of any credit 
     under subpart A, B, or D of this part.
       ``(C) No recapture by reason of casualty loss.--The 
     increase in tax under this subsection shall not apply to a 
     cessation of operation of the facility as a qualified child 
     care facility by reason of a casualty loss to the extent such 
     loss is restored by reconstruction or replacement within a 
     reasonable period established by the Secretary.
       ``(e) Special Rules.--For purposes of this section--
       ``(1) Aggregation rules.--All persons which are treated as 
     a single employer under subsections (a) and (b) of section 52 
     shall be treated as a single taxpayer.
       ``(2) Pass-thru in the case of estates and trusts.--Under 
     regulations prescribed by the Secretary, rules similar to the 
     rules of subsection (d) of section 52 shall apply.
       ``(3) Allocation in the case of partnerships.--In the case 
     of partnerships, the credit shall be allocated among partners 
     under regulations prescribed by the Secretary.
       ``(f) No Double Benefit.--
       ``(1) Reduction in basis.--For purposes of this subtitle--
       ``(A) In general.--If a credit is determined under this 
     section with respect to any property by reason of 
     expenditures described in subsection (c)(1)(A), the basis of 
     such property shall be reduced by the amount of the credit so 
     determined.
       ``(B) Certain dispositions.--If during any taxable year 
     there is a recapture amount determined with respect to any 
     property the basis of which was reduced under subparagraph 
     (A), the basis of such property (immediately before the event 
     resulting in such recapture) shall be increased by an amount 
     equal to such recapture amount. For purposes of the preceding 
     sentence, the term `recapture amount' means any increase in 
     tax (or adjustment in carrybacks or carryovers) determined 
     under subsection (d).
       ``(2) Other deductions and credits.--No deduction or credit 
     shall be allowed under any other provision of this chapter 
     with respect to the amount of the credit determined under 
     this section.
       ``(g) Termination.--This section shall not apply to taxable 
     years beginning after December 31, 1999.''
       (b) Conforming Amendments.--
       (1) Section 38(b) of the Internal Revenue Code of 1986 is 
     amended--
       (A) by striking out ``plus'' at the end of paragraph (11),
       (B) by striking out the period at the end of paragraph 
     (12), and inserting a comma and ``plus'', and
       (C) by adding at the end the following new paragraph:
       ``(13) the employer-provided child care credit determined 
     under 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. Employer-provided child care credit.''

       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1996.
                                 ______
                                 
      Mr. AKAKA:
  S. 83. A bill to consolidate and revise the authority of the 
Secretary of Agriculture relating to plant protection and quarantine, 
and for other purposes; to the Committee on Agriculture, Nutrition, and 
Forestry.


                          plant protection act

  Mr. AKAKA.
  Mr. President, today I am introducing the Plant Protection Act, a 
comprehensive consolidation of Federal laws governing plant pests and 
diseases, noxious weeds, and the plant products that harbor pests and 
weeds.
  During the past century, numerous Federal laws were enacted to 
address problems caused by plant pests and noxious weeds. While some of 
these laws continue to protect agriculture and the environment, others 
are ambiguous, outmoded, or difficult to enforce. The Nation's 
agricultural community, as well as private, state, and Federal land 
managers, cannot afford the continuing uncertainty caused by the 
hodgepodge of Federal plant pest laws, some of which were enacted 
before World War I. Legislation to revise and consolidate federal plant 
pest laws is urgently needed and long overdue.
  Agriculture Secretary Dan Glickman highlighted the problem created by 
federal plant protection laws when he told Congress that ``in some 
instances, it is unclear which statutes should be relied upon for 
authority. It is difficult to explain to the public why some apparently 
similar situations have to be treated differently because different 
authorities are involved.''
  A 1993 report issued by the Office of Technology Assessment reached 
the same conclusion. The OTA found that Federal and State statutes, 
regulations, and programs are not keeping pace with new and spreading 
alien pests.
  The Plant Protection Act will address many of these problems. The 
bill I introduced today will enhance the Federal Government's ability 
to combat weeds, plant pests, and diseases, and protect our farms, 
environment, and economy from the harm they cause.
  Plant pests are a problem of monumental proportions. Insects such as 
Mediterranean fruit fly, fire ant, and gypsy moth plague America's 
farmers and cause billions of dollars in crop losses annually. 
Destructive plant diseases include chestnut blight, which wiped out the 
most common tree of our Appalachian forests, elm blight, which 
destroyed many splendid trees throughout our towns and cities, and the 
white pine blister rust, which eliminated western white pine as a 
source of timber for several decades.
  Alien weeds also cause havoc, and nowhere is this problem more 
apparent than in Hawaii. Because our climate is so accommodating, 
Hawaii is heaven-on-earth for weeds. Weeds such as gorse, ivy gourd, 
miconia, and banana poka are ravaging our tropical and subtropical 
landscape.
  Invasive noxious weeds do more than just compete with domestic 
species. They transform the landscape, change the rules by which native 
plants and animals live, and undermine the economic and environmental 
health of the areas they infest.
  Alien weeds fuel grass and forest fires, promote soil erosion, and 
destroy critical water resources. They significantly increase the cost 
of farming and ranching. Noxious weeds destroy or alter natural 
habitat, damage waterways and powerlines, and depress property values. 
Some are toxic to humans, livestock, and wildlife.
  Alien weeds are biological pollution, pure and simple. Due to the 
worldwide growth in trade and travel we are witnessing an explosion in 
the number of foreign weeds that plague our Nation.
  Just how big is this problem? Let me offer an example. Last year, on 
Federal lands alone, we lost 4,500 acres each day to noxious weeds. 
That's a million-and-a-half acres a year, or an area the size of 
Delaware. By comparison, forest fires--one of the most fearsome natural 
disasters--claimed only half as many Federal acres as weeds.
  Noxious weeds have also been called biological wildfire, and for good 
reason. Forests, national parks, recreation areas, urban landscapes, 
wilderness, grasslands, waterways, farm and range land across the 
Nation are overrun by noxious weeds.

[[Page S463]]

  Farmers experience the greatest economic impact of this problem. The 
Office of Technology Assessment estimates that exotic weeds cost U.S. 
farmers $3.6 to $5.4 billion annually due to reduced yields, crops of 
poor quality, increased herbicide use, and other weed control costs. 
Noxious weeds are a significant drain on farm productivity.
  Despite the magnitude of this problem, few people get alarmed about 
weeds. The issue certainly doesn't appear on the cover of Time or 
Newsweek. Perhaps if kudzu, a weed known as the ``vine that ate the 
South,'' attacked the Capitol grounds, weeds would finally get the 
attention they deserve.
  Several of these foreign weeds are truly the King Kong of plants. 
Some are 50 feet tall. Others have 4 inch thorns. Some have roots 25 
feet deep, and others produce 20 million seeds each year.
  My least-favorite weed is the tropical soda apple, a thorny plant 
with a sweet-sounding name. It bears small yellow and green fruit. But, 
like fruit from the forbidden tree, tropical soda apples are a source 
of great strife.
  This import from Brazil has inch-long spikes covering its stems and 
leaves. The fruit is a favorite among cattle, and when they pass the 
seeds in their manure new weeds quickly sprout. As cattle are shipped 
from state to state with soda apple seeds in their stomachs you can 
easily imagine how the problem rapidly spreads. Tropical soda apple is 
a weed control nightmare.
  The saga of tropical soda apple prompted me to introduce S. 690, the 
Federal Noxious Weed Improvement Act during the 104th Congress. S. 690 
would grant the Secretary of Agriculture emergency powers to restrict 
the entry of a foreign weed until formal action can be taken to place 
it on the noxious weed list. This legislation would prevent future 
tropical soda apples from taking root.
  I have incorporated the text of S. 690 into section 4 of the Plant 
Protection Act. Other provisions of the legislation I have introduced 
today are drawn from USDA recommendations for consolidating weed and 
plant pest authorities.
  Because the U.S. Department of Agriculture's authority over plant 
pests and noxious weeds is dispersed throughout many statutes, Federal 
efforts to protect agriculture, forestry, and our environment are 
seriously hindered. To enable the Department to respond more 
efficiently to this challenge, the Plant Protection Act will 
consolidate these authorities into a single statute.
  I ask unanimous consent that the text of the Plant Protection Act be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                 S. 83

       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 ``Plant Protection Act''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) the detection, control, eradication, suppression, 
     prevention, and retardation of the spread of plant pests and 
     noxious weeds is necessary for the protection of the 
     agriculture, environment, and economy of the United States;
       (2) biological control--
       (A) is often a desirable, low-risk means of ridding crops 
     and other plants of plant pests and noxious weeds; and
       (B) should be facilitated by the Secretary of Agriculture, 
     Federal agencies, and States, whenever feasible;
       (3) markets could be severely impacted by the introduction 
     or spread of pests or noxious weeds into or within the United 
     States;
       (4) the unregulated movement of plant pests, noxious weeds, 
     plants, biological control organisms, plant products, and 
     articles capable of harboring plant pests or noxious weeds 
     would present an unacceptable risk of introducing or 
     spreading plant pests or noxious weeds;
       (5) the existence on any premises in the United States of a 
     plant pest or noxious weed new to or not known to be widely 
     prevalent in or distributed within and throughout the United 
     States could threaten crops, other plants, plant products, 
     and the natural resources and environment of the United 
     States and burden interstate commerce or foreign commerce; 
     and
       (6) all plant pests, noxious weeds, plants, plant products, 
     or articles capable of harboring plant pests or noxious weeds 
     regulated under this Act are in or affect interstate commerce 
     or foreign commerce.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Article.--The term ``article'' means any material or 
     tangible object that could harbor a pest, disease, or noxious 
     weed.
       (2) Biological control organism.--The term ``biological 
     control organism'' means a biological entity, as defined by 
     the Secretary, that suppresses or decreases the population of 
     another biological entity.
       (3) Enter.--The term ``enter'' means to move into the 
     commerce of the United States.
       (4) Entry.--The term ``entry'' means the act of movement 
     into the commerce of the United States.
       (5) Export.--The term ``export'' means to move from the 
     United States to any place outside the United States.
       (6) Exportation.--The term ``exportation'' means the act of 
     movement from the United States to any place outside the 
     United States.
       (7) Import.--The term ``import'' means to move into the 
     territorial limits of the United States.
       (8) Importation.--The term ``importation'' means the act of 
     movement into the territorial limits of the United States.
       (9) Indigenous.--The term ``indigenous'' means a plant 
     species found naturally as part of a natural habitat in a 
     geographic area in the United States.
       (10) Interstate.--The term ``interstate'' means from 1 
     State into or through any other State, or within the District 
     of Columbia, Guam, the Virgin Islands of the United States, 
     or any other territory or possession of the United States.
       (11) Interstate commerce.--The term ``interstate commerce'' 
     means trade, traffic, movement, or other commerce--
       (A) between a place in a State and a point in another 
     State;
       (B) between points within the same State but through any 
     place outside the State; or
       (C) within the District of Columbia, Guam, the Virgin 
     Islands of the United States, or any other territory or 
     possession of the United States.
       (12) Means of conveyance.--The term ``means of conveyance'' 
     means any personal property or means used for or intended for 
     use for the movement of any other personal property.
       (13) Move.--The term ``move'' means to--
       (A) carry, enter, import, mail, ship, or transport;
       (B) aid, abet, cause, or induce the carrying, entering, 
     importing, mailing, shipping, or transporting;
       (C) offer to carry, enter, import, mail, ship, or 
     transport;
       (D) receive to carry, enter, import, mail, ship, or 
     transport; or
       (E) allow any of the activities referred to this paragraph.
       (14) Noxious weed.--The term ``noxious weed'' means a 
     plant, seed, reproductive part, or propagative part of a 
     plant that--
       (A) can directly or indirectly injure or cause damage to a 
     crop, other useful plant, plant product, livestock, poultry, 
     or other interest of agriculture (including irrigation), 
     navigation, public health, or natural resources or 
     environment of the United States; and
       (B) belongs to a species that is not indigenous to the 
     geographic area or ecosystem in which it is causing injury or 
     damage.
       (15) Permit.--The term ``permit'' means a written or oral 
     authorization (including electronic authorization) by the 
     Secretary to move a plant, plant product, biological control 
     organism, plant pest, noxious weed, or article under 
     conditions prescribed by the Secretary.
       (16) Person.--The term ``person'' means an individual, 
     partnership, corporation, association, joint venture, or 
     other legal entity.
       (17) Plant.--The term ``plant'' means a plant or plant part 
     for or capable of propagation, including a tree, shrub, vine, 
     bulb, root, pollen, seed, tissue culture, plantlet culture, 
     cutting, graft, scion, and bud.
       (18) Plant pest.--The term ``plant pest'' means--
       (A) a living stage of a protozoan, animal, bacteria, 
     fungus, virus, viroid, infection agent, or parasitic plant 
     that can directly or indirectly injure or cause damage to, or 
     cause disease in, a plant or plant product; or
       (B) an article that is similar to or allied with an article 
     referred to in subparagraph (A).
       (19) Plant product.--The term ``plant product'' means a 
     flower, fruit, vegetable, root, bulb, seed, or other plant 
     part that is not considered a plant or a manufactured or 
     processed plant or plant part.
       (20) Secretary.--The term ``Secretary'' means the Secretary 
     of Agriculture.
       (21) State.--The term ``State'' means each of the several 
     States of the United States, the District of Columbia, the 
     Commonwealth of Puerto Rico, the Virgin Islands, Guam, 
     American Samoa, the Commonwealth of the Northern Mariana 
     Islands, and any other territory or possession of the United 
     States.
       (22) United states.--The term ``United States'', when used 
     in a geographical sense, means all of the States.

     SEC. 4. RESTRICTIONS ON MOVEMENT OF PLANTS, PLANT PRODUCTS, 
                   BIOLOGICAL CONTROL ORGANISMS, PLANT PESTS, 
                   NOXIOUS WEEDS, ARTICLES, AND MEANS OF 
                   CONVEYANCE.

       (a) In General.--The Secretary may prohibit or restrict the 
     importation, entry, exportation, or movement in interstate 
     commerce of a plant, plant product, biological control 
     organism, plant pest, noxious weed,

[[Page S464]]

     article, or means of conveyance if the Secretary determines 
     that the prohibition or restriction is necessary to prevent 
     the introduction into the United States or the interstate 
     dissemination of a plant pest or noxious weed.
       (b) Mail.--
       (1) In general.--No person shall convey in the mail, or 
     deliver from a post office or by a mail carrier, a letter or 
     package containing a plant pest, biological control organism, 
     or noxious weed unless it is mailed in accordance with such 
     regulations as the Secretary may issue to prevent the 
     introduction into the United States, or interstate 
     dissemination, of plant pests or noxious weeds.
       (2) Postal employees.--This subsection shall not apply to 
     an employee of the United States in the performance of the 
     duties of the employee in handling the mail.
       (3) Postal laws and regulations.--Nothing in this 
     subsection authorizes a person to open a mailed letter or 
     other mailed sealed matter except in accordance with the 
     postal laws and regulations.
       (c) State Restrictions on Noxious Weeds.--No person shall 
     move into a State, or sell or offer for sale in the State, a 
     plant species the sale of which is prohibited by the State 
     because the plant species is designated as a noxious weed or 
     has a similar designation.
       (d) Administration.--The Secretary may issue regulations to 
     carry out this section, including regulations requiring that 
     a plant, plant product, biological control organism, plant 
     pest, noxious weed, article, or means of conveyance imported, 
     entered, to be exported, or moved in interstate commerce--
       (1) be accompanied by a permit issued by the Secretary 
     prior to the importation, entry, exportation, or movement in 
     interstate commerce;
       (2) be accompanied by a certificate of inspection issued in 
     a manner and form required by the Secretary or by an 
     appropriate official of the country or State from which the 
     plant, plant product, biological control organism, plant 
     pest, noxious weed, article, or means of conveyance is to be 
     moved;
       (3) be subject to remedial measures the Secretary 
     determines to be necessary to prevent the spread of plant 
     pests; and
       (4) in the case of a plant or biological control organism, 
     be grown or handled under post-entry quarantine conditions by 
     or under the supervision of the Secretary for the purpose of 
     determining whether the plant or biological control organism 
     may be infested with a plant pest or noxious weed, or may be 
     a plant pest or noxious weed.
       (e) List of Restricted Noxious Weeds.--
       (1) Publication.--The Secretary may publish, by regulation, 
     a list of noxious weeds that are prohibited or restricted 
     from entering the United States or that are subject to 
     restrictions on interstate movement within the United States.
       (2) Petitions to add or remove plant species.--
       (A) In general.--A person may petition the Secretary to add 
     or remove a plant species from the list required under 
     paragraph (1).
       (B) Action on petition.--The Secretary shall--
       (i) act on a petition not later than 1 year after receipt 
     of the petition by the Secretary; and
       (ii) notify the petitioner of the final action the 
     Secretary takes on the petition.
       (C) Basis for determination.--The Secretary's determination 
     on the petition shall be based on sound science, available 
     data and technology, and information received from public 
     comment.
       (D) Inclusion on list.--To include a plant species on the 
     list, the Secretary must determine that--
       (i) the plant species is nonindigenous to the geographic 
     region or ecosystem in which the species is spreading and 
     causing injury; and
       (ii) the dissemination of the plant in the United States 
     may reasonably be expected to interfere with natural 
     resources, agriculture, forestry, or a native ecosystem of a 
     geographic region, or management of an ecosystem, or cause 
     injury to the public health.
       (f) Conforming Amendments.--
       (1) Section 102 of the Act of September 21, 1944 (58 Stat. 
     735, chapter 412; 7 U.S.C. 147a) is amended by striking 
     ``(a)'' in subsection (a) and all that follows through 
     ``(2)'' in subsection (f)(2).
       (2) The matter under the heading ``Enforcement of the 
     Plant-quarantine Act:'' under the heading ``Miscellaneous'' 
     of the Act of March 4, 1915 (commonly known as the ``Terminal 
     Inspection Act'') (38 Stat. 1113, chapter 144; 7 U.S.C. 166) 
     is amended--
       (A) in the second paragraph--
       (i) by striking ``plants and plant products'' each place it 
     appears and inserting ``plants, plant products, animals, and 
     other organisms'';
       (ii) by striking ``plants or plant products'' each place it 
     appears and inserting ``plants, plant products, animals, or 
     other organisms'';
       (iii) by striking ``plant-quarantine law or plant-
     quarantine regulation'' each place it appears and inserting 
     ``plant-quarantine or other law or plant-quarantine 
     regulation'';
       (iv) in the second sentence--

       (I) by striking ``Upon his approval of said list, in whole 
     or in part, the Secretary of Agriculture'' and inserting ``On 
     the receipt of the list by the Secretary of Agriculture, the 
     Secretary''; and
       (II) by striking ``said approved lists'' and inserting 
     ``the lists'';

       (v) by inserting after the second sentence the following: 
     ``On the request of a representative of a State, a Federal 
     agency shall act on behalf of the State to obtain a warrant 
     to inspect mail to carry out this paragraph.''; and
       (vi) in the last sentence, by striking ``be forward'' and 
     inserting ``be forwarded''; and
       (B) in the third paragraph, by striking ``plant or plant 
     product'' and inserting ``plant, plant product, animal, or 
     other organism''.

     SEC. 5. NOTIFICATION OF ARRIVAL AND INSPECTION BEFORE 
                   MOVEMENT OF PLANTS, PLANT PRODUCTS, BIOLOGICAL 
                   CONTROL ORGANISMS, PLANT PESTS, NOXIOUS WEEDS, 
                   ARTICLES, AND MEANS OF CONVEYANCE.

       (a) Notification and Holding by Secretary of the 
     Treasury.--
       (1) In general.--Except as provided in paragraph (2), the 
     Secretary of the Treasury shall--
       (A) promptly notify the Secretary of the arrival of a 
     plant, plant product, biological control organism, plant 
     pest, noxious weed, article, or means of conveyance at a port 
     of entry; and
       (B) hold the plant, plant product, biological control 
     organism, plant pest, noxious weed, article, or means of 
     conveyance until inspected and authorized for entry into or 
     transit movement through the United States, or otherwise 
     released by the Secretary.
       (2) Application.--Paragraph (1) shall not apply to a plant, 
     plant product, biological control organism, plant pest, 
     noxious weed, article, or means of conveyance that is 
     imported from a country or region of countries that the 
     Secretary designates as exempt from paragraph (1), pursuant 
     to such regulations as the Secretary may issue.
       (b) Notification by Responsible Person.--The person 
     responsible for a plant, plant product, biological control 
     organism, plant pest, noxious weed, article, or means of 
     conveyance subject to subsection (a) shall promptly, on 
     arrival at the port of entry and before the plant, plant 
     product, biological control organism, plant pest, noxious 
     weed, article, or means of conveyance is moved from the port 
     of entry, notify the Secretary or, at the Secretary's 
     direction, the proper official of the State to which the 
     plant, plant product, biological control organism, plant 
     pest, noxious weed, article, or means of conveyance is 
     destined, or both, as the Secretary may prescribe, of--
       (1) the name and address of the consignee;
       (2) the nature and quantity of the plant, plant product, 
     biological control organism, plant pest, noxious weed, 
     article, or means of conveyance proposed to be moved; and
       (3) the country and locality where the plant, plant 
     product, biological control organism, plant pest, noxious 
     weed, article, or means of conveyance was grown, produced, or 
     located.
       (c) No Movement Without Inspection and Authorization.--No 
     person shall move from the port of entry or interstate an 
     imported plant, plant product, biological control organism, 
     plant pest, noxious weed, article, or means of conveyance 
     unless the imported plant, plant product, biological control 
     organism, plant pest, noxious weed, article, or means of 
     conveyance has been inspected and authorized for entry into 
     or transit movement through the United States, or otherwise 
     released by the Secretary.

     SEC. 6. REMEDIAL MEASURES OR DISPOSAL FOR PLANT PESTS OR 
                   NOXIOUS WEEDS; EXTRAORDINARY EMERGENCY.

       (a) Remedial Measures or Disposal for Plant Pests or 
     Noxious Weeds.--
       (1) In general.--Except as provided in subsection (c), if 
     the Secretary considers it necessary to prevent the 
     dissemination of a plant pest or noxious weed new to or not 
     known to be widely prevalent or distributed within and 
     throughout the United States, the Secretary may hold, seize, 
     quarantine, treat, apply other remedial measures to, destroy, 
     or otherwise dispose of--
       (A) a plant, plant product, biological control organism, 
     plant pest, noxious weed, article, or means of conveyance 
     that is moving into or through the United States or 
     interstate and that the Secretary has reason to believe is 
     infested with the plant pest or noxious weed;
       (B) a plant, plant product, biological control organism, 
     plant pest, noxious weed, article, or means of conveyance 
     that has moved into the United States or interstate and that 
     the Secretary has reason to believe was infested with the 
     plant pest or noxious weed at the time of the movement;
       (C) a plant, plant product, biological control organism, 
     plant pest, noxious weed, article, or means of conveyance 
     that is moving into or through the United States or 
     interstate, or has moved into the United States or 
     interstate, in violation of this Act;
       (D) a plant, plant product, biological control organism, 
     plant pest, noxious weed, article, or means of conveyance 
     that has not been maintained in compliance with a post-entry 
     quarantine requirement;
       (E) a progeny of a plant, plant product, biological control 
     organism, plant pest, or noxious weed that is moving into or 
     through the United States or interstate, or has moved into 
     the United States or interstate, in violation of this Act; or
       (F) a plant, plant product, biological control organism, 
     plant pest, noxious weed, article, or means of conveyance 
     that is infested

[[Page S465]]

     with a plant pest or noxious weed that the Secretary has 
     reason to believe was moved into the United States or in 
     interstate commerce.
       (2) Ordering treatment or disposal by the owner.--Except as 
     provided in subsection (c), the Secretary may order the owner 
     of a plant, plant product, biological control organism, plant 
     pest, noxious weed, article, or means of conveyance subject 
     to disposal under paragraph (1), or the owner's agent, to 
     treat, apply other remedial measures to, destroy, or 
     otherwise dispose of the plant, plant product, biological 
     control organism, plant pest, noxious weed, article, or means 
     of conveyance, without cost to the Federal Government and in 
     a manner the Secretary considers appropriate.
       (3) Classification system for noxious weeds.--
       (A) In general.--To facilitate control of noxious weeds, 
     the Secretary shall develop a classification system to 
     describe the status and action levels for noxious weeds.
       (B) Categories.--The classification system shall 
     differentiate between--
       (i) noxious weeds that are not known to be introduced into 
     the United States;
       (ii) noxious weeds that are not known to be widely 
     disseminated within the United States;
       (iii) noxious weeds that are widely distributed within the 
     United States; and
       (iv) noxious weeds that are not indigenous, including 
     native plant species that are invasive in limited geographic 
     areas within the United States.
       (C) Other categories.--In addition to the categories 
     required under subparagraph (B), the Secretary may establish 
     other categories of noxious weeds for the system.
       (D) Varying levels of regulation and control.--The 
     Secretary shall develop varying levels of regulation and 
     control appropriate to each of the categories of the system.
       (E) Application of regulations.--The regulations issued to 
     carry out this paragraph shall apply, as the Secretary 
     considers appropriate, to--
       (i) exclude a noxious weed;
       (ii) prevent further dissemination of a noxious weed 
     through movement or commerce;
       (iii) establish mandatory controls for a noxious weed; or
       (iv) designate a noxious weed as warranting control 
     efforts.
       (F) Revisions.--The Secretary shall revise the 
     classification system, and the placement of individual 
     noxious weeds within the system, in response to changing 
     circumstances.
       (G) Integrated management plans.--In conjunction with the 
     classification system, the Secretary may develop an 
     integrated management plan for a noxious weed for the 
     geographic region or ecological range of the United States 
     where the noxious weed is found or to which the noxious weed 
     may spread.
       (b) Extraordinary Emergencies.--
       (1) In general.--Subject to paragraph (2), if the Secretary 
     determines that an extraordinary emergency exists because of 
     the presence of a plant pest or noxious weed new to or not 
     known to be widely prevalent in or distributed within and 
     throughout the United States and that the presence of the 
     plant pest or noxious weed threatens a crop, other plant, 
     plant product, or the natural resources or environment of the 
     United States, the Secretary may--
       (A) hold, seize, quarantine, treat, apply other remedial 
     measures to, destroy, or otherwise dispose of, a plant, plant 
     product, biological control organism, plant pest, noxious 
     weed, article, or means of conveyance that the Secretary has 
     reason to believe is infested with the plant pest or noxious 
     weed;
       (B) quarantine, treat, or apply other remedial measures to 
     a premises, including a plant, plant product, biological 
     control organism, article, or means of conveyance on the 
     premises, that the Secretary has reason to believe is 
     infested with the plant pest or noxious weed;
       (C) quarantine a State or portion of a State in which the 
     Secretary finds the plant pest or noxious weed, or a plant, 
     plant product, biological control organism, article, or means 
     of conveyance that the Secretary has reason to believe is 
     infested with the plant pest or noxious weed; or
       (D) prohibit or restrict the movement within a State of a 
     plant, plant product, biological control organism, article, 
     or means of conveyance if the Secretary determines that the 
     prohibition or restriction is necessary to prevent the 
     dissemination of the plant pest or noxious weed or to 
     eradicate the plant pest or noxious weed.
       (2) Requirements for action.--
       (A) Inadequate state measures.--After review and 
     consultation with the Governor or other appropriate official 
     of the State, the Secretary may take action under this 
     subsection only on a finding that the measures being taken by 
     the State are inadequate to eradicate the plant pest or 
     noxious weed.
       (B) Notice to state and public.--Before taking any action 
     in a State under this subsection, the Secretary shall--
       (i) notify the Governor or another appropriate official of 
     the State;
       (ii) issue a public announcement; and
       (iii) except as provided in subparagraph (C), publish in 
     the Federal Register a statement of--

       (I) the Secretary's findings;
       (II) the action the Secretary intends to take;
       (III) the reason for the intended action; and
       (IV) if practicable, an estimate of the anticipated 
     duration of the extraordinary emergency.

       (C) Notice after action.--If it is not practicable to 
     publish a statement in the Federal Register under 
     subparagraph (B) prior to taking an action under this 
     subsection, the Secretary shall publish the statement in the 
     Federal Register within a reasonable period of time, not to 
     exceed 10 business days, after commencement of the action.
       (3) Compensation.--
       (A) In general.--The Secretary may pay compensation to a 
     person for economic losses incurred by the person as a result 
     of action taken by the Secretary under paragraph (1).
       (B) Final determination.--The determination by the 
     Secretary of the amount of any compensation paid under this 
     subsection shall be final and shall not be subject to 
     judicial review.
       (c) Least Drastic Action to Prevent Dissemination.--No 
     plant, plant product, biological control organism, article, 
     or means of conveyance shall be destroyed, exported, or 
     returned to the shipping point of origin, or ordered to be 
     destroyed, exported, or returned to the shipping point of 
     origin under this section unless, in the opinion of the 
     Secretary, there is no less drastic action that is feasible, 
     and that would be adequate, to prevent the dissemination of a 
     plant pest or noxious weed new to or not known to be widely 
     prevalent or distributed within and throughout the United 
     States.
       (d) Compensation of Owner for Unauthorized Disposal.--
       (1) In general.--The owner of a plant, plant product, 
     biological control organism, article, or means of conveyance 
     destroyed or otherwise disposed of by the Secretary under 
     this section may bring an action against the United States in 
     the United States District Court of the District of Columbia, 
     not later than 1 year after the destruction or disposal, and 
     recover just compensation for the destruction or disposal of 
     the plant, plant product, biological control organism, 
     article, or means of conveyance (not including compensation 
     for loss due to delays incident to determining eligibility 
     for importation, entry, exportation, movement in interstate 
     commerce, or release into the environment) if the owner 
     establishes that the destruction or disposal was not 
     authorized under this Act.
       (2) Source for payments.--A judgment rendered in favor of 
     the owner shall be paid out of the money in the Treasury 
     appropriated for plant pest control activities of the 
     Department of Agriculture.

     SEC. 7. INSPECTIONS, SEIZURES, AND WARRANTS.

       (a) In General.--Consistent with guidelines approved by the 
     Attorney General, the Secretary may--
       (1) stop and inspect, without a warrant, a person or means 
     of conveyance moving into the United States to determine 
     whether the person or means of conveyance is carrying a 
     plant, plant product, biological control organism, or article 
     regulated under this Act or is moving subject to this Act;
       (2) stop and inspect, without a warrant, a person or means 
     of conveyance moving in interstate commerce on probable cause 
     to believe that the person or means of conveyance is carrying 
     a plant, plant product, biological control organism, or 
     article regulated under this Act or is moving subject to this 
     Act;
       (3) stop and inspect, without a warrant, a person or means 
     of conveyance moving in interstate commerce from or within a 
     State, portion of a State, or premises quarantined under 
     section 6(b) on probable cause to believe that the person or 
     means of conveyance is carrying any plant, plant product, 
     biological control organism, or article regulated under this 
     Act or is moving subject to this Act; and
       (4) enter, with a warrant, a premises in the United States 
     for the purpose of making inspections and seizures under this 
     Act.
       (b) Warrants.--
       (1) In general.--A United States judge, a judge of a court 
     of record in the United States, or a United States magistrate 
     judge may, within the judge's or magistrate's jurisdiction, 
     on proper oath or affirmation showing probable cause to 
     believe that there is on certain premises a plant, plant 
     product, biological control organism, article, facility, or 
     means of conveyance regulated under this Act, issue a warrant 
     for entry on the premises to make an inspection or seizure 
     under this Act.
       (2) Execution.--The warrant may be executed by the 
     Secretary or a United States Marshal.

     SEC. 8. COOPERATION.

       (a) In General.--To carry out this Act, the Secretary may 
     cooperate with--
       (1) other Federal agencies;
       (2) States or political subdivisions of States;
       (3) national, State, or local associations;
       (4) national governments;
       (5) local governments of other nations;
       (6) international organizations;
       (7) international associations; and
       (8) other persons.
       (b) Responsibility.--The individual or entity cooperating 
     with the Secretary shall be responsible for conducting the 
     operations or taking measures on all land and property within 
     the foreign country or State, other than land and property 
     owned or controlled by the United States, and for other 
     facilities and means determined by the Secretary.
       (c) Transfer of Biological Control Methods.--At the request 
     of a Federal or

[[Page S466]]

     State land management agency, the Secretary may transfer to 
     the agency biological control methods utilizing biological 
     control organisms against plant pests or noxious weeds.
       (d) Improvement of Plants, Plant Products, and Biological 
     Control Organisms.--The Secretary may cooperate with State 
     authorities in the administration of regulations for the 
     improvement of plants, plant products, and biological control 
     organisms.

     SEC. 9. PHYTOSANITARY CERTIFICATE FOR EXPORTS.

       The Secretary may certify a plant, plant product, or 
     biological control organism as free from plant pests and 
     noxious weeds, and exposure to plant pests and noxious weeds, 
     according to the phytosanitary requirements of the country to 
     which the plant, plant product, or biological control 
     organism may be exported.

     SEC. 10. ADMINISTRATION.

       (a) In General.--The Secretary may acquire and maintain 
     such real or personal property, employ such persons, make 
     such grants, and enter into such contracts, cooperative 
     agreements, memoranda of understanding, or other agreements 
     as are necessary to carry out this Act.
       (b) Personnel of User Fee Services.--Notwithstanding any 
     other law, the Secretary shall provide adequate personnel for 
     services provided under this Act that are funded by user 
     fees.
       (c) Tort Claims.--
       (1) In general.--The Secretary may pay a tort claim (in the 
     manner authorized in the first paragraph of section 2672 of 
     title 28, United States Code) if the claim arises outside the 
     United States in connection with an activity authorized under 
     this Act.
       (2) Time limitation.--A claim may not be allowed under 
     paragraph (1) unless the claim is presented in writing to the 
     Secretary not later than 2 years after the claim accrues.

     SEC. 11. REIMBURSABLE AGREEMENTS.

       (a) Preclearance.--
       (1) In general.--The Secretary may enter into a 
     reimbursable fee agreement with a person for preclearance (at 
     a location outside the United States) of plants, plant 
     products, and articles for movement into the United States.
       (2) Account.--All funds collected under this subsection 
     shall be credited to an account that may be established by 
     the Secretary and remain available until expended without 
     fiscal year limitation.
       (b) Overtime.--
       (1) In general.--Notwithstanding any other law, the 
     Secretary may pay an employee of the Department of 
     Agriculture performing services under this Act relating to 
     imports into and exports from the United States, for all 
     overtime, night, or holiday work performed by the employee, 
     at a rate of pay determined by the Secretary.
       (2) Reimbursement of secretary.--The Secretary may require 
     a person for whom the services are performed to reimburse the 
     Secretary for any funds paid by the Secretary for the 
     services.
       (3) Account.--All funds collected under this subsection 
     shall be credited to the account that incurs the costs and 
     remain available until expended without fiscal year 
     limitation.
       (c) Late Payment Penalty and Interest.--
       (1) Penalty.--On failure of a person to reimburse the 
     Secretary in accordance with this section, the Secretary may 
     assess a late payment penalty against the person.
       (2) Interest.--Overdue funds due the Secretary under this 
     section shall accrue interest in accordance with section 3717 
     of title 31, United States Code.
       (3) Account.--A late payment penalty and accrued interest 
     shall be credited to the account that incurs the costs and 
     shall remain available until expended without fiscal year 
     limitation.

     SEC. l2. VIOLATIONS; PENALTIES.

       (a) Criminal Penalties.--A person who knowingly violates 
     this Act, or who knowingly forges, counterfeits, or, without 
     authority from the Secretary, uses, alters, defaces, or 
     destroys a certificate, permit, or other document provided 
     under this Act shall be guilty of a misdemeanor, and, on 
     conviction, shall be fined in accordance with title 18, 
     United States Code, or imprisoned for not more than 1 year, 
     or both.
       (b) Civil Penalties.--
       (1) In general.--A person who violates this Act, or who 
     forges, counterfeits, or, without authority from the 
     Secretary, uses, alters, defaces, or destroys a certificate, 
     permit, or other document provided under this Act may, after 
     notice and opportunity for a hearing on the record, be 
     assessed a civil penalty by the Secretary of not more than 
     $25,000 for each violation.
       (2) Final order.--The order of the Secretary assessing a 
     civil penalty shall be treated as a final order that is 
     reviewable under chapter 158 of title 28, United States Code.
       (3) Validity of order.--The validity of an order of the 
     Secretary may not be reviewed in an action to collect the 
     civil penalty.
       (4) Interest.--A civil penalty not paid in full when due 
     under an order assessing the civil penalty shall (after the 
     due date) accrue interest until paid at the rate of interest 
     applicable to a civil judgment of a court of the United 
     States.
       (c) Pecuniary Gains or Losses.--If a person derives 
     pecuniary gain from an offense described in subsection (a) or 
     (b), or if the offense results in pecuniary loss to a person 
     other than the defendant, the defendant may be fined not more 
     than an amount that is the greater of twice the gross gain or 
     twice the gross loss, unless imposition of a fine under this 
     subsection would unduly complicate or prolong the imposition 
     of a fine or sentence under subsection (a) or (b).
       (d) Agents.--For purposes of this Act, the act, omission, 
     or failure of an officer, agent, or person acting for or 
     employed by any other person within the scope of the 
     employment or office of the other person shall be considered 
     also to be the act, omission, or failure of the other person.
       (e) Civil Penalties or Notice in Lieu of Prosecution.--The 
     Secretary shall coordinate with the Attorney General to 
     establish guidelines to determine under what circumstances 
     the Secretary may issue a civil penalty or suitable notice of 
     warning in lieu of prosecution by the Attorney General of a 
     violation of this Act.

     SEC. 13. ENFORCEMENT.

       (a) Investigations, Evidence, and Subpoenas.--
       (1) Investigations.--The Secretary may gather and compile 
     information and conduct any investigations the Secretary 
     considers necessary for the administration and enforcement of 
     this Act.
       (2) Evidence.--The Secretary shall at all reasonable times 
     have the right to examine and copy any documentary evidence 
     of a person being investigated or proceeded against.
       (3) Subpoenas.--
       (A) In general.--The Secretary shall have power to require 
     by subpoena the attendance and testimony of any witness and 
     the production of all documentary evidence relating to the 
     administration or enforcement of this Act or any matter under 
     investigation in connection with this Act.
       (B) Location.--The attendance of a witness and production 
     of documentary evidence may be required from any place in the 
     United States at any designated place of hearing.
       (C) Noncompliance with subpoena.--If a person disobeys a 
     subpoena, the Secretary may request the Attorney General to 
     invoke the aid of a court of the United States within the 
     jurisdiction in which the investigation is conducted, or 
     where the person resides, is found, transacts business, is 
     licensed to do business, or is incorporated to require the 
     attendance and testimony of a witness and the production of 
     documentary evidence.
       (D) Order.--If a person disobeys a subpoena, the court may 
     order the person to appear before the Secretary and give 
     evidence concerning the matter in question or to produce 
     documentary evidence.
       (E) Noncompliance with order.--A failure to obey the 
     court's order may be punished by the court as a contempt of 
     the court.
       (F) Fees and mileage.--
       (i) In general.--A witness summoned by the Secretary shall 
     be paid the same fees and reimbursement for mileage that is 
     paid to a witness in the courts of the United States.
       (ii) Depositions.--A witness whose deposition is taken, and 
     the person taking the deposition, shall be entitled to the 
     same fees that are paid for similar services in a court of 
     the United States.
       (b) Attorney General.--The Attorney General may--
       (1) prosecute, in the name of the United States, a criminal 
     violation of this Act that is referred to the Attorney 
     General by the Secretary or is brought to the notice of the 
     Attorney General by a person;
       (2) bring an action to enjoin the violation of or to compel 
     compliance with this Act, or to enjoin any interference by a 
     person with the Secretary in carrying out this Act, if the 
     Secretary has reason to believe that the person has violated 
     or is about to violate this Act, or has interfered, or is 
     about to interfere, with the Secretary; and
       (3) bring an action for the recovery of any unpaid civil 
     penalty, funds under a reimbursable agreement, late payment 
     penalty, or interest assessed under this Act.
       (c) Jurisdiction.--
       (1) In general.--Except as provided in section 12(b), a 
     United States district court, the District Court of Guam, the 
     District Court of the Virgin Islands, the highest court of 
     American Samoa, and the United States courts of other 
     territories and possessions shall have jurisdiction over all 
     cases arising under this Act.
       (2) Venue.--Except as provided in subsection (b), an action 
     arising under this Act may be brought, and process may be 
     served, in the judicial district where a violation or 
     interference occurred or is about to occur, or where the 
     person charged with the violation, interference, impending 
     violation, impending interference, or failure to pay resides, 
     is found, transacts business, is licensed to do business, or 
     is incorporated.
       (3) Subpoenas.--A subpoena for a witness to attend court in 
     a judicial district or to testify or produce evidence at an 
     administrative hearing in a judicial district in an action or 
     proceeding arising under this Act may apply to any other 
     judicial district.

     SEC. 14. PREEMPTION.

       (a) In General.--Except as provided in subsection (b), no 
     State or political subdivision of a State may regulate any 
     article, means of conveyance, plant, biological control 
     organism, plant pest, noxious weed, or plant product in 
     foreign commerce to control a plant pest or noxious weed, 
     eradicate a plant pest or noxious weed, or prevent the 
     introduction or dissemination of a biological control 
     organism, plant pest, or noxious weed.
       (b) State Noxious Weed Laws.--This Act shall not invalidate 
     the law of any State or

[[Page S467]]

     political subdivision of a State relating to noxious weeds, 
     except that a State or political subdivision of a State may 
     not permit any action that is prohibited under this Act.

     SEC. 15. REGULATIONS AND ORDERS.

       The Secretary may issue such regulations and orders as the 
     Secretary considers necessary to carry out this Act, 
     including (at the option of the Secretary) regulations and 
     orders relating to--
       (1) notification of arrival of plants, plant products, 
     biological control organisms, plant pests, noxious weeds, 
     articles, or means of conveyance;
       (2) prohibition or restriction of or on the importation, 
     entry, exportation, or movement in interstate commerce of 
     plants, plant products, biological control organisms, plant 
     pests, noxious weeds, articles, or means of conveyance;
       (3) holding, seizure of, quarantine of, treatment of, 
     application of remedial measures to, destruction of, or 
     disposal of plants, plant products, biological control 
     organisms, plant pests, noxious weeds, articles, premises, or 
     means of conveyance;
       (4) in the case of an extraordinary emergency, prohibition 
     or restriction on the movement of plants, plant products, 
     biological control organisms, plant pests, noxious weeds, 
     articles, or means of conveyance;
       (5) payment of compensation;
       (6) cooperation with other Federal agencies, States, 
     political subdivisions of States, national governments, local 
     governments of other countries, international organizations, 
     international associations, and other persons, entities, and 
     individuals;
       (7) transfer of biological control methods for plant pests 
     or noxious weeds;
       (8) negotiation and execution of agreements;
       (9) acquisition and maintenance of real and personal 
     property;
       (10) issuance of letters of warning;
       (11) compilation of information;
       (12) conduct of investigations;
       (13) transfer of funds for emergencies;
       (14) approval of facilities and means of conveyance;
       (15) denial of approval of facilities and means of 
     conveyance;
       (16) suspension and revocation of approval of facilities 
     and means of conveyance;
       (17) inspection, testing, and certification;
       (18) cleaning and disinfection;
       (19) designation of ports of entry;
       (20) imposition and collection of fees, penalties, and 
     interest;
       (21) recordkeeping, marking, and identification;
       (22) issuance of permits and phytosanitary certificates;
       (23) establishment of quarantines, post-importation 
     conditions, and post-entry quarantine conditions;
       (24) establishment of conditions for transit movement 
     through the United States; and
       (25) treatment of land for the prevention, suppression, or 
     control of plant pests or noxious weeds.

     SEC. 16. AUTHORIZATION OF APPROPRIATIONS; TRANSFERS.

       (a) Authorization of Appropriations.--
       (1) In general.--There are authorized to be appropriated 
     such sums as are necessary to carry out this Act.
       (2) Indemnities.--Except as specifically authorized by law, 
     no part of the money made available under paragraph (1) shall 
     be used to pay an indemnity for property injured or destroyed 
     by or at the direction of the Secretary.
       (b) Transfers.--
       (1) In general.--In connection with an emergency in which a 
     plant pest or noxious weeds threatens any segment of the 
     agricultural production of the United States, the Secretary 
     may transfer (from other appropriations or funds available to 
     an agency or corporation of the Department of Agriculture) 
     such funds as the Secretary considers necessary for the 
     arrest, control, eradication, and prevention of the spread of 
     the plant pest or noxious weed and for related expenses.
       (2) Availability.--Any funds transferred under this 
     subsection shall remain available to carry out paragraph (1) 
     without fiscal year limitation.

     SEC. 17. REPEALS.

       The following provisions of law are repealed:
       (1) Public Law 97-46 (7 U.S.C. 147b).
       (2) The Joint Resolution of April 6, 1937 (50 Stat. 57, 
     chapter 69; 7 U.S.C. 148 et seq.).
       (3) Section 1773 of the Food Security Act of 1985 (7 U.S.C. 
     148f).
       (4) The Act of January 31, 1942 (56 Stat. 40, chapter 31; 7 
     U.S.C. 149).
       (5) The Golden Nematode Act (7 U.S.C. 150 et seq.).
       (6) The Federal Plant Pest Act (7 U.S.C. 150aa et seq.).
       (7) The Act of August 20, 1912 (commonly known as the 
     ``Plant Quarantine Act'') (37 Stat. 315, chapter 308; 7 
     U.S.C. 151 et seq.).
       (8) The Halogeton Glomeratus Control Act (7 U.S.C. 1651 et 
     seq.).
       (9) The Act of August 28, 1950 (64 Stat. 561, chapter 815; 
     7 U.S.C. 2260).
       (10) The Federal Noxious Weed Act of 1974 (7 U.S.C. 2801 et 
     seq.), other than the first section of the Act (Public Law 
     93-629; 7 U.S.C. 2801 note) and section 15 of the Act (7 
     U.S.C. 2814).
                                 ______
                                 
      By Mr. GRAMM:
  S. 84. A bill to authorize negotiation of free trade agreements with 
the countries of the Americas, and for other purposes; to the Committee 
on Finance.
  S. 85. A bill to authorize negotiation for the accession of Chile to 
the North American Free Trade Agreement, and for other purposes; to the 
Committee on Finance.


            americas free trade act and nafta accession act

  Mr. GRAMM. Mr. President, when America trades, America wins. The 
United States of America is the greatest trading Nation the world has 
ever known. From beef to computers to engineering, last year American 
workers exported more than $830 billion in goods and services. No other 
country even came close.
  Over the last decade, America's exports in goods of all kinds grew by 
131 percent. By comparison, Europe's exports of goods grew by 55 
percent, and Japan's total grew less than half the rate of Europe's by 
24 percent. The U.S. trade expansion involved virtually every sector of 
the economy, but it was particularly pronounced in the export of 
manufactured goods. From 1985 to 1995, U.S. exports of manufactured 
goods grew by over 180 percent. That growth rate was six times the rate 
for Germany and almost nine times Japan's export growth.
  In short, trade is our game. American workers, businesses, and farms 
are more competitive and far more successful than the merchants of fear 
and defeatism advertise.
  Fortunately, we have resisted incessant cries to model our economic 
and trade policies after those of Japan, Germany, and others, and we 
have outperformed them in every respect. Lately, one does not hear much 
talk about the Japanese economic miracle, and Germany's double-digit 
unemployment rate finds few admirers. Instead, what Pericles said of 
ancient Athens in the days of that city's glory may without fear be 
said of us. ``The magnitude of our city draws the produce of the world 
into our harbor, so that to the Athenian the fruits of other countries 
are as familiar a luxury as those of his own.''
  In fact, successful economic and trade policies have resulted in the 
addition of 18 million jobs to the Nation since 1985, 6 million jobs 
more than the total job creation for Japan and the nations of the 
European Community combined.
  We must not forget that the most valuable products of trade are high-
wage jobs. An export-related job in America pays better, 15 percent 
better, than the average pay in the Nation. Today, America exports over 
$26,000 in manufactured goods for every man and woman employed in 
manufacturing.
  In January 1988, President Reagan gave his final State of the Union 
address. As a veteran of those trade battles, President Reagan warned 
us all: ``A creative, competitive America is the answer to a changing 
world, not trade wars that would close doors, create great barriers, 
and destroy millions of jobs. We should always remember: protectionism 
is destructionism.''
  Mr. President, on May 21, 1986, I introduced legislation to begin 
negotiations for a free trade agreement with Mexico. On February 26, 
1987, I introduced a bill that laid out a framework for negotiating a 
North American free trade area, and on June 26 of that same year the 
Senate adopted an amendment that I offered to the omnibus trade bill, 
authorizing the negotiation of a North American Free Trade Agreement.
  On February 7, 1989, I once again introduced trade legislation and 
called for a free trade agreement encompassing the entire Western 
Hemisphere. I have introduced similar legislation in the 103d and the 
104th Congress, providing authority for negotiation of a free trade 
agreement with the nations of the Americas.
  Today I am introducing two pieces of legislation to extend free trade 
from Point Barrow, AK, to Cape Horn at the tip of South America. The 
first bill, the Americas Free Trade Act, will provide fast track 
authority for consideration of free trade agreements with any or all 
of the nations of the Western Hemisphere.

  While renewing fast track authority, the legislation provides two 
very important reforms made necessary by the abuse of the fast track 
authority in the most recent trade agreement. First of all, the 
legislation explicitly excludes labor and environmental provisions from 
the fast track approval process.

[[Page S468]]

These are important issues to be addressed in our relations with other 
nations, but the Senate must not surrender its constitutional treaty 
review responsibilities over these important matters.
  The legislation also deals with the problem of unrelated matters 
being included in a bill implementing a trade agreement. Similar to the 
Byrd Rule that excludes extraneous matter from reconciliation 
legislation, this bill will permit a point of order to be raised 
against any provision in an implementing bill that is not necessary to 
carry out the provisions of the trade agreement. This point of order, 
as with the Byrd Rule, would strike the offending provision from the 
bill rather than cause the entire bill to fail.
  As with legislation that I have introduced in the past, this bill 
provides special procedures for trade agreements with Cuba. In short, 
Fidel Castro's Cuba would not be eligible, but a free trade agreement 
with a free Cuba would be made a national priority.
  I am also introducing today legislation to provide for Chile to join 
the North American Free Trade Agreement. While I would prefer the 
extension of fast track authority for free trade agreements for any 
nation of the Western Hemisphere, as the Americas Free Trade Act would 
do, I do not believe that we should delay the process of including 
Chile in NAFTA, or hold Chile hostage to that process, should a broader 
trade bill require more time to be enacted. I believe that a free trade 
agreement with Chile could and should be concluded this year, and I am 
eager to see the progress toward lower barriers to trade and economic 
growth move forward.
  We are the best competitor the world has ever known, and we have the 
biggest stake. Trade and expanding economic opportunity power America's 
engines of economic growth and prosperity. Let us embrace them, not 
destroy them.
  Mr. President, I ask unanimous consent that the text of the Americas 
Free Trade Act and the NAFTA Accession Act, together with an outline of 
each bill, be included in the Record.
  There being no objection, the materials were ordered to be printed in 
the Record, as follows:

                                 S. 84

       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 ``Americas Free Trade Act''.

     SEC. 2. FINDINGS.

       Congress makes the following findings:
       (1) The countries of the Western Hemisphere have enjoyed 
     more success in the twentieth century in the peaceful conduct 
     of their relations among themselves than have the countries 
     in the rest of the world.
       (2) The economic prosperity of the United States and its 
     trading partners in the Western Hemisphere is increased by 
     the reduction of trade barriers.
       (3) Trade protection endangers economic prosperity in the 
     United States and throughout the Western Hemisphere and 
     undermines civil liberty and constitutionally limited 
     government.
       (4) The successful establishment of a North American Free 
     Trade Area sets the pattern for the reduction of trade 
     barriers throughout the Western Hemisphere, enhancing 
     prosperity in place of the cycle of increasing trade barriers 
     and deepening poverty that results from a resort to 
     protectionism and trade retaliation.
       (5) The reduction of government interference in the foreign 
     and domestic sectors of a nation's economy and the 
     concomitant promotion of economic opportunity and freedoms 
     promote civil liberty and constitutionally limited 
     government.
       (6) Countries that observe a consistent policy of free 
     trade, the promotion of free enterprise and other economic 
     freedoms (including effective protection of private property 
     rights), and the removal of barriers to foreign direct 
     investment, in the context of constitutionally limited 
     government and minimal interference in the economy, will 
     follow the surest and most effective prescription to 
     alleviate poverty and provide for economic, social, and 
     political development.

     SEC. 3. FREE TRADE AREA FOR THE WESTERN HEMISPHERE.

       (a) In General.--The President shall take action to 
     initiate negotiations to obtain trade agreements with the 
     sovereign countries located in the Western Hemisphere, the 
     terms of which provide for the reduction and ultimate 
     elimination of tariffs and other nontariff barriers to trade, 
     for the purpose of promoting the eventual establishment of a 
     free trade area for the entire Western Hemisphere.
       (b) Reciprocal Basis.--An agreement entered into under 
     subsection (a) shall be reciprocal and provide mutual 
     reductions in trade barriers to promote trade, economic 
     growth, and employment.
       (c) Bilateral or Multilateral Basis.--Agreements may be 
     entered into under subsection (a) on a bilateral basis with 
     any foreign country described in that subsection or on a 
     multilateral basis with all of such countries or any group of 
     such countries.

     SEC. 4. FREE TRADE WITH FREE CUBA.

       (a) Restrictions Prior to Restoration of Freedom in Cuba.--
     The provisions of this Act shall not apply to Cuba unless the 
     President certifies to Congress that--
       (1) freedom has been restored in Cuba; and
       (2) the claims of United States citizens for compensation 
     for expropriated property have been appropriately addressed.
       (b) Standards for the Restoration of Freedom in Cuba.--The 
     President shall not make the certification that freedom has 
     been restored in Cuba, for purpose of subsection (a), unless 
     the President determines that--
       (1) a constitutionally guaranteed democratic government has 
     been established in Cuba with leaders chosen through free and 
     fair elections;
       (2) the rights of individuals to private property have been 
     restored and are effectively protected and broadly exercised 
     in Cuba;
       (3) Cuba has a currency that is fully convertible 
     domestically and internationally;
       (4) all political prisoners have been released in Cuba; and
       (5) the rights of free speech and freedom of the press in 
     Cuba are effectively guaranteed.
       (c) Priority for Free Trade With Free Cuba.--Upon making 
     the certification described in subsection (a), the President 
     shall give priority to the negotiation of a free trade 
     agreement with Cuba.

     SEC. 5. INTRODUCTION AND FAST-TRACK CONSIDERATION OF 
                   IMPLEMENTING BILLS.

       (a) Introduction in House and Senate.--When the President 
     submits to Congress a bill to implement a trade agreement 
     described in section 3, the bill shall be introduced (by 
     request) in the House and the Senate as described in section 
     151(c) of the Trade Act of 1974 (19 U.S.C. 2191(c)).
       (b) Restrictions on Content.--A bill to implement a trade 
     agreement described in section 3--
       (1) shall contain only provisions that are necessary to 
     implement the trade agreement; and
       (2) may not contain any provision that establishes (or 
     requires or authorizes the establishment of) a labor or 
     environmental protection standard or amends (or requires or 
     authorizes an amendment of) any labor or environmental 
     protection standard set forth in law or regulation.
       (c) Point of Order in Senate.--
       (1) Applicability to all legislative forms of implementing 
     bill.--For the purposes of this subsection, the term 
     ``implementing bill'' means the following:
       (A) The bill.--A bill described in subsection (a), without 
     regard to whether that bill originated in the Senate or the 
     House of Representatives.
       (B) Amendment.--An amendment to a bill referred to in 
     subparagraph (A).
       (C) Conference report.--A conference report on a bill 
     referred to in subparagraph (A).
       (D) Amendment between houses.--An amendment between the 
     houses of Congress in relation to a bill referred to in 
     subparagraph (A).
       (E) Motion.--A motion in relation to an item referred to in 
     subparagraph (A), (B), (C), or (D).
       (2) Making of point of order.--
       (A) Against single item.--When the Senate is considering an 
     implementing bill, a Senator may make a point of order 
     against any part of the implementing bill that contains 
     material in violation of a restriction under subsection (b).
       (B) Against several items.--Notwithstanding any other 
     provision of law or rule of the Senate, when the Senate is 
     considering an implementing bill, it shall be in order for a 
     Senator to raise a single point of order that several 
     provisions of the implementing bill violate subsection (b). 
     The Presiding Officer may sustain the point of order as to 
     some or all of the provisions against which the Senator 
     raised the point of order.
       (3) Effect of sustainment of point of order.--
       (A) Against single item.--If a point of order made against 
     a part of an implementing bill under paragraph (2)(A) is 
     sustained by the Presiding Officer, the part of the 
     implementing bill against which the point of order is 
     sustained shall be deemed stricken.
       (B) Against several items.--In the case of a point of order 
     made under paragraph (2)(B) against several provisions of an 
     implementing bill, only those provisions against which the 
     Presiding Officer sustains the point of order shall be deemed 
     stricken.
       (C) Stricken matter not in order as amendment.--Matter 
     stricken from an implementing bill under this paragraph may 
     not be offered as an amendment to the implementing bill (in 
     any of its forms described in paragraph (1)) from the floor.
       (4) Waivers and appeals.--
       (A) Waivers.--Before the Presiding Officer rules on a point 
     of order under this subsection, any Senator may move to waive 
     the point of order as it applies to some or all of the 
     provisions against which the point of order is raised. Such a 
     motion to waive is

[[Page S469]]

     amendable in accordance with the rules and precedents of the 
     Senate.
       (B) Appeals.--After the Presiding Officer rules on a point 
     of order under this subsection, any Senator may appeal the 
     ruling of the Presiding Officer on the point of order as it 
     applies to some or all of the provisions on which the 
     Presiding Officer ruled.
       (C) Three-fifths majority required.--
       (i) Waivers.--A point of order under this subsection is 
     waived only by the affirmative vote of at least the requisite 
     majority.
       (ii) Appeals.--A ruling of the Presiding Officer on a point 
     of order under this subsection is sustained unless at least 
     the requisite majority votes not to sustain the ruling.
       (iii) Requisite majority.--For purposes of clauses (i) and 
     (ii), the requisite majority is three-fifths of the Members 
     of the Senate, duly chosen and sworn.
       (c) Applicability of Fast Track Procedures.--Section 151 of 
     the Trade Act of 1974 (19 U.S.C. 2191) is amended--
       (1) in subsection (b)(1)--
       (A) by inserting ``section 5 of the Americas Free Trade 
     Act,'' after ``the Omnibus Trade and Competitiveness Act of 
     1988,''; and
       (B) by amending subparagraph (C) to read as follows:
       ``(C) if changes in existing laws or new statutory 
     authority is required to implement such trade agreement or 
     agreements or such extension, provisions, necessary to 
     implement such trade agreement or agreements or such 
     extension, either repealing or amending existing laws or 
     providing new statutory authority.''; and
       (2) in subsection (c)(1), by inserting ``or under section 5 
     of the Americas Free Trade Act,'' after ``the Uruguay Round 
     Agreements Act,''.

                  The Americas Free Trade Act--Summary

       I. The President is directed to undertake negotiations to 
     establish free trade agreements between the United States and 
     countries of the Western Hemisphere (including North and 
     South America and the Caribbean). Agreements may be bilateral 
     or multilateral.
       II. The President, before seeking a free trade agreement 
     with Cuba under the Act, would have to certify (1) that 
     freedom has been restored in Cuba, and (2) that the claims of 
     U.S. citizens for compensation for expropriated property have 
     been appropriately addressed. The President could make the 
     certification that freedom has been restored to Cuba only if 
     he determines that--
       A. constitutionally guaranteed democratic government has 
     been established in Cuba, with leaders freely and fairly 
     elected;
       B. private property rights have been restored and are 
     effectively protected and broadly exercised;
       C. Cuba has a convertible currency;
       D. all political prisoners have been released; and
       E. free speech and freedom of the press are effectively 
     guaranteed.
       If the President certifies that freedom has been restored 
     to Cuba, priority will be given to the negotiation of a free 
     trade agreement with Cuba.
       III. Congressional fast track procedures for consideration 
     of any such agreement (i.e. expedited consideration, no 
     amendments), are extended permanently.
       IV. Fast track procedures are amended to provide that they 
     apply to an implementing bill only if such bill contains 
     legislation that is ``necessary'' to implement the trade 
     agreement. Also, such bills will be subject in the Senate to 
     a procedure like the Byrd Rule that applies to extraneous 
     provisions in reconciliation bills. That is, any provision 
     that does not meet the ``necessary'' standard is subject to a 
     point of order which, if sustained, causes the offending 
     provisions to be stricken from the bill (rather than the 
     whole bill falling), and this point of order can be overruled 
     only by a vote of three-fifths of the members duly sworn.
       V. Labor and environmental standards may not be included as 
     elements of an implementing bill.
                                                                    ____


                                 S. 85

       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 ``NAFTA Accession Act''.

     SEC. 2. ACCESSION OF CHILE TO THE NORTH AMERICAN FREE TRADE 
                   AGREEMENT.

       Subject to section 3, the President is authorized to enter 
     into an agreement which provides for the accession of Chile 
     to the North American Free Trade Agreement and the provisions 
     of section 151(c) of the Trade Act of 1974 (19 U.S.C. 
     2191(c)) shall apply with respect to a bill to implement such 
     agreement if such agreement is entered into on or before 
     December 31, 1998.

     SEC. 3. INTRODUCTION AND FAST-TRACK CONSIDERATION OF 
                   IMPLEMENTING BILL.

       (a) Introduction in House and Senate.--When the President 
     submits to Congress a bill to implement a trade agreement 
     described in section 2, the bill shall be introduced (by 
     request) in the House and the Senate as described in section 
     151(c) of the Trade Act of 1974 (19 U.S.C. 2191(c)).
       (b) Restrictions on Content.--A bill to implement a trade 
     agreement described in section 2--
       (1) shall contain only provisions that are necessary to 
     implement the trade agreement; and
       (2) may not contain any provision that establishes (or 
     requires or authorizes the establishment of) a labor or 
     environmental protection standard or amends (or requires or 
     authorizes an amendment of) any labor or environmental 
     protection standard set forth in law or regulation.
       (c) Point of Order in Senate.--
       (1) Applicability to all legislative forms of implementing 
     bill.--For the purposes of this subsection, the term 
     ``implementing bill'' means the following:
       (A) The bill.--A bill described in subsection (a), without 
     regard to whether that bill originated in the Senate or the 
     House of Representatives.
       (B) Amendment.--An amendment to a bill referred to in 
     subparagraph (A).
       (C) Conference report.--A conference report on a bill 
     referred to in subparagraph (A).
       (D) Amendment between houses.--An amendment between the 
     houses of Congress in relation to a bill referred to in 
     subparagraph (A).
       (E) Motion.--A motion in relation to an item referred to in 
     subparagraph (A), (B), (C), or (D).
       (2) Making of point of order.--
       (A) Against single item.--When the Senate is considering an 
     implementing bill, a Senator may make a point of order 
     against any part of the implementing bill that contains 
     material in violation of a restriction under subsection (b).
       (B) Against several items.--Notwithstanding any other 
     provision of law or rule of the Senate, when the Senate is 
     considering an implementing bill, it shall be in order for a 
     Senator to raise a single point of order that several 
     provisions of the implementing bill violate subsection (b). 
     The Presiding Officer may sustain the point of order as to 
     some or all of the provisions against which the Senator 
     raised the point of order.
       (3) Effect of sustainment of point of order.--
       (A) Against single item.--If a point of order made against 
     a part of an implementing bill under paragraph (2)(A) is 
     sustained by the Presiding Officer, the part of the 
     implementing bill against which the point of order is 
     sustained shall be deemed stricken.
       (B) Against several items.--In the case of a point of order 
     made under paragraph (2)(B) against several provisions of an 
     implementing bill, only those provisions against which the 
     Presiding Officer sustains the point of order shall be deemed 
     stricken.
       (C) Stricken matter not in order as amendment.--Matter 
     stricken from an implementing bill under this paragraph may 
     not be offered as an amendment to the implementing bill (in 
     any of its forms described in paragraph (1)) from the floor.
       (4) Waivers and appeals.--
       (A) Waivers.--Before the Presiding Officer rules on a point 
     of order under this subsection, any Senator may move to waive 
     the point of order as it applies to some or all of the 
     provisions against which the point of order is raised. Such a 
     motion to waive is amendable in accordance with the rules and 
     precedents of the Senate.
       (B) Appeals.--After the Presiding Officer rules on a point 
     of order under this subsection, any Senator may appeal the 
     ruling of the Presiding Officer on the point of order as it 
     applies to some or all of the provisions on which the 
     Presiding Officer ruled.
       (C) Three-fifths majority required.--
       (i) Waivers.--A point of order under this subsection is 
     waived only by the affirmative vote of at least the requisite 
     majority.
       (ii) Appeals.--A ruling of the Presiding Officer on a point 
     of order under this subsection is sustained unless at least 
     the requisite majority votes not to sustain the ruling.
       (iii) Requisite majority.--For purposes of clauses (i) and 
     (ii), the requisite majority is three-fifths of the Members 
     of the Senate, duly chosen and sworn.
       (c) Applicability of Fast Track Procedures.--Section 151 of 
     the Trade Act of 1974 (19 U.S.C. 2191) is amended--
       (1) in subsection (b)(1)--
       (A) by inserting ``section 3 of the NAFTA Accession Act,'' 
     after ``the Omnibus Trade and Competitiveness Act of 1988,''; 
     and
       (B) by amending subparagraph (C) to read as follows:
       ``(C) if changes in existing laws or new statutory 
     authority is required to implement such trade agreement or 
     agreements or such extension, provisions, necessary to 
     implement such trade agreement or agreements or such 
     extension, either repealing or amending existing laws or 
     providing new statutory authority.''; and
       (2) in subsection (c)(1), by inserting ``or under section 3 
     of the NAFTA Accession Act,'' after ``the Uruguay Round 
     Agreements Act,''.
                                                                    ____


                    The NAFTA Accession Act--Summary

       I. The President is directed to undertake negotiations for 
     the accession of Chile to the North American Free Trade 
     Agreement.
       II. Congressional fast track procedures for consideration 
     of any such agreement (i.e., expedited consideration, no 
     amendments), are extended through December 31, 1998.
       III. Fast track procedures are amended to provide that they 
     apply to an implementing bill only if such bill contains 
     legislation that is ``necessary'' to implement the trade 
     agreement. Also, such bill will be subject in the

[[Page S470]]

     Senate to a procedure like the Byrd rule that applies to 
     extraneous provisions in reconciliation bills. That is, any 
     provision that does not meet the ``necessary'' standard is 
     subject to a point of order which, if sustained, causes the 
     offending provision to be stricken from the bill (rather than 
     the whole bill falling), and this point of order can be 
     overruled only by a vote of three-fifths of the members duly 
     sworn.
       IV. Labor and environmental standards may not be included 
     as elements of an implementing bill.
                                 ______
                                 
      By Ms. SNOWE (for herself and Mr. Leahy):
  S. 86. A bill to amend the Public Health Service Act to provide, with 
respect to research on breast cancer, for the increased involvement of 
advocates in decision making at the National Cancer Institute; to the 
Committee on Labor and Human Resources.
                                 ______
                                 
      By Ms. SNOWE (for herself and Mrs. Feinstein):
  S. 87. A bill to amend the Public Health Service Act to provide a 
one-stop shopping information service for individuals with serious or 
life-threatening diseases; to the Committee on Labor and Human 
Resources.
                                 ______
                                 
      By Ms. SNOWE:
  S. 88. A bill to permit individuals to continue health plan coverage 
of services while participating in approved clinical studies; to the 
Committee on Labor and Human Resources.
  S. 89. A bill to prohibit discrimination against individuals and 
their family members on the basis of genetic information, or a request 
for genetic services; to the Committee on Labor and Human Resources.
  S. 90. A bill to require studies and guidelines for breast cancer 
screening for women ages 40-49, and for other purposes; to the 
Committee on Labor and Human Resources.
  S. 91. A bill to establish an Office on Women's Health within the 
Department of Health and Human Services; to the Committee on Labor and 
Human Resources.


                       women's health legislation

  Ms. SNOWE. Mr. President, I rise today to introduce a package of six 
bills designed to improve the health of countless women across America. 
By introducing these bills during the opening days of the 105th 
Congress, I hope to convey that women's health is one of my top 
legislative priorities for this Congress, and that I will do everything 
I can to ensure that it is a priority for the 105th Congress as well.

  For too many years, women's health care needs were ignored or poorly 
understood, and women were systematically excluded from important 
health research. One famous medical study on breast cancer examined 
hundreds of men. Another federally-funded study examined the ability of 
aspirin to prevent heart attacks in 20,000 medical doctors, all of whom 
were men, despite the fact that heart disease is the leading cause of 
death among women.
  Today, members of Congress and the American public understand the 
importance of ensuring that both genders benefit equally from medical 
research and health care services. Unfortunately, equity does not yet 
exist in health care, and we have a long way to go. Knowledge about 
appropriate courses of treatment for women lags far behind that for men 
for many diseases. For years, research into diseases that predominantly 
affect women, such as breast cancer, went grossly underfunded. And many 
women do not have access to reproductive and other vital health 
services.
  Throughout my tenure in the House and Senate, I have worked hard to 
expose and eliminate this health care gender gap and improve women's 
access to affordable, quality health services. As co-chairs of the 
Congressional Caucus for Women's Issues (CCWI), Representative Pat 
Schroeder and I, along with Representative Henry Waxman, called for a 
GAO investigation into the inclusion of women and minorities in medical 
research at the National Institutes of Health. This study documented 
the widespread exclusion of women from medical research, and spurred 
the Caucus to introduce the first Women's Health Equity Act (WHEA) in 
1990. This comprehensive legislation provided Congress with its first 
broad, forward looking health agenda designed to redress the historical 
inequities that face women in medical research, prevention and 
services.
  Since the initial introduction of WHEA, we have made important 
strides on behalf of women's health. Legislation from that first 
package became law in June 1993, mandating the inclusion of women and 
minorities in clinical trials at NIH. We secured dramatic funding 
increases for research into breast cancer, osteoporosis, and cervical 
cancer, and my legislation established the Office of Research on 
Women's Health at NIH. And last year the Mothers' and Newborns' Health 
Protection Act, which I cosponsored, became law. This Act will end the 
practice of ``drive-thru deliveries'', where hospitals discharge 
mothers and their newborns too soon after delivery.
  Despite these achievements, women remain at a stark and singular 
disadvantage in our health care system and in health research. Equality 
in women's health remains a goal, not a completed task. Legislators 
must build on the gains that we have made on behalf of women's health 
to take the next crucial steps toward achieving equity. I believe that 
the package of bills which I am introducing today provides this 
framework for progress.
  Several of the bills I am introducing today target one of the major 
public health crises facing this nation--breast cancer. This year 
alone, 180,000 new cases of breast cancer will be diagnosed in this 
country, and more than 44,000 women will die from the disease. Breast 
cancer is the most common form of cancer and the second leading cause 
of cancer deaths among American women.
  Our first priority in the fight against breast cancer must be to 
maintain and strengthen our commitment to discovering new treatments 
for this deadly disease. As the Federal Government continues to fund 
breast cancer research, we also must ensure that funding goes to those 
projects which victims of breast cancer believe are important and 
meaningful to them in their fight against this disease.
  Over the past three years, the Department of Defense has included lay 
breast cancer advocates in breast cancer research decision making. The 
involvement of these breast cancer advocates has helped foster new and 
innovative breast cancer research funding designs and research 
projects. While maintaining the highest level of quality assurance 
through peer review, breast cancer advocates have helped to ensure that 
all breast cancer research reflects the experiences and wisdom of the 
individuals who have lived with the disease. In addition, breast cancer 
advocates provide a vital educational link between the scientific and 
lay communities.
  The first bill I am introducing today, which I am introducing with my 
colleague from Vermont, Senator Leahy, urges the National Institutes of 
Health to follow the DOD's lead. This bill, the Consumer Involvement in 
Breast Cancer Research Act, urges NIH to include breast cancer 
advocates in breast cancer research decision making, and to report on 
progress that the Institute is making next year.
  But funding new research alone is not enough--we must ensure that 
people who are suffering from deadly diseases such as breast cancer 
have access to information about the latest, most-innovative therapies 
which are frequently available only through experimental drug trials. 
At a breast cancer hearing which I sponsored last year with my 
colleagues, Senators Connie Mack and Dianne Feinstein, we heard 
testimony from breast cancer advocates on the difficulty patients and 
physicians face in learning about ongoing clinical trials. The second 
bill I introduce today addresses this knowledge gap, by establishing a 
data bank of information on clinical trials and experimental treatments 
for all serious or life-threatening illnesses.
  This ``one-stop shopping information service'' will include a 
registry of all privately and publicly funded clinical trials, and will 
contain information describing the purpose of the trial, eligibility 
criteria for participating in the trial, as well as the location of the 
trial. The database will also contain information on the results of 
completed clinical trials, enabling patients to make fully informed 
decisions about medical treatments. The bill would allow people with a 
serious or life-threatening illness, or the doctor of a family member, 
to call a toll-free number to access this critical information so they 
could locate a clinical trial near them that may offer hope by 
extending their lives or alleviating their

[[Page S471]]

suffering. I am pleased that my colleague from California, Senator 
Feinstein, is joining me in introducing this important bill.

  Providing people with information about clinical trials is only the 
first step in increasing access to experimental treatments--we must 
also ensure that they have adequate insurance coverage to cover costs 
associated with clinical trials. While pharmaceutical companies 
typically cover the costs of the experimental treatment, insurance 
companies are expected to cover the costs of non-experimental services. 
Yet many insurance companies deny coverage for these non-experimental 
services when a patient is enrolled in an experimental trial.
  As a result, many patients who could benefit from these potentially 
life-saving investigational treatments do not have access to them 
because their insurance will not cover these associated costs. Denying 
reimbursement for these services also impedes the ability of scientists 
to conduct important research, by reducing the number of patients who 
are eligible to participate in clinical trials.
  The third bill I am introducing today, the Improved Patient Access to 
Clinical Studies Act of 1997, addresses this problem. This bill would 
prohibit insurance companies from denying coverage for services 
provided to individuals participating in clinical trials, if those 
services would otherwise be covered by the plan. This bill would also 
prevent health plans from discriminating against enrollees who choose 
to participate in clinical trials.
  Another form of discrimination in health insurance we see today is 
based on genetic information. This is a particular concern to women who 
inherit or may have inherited a mutated form of the breast cancer gene 
[BRCA1 or BRCA2]. Women who inherit either of these mutated genes have 
an 85 percent risk of developing breast cancer in their lifetime, and a 
50 percent chance of developing ovarian cancer. Although there is no 
known treatment to ensure that women who carry the mutated gene do not 
develop breast cancer, genetic testing makes it possible for carriers 
of these mutated genes to take extra precautions in order to detect 
cancer at its earliest stages--precautions such as mammograms and self-
examinations.
  The tremendous promise of genetic testing, however, is significantly 
threatened when insurance companies use the results of genetic testing 
to deny or limit coverage to consumers on the basis of genetic 
information. Yet this practice is relatively common today. In fact, a 
recent survey of individuals with a known genetic condition in the 
family revealed that 22 percent had been denied health insurance 
coverage because of genetic information.
  In addition to the potentially devastating consequences of being 
denied health insurance on the basis of genetic information, the fear 
of discrimination has equally harmful consequences for consumers and 
for scientific research. For example, many women who might take extra 
precautions if they knew they had the breast cancer gene may not seek 
testing because they fear losing their health insurance. Patients may 
be unwilling to disclose information about their genetic status to 
their physicians out of fear, hindering treatment or preventive 
efforts. And people may be unwilling to participate in potentially 
ground breaking research because they do not want to reveal information 
about their genetic status.
  The Kassebaum/Kennedy Health Care Reform Act took the first step in 
protecting Americans in group health plans from genetic discrimination 
by preventing discrimination in health insurance based on a pre-exiting 
genetic condition. My bill, the Genetic Information Nondiscrimination 
in Health Insurance Act of 1997, takes the next crucial steps to 
prohibit genetic discrimination. My bill prevents insurers from 
charging higher premiums based on genetic information, prohibits 
insurers from requiring or requesting a genetic test as a condition of 
coverage, requires informed written consent before an insurance company 
can disclose genetic information to a third party, and extends these 
important protections to Medigap.
  While there is much that we still do not know in the fight against 
breast cancer, we do know that mammograms are currently the most 
effective weapon we have in the fight against breast cancer. Yet 
experts still disagree about the effectiveness of mammograms for women 
in their forties. In fact, the National Cancer Institute (NCI) in 1993 
reversed its position on the effectiveness of mammograms for women in 
their forties, producing widespread confusion in women and their 
doctors. To assure that American women have clear guidance from their 
government on when to have a mammogram, I am reintroducing my bill, the 
Breast Cancer Screening Act of 1997, directing NCI to reissue its 
guidelines recommending mammograms for women in this age group. This 
legislation is particularly crucial in light of recent studies that 
show a reduced death rate for women in their forties who seek 
mammograms. In fact, one Swedish study of 150,000 women conducted in 
1996 showed a 25 percent lower death rate for women who obtained 
mammograms beginning in their forties.
  Finally, the sixth bill I am introducing is the Women's Health Office 
Act of 1997. This bill creates or codifies offices of women's health at 
various federal agencies, including the Office of the Assistant 
Secretary at HHS, the Centers for Disease Control, the Agency for 
Health Care Policy and Research, the Health Resources and Services 
Administration and the Food and Drug Administration. This bill provides 
for short and long-range goals and coordination of all activities that 
related to disease prevention, health promotion, delivery of health 
services and scientific research concerning women. The bill also 
creates a clearinghouse for information on women's health.
  By statutorily creating Offices of Women's Health, the Deputy 
Assistant Secretary for Women's Health will be able to better monitor 
various Public Health Service agencies and advise them on scientific, 
legal, ethical and policy issues. Agencies would establish a 
Coordinating Committee on Women's Health to identify and prioritize 
which women's health projects should be conducted. This will also 
provide a mechanism for coordination within and across these agencies, 
and with the private sector. But most importantly, this bill will 
ensure the presence of enduring offices dedicated to addressing the 
ongoing needs and gaps in research policy, programs, and education and 
training in women'shealth.
  Improving the health of American women requires a far greater 
understanding of women's health needs and conditions, and ongoing 
evaluation in the areas of research, education, prevention, treatment 
and the delivery of services. I believe that passage of these important 
bills will help ensure that women's health will never again be a 
missing page in America's medical textbook.
  Mrs. FEINSTEIN. Mr. President, today Senator Snowe and I are 
introducing S. 87, a bill to set up a toll-free service so that people 
with life-threatening diseases and the medical community can find out 
about research projects on new treatments.
  There are thousands of serious and life-threatening diseases, 
diseases for which we have no cure. For genetic diseases alone, there 
are 3,000 to 4,000. We are familiar with diseases like cancer, 
Alzheimer's disease and multiple sclerosis. But there are thousands of 
others that are not so common, like cystinosis, Tay-Sachs disease, 
Wilson's disease, and Sjogren's syndrome. Indeed, there are over 5,000 
known rare diseases, diseases most of us have never heard of, affecting 
between 10 and 20 million Americans.
  Cancer kills half a million Americans per year. Diabetes afflicts 15 
million Americans per year, half of whom do not know they have it. 
Arthritis affects 40 million Americans every year. 15,000 American 
children die every year. Among children, the rates of chronic 
respiratory diseases (asthma, bronchitis and sinusitis), heart murmurs, 
migraine headaches, anemia, epilepsy and diabetes are increasing. Few 
families escape illness today. Every family fears it.


                                The Bill

  Our bill requires the Secretary of Health and Human Services to 
establish a ``one-stop shopping'' database, including a toll-free 
telephone number, so that patients and physicians can conveniently find 
out what clinical research trials are being conducted on experimental 
treatments. By accessing

[[Page S472]]

this database, users would be able to find out the purpose of the 
study, eligibility requirements, research locations, and a contact 
person. Information would have to be presented in ``plain English,'' 
not ``medicalese,'' so that the average person could understand it.
  Our bill is endorsed by the American Cancer Society, the National 
Organization for Rare Disorders, AIDS Action and the Alzheimer's 
Association.


                        A Constituent Suggestion

  The need for this information center came from my constituent, Nancy 
Evans, of San Francisco's Breast Cancer Action, in a June 13, 1996 
hearing of the Senate cancer coalition, which I co-chair with Senator 
Mack. She described the difficulty that cancer patients have in trying 
to find out what experimental treatments might be available, research 
trials sponsored by the federal government and by private companies. 
Most of them are desperate; most have tried everything. She testfied 
that the National Cancer Institute has established 1-800-4-CANCER, but 
the NCI information is incomplete. It does not include all trials and 
the information is often difficult for the lay person to understand.
  In addition, the National Kidney Cancer Association has called for a 
central database.


                         People in Serious Need

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


                          Help for Physicians

  Physicians, no matter how competent and well trained, also cannot be 
knowledgeable about experimental treatments being researched. And most 
Americans do not have sophisticated computers hookups that provide them 
instant access to the latest information. Our witness, Nancy Evans, 
testified that she can find out more about a company's clinical trials 
by calling her stockbroker than by calling existing data services.
  Many desperate families have called me, their U.S. Senator, seeking 
help. Others have lodged their pleas at the White House. Others call 
lawyers, 911, the local medical society, the local Chamber of Commerce, 
anything they can think of. Getting information on health research 
projects should not require a ``fishing expedition'' of futiile calls, 
``good connections'' or the involvement of elected officials.
  In 1988, Congress directed HHS to establish an AIDS Clinical Trials 
Information Services. It is now operational (1-800-TRIALS-A) so that 
patients, providers and their families can find out about AIDS clinical 
trials. All calls are confidential and experienced professionals at the 
service can help people.


                       Improving Health, Research

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


                        Modest Help for the Ill

  The bill we introduce does not guarantee that anyone can participate 
in a clinical research trial. Researchers would still control who 
participates and set the requirements for the research. But for people 
who cling to hopes for a cure, for people who want to live longer, for 
people who want to feel better, this database can offer a little help.
  If you have a life-threatening illness, you should not have to have 
political or other connections, computer sophistication or access to 
top-flight university medical schools to find out about research on 
treatments of disease
  I hope this bill will offer some hope to the millions who are 
suffering today.
                                 ______
                                 
      By Mr. KERRY:
  S. 92. A bill to amend title VII of the Civil Rights Act of 1964 to 
establish provisions with respect to religious accommodation in 
employment, and for other purposes; to the Committee on Labor and Human 
Resources.


                    WORKPLACE RELIGIOUS FREEDOM ACT

  Mr. KERRY. Mr. President, I am proud today to introduce the Workplace 
Religious Freedom Act of 1997. This bill would protect workers from on-
the-job discrimination. It represents a milestone in the protection of 
religious liberty, assuring that all workers have equal employment 
opportunities.
  In 1972, Congress amended the Civil Rights Act of 1964 to require 
employers to reasonably accommodate an employee's religious practice or 
observance unless doing so would impose an undue hardship on the 
employer. This 1972 amendment, although completely appropriate, has 
been interpreted by the courts so narrowly as to place little restraint 
on an employer's refusal to provide religious accommodation. The 
``Workplace Religious Freedom Act'' will restore to the religious 
accommodation provision the weight that Congress originally intended 
and help assure that employers have a meaningful obligation to 
reasonably accommodate their employees' religious practices.
  The restoration of this protection is no small matter. For many 
religiously observant Americans the greatest peril to their ability to 
carry out their religious faiths on a day-to-day basis may come from 
employers. I have heard accounts from around the country about a small 
minority of employers who will not make reasonable accommodation for 
employees to observe the Sabbath and other holy days or for employees 
who must wear religiously-required garb, such as a yarmulke, or for 
employees to wear clothing that meets religious modesty requirements.
  The refusal of an employer, absent undue hardship, to provide 
reasonable accommodation of a religious practice should be seen as a 
form of religious discrimination, as originally intended by Congress in 
1972. And religious discrimination should be treated fully as seriously 
as any other form of discrimination that stands between Americans and 
equal employment opportunities. Enactment of the ``Workplace Religious 
Freedom Act'' will constitute an important step towards ensuring that 
all members of society, whatever their religious beliefs and practices, 
will be protected from an invidious form of discrimination.
  It is important to recognize that, in addition to protecting the 
religious freedom of employees, this legislation protects employers 
from an undue burden. Employees would be allowed to take time off only 
if their doing so does not pose a significant difficulty or expense for 
the employer. This common sense definition of ``undue hardship'' is 
used in the Americans with Disabilities Act and has worked well in that 
context.
  I believe this bill should receive bipartisan support. The same bill 
was endorsed in the last session by a wide range of organizations 
including the American Jewish Committee, the Baptist Joint Committee on 
Public Affairs, the Christian Legal Society, and the Jewish Community 
Relations Council of Greater Boston.
  I urge this body to pass this legislation so that all American 
workers can both be assured of equal employment opportunities and the 
ability to practice their religion.
  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. 92

       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 ``Workplace Religious Freedom 
     Act of 1997''.

     SEC. 2. AMENDMENT.

       (a) Definitions.--Section 701(j) of the Civil Rights Act of 
     1964 (42 U.S.C. 2000e(j)) is amended--

[[Page S473]]

       (1) by inserting ``(1)'' after ``(j)'';
       (2) by inserting ``, after initiating and engaging in an 
     affirmative and bona fide effort,'' after ``unable''; and
       (3) by adding at the end the following:
       ``(2) As used in this subsection, the term `undue hardship' 
     means an accommodation requiring significant difficulty or 
     expense. For purposes of determining whether an accommodation 
     requires significant difficulty or expense, the factors to be 
     considered shall include--
       ``(A) the identifiable cost of the accommodation in 
     relation to the size and operating cost of the employer; and
       ``(B) the number of individuals who will need a particular 
     accommodation to a religious observance or practice.''.
       (b) Employment Practices.--Section 703 of such Act (42 
     U.S.C. 2000e-2) is amended by adding at the end the 
     following:
       ``(o)(1) As used in this subsection:
       ``(A) The term `employee' includes a prospective employee.
       ``(B) The term `undue hardship' has the meaning given the 
     term in section 701(j)(2).
       ``(2) For purposes of determining whether an employer has 
     committed an unlawful employment practice under this title by 
     failing to provide a reasonable accommodation to the 
     religious observance or practice of an employee, an 
     accommodation by the employer shall not be deemed to be 
     reasonable if--
       ``(A) such accommodation does not remove the conflict 
     between employment requirements and the religious observance 
     or practice of the employee; or
       ``(B)(i) the employee demonstrates to the employer the 
     availability of an alternative accommodation less onerous to 
     the employee that may be made by the employer without undue 
     hardship on the conduct of the employer's business; and
       ``(ii) the employer refuses to make such accommodation.
       ``(3) It shall not be a defense to a claim of unlawful 
     employment practice under this title for failure to provide a 
     reasonable accommodation to a religious observance or 
     practice of an employee that such accommodation would be in 
     violation of a bona fide seniority system if, in order for 
     the employer to reasonably accommodate to such observance or 
     practice--
       ``(A) an adjustment would be made in the employee's work 
     hours (including an adjustment that requires the employee to 
     work overtime in order to avoid working at a time that 
     abstention from work is necessary to satisfy religious 
     requirements), shift, or job assignment, that would not be 
     available to any employee but for such accommodation; or
       ``(B) the employee and any other employee would voluntarily 
     exchange shifts or job assignments, or voluntarily make some 
     other arrangement between the employees.
       ``(4)(A) An employer shall not be required to pay premium 
     wages for work performed during hours to which such premium 
     wages would ordinarily be applicable, if work is performed 
     during such hours only to accommodate religious requirements 
     of an employee.
       ``(B) As used in this paragraph, the term `premium wages' 
     includes overtime pay and compensatory time off, pay for 
     night, weekend, or holiday work, and pay for standby or 
     irregular duty.''.

     SEC. 3. EFFECTIVE DATE; APPLICATION OF AMENDMENTS.

       (a) Effective Date.--Except as provided in subsection (b), 
     this Act and the amendments made by section 2 take effect on 
     the date of enactment of this Act.
       (b) Application of Amendments.--The amendments made by 
     section 2 do not apply with respect to conduct occurring 
     before the date of enactment of this Act.
                                 ______
                                 
      By Mr. KERRY:
  S. 93. A bill to increase funding for child care under the temporary 
assistance for needy families program; to the Committee on Finance.


               working families child care assistance act

  Mr. KERRY. Mr. President, today I am introducing the ``Working 
Families' Child Care Assistance Act'' to help the many working families 
who face great struggles to find affordable, good-quality child care.
  Mr. President, we no longer live in an era when one parent generally 
stays at home full time to take care of the children. Today, 60 percent 
of women with children younger than six are in the labor force. The 
result is that approximately seven million children of working parents 
are cared for each month by someone other than a parent. And most of 
these children spend 30 hours or more each week in child care, 
according to the National Research Council.
  New research also confirms that our current social reality has placed 
enormous strains on working families' budgets because many families 
must pay for child care. According to a new study of 100 child care 
centers entitled ``Cost, Quality, and Child Outcomes in Child Care 
Centers,'' families spend an average of $4,940 per year to provide 
services for each enrolled child. Annual child care costs of this size 
represent a whopping 28 percent of $17,481, which is the yearly income 
of an average family in the bottom two-fifths of the income scale.
  But even for families who can afford the cost of child care, in some 
communities child care continues to be hard to obtain at any cost. In 
1994, 36 States reported State child care assistance waiting lists, 
according to the Children's Defense Fund. Eight States had at least 
10,000 children waiting for assistance. Georgia's list was the longest 
with 41,000, while in Texas the list had 36,000 names and a wait of 
about 2 years. In Massachusetts, the statewide waiting list contains 
the names of 4,000 working families. Additionally, a 1995 U.S. General 
Accounting Office (GAO) study found that shortages of child care for 
infants, sick children, children with special needs, and school-age 
children before and after school pose difficulties for many families.
  I believe the child care situation may worsen because of a provision 
to which I was opposed in last year's welfare reform bill which cuts 
the Title XX Social Services Block Grant by 15 percent. Many States use 
Title XX funding to pay for child care for working families; 
unfortunately, this cut will result in even more families needing child 
care assistance.
  Mr. President, it is time to provide help to working families to 
afford quality child care. My bill would double the funding through the 
Child Care Development Block Grant, increasing child care funding by $1 
billion per year. In my home State of Massachusetts, this would result 
in more than 5,000 families receiving child care help which otherwise 
would not receive it.
  Working parents face an extraordinary uphill battle in trying to make 
ends meet and cover the high cost of child care. Well over half the 
women in the work force are parents of preschool children, and they 
need access to affordable, quality child care they can trust. This bill 
provides real help to working families and hopefully will send a strong 
signal that their work and their efforts to provide reliable child care 
for their children are valued and supported.
  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. 93

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

     SECTION 1. INCREASED FUNDING FOR CHILD CARE.

       (a) In General.--Section 418(a) of the Social Security Act 
     (42 U.S.C. 618(a)) is amended by striking paragraph (3) and 
     inserting the following:
       ``(3) Appropriation.--For grants under this section, there 
     are appropriated--
       ``(A) $2,967,000,000 for fiscal year 1997;
       ``(B) $3,067,000,000 for fiscal year 1998;
       ``(C) $3,167,000,000 for fiscal year 1999;
       ``(D) $3,367,000,000 for fiscal year 2000;
       ``(E) $3,567,000,000 for fiscal year 2001; and
       ``(F) $3,717,000,000 for fiscal year 2002.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect as if enacted on August 22, 1996.
                                 ______
                                 
      By Mr. DORGAN:
  S. 95. A bill to provide for Federal campaign finance reform, and for 
other purposes; to the Committee on Rules and Administration.


                  CAMPAIGN FINANCE REFORM LEGISLATION

       Mr. DORGAN. Mr President, the current system of electing 
     Members of Congress is badly in need of reform. Elections are 
     too long, too negative and too expensive; incumbents have a 
     decided advantage over challengers, voter participation 
     continues to decline, and 30-second political attack ads are 
     polluting the airways. The American people want us to fix the 
     system, and they want us to do it now. It is my view that 
     campaign finance reform, along with balancing the budget, 
     should be the highest priorities on the Senate agenda in the 
     105th Congress.
       Successive Supreme court decisions have made it 
     increasingly difficult to control campaign spending. In its 
     review of the Federal Election Campaign Act (FECA) of 1971, 
     the Court, in Buckley v. Valeo, stuck down the mandatory 
     spending limits in that law as an infringement of First 
     Amendment rights. The Court stated unequivocally: ``In the 
     free society ordained by our Constitution, it is not the 
     government, but the people--individuals as citizens and 
     candidates and collectively as associations and political 
     committees--who must retain control over the quantity and 
     range of debate on public issues in a political campaign.'' 
     The Court at that time did, however, retain the section of 
     FECA which limited contributions to political candidates 
     because of the Court's stated

[[Page S474]]

     concern that unlimited gifts to candidates were a recipe for 
     corruption. Simply put, the Courts have prohibited mandatory 
     spending limits while preserving contribution limits. In the 
     long run, it seems to me that we will have to pass a 
     constitutional amendment to get a handle on the spending side 
     of the campaign equation, and I intend to cosponsor just such 
     a measure.
       Nevertheless, there are short term solutions that can and 
     should be addressed, including voluntary spending limits. The 
     system is awash in money, and the public is disgusted with 
     the ever increasing amounts of money flowing into 
     congressional campaign coffers. Whether we like it or not, 
     the public believes the money is tainted. They know that 
     money flows towards power, and are convinced that large 
     campaign contributions buy influence. To put their concerns 
     in some perspective, one need only look at the statistics. 
     The average cost of winning a Senate seat rose from $609,100 
     in 1976 to $3.6 million in the 1996 election cycle, and 
     incumbents on average have a spending advantage of more than 
     2-1 over challengers.
       There is simply no way to justify these escalating 
     expenditures. No wonder the American people have grown 
     cynical of public institutions and officials, and no wonder 
     talented people in our communities do not want to run for 
     elective office. If we hope to reverse public attitudes and 
     restore confidence in our government officials and 
     institutions, we should begin with campaign finance reform. 
     We have a unique opportunity this year to pass meaningful and 
     bipartisan reform, something that has eluded us for more than 
     a decade. I hope we will seize the moment.
       While I intend to support comprehensive reform efforts as I 
     have in the past, I am introducing legislation today to 
     address what I perceive to be the most serious problems in 
     the system now. My bill includes the following provisions 
     which I will describe briefly:


 1. Voluntary Spending Limits/Limitation on Personal Funds/Fee on Non-
                          Complying Candidates

       As a result of the Supreme Court decisions mentioned above, 
     the only way to control spending in the short term is through 
     voluntary spending limits. My bill contains voluntary limits 
     which are based on a percentage of the voting age population 
     in each state. These are the same limits that were contained 
     in the campaign finance reform bill that passed the Senate in 
     the 103rd Congress and which have been the basis of 
     comprehensive reform proposals in the 104th Congress. In 
     addition, my bill would limit the amount of personal or 
     family money that a candidate can contribute to his or her 
     campaign to $25,000. I don't believe any candidate should be 
     able to spend unlimited personal funds in an attempt to buy a 
     seat in the U.S. Senate.
       Unlike other bills, however, my proposal imposes a fee on 
     candidates who choose not to comply with the spending limits. 
     Under my legislation, non-complying candidates would be 
     charged a fee of 50 percent on all expenditures exceeding the 
     spending limits. The fee would be due and payable at the time 
     candidates are currently required to submit quarterly and 
     other reports to the Federal Election Commission. The 
     proceeds from the fee would be distributed by the FEC on a 
     fair and equitable basis among complying candidates for the 
     same federal office. It is my hope that this fee will provide 
     a strong inducement for candidates to comply with the 
     voluntary spending limits.


                             2. Soft Money

       My bill prohibits national political parties and 
     congressional campaign committees from raising or spending 
     so-called ``soft money.'' Only money raised and spent 
     according to the requirements and restrictions of federal law 
     can be used to ``expressly advocate'' the election or defeat 
     of a federal candidate. This is called ``hard money.'' 
     However, unlimited amounts of soft money are being raised by 
     the national parties and congressional campaign committees, 
     outside the constraints of federal election law, ostensibly 
     to support state and local candidates as well as federal 
     candidates to the extent that they do not directly advocate 
     the election or defeat of that candidate. In practice, 
     however, soft money is being raised and spent on federal 
     elections because of a loophole in federal election law.
       Soft money is raised from unions and corporations, which 
     are prohibited from contributing to federal elections except 
     through their PACs, and from individuals who have reached the 
     aggregate federal contribution limits of $25,000 a year. In a 
     nutshell, soft money contributions are unlimited and 
     unregulated.
       It is this pot of soft money which has dramatically 
     increased in recent election cycles. The Republican national 
     committees raised $141.2 million in soft money in the 1996 
     election cycle, a 183 percent increase over the $49.2 raised 
     in 1992. The Democratic party committees raised $122 million 
     in 1996, a 237 percent increase over their 1992 level of 
     $36.5 million. A substantial portion of soft money spending 
     by party campaign committees has gone to finance the generic 
     issue ads we have come to know as attack ads. The figures 
     above illustrate the problem. My bill would eliminate it by 
     preventing national committees from raising or spending soft 
     money which does not comply with the source and dollar 
     restrictions in federal campaign finance law.


                          3. Express Advocacy

       As mentioned above, only money raised under the 
     restrictions and prohibitions of federal election law can be 
     used to advocate the election or defeat of a candidate for 
     federal office. As currently defined in FEC regulations, only 
     communications which use such words as ``vote for'', 
     ``elect'', ``support'', ``defeat'', ``reject'' or ``Smith for 
     Congress'' are considered express advocacy which must be paid 
     for with money raised under federal election law restraints, 
     i.e., hard money.
       This overly narrow definition of what constitutes express 
     advocacy has created a giant loophole for attack ads. Simply 
     by avoiding the magic words mentioned above, political 
     parties, corporations, unions and other special interest 
     groups can pay for brutal attack ads which certainly have the 
     intent of influencing the outcome of federal elections--and 
     they can do it without having to disclose it to the FEC.
       My bill would expand the current express advocacy standard 
     to include both the content and intent of such ads. It would 
     not prohibit such ads; it would simply ensure--as Congress 
     intended--that such ads are paid for with money which is 
     subject to regulation and disclosure. Any political ads that 
     clearly identify a candidate(s) and which are broadcast 
     within 60 days prior to an election (or 90 days prior to a 
     general election with respect to a candidate for Vice 
     President or President) will be considered express advocacy 
     and, therefore, will be subject to the restrictions and 
     limitations of federal election law. The bottom line is that 
     you would have to pay for these ads with hard money which is 
     more difficult to raise and which requires full disclosure to 
     the FEC.


                        4. Political advertising

       I have long thought that the 30-second political attack ad 
     does little, if anything, to advance the cause of public 
     debate. They tend to be hit-and-run ads. Under current 
     federal communications law, television broadcasters are 
     required to provide political candidates with their lowest 
     unit rate--the rate they charge their best customers--for 
     political ads run in the 45 days prior to a primary election 
     and 60 days prior to a general election. Unfortunately, 
     oftentimes the candidate never appears in the ad. My bill 
     would require broadcasters to provide this reduced rate only 
     for ads which are at least one minute in length and in which 
     the candidate appears at least 75 percent of the time.


                            5. Non-citizens

       It is my strong view that people who are not citizens of 
     the United States should not be able to influence our 
     election process in any way. Therefore, my bill prohibits 
     non-citizens from raising funds for or contributing to 
     federal elections.


                         6. Voter Participation

       I am extremely disheartened by the lack of individual 
     involvement in the political process and the every increasing 
     decline in voter participation numbers. Between 1948-1968, 
     voter turnout for presidential elections was 60.43 percent. 
     Between 1972-1992, it fell to 53.21 percent. Last year, it 
     fell below 50 percent. These statistics are a national 
     disgrace Certainly, there must be something that can be done 
     to increase voter participation. Unfortunately, past 
     initiatives have had little or marginal impact on increasing 
     the number of voters who choose to fulfill their civic 
     responsibility to vote. I believe we need a comprehensive 
     analysis of what has worked, what has not worked or what we 
     might try to change public attitudes, educate voters and 
     improve participation. Early voting, extended polling hours 
     and weekend voting are areas that ought to be researched. My 
     bill provides $150,000 for the Federal Election Commission to 
     conduct such a study and to make recommendations to Congress. 
     This is a small amount of money to invest in an increasingly 
     serious public problem.


                             7. Tax Credit

       If we want to encourage participation by ordinary citizens, 
     I believe it is in our national interest to restore a tax 
     credit for small contributors similar to what existed between 
     1972 and 1986. My bill does that by providing an annual 100% 
     tax credit for the first $100 ($200 for joint returns) of 
     contributions to congressional campaigns. It is my belief 
     that many people who want to participate financially in the 
     political process simply cannot afford to do so. These voters 
     believe they have no power or influence. They are 
     increasingly frustrated, disgusted and disengaged. My bill 
     will afford them the opportunity to participate in the 
     process.
       The American public and the voters in my state of North 
     Dakota are clearly appalled by the amount of money involved 
     in electing federal officials. They are adamant that we clean 
     up the system--NOW. If we don't, we do so at our personal and 
     collective peril.
       I want the people of North Dakota and the Members of this 
     body to know that I intend to support and to work as hard as 
     I can to enact comprehensive campaign finance legislation 
     this year. I think is in all our best interests to do so, and 
     I hope my bill will stimulate debate and be incorporated in 
     the final reform package.
                                 ______
                                 
      By Mr. INOUYE:
  S. 96. A bill to require the Secretary of the Army to determine the 
validity of the claims of certain Filipinos that they performed 
military service on behalf of the United States during World War II; to 
the Committee on Armed Services.


                      military service legislation

  Mr. INOUYE. Mr. President, I am

[[Page S475]]

reintroducing legislation today that would direct the Secretary of the 
Army to determine whether certain nationals of the Philippine Islands 
performed military service on behalf of the United States during World 
War II.
  Mr. President, our Filipino veterans fought side by side and 
sacrificed their lives on behalf of the United States. This legislation 
would confirm the validity of their claims and further allow qualified 
individuals the opportunity to apply for military and veterans benefits 
that, I believe, they are entitled to. As this population becomes 
older, it is important for our nation to extend its firm commitment to 
the Filipino veterans and their families who participated in making us 
the great nation that we are today.
  I ask unanimous consent that the text of my bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 129

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

     SECTION 1. DETERMINATIONS BY THE SECRETARY OF THE ARMY.

       (a) In General.--Upon the written application of any person 
     who is a national of the Philippine Islands, the Secretary of 
     the Army shall determine whether such person performed any 
     military service in the Philippine Islands in aid of the 
     Armed Forces of the United States during World War II which 
     qualifies such person to receive any military, veterans', or 
     other benefits under the laws of the United States.
       (b) Information To Be Considered.--In making a 
     determination for the purpose of subsection (a), the 
     Secretary shall consider all information and evidence 
     (relating to service referred to in subsection (a)) available 
     to the Secretary, including information and evidence 
     submitted by the applicant, if any.

     SEC. 2. CERTIFICATE OF SERVICE.

       (A) Issuance of Certificate of Service.--The Secretary 
     shall issue a certificate of service to each person 
     determined by the Secretary to have performed military 
     service described in section 1(a).
       (b) Effect of Certificate of Service.--A certificate of 
     service issued to any person under subsection (a) shall, for 
     the purpose of any law of the United States, conclusively 
     establish the period, nature, and character of the military 
     service described in the certificate.

     SEC. 3. APPLICATIONS BY SURVIVORS.

       An application submitted by a surviving spouse, child, or 
     parent of a deceased person described in section 1(a) shall 
     be treated as an application submitted by such person.

     SEC. 4. LIMITATION PERIOD.

       The Secretary may not consider for the purpose of this Act 
     any application received by the Secretary more than two years 
     after the date of enactment of this Act.

     SEC. 5. PROSPECTIVE APPLICATION OF DETERMINATIONS BY THE 
                   SECRETARY OF THE ARMY.

       No benefits shall accrue to any person for any period prior 
     to the date of enactment of this Act as a result of the 
     enactment of this Act.

     SEC. 6. REGULATIONS.

       The Secretary shall issue regulations to carry out sections 
     1, 3, and 4.

     SEC. 7. RESPONSIBILITIES OF THE SECRETARY OF VETERANS 
                   AFFAIRS.

       Any entitlement of a person to receive veterans' benefits 
     by reason of this Act shall be administered by the Department 
     of Veterans Affairs pursuant to regulations issued by the 
     Secretary of Veterans Affairs.

     SEC. 8. DEFINITIONS.

       In this Act:
       (1) The term ``Secretary'' means the Secretary of the Army.
       (2) The term ``World War II'' means the period beginning on 
     December 7, 1941, and ending on December 31, 1946.
                                 ______
                                 
      By Mr. KERRY:
  S. 97. A bill to amend the Internal Revenue Code of 1986 and the 
Social Security Act to require the Internal Revenue Service to collect 
child support through wage withholding and to eliminate State 
enforcement of child support obligations other than medical support 
obligations; to the Committee on Finance.


           the uniform child support enforcement act of 1997

  Mr. KERRY. Mr. President, I am introducing legislation today to help 
ensure that children across this country get the economic support they 
need and deserve from both parents in order to have a wholesome 
childhood, grow up healthy, and thrive.
  Mr. President, child support reform is an urgent public issue because 
it affects so many children. In 1994, one out of every four children 
lived in a family with only one parent present in the home. Half of all 
the 18.7 million children living in single-parent families in 1994 were 
poor, compared with only slightly more than one out of every ten 
children in two-parent families. Clearly the payment of child support 
by the absent parent is an important determinant of the economic status 
of these children.
  Unfortunately, the failure to pay child support is extraordinarily 
widespread, cutting across income and racial lines. Of the 10 million 
women raising children with an absent parent, over 4 million had no 
support awarded. Of those 5.4 million women who were due support, 
slightly over half received the full amount due, while a quarter 
received partial payment and a quarter received nothing at all. Let me 
repeat that, Mr. President--more than half of the women with child 
support orders received no support or less than the full amount.
  Mr. President, common sense will tell you that children are hurt when 
parents do not pay support. But perhaps some evidence will make the 
point even clearer. A recent survey of single parents in Georgia, 
Oregon, Ohio, and New York documents the real harm children suffer when 
child support is not paid: during the first year after the parent left 
the home, more than half the families surveyed faced a serious housing 
crisis. Nearly a third reported that their children went hungry at some 
point during the year. And over a third reported that their children 
lacked appropriate clothing such as a winter coat.
  Mr. President, it is also evident that better child support 
enforcement can produce a lot more money for children. A 1994 study by 
the Urban Institute estimates that if child support orders were 
established for all children with a living non-custodial father and 
these orders were fully enforced, aggregate child support payments 
would have been $47.6 billion dollars in 1990--nearly three times the 
amount of child support actually paid in this country.
  Unfortunately, this country has made all too little progress in 
tackling the child support problem, and this has been true under both 
Democratic and Republican Administrations. Over the past decade, the 
average child support payment due to all women with a child support 
award, the average amount received by those women, as well as the 
percentage of women with awards have remained virtually unchanged 
(adjusting for inflation). Similarly, the state child support 
enforcement system that serves welfare families and non-welfare 
families who ask for help has made progress in paternity establishment, 
but little progress overall. Over half a million children had their 
paternity established by state agencies in FY 1994--a fifty percent 
increase from five years earlier. But fewer than one out of every five 
cases served by state agencies had any child support paid in FY 1994--a 
figure that has risen only slightly since FY 1990. Mr. President, it is 
an intolerable situation for our nation's children when state child 
support agencies are making absolutely no collection in 80 percent of 
their cases.
  My bill will help make sure that we achieve real progress for 
children. Last year, Congress passed some important improvements in the 
child support system in the welfare reform bill that became law. My 
bill would give states a chance to implement these new changes and then 
assess their success or failure. If these reforms succeed in 
dramatically improving the performance of state child support offices, 
then this bill would not tinker with success. If, however, we do not 
see dramatic improvement in collections within the next three years, 
this bill would ensure that we take bold steps to help children. This 
bill would leave establishment of paternity and child support orders at 
the state level but move collection of support to the national level 
where we can more aggressively pursue interstate cases and send a 
message to all parents obligated to pay support that making full and 
timely support payments is an obligation as serious as making full and 
timely payment of taxes. If more than half the states do not achieve a 
75 percent collection rate in their child support cases, then the 
system of collection would be federalized to ensure that children get 
the support they need and deserve.
  Mr. President, it has been 13 years since this Congress passed the 
first major child support legislation. Despite this legislative effort 
and additional reforms in 1988, according to a

[[Page S476]]

recent study there is a higher default rate on child support payments 
than on used car loans. I believe that every single member of this body 
will agree with me that this is wrong. If, under the newly revised 
federal law, states can rectify this situation, we can all take 
pleasure and satisfaction from watching them do it. If they cannot, we 
must take action. I urge my colleagues to support this bill so that 
America's children of every income level will be assured of the support 
they need and deserve.
  Mr. President, I ask unanimous consent that the full 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. 97

       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 ``Uniform Child Support 
     Enforcement Act of 1997''.

     SEC. 2. EFFECTIVE DATE; AMENDMENTS.

       (a) In General.--This Act and the amendments made by this 
     Act shall take effect on the first day of the first calendar 
     month that begins after the 3-year period that begins with 
     the date of the enactment of this Act, if the Secretary of 
     Health and Human Services certifies to the Congress that on 
     such first day more than 50 percent of the States have not 
     achieved a 75 percent collection rate in child support cases 
     in which child support is awarded and due under the 
     jurisdiction of such States pursuant to part D of title IV of 
     the Social Security Act (42 U.S.C. 651 et seq.).
       (b) Elimination of Provisions of Law Relating To State 
     Enforcement of Child Support Obligations Other Than Medical 
     Support Obligations.--Not later than 90 days after the 
     effective date of this Act and the amendments made by this 
     Act, the Secretary of Health and Human Services shall submit 
     to the appropriate committees of the Congress a legislative 
     proposal proposing such technical and conforming amendments 
     as are necessary to eliminate State enforcement of child 
     support obligations other than medical support obligations 
     and to bring the law into conformity with the policy embodied 
     in this Act.

     SEC. 3. NATIONAL CHILD SUPPORT ORDER REGISTRY.

       (a) Establishment.--
       (1) In general.--The Secretary of the Treasury shall 
     establish in the Internal Revenue Service a national registry 
     of abstracts of child support orders.
       (2) Child support order defined.--As used in this section, 
     the term ``child support order'' means an order, issued or 
     modified by a State court or an administrative process 
     established under State law, that requires an individual to 
     make payments for support and maintenance of a child or of a 
     child and the parent with whom the child is living.
       (b) Contents of Abstracts.--The abstract of a child support 
     order shall contain the following information:
       (1) The names, addresses, and social security account 
     numbers of each individual with rights or obligations under 
     the order, to the extent that the authority that issued the 
     order has not prohibited the release of such information.
       (2) The name and date of birth of any child with respect to 
     whom payments are to be made under the order.
       (3) The dollar amount of child support required to be paid 
     on a monthly basis under the order.
       (4) The date the order was issued or most recently 
     modified, and each date the order is required or scheduled to 
     be reviewed by a court or an administrative process 
     established under State law.
       (5) Any orders superseded by the order.
       (6) Such other information as the Secretary of the 
     Treasury, in consultation with the Secretary of Health and 
     Human Services, shall, by regulation require.

     SEC. 4. CERTAIN STATUTORILY PRESCRIBED PROCEDURES REQUIRED AS 
                   A CONDITION OF RECEIVING FEDERAL CHILD SUPPORT 
                   FUNDS.

       Section 466(a) of the Social Security Act (42 U.S.C. 
     666(a)) is amended by inserting after paragraph (19) the 
     following:
       ``(20)(A) Procedures which require any State court or 
     administrative agency that issues or modifies (or has issued 
     or modified) a child support order to transmit an abstract of 
     the order to the Internal Revenue Service on the later of--
       ``(i) the date the order is issued or modified; or
       ``(ii) the effective date of this paragraph.
       ``(B) Procedures which--
       ``(i) require any individual with the right to collect 
     child support pursuant to an order issued or modified in the 
     State (whether before or after the effective date of this 
     paragraph) to be presumed to have assigned to the Internal 
     Revenue Service the right to collect such support, unless the 
     individual affirmatively elects to retain such right at any 
     time; and
       ``(ii) allow any individual who has made the election 
     referred to in clause (i) to rescind or revive such election 
     at any time.''.

     SEC. 5. COLLECTION OF CHILD SUPPORT BY INTERNAL REVENUE 
                   SERVICE.

       (a) In General.--Chapter 77 of the Internal Revenue Code of 
     1986 (relating to miscellaneous provisions) is amended by 
     adding at the end the following new section:

     ``SEC. 7525. COLLECTION OF CHILD SUPPORT.

       ``(a) Employee To Notify Employer of Child Support 
     Obligation.--
       ``(1) In general.--Each employee shall specify, on each 
     withholding certificate furnished to such employee's 
     employer--
       ``(A) the monthly amount (if any) of each child support 
     obligation of such employee, and
       ``(B) the TIN of the individual to whom each such 
     obligation is owed.
       ``(2) When certificate filed.--In addition to the other 
     required times for filing a withholding certificate, a new 
     withholding certificate shall be filed within 30 days after 
     the date of any change in the information specified under 
     paragraph (1).
       ``(3) Period certificate in effect.--Any specification 
     under paragraph (1) shall continue in effect until another 
     withholding certificate takes effect which specifies a change 
     in the information specified under paragraph (1).
       ``(4) Authority to specify smaller child support amount.--
     In the case of an employee who is employed by more than 1 
     employer for any period, such employee may specify less than 
     the monthly amount described in paragraph (1)(A) to each such 
     employer so long as the total of the amounts specified to all 
     such employers is not less than such monthly amount.
       ``(b) Certain Obligations Exempt.--This section shall not 
     apply to a child support obligation for any month if the 
     individual to whom such obligation is owed has so notified 
     the Secretary and the individual owing such obligation more 
     than 30 business days before the beginning of such month.
       ``(c) Employer Obligations.--
       ``(1) Requirement to deduct and withhold.--
       ``(A) In general.--Every employer who receives a 
     certificate under subsection (a) that specifies that the 
     employee has a child support obligation for any month shall 
     deduct and withhold from the wages (as defined in section 
     3401(a)) paid by such employer to such employee during each 
     month that such certificate is in effect an additional amount 
     equal to the amount of such obligation or such other amount 
     as may be specified by the Secretary under subsection (d).
       ``(B) Limitation on aggregate withholding.--In no event 
     shall an employer deduct and withhold under this section from 
     a payment of wages an amount in excess of the amount of such 
     payment which would be permitted to be garnished under 
     section 303(b) of the Consumer Credit Protection Act.
       ``(2) Notice to secretary.--
       ``(A) In general.--Every employer who receives a 
     withholding certificate shall, within 30 business days after 
     such receipt, submit a copy of such certificate to the 
     Secretary.
       ``(B) Exception.--Subparagraph (A) shall not apply to any 
     withholding certificate if--
       ``(i) a previous withholding certificate is in effect with 
     the employer, and
       ``(ii) the information shown on the new certificate with 
     respect to child support is the same as the information with 
     respect to child support shown on the certificate in effect.
       ``(3) When withholding obligation takes effect.--Any 
     withholding obligation with respect to a child support 
     obligation of an employee shall commence with the first 
     payment of wages after the certificate is furnished.
       ``(d) Secretary To Verify Amount of Child Support 
     Obligation.--
       ``(1) Verification of information specified on withholding 
     certificates.--Within 45 business days after receiving a 
     withholding certificate of any employee, or a notice from any 
     person claiming that an employee is delinquent in making any 
     payment pursuant to a child support obligation, the Secretary 
     shall determine whether the information available to the 
     Secretary under section 3 of the Uniform Child Support 
     Enforcement Act of 1996 indicates that such employee has a 
     child support obligation.
       ``(2) Employer notified if increased withholding is 
     required.--If the Secretary determines that an employee's 
     child support obligation is greater than the amount (if any) 
     shown on the withholding certificate in effect with respect 
     to such employee, the Secretary shall, within 45 business 
     days after such determination, notify the employer to whom 
     such certificate was furnished of the correct amount of such 
     obligation, and such amount shall apply in lieu of the amount 
     (if any) specified by the employee with respect to payments 
     of wages by the employer after the date the employer receives 
     such notice.
       ``(3) Determination of correct amount.--In making the 
     determination under paragraph (2), the Secretary shall take 
     into account whether the employee is an employee of more than 
     1 employer and shall appropriately adjust the amount of the 
     required withholding from each such employer.
       ``(e) Child Support Obligations Required To Be Paid With 
     Income Tax Return.--
       ``(1) In general.--The child support obligation of any 
     individual for months ending with or within any taxable year 
     shall be paid--
       ``(A) not later than the last date (determined without 
     regard to extensions) prescribed for filing his return of tax 
     imposed by chapter 1 for such taxable year, and
       ``(B)(i) if such return is filed not later than such date, 
     with such return, or

[[Page S477]]

       ``(ii) in any case not described in clause (i), in such 
     manner as the Secretary may by regulations prescribe.
       ``(2) Credit for amount previously paid.--The amount 
     required to be paid by an individual under paragraph (1) 
     shall be reduced by the sum of--
       ``(A) the amount collected under this section with respect 
     to periods during the taxable year, plus
       ``(B) the amount (if any) paid by such individual under 
     section 6654 by reason of subsection (f)(3) thereof for such 
     taxable year.
       ``(f) Failure To Pay Amount Owing.--If an individual fails 
     to pay the full amount required to be paid under subsection 
     (e) on or before due date for such payment, the Secretary 
     shall assess and collect the unpaid amount in the same 
     manner, with the same powers, and subject to the same 
     limitations applicable to a tax imposed by subtitle C the 
     collection of which would be jeopardized by delay.
       ``(g) Credit or Refund for Withheld Child Support in Excess 
     of Actual Obligation.--There shall be allowed as a credit 
     against the taxes imposed by subtitle A for the taxable year 
     an amount equal to the excess (if any) of--
       ``(1) the aggregate of the amounts described in 
     subparagraphs (A) and (B) of subsection (e)(2), over
       ``(2) the actual child support obligation of the taxpayer 
     for such taxable year.
     The credit allowed by this subsection shall be treated for 
     purposes of this title as allowed by subpart C of part IV of 
     subchapter A of chapter 1.
       ``(h) Child Support Treated as Taxes.--
       ``(1) In general.--For purposes of penalties and interest 
     related to failure to deduct and withhold taxes, amounts 
     required to be deducted and withheld under this section shall 
     be treated as taxes imposed by chapter 24.
       ``(2) Other rules.--Rules similar to the rules of sections 
     3403, 3404, 3501, 3502, 3504, and 3505 shall apply with 
     respect to child support obligations required to be deducted 
     and withheld.
       ``(3) Special rule for collections.--For purposes of 
     collecting any unpaid amount which is required to be paid 
     under this section--
       ``(A) paragraphs (4), (6), and (8) of section 6334(a) 
     (relating to property exempt from levy) shall not apply, and
       ``(B) there shall be exempt from levy so much of the 
     salary, wages, or other income of an individual as is being 
     withheld therefrom in garnishment pursuant to a judgment 
     entered by a court of competent jurisdiction for the support 
     of his minor children.
       ``(i) Collections Dispersed to Individual Owed 
     Obligation.--
       ``(1) In general.--Payments received by the Secretary 
     pursuant to this section or by reason of section 6654(f)(3) 
     which are attributable to a child support obligation payable 
     for any month shall be paid (to the extent such payments do 
     not exceed the amount of such obligation for such month) to 
     the individual to whom such obligation is owed as quickly as 
     possible. Any penalties and interest collected with respect 
     to such payments also shall be paid to such individual.
       ``(2) Shortfalls in payments made by other withheld 
     amounts.--If the amount payable under a child support 
     obligation for any month exceeds the payments (referred in 
     paragraph (1)) received with respect to such obligation for 
     such month, such excess shall be paid from other amounts 
     received under subtitle C or section 6654 with respect to the 
     individual owing such obligation. The treasury of the United 
     States shall be reimbursed for such other amounts from 
     collections from the individual owing such obligation.
       ``(3) Families receiving state assistance.--In the case of 
     an individual with respect to whom an assignment of child 
     support payments to a State is in effect--
       ``(A) of the amounts collected which represent monthly 
     support payments, the first $50 of any payments for a month 
     shall be paid to such individual and shall not be 
     considered as income for purposes of calculating amounts 
     of State assistance, and
       ``(B) all other amounts shall be paid to such State 
     pursuant to such assignment.
       ``(j) Treatment of Arrearages Under Child Support 
     Obligations Not Subject To Section For Prior Period.--If--
       ``(1) this section did not apply to any child support 
     obligation by reason of subsection (b) for any prior period, 
     and
       ``(2) there is a legally enforceable past-due amount under 
     such obligation for such period,
     then such past-due amount shall be treated for purposes of 
     this section as owed (until paid) for each month that this 
     section applies to such obligation.
       ``(k) Definitions and Special Rules.--
       ``(1) Definitions.--For purposes of this section--
       ``(A) Withholding certificate.--The term `withholding 
     certificate' means the withholding exemption certificate used 
     for purposes of chapter 24.
       ``(B) Business day.--The term `business day' means any day 
     other than a Saturday, Sunday, or legal holiday (as defined 
     in section 7503).
       ``(2) Timely mailing.--Any notice under subsection (c)(2) 
     or (d)(2) which is delivered by United States mail shall be 
     treated as given on the date of the United States postmark 
     stamped on the cover in which such notice is mailed.
       ``(l) Regulations.--The Secretary shall prescribe such 
     regulations as may be necessary or appropriate to carry out 
     the purposes of this section.''
       (b) Withheld Child Support To Be Shown on W-2.--Subsection 
     (a) of section 6051 of such Code, as amended by section 
     310(c)(3) of the Health Insurance Portability and 
     Accountability Act of 1996, is amended by striking ``and'' at 
     the end of paragraph (10), by striking the period at the end 
     of paragraph (11) and inserting ``, and'', and by inserting 
     after paragraph (11) the following new paragraph:
       ``(12) the total amount deducted and withheld as a child 
     support obligation under section 7525(c).''
       (c) Application of Estimated Tax.--
       (1) In general.--Subsection (f) of section 6654 of such 
     Code (relating to failure by individual to pay estimated 
     income tax) is amended by striking ``minus'' at the end of 
     paragraph (2) and inserting ``plus'', by redesignating 
     paragraph (3) as paragraph (4), and by inserting after 
     paragraph (2) the following new paragraph:
       ``(3) the aggregate amount of the child support obligations 
     of the taxpayer for months ending with or within the taxable 
     year (other than such an obligation for any month for which 
     section 7525 does not apply to such obligation), minus''.
       (2) Paragraph (1) of section 6654(d) of such Code is 
     amended by adding at the end the following new subparagraph:
       ``(D) Determination of required annual payment for 
     taxpayers required to pay child support.--In the case of a 
     taxpayer who is required under section 7525 to pay a child 
     support obligation (as defined in section 7525) for any month 
     ending with or within the taxable year, the required annual 
     payment shall be the sum of--
       ``(i) the amount determined under subparagraph (B) without 
     regard to subsection (f)(3), plus
       ``(ii) the aggregate amount described in subsection 
     (f)(3).''
       (3) Credit for withheld amounts, etc.--Subsection (g) of 
     section 6654 of such Code is amended by adding at the end the 
     following new paragraph:
       ``(3) Child support obligations.--For purposes of applying 
     this section, the amounts collected under section 7525 shall 
     be deemed to be a payment of the amount described in 
     subsection (f)(3) on the date such amounts were actually 
     withheld or paid, as the case may be.''
       (d) Penalty For False Information on Withholding 
     Certificate.--Section 7205 of such Code (relating to 
     fraudulent withholding exemption certificate or failure to 
     supply information) is amended by adding at the end the 
     following new subsection:
       ``(c) Withholding of Child Support Obligations.--If any 
     individual willfully makes a false statement under section 
     7525(a), then such individual shall, in addition to any other 
     penalty provided by law, upon conviction thereof, be fined 
     not more than $1,000, or imprisoned not more than 1 year, or 
     both.''
       (e) New Withholding Certificate Required.--Not later than 
     90 days after the date this Act takes effect, each employee 
     who has a child support obligation to which section 7525 of 
     the Internal Revenue Code of 1986 (as added by this section) 
     applies shall furnish a new withholding certificate to each 
     of such employee's employers. A certificate required under 
     the preceding sentence shall be treated as required under 
     such section 7525.
       (f) Repeal of Offset of Past-Due Support Against 
     Overpayments.--
       (1) Section 6402 of such Code, as amended by section 
     110(l)(7) of the Personal Responsibility and Work Opportunity 
     Reconciliation Act of 1996, is amended by striking 
     subsections (c) and (h) and by redesignating subsections (d), 
     (e), (f), (g), (i), and (j) as subsections (c), (d), (e), 
     (f), (g), and (h), respectively.
       (2) Subsection (a) of section 6402 of such Code, as so 
     amended, is amended by striking ``(c), (d), and (e)'' and 
     inserting ``(c) and (d)''.
       (3) Subsection (c) of section 6402 of such Code (as 
     redesignated by paragraph (1)) is amended--
       (A) by striking ``(other than past-due support subject to 
     the provisions of subsection (c))'' in paragraph (1),
       (B) by striking ``after such overpayment is reduced 
     pursuant to subsection (c) with respect to past-due support 
     collected pursuant to an assignment under section 402(a)(26) 
     of the Social Security Act and'' in paragraph (2).
       (4) Subsection (d) of section 6402 of such Code (as 
     redesignated by paragraph (1)) is amended by striking ``or 
     (d)''.
       (g) Repeal of Collection of Past-Due Support.--Section 6305 
     of such Code is hereby repealed.
       (h) Clerical Amendments.--
       (1) The table of sections for subchapter A of chapter 64 of 
     such Code is amended by striking the item relating to section 
     6305.
       (2) The table of sections for chapter 77 of such Code is 
     amended by adding at the end thereof the following new item:

``Sec. 7525. Collection of child support.''
       (h) Use of Parent Locator Service.--Section 453(a) of the 
     Social Security Act (42 U.S.C. 653(a)) is amended by 
     inserting ``or the Internal Revenue Service'' before 
     ``information as''.
                                 ______
                                 
      By Mr. GRAMS (for himself, Mr. Hutchinson, Mr. Nickles, Mr. Kyl, 
        and Mr. Coats):
  S. 98. A bill to amend the Internal Revenue Code of 1986 to provide a 
family tax credit; to the Committee on Finance.

[[Page S478]]

                  THE FAMILY TAX FAIRNESS ACT OF 1997

  Mr. GRAMS. Madam President, I thank my colleague from Oklahoma for 
helping us in supporting this bill.
  Madam President, I rise today to introduce legislation, together with 
Senator Hutchinson, my distinguished colleague from Arkansas, a bill to 
provide the $500 per child tax credit for America's working families. 
We are pleased, as I said, to be joined by Senator Nickles, along with 
Senators Kyl and Coats, in introducing this bill.
  The November election sends us a very clear message that the American 
people want us to work together, to work together in a bipartisan 
manner, to balance the Federal budget, control the growth of 
Government, and to restore its accountability. While we see the tax 
burden increase on the middle class, working families need our help, 
and it is time that Congress and the President come together to deliver 
it.
  Since the opening days of the 105th Congress, a renewed spirit of 
cooperation has settled in over Washington. Instead of the partisan 
politics that have often and too often exploited our disagreements, the 
talk from the Capitol Building to the White House has centered on 
creating consensus. Just yesterday in his inaugural address the 
President affirmed this commitment when he said, ``The American people 
returned to office a President of one party and a Congress of another. 
Surely they did not do this to advance the politics of petty bickering 
and partisanship, which they plainly deplore.''
  While a sign of that new commitment, I believe, is the strongest and 
the most compassionate statement this Congress and this President can 
make in 1997 on behalf of working families is to cut their taxes and to 
leave them a little bit more of their own money at the end of the day, 
the extensive debate that we have undertaken in the past 2 years over 
fiscal policy has helped us to understand that working families are 
indeed overtaxed.
  The child tax credit is appropriate and necessary to stimulate 
economic growth and to allow families to make more of their own 
spending decisions. The people of Minnesota sent me to Washington with 
their instructions to make the $500-per-child tax credit a top 
priority. Like struggling men and women nationwide, Minnesotans have 
seen what our outrageous tax burden has done to their families over the 
past 40 years. It is far from merely being a fact of life. Taxes today 
dominate the family budget.
  There is no better argument for tax relief than to consider that 
taxpayers today are spending more to feed their Government than they 
are spending to feed, clothe, and shelter their families. When we 
debated the $500-per-child tax credit in the last Congress, some of my 
colleagues expressed their concern that any tax relief now would 
jeopardize their efforts to balance the Federal budget. Balance the 
budget first, they said, and then cut taxes later. Their concerns 
missed a very important part. The budget will never be balanced or stay 
balanced until we decide that it is the people who should prosper under 
it and not the Government.
  Recent economic data reveal that despite a shrinking Federal deficit, 
the Government is in fact getting bigger, not smaller. Government 
spending and taxes continue to soar, and total taxation now claims the 
largest bite in the Nation's income in history. Without significant 
policy changes, the deficit will begin climbing again in fiscal year 
1998 and reach over $200 billion by the year 2002.

  By enacting the $500-per-child tax credit we can begin turning back 
the decades of abuse which taxpayers have suffered at the hands of 
their own Government, a Government often eager to spend the taxpayers' 
money with reckless regard. The $500-per-child tax credit is the right 
solution because it takes power out of the hands of Washington's big 
spenders and puts it back where it can do the most good, and that is in 
the hands of families.
  Nobody outside of Washington's insulated fantasy world really thinks 
the Government can spend the family's dollars more efficiently than the 
family would. By leaving that money in the family bank accounts, 
taxpayers are then empowered to use it to directly benefit their own 
household. They can make the best decisions on how to spend those 
dollars. Beyond the direct benefits, families' tax relief can have a 
substantial and a positive impact on the economy as a whole.
  It was John F. Kennedy who observed that ``an economy hampered with 
high tax rates will never introduce enough revenue to balance the 
budget, just as it will never produce enough output and enough jobs.'' 
President Kennedy was able to put these theories to work in the early 
1960's when he enacted significant tax cuts that sparked one of the few 
periods of sustained growth that we have experienced in the last half 
century.
  It was 20 years later when President Ronald Reagan cut taxes once 
again that reinvigorated the economy, which responded enthusiastically 
with 19 million new jobs that were created, and take-home pay grew 13 
percent between 1982 and 1996. It is now President Clinton who has the 
opportunity to work alongside Congress as we cut taxes and generate a 
new era of growth in the economy and prosperity for American families. 
I am encouraged by his public cause for family tax relief, and in 
particular his words in support of the $500-per-child tax credit.
  With the President truly committed to working with us, there is every 
reason to believe that a plan that will balance the budget and reduce 
the tax load for working families will pass this Congress and be signed 
into law this year. We made a promise to middle class Americans that we 
would cut their taxes. We laid the groundwork for the $500-per-child 
tax credit in the 104th Congress, so now in the 105th it is time that 
we put aside politics and deliver on the promise.
  So I ask that S. 9 be introduced and properly referred.
  The PRESIDING OFFICER. The bill will be appropriately referred.
  Mr. GRAMS. Thank you very much, Madam President.
  Mr. HUTCHINSON. Madam President, I rise today in support of America's 
families. It is with a deep sense of honor that I stand for the first 
time before this great deliberative body. As the first Republican 
Senator to be popularly elected from the great state of Arkansas, I 
believe it is fitting that my first legislative initiative be on behalf 
of those whom we hold most dear--the children of America's families. It 
is doubly fitting that I join my dear friend from our days in the House 
of Representatives and now Senate colleague, Rod Grams, in 
cosponsorship of the Family Tax Fairness Act of 1997.
  My career of public service has been grounded in principles of faith, 
preservation of the family and honest but less intrusive government. 
These tenets will be my guide post as I serve the good people of 
Arkansas in the United States Senate.
  In my lifetime, I have observed the precipitous decline of the 
economic and moral health of the American family. This decline is 
attributable to many causes not the least of which is the rising tax 
burden. As a member of the baby boomer generation, I, like all of you, 
have watched our 2% tax rate of the 1950's grow to 25%, nearly a 300% 
increase since World War II. This means that America's families send 
one out of every four dollars to Washington. In real terms, the average 
American family pays more in federal taxes than it spends on food, 
clothing, transportation, insurance, and recreation combined.
  What is the payback for millions of hardworking American families? It 
is increased crime rates, failing educational systems, intrusive 
government, and a very real threat to our overall quality of life by 
the shrinking of America's backbone--the middle class. It is my belief 
that over taxation is slowly destroying the middle class American 
family. Families are working harder and harder and taking home less and 
less. Measured by average after-tax per capita income, families with 
children are now the lowest income group in America. Their average 
after-tax income is below that of elderly households. It is below that 
of single individuals, and it is below that of couples without 
children. The shrinking family paycheck because of ever-higher taxes 
forces families with children to spend more time at work and less time 
at home. Less family time translates into children with less parental 
supervision with all of its attendant problems.
  The Family Tax Fairness Act of 1997 with a $500 tax credit for every 
child under the age of 18, provides the stimulus to keep our families 
strong. It

[[Page S479]]

translates into over $25 billion of tax relief each year, of which over 
78 percent would directly benefit working and middle class families. I 
am convinced that parents, not government, can best decide how to 
allocate resources. Under this proposal, a family with two children 
would receive $1,000 to pay for clothes, college, or health insurance 
for the children. The Family Tax Fairness Act of 1997 is a statement by 
our government and our society that all our families and all of our 
children are valuable.
  In closing, I am reminded of the words of William Sumner in his 
speech, The Forgotten Man.
  ``The Forgotten Man . . . delving away in patient industry supporting 
his family, paying his taxes, casting his vote, supporting the church 
and school . . . but he is the only one for whom there is no provision 
in the great scramble and the big divide. Such is the Forgotten Man. He 
works, he votes, generally he prays--but his chief business in life is 
to pay . . . Who and where is the Forgotten Man in this case? Who will 
have to pay for it all?''
  Sadly, the Forgotten Man is a metaphor for today's American family. 
So, while I urge support for the repeal of the death tax--the 
inheritance tax--that killer of the American dream . . . and while I 
urge support for dramatically cutting the capital gains tax rate, which 
both economists and experience teach will actually increase federal 
revenues, let us not forget the American family.
  I urge my colleagues to join Senator Grams and myself in support of 
the Family Tax Fairness Act of 1997.
  I thank the chair and yield the floor.
  Mr. NICKLES. Madam President, Senator Grams and Senator Hutchinson 
will be introducing legislation dealing with the $500 tax credit per 
child. I compliment them on this legislation. I am happy to cosponsor 
it with them. It is outstanding legislation that will restore 
individual families the opportunity to keep more of their own money. I 
might mention that the definition of ``child'' in the legislation which 
we are introducing includes children up to age 18 in contrast to that 
introduced by the President which is up to age 12, a big difference. It 
is a very profamily, very positive protaxpayer piece of legislation of 
which I am very happy to cosponsor. And I compliment my colleagues from 
Minnesota and Arkansas for their leadership on this issue.
  I yield the floor.
  Mr. GRAMS addressed the Chair.
  The PRESIDING OFFICER. The Senator from Minnesota.
                                 ______
                                 
      By Mrs. BOXER:
  S. 99. A bill to amend the Internal Revenue Code of 1986 to allow 
companies to donate scientific equipment to elementary and secondary 
schools for use in their educational programs, and for other purposes; 
to the Committee on Finance.


              the computer donation incentive act of 1997

  Mrs. BOXER. Mr. President, in March 1996 scores of volunteers 
throughout California helped make NetDay 96 one of the most successful 
one-day public projects in history. At the time, we all noted that this 
electronic barn-raising could be a turning point in educational 
history--but only if we followed through with other steps to help our 
children travel the information superhighway. I would like to take one 
step by introducing the Computer Donation Incentive Act of 1997.
  The successful education of America's children is closely linked to 
the use of innovative educational technologies, particularly computer-
based instruction and research. Unfortunately, however, far too many 
public elementary and secondary school classrooms lack the computers 
they need to take advantage of these new educational technologies.
  The Computer Donation Incentive Act will help get our students those 
computers. Current law allows computer manufacturers to receive a 
greater deduction for donations of computers to college and 
universities, for scientific and research purposes, than for donations 
made to elementary and secondary schools for education purposes. That 
limitation may have made sense when this provision was enacted, before 
the personal computer boom, but not in the era of the Information 
Superhighway, such a limitation is unreasonable.
  The Computer Donation Incentive Act provides computer manufacturers 
the same enhanced deduction for donating computers for educational 
purposes that they currently receive for donating computers to colleges 
and universities for scientific purposes. Similarly, the bill will 
allow nonmanufacturers to receive a deduction for donating computers to 
elementary and secondary schools for educational use.
  The Boxer-Chafee bill will provide a reasonable incentive for 
businesses to donate computer to the schools. I would like to emphasize 
the donated computers must be nearly new; those donated by 
manufacturers must be no more than 2 year old, and those donated by 
nonmanufacturers must be no more than 3 year old.
  Along with computers and software, businesses should also donate 
their expertise, providing the training required to bring our schools 
fully on-line--and we challenge them to do so. Teachers and students 
both need such training in order to integrate computer-based lessons 
into their basic curriculum.
  Alone, neither NetDay nor an adjustment to the Tax Code can solve all 
our educational problems or even make every student computer literate 
for the next century. But together, each initiative we take will help 
provide our students with the tools they need to drive on the 
information Superhighway and compete in a global information-based 
marketplace. Such initiatives are investments in the futures of our 
children.
  Mr. President, I ask unanimous consent that this bill be printed in 
the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 99

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

     SECTION 1. CHARITABLE CONTRIBUTIONS OF SCIENTIFIC EQUIPMENT 
                   TO ELEMENTARY AND SECONDARY SCHOOLS.

       (a) In General.--Subparagraph (B) of section 170(e)(4) of 
     the Internal Revenue Code of 1986 is amended to read as 
     follows:
       ``(B) Qualified research or education contribution.--For 
     purposes of this paragraph, the term `qualified research or 
     education contribution' means a charitable contribution by a 
     corporation of tangible personal property (including computer 
     software), but only if--
       ``(i) the contribution is to--

       ``(I) an educational organization described in subsection 
     (b)(1)(A)(ii),
       ``(II) a governmental unit described in subsection (c)(1), 
     or
       ``(III) an organization described in section 41(e)(6)(B),

       ``(ii) the contribution is made not later than 3 years 
     after the date the taxpayer acquired the property (or in the 
     case of property constructed by the taxpayer, the date the 
     construction of the property is substantially completed),
       ``(iii) the property is scientific equipment or apparatus 
     substantially all of the use of which by the donee is for--

       ``(I) research or experimentation (within the meaning of 
     section 174), or for research training, in the United States 
     in physical or biological sciences, or
       ``(II) in the case of an organization described in clause 
     (i) (I) or (II), use within the United States for educational 
     purposes related to the purpose or function of the 
     organization,

       ``(iv) the original use of the property began with the 
     taxpayer (or in the case of property constructed by the 
     taxpayer, with the donee),
       ``(v) the property is not transferred by the donee in 
     exchange for money, other property, or services, and
       ``(vi) the taxpayer receives from the donee a written 
     statement representing that its use and disposition of the 
     property will be in accordance with the provisions of clauses 
     (iv) and (v).''
       (b) Donations to Charity for Refurbishing.--Section 
     170(e)(4) of the Internal Revenue Code of 1986 is amended by 
     adding at the end the following new subparagraph:
       ``(D) Donations to charity for refurbishing.--For purposes 
     of this paragraph, a charitable contribution by a corporation 
     shall be treated as a qualified research or education 
     contribution if--
       ``(i) such contribution is a contribution of property 
     described in subparagraph (B)(iii) to an organization 
     described in section 501(c)(3) and exempt from taxation under 
     section 501(a),
       ``(ii) such organization repairs and refurbishes the 
     property and donates the property to an organization 
     described in subparagraph (B)(i), and
       ``(iii) the taxpayer receives from the organization to whom 
     the taxpayer contributed the property a written statement 
     representing that its use of the property (and any use

[[Page S480]]

     by the organization to which it donates the property) meets 
     the requirements of this paragraph.''
       (c) Conforming Amendments.--
       (1) Paragraph (4)(A) of section 170(e) of the Internal 
     Revenue Code of 1986 is amended by striking ``qualified 
     research contribution'' each place it appears and inserting 
     ``qualified research or education contribution''.
       (2) The heading for section 170(e)(4) of such Code is 
     amended by inserting ``or education'' after ``research''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1996.
                                 ______
                                 
      By Mr. KERRY:
  S. 100. A bill to amend title 49, United States Code, to provide 
protection for airline employees who provide certain air safety 
information, and for other purposes; to the Committee on Labor and 
Human Resources.


                     aviation safety protection act

  Mr. KERRY. Mr. President, in an effort to increase overall safety of 
the airline industry, I am introducing the ``Aviation Safety Protection 
Act of 1997,'' which would establish whistle blower protection for 
aviation workers.
  The worker protections contained in the Occupational Safety and 
Health Act [OSHA] are very important to American workers. OSHA properly 
protects both private and Federal Government employees who report 
health and safety violations from reprisal by their employers. However, 
because of a loophole, aviation employees are not covered by these 
protections. Flight attendants and other airline employees are in the 
best position to recognize breaches in safety regulations and can be 
the critical link in ensuring safer air travel. Currently, those 
employees who work for unscrupulous airlines face the possibility of 
harassment, negative disciplinary action, and even termination if they 
report work violations.
  Aviation employees perform an important public service when they 
choose to report safety concerns. No employee should be put in the 
position of having to choose between his or her job and reporting 
violations that threaten the safety of passengers and crew. For that 
reason, we need a strong whistle blower law to protect aviation 
employees from retaliation by their employers when reporting incidents 
to Federal authorities. Americans who travel on commercial airlines 
deserve the safeguards that exist when flight attendants and other 
airline employees can step forward to help Federal authorities enforce 
safety laws.
  This bill would close the loophole in OSHA law and provide the 
necessary protections for aviation employees who provide safety 
violation information to Federal authorities or testify about or assist 
in disclosure of safety violations. The act provides a Department of 
Labor complaint procedure for employees who experience employer 
reprisal for reporting such violations, and assures that there are 
strong enforcement and judicial review provisions for fair 
implementation of the protections. The act also protects airlines from 
frivolous complaints by establishing a fine which will be imposed on an 
employee who files a complaint if the Department of Labor determines 
that there is no merit to the complaint.
  I want to acknowledge the leadership of Representative James Clyburn 
who will introduce the bill in the House of Representatives. I am 
pleased to introduce the companion legislation in the Senate.
  This bill will provide important protections to aviation workers and 
the general public. I urge my colleagues to join me in supporting it.
  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. 100

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Aviation Safety Protection 
     Act of 1997''.

     SEC. 2. PROTECTION OF EMPLOYEES PROVIDING AIR SAFETY 
                   INFORMATION.

       (a) General Rule.--Chapter 421 of title 49, United States 
     Code, is amended by adding at the end the following new 
     subchapter:

           ``SUBCHAPTER III--WHISTLEBLOWER PROTECTION PROGRAM

     ``Sec. 42121. Protection of employees providing air safety 
       information

       ``(a) Discrimination Against Airline Employees.--No air 
     carrier or contractor or subcontractor of an air carrier may 
     discharge an employee of the air carrier or the contractor or 
     subcontractor of an air carrier or otherwise discriminate 
     against any such employee with respect to compensation, 
     terms, conditions, or privileges of employment because the 
     employee (or any person acting pursuant to a request of the 
     employee)--
       ``(1) provided, caused to be provided, or is about to 
     provide or cause to be provided to the Federal Government 
     information relating to air safety under this subtitle or any 
     other law of the United States;
       ``(2) has filed, caused to be filed, or is about to file or 
     cause to be filed a proceeding relating to air carrier safety 
     under this subtitle or any other law of the United States;
       ``(3) testified or is about to testify in such a 
     proceeding; or
       ``(4) assisted or participated or is about to assist or 
     participate in such a proceeding.
       ``(b) Department of Labor Complaint Procedure.--
       ``(1) Filing and notification.--
       ``(A) In general.--In accordance with this paragraph, a 
     person may file (or have a person file on behalf of that 
     person) a complaint with the Secretary of Labor if that 
     person believes that an air carrier or contractor or 
     subcontractor of an air carrier discharged or otherwise 
     discriminated against that person in violation of subsection 
     (a).
       ``(B) Requirements for filing complaints.--A complaint 
     referred to in subparagraph (A) may be filed not later than 
     180 days after an alleged violation occurs. The complaint 
     shall state the alleged violation.
       ``(C) Notification.--Upon receipt of a complaint submitted 
     under subparagraph (A), the Secretary of Labor shall notify 
     the air carrier, contractor, or subcontractor named in the 
     complaint and the Administrator of the Federal Aviation 
     Administration of the--
       ``(i) filing of the complaint;
       ``(ii) allegations contained in the complaint;
       ``(iii) substance of evidence supporting the complaint; and
       ``(iv) opportunities that are afforded to the air carrier, 
     contractor, or subcontractor under paragraph (2).
       ``(2) Investigation; preliminary order.--
       ``(A) In general.--Not later than 60 days after receiving a 
     complaint under paragraph (1), and after affording the air 
     carrier, contractor, or subcontractor named in the complaint 
     the opportunities specified in subparagraph (B), the 
     Secretary of Labor shall conduct an investigation to 
     determine whether there is reasonable cause to believe that a 
     complaint submitted under this subsection has merit.
       ``(B) Opportunity for response.--Before the date specified 
     in subparagraph (A), the Secretary of Labor shall afford the 
     air carrier, contractor, or subcontractor named in the 
     complaint an opportunity to--
       ``(i) submit to the Secretary of Labor a written response 
     to the complaint; and
       ``(ii) meet with a representative of the Secretary of Labor 
     to present statements from witnesses.
       ``(C) Notification.--Upon completion of an investigation 
     under subparagraph (A), the Secretary of Labor shall notify 
     the complainant and the air carrier, contractor, or 
     subcontractor alleged to have committed a violation of 
     subsection (a) of the findings of the investigation.
       ``(D) Orders.--If, on the basis of the investigation 
     conducted under this paragraph, the Secretary of Labor 
     concludes that there is a reasonable cause to believe that a 
     violation of subsection (a) has occurred, the Secretary 
     shall--
       ``(i) issue a preliminary order providing the relief 
     prescribed by paragraph (3)(B); and
       ``(ii) provide a copy of the order to the parties specified 
     in subparagraph (C).
       ``(E) Objections.--Not later than 30 days after receiving a 
     notification under subparagraph (C), the air carrier, 
     contractor, or subcontractor alleged to have committed a 
     violation in a complaint filed under this subsection or the 
     complainant may file an objection to the findings of an 
     investigation conducted under this paragraph or a preliminary 
     order issued under this paragraph and request a hearing on 
     the record. The filing of an objection under this 
     subparagraph shall not operate to stay any reinstatement 
     remedy contained in a preliminary order issued under this 
     paragraph.
       ``(F) Hearings.--A hearing requested under this paragraph 
     shall be conducted expeditiously.
       ``(G) Final order.--If no hearing is requested by the date 
     specified in subparagraph (E), a preliminary order shall be 
     considered to be a final order that is not subject to 
     judicial review.
       ``(3) Final order.--
       ``(A) Deadline for issuance; settlement agreements.--
       ``(i) In general.--Not later than 120 days after conclusion 
     of a hearing under paragraph (2), the Secretary of Labor 
     shall issue a final order that--

       ``(I) provides relief in accordance with this paragraph; or
       ``(II) denies the complaint.

       ``(ii) Settlement agreement.--At any time before issuance 
     of a final order under this paragraph, a proceeding under 
     this subsection may be terminated on the basis of a 
     settlement agreement entered into by the Secretary of Labor, 
     the complainant, and the air carrier, contractor, or 
     subcontractor alleged to have committed the violation.

[[Page S481]]

       ``(B) Remedy.--If, in response to a complaint filed under 
     paragraph (1), the Secretary of Labor determines that a 
     violation of subsection (a) has occurred, the Secretary of 
     Labor shall order the air carrier, contractor, or 
     subcontractor that the Secretary of Labor determines to have 
     committed the violation to--
       ``(i) take action to abate the violation;
       ``(ii) reinstate the complainant to the former position of 
     the complainant and ensure the payment of compensation 
     (including back pay) and the restoration of terms, 
     conditions, and privileges associated with the employment; 
     and
       ``(iii) provide compensatory damages to the complainant.
       ``(C) Costs of complaint.--If the Secretary of Labor issues 
     a final order that provides for relief in accordance with 
     this paragraph, the Secretary of Labor, at the request of the 
     complainant, shall assess against the air carrier, 
     contractor, or subcontractor named in the order an amount 
     equal to the aggregate amount of all costs and expenses 
     (including attorney and expert witness fees) reasonably 
     incurred by the complainant (as determined by the Secretary 
     of Labor) for, or in connection with, the bringing of the 
     complaint that resulted in the issuance of the order.
       ``(D) Frivolous complaints.--If the Secretary of Labor 
     finds that a complaint brought under paragraph (1) is 
     frivolous or was brought in bad faith, the Secretary of Labor 
     may award to the prevailing employer a reasonable attorney 
     fee in an amount not to exceed $5,000.
       ``(4) Review.--
       ``(A) Appeal to court of appeals.--
       ``(i) In general.--Not later than 60 days after a final 
     order is issued under paragraph (3), a person adversely 
     affected or aggrieved by that order may obtain review of the 
     order in the United States court of appeals for the circuit 
     in which the violation allegedly occurred or the circuit in 
     which the complainant resided on the date of that violation.
       ``(ii) Requirements for judicial review.--A review 
     conducted under this paragraph shall be conducted in 
     accordance with chapter 7 of title 5. The commencement of 
     proceedings under this subparagraph shall not, unless ordered 
     by the court, operate as a stay of the order that is the 
     subject of the review.
       ``(B) Limitation on collateral attack.--An order referred 
     to in subparagraph (A) shall not be subject to judicial 
     review in any criminal or other civil proceeding.
       ``(5) Enforcement of order by secretary of labor.--
       ``(A) In general.--If an air carrier, contractor, or 
     subcontractor named in an order issued under paragraph (3) 
     fails to comply with the order, the Secretary of Labor may 
     file a civil action in the United States district court for 
     the district in which the violation occurred to enforce that 
     order.
       ``(B) Relief.--In any action brought under this paragraph, 
     the district court shall have jurisdiction to grant any 
     appropriate form of relief, including injunctive relief and 
     compensatory damages.
       ``(6) Enforcement of order by parties.--
       ``(A) Commencement of action.--A person on whose behalf an 
     order is issued under paragraph (3) may commence a civil 
     action against the air carrier, contractor, or subcontractor 
     named in the order to require compliance with the order. The 
     appropriate United States district court shall have 
     jurisdiction, without regard to the amount in controversy or 
     the citizenship of the parties, to enforce the order.
       ``(B) Attorney fees.--In issuing any final order under this 
     paragraph, the court may award costs of litigation (including 
     reasonable attorney and expert witness fees) to any party if 
     the court determines that the awarding of those costs is 
     appropriate.
       ``(c) Mandamus.--Any nondiscretionary duty imposed by this 
     section shall be enforceable in a mandamus proceeding brought 
     under section 1361 of title 28.
       ``(d) Nonapplicability To Deliberate Violations.--
     Subsection (a) shall not apply with respect to an employee of 
     an air carrier, or contractor or subcontractor of an air 
     carrier who, acting without direction from the air carrier 
     (or an agent, contractor, or subcontractor of the air 
     carrier), deliberately causes a violation of any requirement 
     relating to air carrier safety under this subtitle or any 
     other law of the United States.''.
       (b) Conforming Amendment.--The chapter analysis for chapter 
     421 of title 49, United States Code, is amended by adding at 
     the end the following:

           ``SUBCHAPTER III--WHISTLEBLOWER PROTECTION PROGRAM

``42121. Protection of employees providing air safety information.''.

     SEC. 3. CIVIL PENALTY.

       Section 46301(a)(1)(A) of title 49, United States Code, is 
     amended by striking ``subchapter II of chapter 421'' and 
     inserting ``subchapter II or III of chapter 421''.
                                 ______
                                 
      By Mrs. BOXER:
  S. 101. A bill to amend the Public Health Service Act to provide for 
the training of health professions students with respect to the 
identification and referral of victims of domestic violence; to the 
Committee on Labor and Human Resources.


         the domestic violence identification and referral act

  Mrs. BOXER. Mr. President, I rise today to introduce the Domestic 
Violence Identification and Referral Act.
  Spousal abuse, child abuse, and elder abuse injures millions of 
Americans each year, and is growing at an alarming rate. An estimated 2 
to 4 million women are beaten by their spouses or former spouses each 
year. In 1993, 2.9 million children were reported abused or neglected, 
about triple the number reported in 1980. Studies also showed that 
spouse abuse and child abuse often go hand-in-hand.
  Doctors, nurses, and other health care professionals are on the front 
lines of this abuse, but they cannot stop what they have been trained 
to see or talk about. The Domestic Violence Identification and Referral 
Act addresses this need by encouraging medical schools to incorporate 
training on domestic violence into their curriculums.
  There is a need for this legislation. While many medical 
specialities, hospitals, and other organizations have made education 
about domestic violence a priority, this instruction typically occurs 
on the job or as part of a continuing medical education program. A 1994 
survey by the Association of American Medical Colleges [AAMC] found 
that 60 percent of medical school graduates rated the time devoted to 
instruction in domestic violence as inadequate.
  The bill I am introducing today would give preference in Federal 
funding to those medical and other health professional schools which 
provide significant training in domestic violence. It defines 
significant training to include identifying victims of domestic 
violence and maintaining complete medical records, providing medical 
advice regarding the dynamics and nature of domestic violence, and 
referring victims to appropriate public and nonprofit entities for 
assistance.
  The bill also defines domestic violence in the broadest terms, to 
include battering, child abuse and elder abuse.
  I hope my colleagues agree that this legislation is a critical next 
step in the fight to bring the brutality of domestic violence out in 
the open. It mobilizes our Nation's health care providers to recognize 
and treat its victims--and will ultimately save lives by helping to 
break the cycle of violence.
  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. 101

       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 ``Domestic Violence 
     Identification and Referral Act of 1997''.

     SEC. 2. ESTABLISHMENT, FOR CERTAIN HEALTH PROFESSIONS 
                   PROGRAMS, OF PROVISIONS REGARDING DOMESTIC 
                   VIOLENCE.

       (a) Title VII Programs; Preferences in Financial Awards.--
     Section 791 of the Public Health Service Act (42 U.S.C. 295j) 
     is amended by adding at the end the following:
       ``(c) Preferences Regarding Training in Identification and 
     Referral of Victims of Domestic Violence.--
       ``(1) In general.--In the case of a health professions 
     entity specified in paragraph (2), the Secretary shall, in 
     making awards of grants or contracts under this title, give 
     preference to any such entity (if otherwise a qualified 
     applicant for the award involved) that has in effect the 
     requirement that, as a condition of receiving a degree or 
     certificate (as applicable) from the entity, each student 
     have had significant training in carrying out the following 
     functions as a provider of health care:
       ``(A) Identifying victims of domestic violence, and 
     maintaining complete medical records that include 
     documentation of the examination, treatment given, and 
     referrals made, and recording the location and nature of the 
     victim's injuries.
       ``(B) Examining and treating such victims, within the scope 
     of the health professional's discipline, training, and 
     practice, including, at a minimum, providing medical advice 
     regarding the dynamics and nature of domestic violence.
       ``(C) Referring the victims to public and nonprofit private 
     entities that provide services for such victims.
       ``(2) Relevant health professions entities.--For purposes 
     of paragraph (1), a health professions entity specified in 
     this paragraph is any entity that is a school of medicine, a 
     school of osteopathic medicine, a graduate program in mental 
     health practice, a school of nursing (as defined in section 
     853), a program for the training of physician assistants, or 
     a program for the training of allied health professionals.
       ``(3) Report to congress.--Not later than 2 years after the 
     date of the enactment of the

[[Page S482]]

     Domestic Violence Identification and Referral Act of 1997, 
     the Secretary shall submit to the Committee on Commerce of 
     the House of Representatives, and the Committee on Labor and 
     Human Resources of the Senate, a report specifying the health 
     professions entities that are receiving preference under 
     paragraph (1); the number of hours of training required by 
     the entities for purposes of such paragraph; the extent of 
     clinical experience so required; and the types of courses 
     through which the training is being provided.
       ``(4) Definitions.--For purposes of this subsection, the 
     term `domestic violence' includes behavior commonly referred 
     to as domestic violence, sexual assault, spousal abuse, woman 
     battering, partner abuse, child abuse, elder abuse, and 
     acquaintance rape.''.
       (b) Title VIII Programs; Preferences in Financial Awards.--
     Section 860 of the Public Health Service Act (42 U.S.C. 298b-
     7) is amended by adding at the end the following:
       ``(f) Preferences Regarding Training in Identification and 
     Referral of Victims of Domestic Violence.--
       ``(1) In general.--In the case of a health professions 
     entity specified in paragraph (2), the Secretary shall, in 
     making awards of grants or contracts under this title, give 
     preference to any such entity (if otherwise a qualified 
     applicant for the award involved) that has in effect the 
     requirement that, as a condition of receiving a degree or 
     certificate (as applicable) from the entity, each student 
     have had significant training in carrying out the following 
     functions as a provider of health care:
       ``(A) Identifying victims of domestic violence, and 
     maintaining complete medical records that include 
     documentation of the examination, treatment given, and 
     referrals made, and recording the location and nature of the 
     victim's injuries.
       ``(B) Examining and treating such victims, within the scope 
     of the health professional's discipline, training, and 
     practice, including, at a minimum, providing medical advice 
     regarding the dynamics and nature of domestic violence.
       ``(C) Referring the victims to public and nonprofit private 
     entities that provide services for such victims.
       ``(2) Relevant health professions entities.--For purposes 
     of paragraph (1), a health professions entity specified in 
     this paragraph is any entity that is a school of nursing or 
     other public or nonprofit private entity that is eligible to 
     receive an award described in such paragraph.
       ``(3) Report to congress.--Not later than 2 years after the 
     date of the enactment of the Domestic Violence Identification 
     and Referral Act of 1997, the Secretary shall submit to the 
     Committee on Commerce of the House of Representatives, and 
     the Committee on Labor and Human Resources of the Senate, a 
     report specifying the health professions entities that are 
     receiving preference under paragraph (1); the number of hours 
     of training required by the entities for purposes of such 
     paragraph; the extent of clinical experience so required; and 
     the types of courses through which the training is being 
     provided.
       ``(4) Definitions.--For purposes of this subsection, the 
     term `domestic violence' includes behavior commonly referred 
     to as domestic violence, sexual assault, spousal abuse, woman 
     battering, partner abuse, child abuse, elder abuse, and 
     acquaintance rape.''.
                                 ______
                                 
      By Mr. BREAUX (for himself, Mr. Akaka, Mr. Bingaman, Mr. Chafee, 
        Mr. Cochran, Mr. Craig, Mr. Glenn, Mr. Jeffords, Mr. Leahy, Mr. 
        Inouye, Ms. Mikulski, and Mr. Reid):
  S. 102. A bill to amend title XVIII of the Social Security Act to 
improve medicare treatment and education for beneficiaries with 
diabetes by providing coverage of diabetes outpatient self-management 
training services and uniform coverage of blood-testing strips for 
individuals with diabetes; to the Committee on Finance.
  Mr. BREAUX. Mr. President, diabetes is the fourth leading cause of 
death from diseases in the United States. Deaths accountable to 
diabetes or resulting complications number about 250,000 per year. 
Diabetes also results in about 12,000 new cases of blindness each year 
and greatly increases an individual's chance of heart disease, kidney 
failure, and stroke.
  The terrible irony, Mr. President, is that diabetes is largely a 
treatable condition. While there is no known cure, individuals who have 
diabetes can lead completely normal, active lives so long as they stick 
to a proper diet, carefully monitor the amount of sugar in their blood, 
and take their medicine, which may or may not include insulin. In order 
to take proper care of themselves, diabetics need to take self-
maintenance education programs--at least once when they are diagnosed 
with the disease and then periodically after that to keep up with the 
latest treatments and any changes in their own condition.
  Appropriate preventive education services for diabetics have the 
potential to save a great deal of money that would otherwise go for 
hospitalizations and other acute care costs--not to mention a great 
deal of unnecessary pain and suffering. CBO projects that this proposal 
would save Medicare money in the long-run.
  Medicare currently covers diabetes self-maintenance education 
services in inpatient or hospital-based settings and in limited 
outpatient settings, specifically hospital outpatient departments or 
rural health clinics. Medicare does not cover education services if 
they are given in any other outpatient setting, such as a doctor's 
office. Even the limited coverage of outpatient settings that is 
currently permitted under Medicare is subject to State-by-State 
variation according to fiscal intermediaries' interpretation.
  Medicare also covers the cost of the paper test strips that are used 
to monitor the sugar levels in the blood--but only for diabetics who 
require insulin to control their disease. All noninsulin dependent 
diabetics must purchase these test strips at their own expense.
  Today, I am introducing the Medicare Diabetes Education and Supplies 
Amendments of 1997. This legislation would provide Medicare coverage 
for outpatient education on a consistent equitable basis throughout the 
country. The bill would extend Medicare coverage of outpatient programs 
beyond hospital-based programs and rural health clinics and direct the 
Secretary of Health and Human Services to do two things: First, to 
develop and implement payment amounts for outpatient diabetes education 
programs; and second, to adopt quality standards for outpatient 
education programs. Only qualified programs would be eligible to 
receive Medicare reimbursement. Furthermore, this legislation would 
mandate test strip coverage for all diabetics.
  This preventive measure is a sensible one that will show savings for 
the Medicare Program in the long run. I encourage my colleagues to join 
me in supporting its passage this Congress.
                                 ______
                                 
      By Mr. MURKOWSKI (for himself, Mr. Craig, Mr. Grams, Mr. 
        Kempthorne, Mr. Abraham, Mr. Helms, Mr. Thurmond, Mr. Kyl, Mr. 
        Hollings, Mr. Mack, Mr. Faircloth, Mr. Hatch, Mr. Warner, Mr. 
        Bond, Mr. Smith, Mr. Roberts, Mr. Santorum, Mr. Lott, and Mr. 
        Jeffords):
  S. 104. A bill to amend the Nuclear Waste Policy Act of 1982; to the 
Committee on Energy and Natural Resources.


                  the nuclear waste policy act of 1997

  Mr. MURKOWSKI. Mr. President, last summer, the U.S. Court of Appeals 
issued a ruling that confirmed something that many of us already 
understood: the Federal Government has an obligation to provide a safe, 
centralized storage place for our Nation's spent nuclear fuel and 
nuclear waste, beginning less than 1 year from today.
  This is a commitment that Congress, and the Department of Energy, 
made 15 years ago. We've collected $12 billion from America's 
ratepayers for this purpose. But after spending 6 billion of those 
dollars, the Federal Government is still not prepared to deliver on its 
promise to take and safely dispose of our Nation's nuclear waste by 
1998. Hardworking Americans have paid for this as part of their monthly 
electric bill. But they haven't gotten results. So a lawsuit was filed, 
and the court confirmed that there is a legal obligation, as well as a 
moral one. We have reached a crossroads. The job of fixing this program 
is ours. The time for fixing the program is now.
  Today, high-level nuclear waste and highly radioactive used nuclear 
fuel is accumulating at over 80 sites in 41 States, including waste 
stored at DOE weapons facilities. It is stored in populated areas, near 
our neighborhoods and schools, on the shores of our lakes and rivers, 
in the backyard of constituents young and old all across this land. 
Used nuclear fuel is being stored near the east and west coasts, where 
most Americans live. It may be in your town. Near your neighborhood.
  Unfortunately, used fuel is being stored in pools that were not 
designed for long-term storage. Some of this fuel is already over 30 
years old. Each year that goes by, our ability to continue storage of 
this used fuel at each of these sites in a safe and responsible

[[Page S483]]

way diminishes. It is irresponsible to let this situation continue. It 
is unsafe to let this dangerous radioactive material continue to 
accumulate at more than 80 sites all across the country. It is unwise 
to block the safe storage of this used fuel in a remote area, away from 
high populations. This is a national problem that requires a 
coordinated, national solution.
  Today, on behalf of myself, Mr. Craig, Mr. Grams, Mr. Kempthorne, Mr. 
Abraham, Mr. Helms, Mr. Thurmond, Mr. Kyl, Mr. Hollings, Mr. Mack, Mr. 
Faircloth, Mr. Hatch, Mr. Warner, Mr. Bond, Mr. Robert Smith, Mr. 
Roberts, Mr. Santorum, Mr. Lott, and Mr. Jeffords, I introduce the text 
of S. 1936, from the 104th Congress, as the Nuclear Waste Policy Act of 
1997. This legislation, which was passed by the Senate last summer by a 
63-to-37 vote, sets forth a program that will allow the Department of 
Energy to meet its obligation as soon as possible. The bill provides 
for an integrated system to manage used fuel from commercial nuclear 
powerplants and high-level radioactive waste from DOE's nuclear weapons 
facilities. The integrated system includes construction and operation 
of a temporary storage center, a safe transportation network to 
transfer these byproducts, and continuing scientific studies at Yucca 
Mountain, NV, to determine if it is a suitable repository site.
  During floor consideration of S. 1936 last year, we received many 
constructive suggestions for improving the bill. The final version of 
S. 1936 passed by the Senate incorporated many of these changes. The 
most important provisions of the bill include:
  Role for EPA.--The bill provides that the Environmental Protection 
Agency shall issue standards for the protection of the public from 
releases of radioactive materials from a permanent nuclear waste 
repository. The Nuclear Regulatory Commission is required to base its 
licensing determination on whether the repository can be operated in 
accordance with EPA's radiation protection standards.
  National Environmental Policy Act [NEPA].--The bill complies fully 
with NEPA by requiring two full environmental impact statements, one in 
advance of operation of the temporary storage facility and one in 
advance of repository licensing by the Nuclear Regulatory Commission. 
The bill provides that where Congress has statutorily determined need, 
location, and size of the facilities, these issues need not be 
reconsidered.
  Transportation routing.--The bill includes language of an amendment 
offered by Senator Moseley-Braun, which provides that, in order to 
ensure that spent nuclear fuel and high-level nuclear waste is 
transported safely, the Secretary of Energy will use transportation 
routes that minimize, to the maximum practicable extent, transportation 
through populated and sensitive environmental areas. The language also 
requires that the Secretary develop, in consultation with the Secretary 
of Transportation, a comprehensive management plan that ensures the 
safe transportation of these materials.

  Transportation requirements.--The bill contains language clarifying 
that transportation of spent fuel under the Nuclear Waste Policy Act 
shall be governed by all requirements of Federal, State, and local 
governments and Indian tribes to the same extent that any person 
engaging in transportation in interstate commerce must comply with 
those requirements, as provided by the Hazardous Materials 
Transportation Act. The bill also requires the Secretary to provide 
technical assistance and funds for training to unions with experience 
with safety training for transportation workers. In addition, the bill 
clarifies that existing employee protections in title 49 of the United 
States Code concerning the refusal to work in hazardous conditions 
apply to transportation under this act. Finally, S. 1936 provides 
authority for the Secretary of Transportation to establish training 
standards, as necessary, for workers engaged in the transportation of 
spent fuel and high-level waste.
  Interim storage facility.--In order to ensure that the size and scope 
of the interim storage facility is manageable in the context of the 
overall nuclear waste program, and yet adequate to address the Nation's 
immediate spent fuel storage needs, the bill would limit the size of 
phase I of the interim storage facility to 15,000 metric tons of spent 
fuel and the size of phase II of the facility to 40,000 metric tons. 
Phase II of the facility would be expandable to 60,000 metric tons if 
the Secretary fails to meet his projected goals with regard to 
licensing of the permanent repository site.
  Preemption of other laws.--The bill provides that, if any law does 
not conflict with the provisions of the Nuclear Waste Policy Act and 
the Atomic Energy Act, that law will govern. State and local laws are 
preempted only if those laws are inconsistent with or duplicative of 
the Nuclear Waste Policy Act or the Atomic Energy Act. This language is 
consistent with the preemption authority found in the existing 
Hazardous Materials Transportation Act.
  Finally, the bill contains bipartisan language that was drafted to 
address the administration's objections to the siting of an interim 
facility at the Nevada test site before the viability assessment of the 
Yucca Mountain permanent repository site was available.--The language 
provides that construction shall not begin on an interim storage 
facility at Yucca Mountain before December 31, 1998. The bill provides 
for the delivery of an assessment of the viability of the Yucca 
Mountain site to the President and Congress by the Secretary 6 months 
before the construction can begin on the interim facility. If, based 
upon the information before him, the President determines, in his 
discretion, that Yucca Mountain is not suitable for development as a 
repository, then the Secretary shall cease work on both the interim and 
permanent repository programs at the Yucca Mountain site. The bill 
further provides that, if the President makes such a determination, he 
shall have 18 months to designate an interim storage facility site. If 
the President fails to designate a site, or if a site he has designated 
has not be approved by Congress within 2 years of his determination, 
the Secretary is instructed to construct an interim storage facility at 
the Yucca Mountain site. This provision ensures that the construction 
of an interim storage facility at the Yucca Mountain site will not 
occur before the President and Congress have had an ample opportunity 
to review the technical assessment of the suitability of the Yucca 
Mountain site for a permanent repository and to designate an 
alternative site for interim storage based upon that technical 
information. However, this provision also ensures that, ultimately, an 
interim storage facility site will be chosen. Without this assurance, 
we leave open the possibility we will find in 1998 that we have no 
interim storage, no permanent repository program and, after more than 
15 years and $6 billion spent, that we are back to where we started in 
1982 when we passed the first version of the Nuclear Waste Policy Act.

  During the debate that will unfold, we will have the Senators from 
Nevada oppose the bill with all the arguments that they can muster. 
That's understandable. They are merely doing what Nevadans have asked 
them to do. Nobody wants nuclear waste in their State, but it has to go 
somewhere. Both Senators from Nevada are friends of mine. We've talked 
about this issue at length. They are doing what they feel they must do 
to satisfy Nevadans. But as U.S. Senators, we must sometimes take a 
national perspective. We must do what's best for the country as a 
whole.
  No one can continue to pretend that there is an unlimited amount of 
time to deal with this problem. The Federal Government must act--and 
act now--to ensure that there is a safe and secure place to put 
radioactive waste it is obligated to accept. Although the court did not 
address the issue of remedies, the court was very clear that DOE has an 
obligation to take spent nuclear fuel in 1998, whether or not a 
repository is ready.

  So far, DOE's only response to the court's decision has been to send 
out a letter asking for suggestions on how it can meet its obligation 
to take spent fuel in 1998. Finally, it is clear that we all agree on 
the question. Now is the time for answers.
  We have a clear and simple choice. We can choose to have one remote, 
safe, and secure nuclear waste storage facility. Or through inaction 
and delay, we can face an uncertain judicial remedy which will almost 
certainly be

[[Page S484]]

costly, and which is unlikely to actually move waste out of America's 
backyards.
  It is not morally right to shirk our responsibility to protect the 
environment and the future of our children and grandchildren. We cannot 
wait until 1998 to decide whether the Department of Energy will store 
this nuclear waste. We have received letters from 23 State Governors 
and attorneys general, including Arizona, Arkansas, Delaware, Florida, 
Georgia, Illinois, Iowa, Kentucky, Maryland, Massachusetts, Michigan, 
Minnesota, Mississippi, New Mexico, North Carolina, Ohio, Oregon, 
Pennsylvania, Rhode Island, South Carolina, Vermont, Virginia, and 
Wisconsin, urging the Congress to pass, and the President to sign, a 
bill that provides for an interim storage site in Nevada. Congress must 
speak now and provide the means to build one, safe and monitored 
facility at the Nevada test site, a unique site so remote that the 
Government used it to explode nuclear weapons for 50 years, or another 
site designated by the President and Congress.
  The time is now--the Nuclear Waste Policy Act of 1997 is the answer.
  Mr. CRAIG. Mr. President, today we begin a new Congress and an urgent 
environmental problem remains unresolved. Today I am reintroducing 
legislation to address the problem that continues to vex us--that is, 
how to address our Nation's high-level nuclear waste disposal. The 
Nuclear Waste Policy Act of 1997 that is introduced today answers this 
problem and is responsible, fair, environmentally friendly, and 
supported by Members of both parties.
  Today, high-level nuclear waste and highly radioactive used nuclear 
fuel continues to accumulate at more than 80 sites in 41 States. Each 
year, as more and more fuel accumulates and our ability to continue to 
store this used fuel at each of these sites in a safe and responsible 
way diminishes. The only responsible choice is to support legislation 
that solves this problem by safely moving this used fuel to a safe, 
monitored facility in the remote Nevada desert. This answer will lead 
us to a safer future for all Americans.
  To facilitate our consideration of such legislation, Senator 
Murkowski and I along with 16 other cosponsors are introducing a bill 
to amend the Nuclear Waste Policy Act of 1982. This legislation is 
identical to S. 1936 that passed the Senate toward the end of the past 
Congress. Unfortunately, that legislation was not acted upon by the 
other body nor signed into law. It is my intent to assure that is not 
the fate of this legislation. The Senate Energy and Natural Resources 
Committee will hold a hearing on this bill on February 5 and will move 
to a speedy markup. I encourage the Senate and House to act quickly and 
to send it to the President for his signature.
  This bill contains all of the important clarifications and changes 
addressing the concerns that were raised prior to and during floor 
debate in the 104th Congress. This is legislation that will allow a 
solution for nuclear waste disposal. Let us move forward to enact it 
into law. I encourage the administration to work with us to make that a 
reality.
  This bill provides a clear and simple choice. We can choose to have 
one, remote, safe, and secure nuclear waste storage facility. Or, 
through inaction and delay, we can perpetuate the status quo and have 
80 such sites spread across the Nation. The courts have made clear the 
Department of Energy must act to dispose of this material in 1998. It 
is irresponsible to shirk our responsibility to protect the environment 
and the future for our children and grandchildren. This Nation needs to 
confront its nuclear waste problem now. I urge my colleagues to support 
the Nuclear Waste Policy Act of 1997.
  Mr. KEMPTHORNE. Mr. President, I rise in support of the Nuclear Waste 
Policy Act of 1997 introduced today by my good friends Senator Craig 
and Senator Murkowski, the chairman of the Senate Energy and Natural 
Resource Committee. This important bill will make substantial, 
necessary and meaningful progress in our Nation's effort to deal with 
the problem of radioactive nuclear waste. The bill is similar to the 
Nuclear Waste Policy Act of 1996 which passed the Senate by a 2-to-1 
ratio last year.
  The Nuclear Waste Policy Act of 1997, which I am proud to cosponsor, 
will establish an interim storage facility for spent nuclear fuel and 
high-level radioactive waste at the Nevada test site. The interim 
storage site will address our near-term problem of safely storing spent 
nuclear fuel and high-level waste while the characterization, 
permitting and construction of the permanent repository at Yucca 
Mountain proceeds.
  My State of Idaho currently stores a wide variety of Department of 
Energy, Navy and commercial reactor spent nuclear fuel at the Idaho 
National Engineering Laboratory. This spent nuclear fuel is stored in 
temporary facilities that are reaching the end of their design life. 
This phenomenon is happening across the country as temporary storage 
facilities are used beyond their design life because our Nation has not 
developed a comprehensive policy of dealing with nuclear waste. Instead 
of dealing with this difficult issue, for far too long our Government, 
under Democratic and Republican leadership, has kicked the hard 
decisions down the road. The Craig-Murkowski bill will tackle this 
difficult problem and it deserves the support of the Congress and the 
administration.
  The Nuclear Waste Policy Act of 1997 directs the Environmental 
Protection Agency's role to determine the appropriate radiation 
protection standards for the interim storage facility. The language 
directing establishment of an interim storage facility complies with 
the National Environmental Protection Act which requires preparation of 
an environmental impact statement before operation of the interim 
storage facility can begin. The Craig-Murkowski bill also directs that 
all shipments to the interim storage facility must comply with existing 
transportation laws and standards.
  The Nuclear Waste Policy Act offers justice to the rate payers and 
electric utilities who have paid into the nuclear waste fund and gotten 
little if any benefit from those fees. After collecting billions in 
fees, the Craig-Murkowski bill will force the Federal Government to 
provide the storage facility promised to those currently storing spent 
nuclear fuel.
  Mr. President, this is a very good bill which solves a vexing nation 
problem. The Craig-Murkowski bill will make important progress in the 
way the United States stores radioactive nuclear waste. The bill will 
show the citizens of this country that this Congress will solve tough 
problems in a fair and rational manner.
  I urge my colleagues to support the Nuclear Waste Policy Act of 1997 
and I want to thank Senators Craig and Murkowski for their tenacious 
determination to solve this national problem.
  Mr. ABRAHAM. Mr. President, today I join several of my colleagues in 
cosponsoring the Nuclear Waste Policy Act of 1997. This bill, a replica 
of the legislation that was passed by the Senate during the 104th 
Congress, is vital to securing this Nation's commercial waste at a 
single, safe facility.
  I believe an agreement for the consolidation of this Nation's 
commercial nuclear waste is long overdue. Today, old fuel is stored at 
over 100 facilities around the country. In 1980, the Department of 
Energy [DOE] recognized the danger of such a system and entered into an 
agreement with much of the nuclear power industry to fund the research 
and development of a central, permanent facility. DOE was to be 
responsible for collecting and storing the fuel starting in 1988. Since 
1980, the DOE has collected over $11 billion of the taxpayers' dollars 
for this permanent facility. Last year, however, the DOE announced that 
it will not be able to begin storing waste from commercial reactors 
until at least the year 2010.
  In my opinion, Michigan cannot wait that long. Michigan has four 
nuclear plants in operation today. All four were designed with some 
storage capacity, but none are capable of storing used fuel for an 
extended period of time. Indeed, the Palisades plant in Southaven, MI, 
has already run out of used fuel storage space. The plant now stores 
its nuclear waste in steel casks which sit on a platform about 100 
yards from Lake Michigan. This storage arrangement illustrates the need 
for a new national storage policy.
  Mr. President, Michigan needs a national storage facility for nuclear 
waste. I am pleased to be a cosponsor

[[Page S485]]

of the Nuclear Waste Policy Act and hope that both the House and Senate 
will move quickly to pass this legislation and present it to the 
President.
                                 ______
                                 
      By Mr. MOYNIHAN:
  S. 105. A bill to repeal the habeas corpus requirement that a Federal 
court defer to State court judgments and uphold a conviction regardless 
of whether the Federal court believes that the State court erroneously 
interpreted Constitutional law, except in cases where the Federal court 
believes the State court acted in an unreasonable manner; to the 
Committee on the Judiciary.


                       habeas corpus legislation

  Mr. MOYNIHAN. Mr. President, I introduce this bill to repeal an 
unprecedented provision--unprecedented until the 104th Congress--to 
tamper with the constitutional protection of habeas corpus.
  The provision reads:

       (d) An application for writ of habeas corpus on behalf of a 
     person in custody pursuant to the judgment of State court 
     shall not be granted with respect to any claim that was 
     adjudicated on the merits in State court proceedings unless 
     the adjudication of the claim--
       (1) resulted in a decision that was contrary to, or 
     involved an unreasonable application of, clearly established 
     Federal law, as determined by the Supreme Court of the United 
     States; or
       (2) resulted in a decision that was based on an 
     unreasonable determination of the facts in light of the 
     evidence presented in the State court proceeding.

  Last year we enacted a statute which holds that constitutional 
protections do not exist unless they have been unreasonably violated, 
an idea that would have confounded the framers. Thus, we introduced a 
virus that will surely spread throughout our system of laws.
  Article I, section 9, clause 2 of the Constitution stipulates, ``The 
Privilege of the Writ of Habeas Corpus shall not be suspended, unless 
when in Cases of Rebellion or Invasion the public Safety may require 
it.''
  We are mightily and properly concerned about the public safety, which 
is why we enacted the counterterrorism bill. But we have not been 
invaded, Mr. President, and the only rebellion at hand appears to be 
against the Constitution itself. We are dealing here, sir, with a 
fundamental provision of law, one of those essential civil liberties 
which precede and are the basis of political liberties.
  The writ of habeas corpus is often referred to as the ``Great Writ of 
Liberty.'' William Blackstone (1723-80) called it ``the most celebrated 
writ in English law, and the great and efficacious writ in all manner 
of illegal imprisonment.''

                           *   *   *   *   *

  I repeat what I have said previously here on the Senate floor: If I 
had to choose between living in a country with habeas corpus but 
without free elections, or a country with free elections but without 
habeas corpus, I would choose habeas corpus every time. To say again, 
this is one of the fundamental civil liberties on which every 
democratic society of the world has built political liberties that have 
come subsequently.
  I make the point that the abuse of habeas corpus--appeals of capital 
sentences--is hugely overstated. A 1995 study by the Department of 
Justice's Bureau of Justice Statistics determined that habeas corpus 
appeals by death row inmates constitute 1 percent of all Federal habeas 
filings. Total habeas filings make up 4 percent of the caseload of 
Federal district courts. And most Federal habeas petitions are disposed 
of in less than 1 year. The serious delays occur in State courts, which 
take an average of 5 years to dispose of habeas petitions. If there is 
delay, the delay is with the State courts.
  It is troubling that Congress has undertaken to tamper with the Great 
Writ in a bill designed to respond to the tragic circumstances of the 
Oklahoma City bombing last year. Habeas corpus has little to do with 
terrorism. The Oklahoma City bombing was a Federal crime and will be 
tried in Federal courts.
  Nothing in our present circumstance requires the suspension of habeas 
corpus, which was the practical effect of the provision in that bill. 
To require a Federal court to defer to a State court's judgment unless 
the State court's decision is ``unreasonably wrong'' effectively 
precludes Federal review. I find this disorienting.
  Anthony Lewis has written of the habeas provision in that bill: ``It 
is a new and remarkable concept in law: that mere wrongness in a 
constitutional decision is not to be noticed.'' We have agreed to this; 
to what will we be agreeing next? I restate Mr. Lewis' observation, a 
person of great experience, long a student of the courts, ``It is a new 
and remarkable concept in law: that mere wrongness in a constitutional 
decision is not to be noticed.'' Backward reels the mind.
  On December 8, 1995, four former U.S. Attorneys General, two 
Republicans and two Democrats, all persons with whom I have the honor 
to be acquainted, Benjamin R. Civiletti, Jr., Edward H. Levi, Nicholas 
Katzenbach, and Elliot Richardson--I served in administrations with Mr. 
Levi, Mr. Katzenbach, Mr. Richardson; I have the deepest regard for 
them--wrote President Clinton. I ask unanimous consent that the full 
text be printed in the Record as follows:

                                                 December 8, 1995.
     Hon. William J. Clinton,
     The White House,
     Washington, DC.
       Dear Mr. President: The habeas corpus provisions in the 
     Senate terrorism bill, which the House will soon take up, are 
     unconstitutional. Though intended in large part to expedite 
     the death penalty review process, the litigation and 
     constitutional rulings will in fact delay and frustrate the 
     imposition of the death penalty. We strongly urge you to 
     communicate to the Congress your resolve, and your duty under 
     the constitution, to prevent the enactment of such 
     unconstitutional legislation and the consequent disruption of 
     so critical of part of our criminal punishment system.
       The constitutional infirmities reside in three provisions 
     of the legislation: one requiring federal courts to defer to 
     erroneous state court rulings on federal constitutional 
     matters, one imposing time limits which could operate to 
     completely bar any federal habeas corpus review at all, and 
     one prevent the federal courts from hearing the evidence 
     necessary to decide a federal courts from hearing the 
     evidence necessary to decide a federal constitutional 
     question. They violate the Habeas Corpus Suspension Clause, 
     the judicial powers of Article III, and due process. None of 
     these provisions appeared in the bill that you and Senator 
     Biden worked out in the last Congress together with 
     representatives of prosecutors' organizations.
       The deference requirement would bar any federal court from 
     granting habeas corpus relief where a state court has 
     misapplied the United States Constitution, unless the 
     constitutional error rose to a level of ``unreasonableness.'' 
     The time-limits provisions set a single period of the filing 
     of both state and federal post-conviction petitions (six 
     months in a capital case and one year in other cases), 
     commencing with the date a state conviction become final on 
     direct review. Under these provisions, the entire period 
     could be consumed in the state process, through no fault of 
     the prisoner or counsel, thus creating an absolute bar to the 
     filing of federal habeas corpus petition. Indeed, the period 
     could be consumed before counsel had even been appointed in 
     the state process, so that the inmate would have no notice of 
     the time limit or the fatal consequences of consuming all of 
     it before filing a state petition.
       Both of these provisions, by flatly barring federal habeas 
     corpus review under certain circumstances, violate the 
     Constitution's Suspension Clause, which provides: ``The 
     privilege of the Writ of Habeas Corpus shall not be 
     suspended, unless when in the case of rebellion or 
     invasion the public safety may require it'' (Art. I, Sec. 
     9, cl. 1). Any doubt as to whether this guarantee applies 
     to persons held in state as well as federal custody was 
     removed by the passage of the Fourteenth Amendment and by 
     the amendment's framers' frequent mention of habeas corpus 
     as one of the privileges and immunities so protected.
       The preclusion of access to habeas corpus also violates Due 
     Process. A measure is subject to proscription under the due 
     process clause if it ``offends some principle of justice so 
     rooted in the traditions and conscience of our people as to 
     be ranked as fundamental,'' as viewed by ``historical 
     practice.'' Medina v. California, 112 S.Ct. 2572, 2577 
     (1992). Independent federal court review of the 
     constitutionality of state criminal judgments has existed 
     since the founding of the Nation, first by writ of error, and 
     since 1867 by writ of habeas corpus. Nothing else is more 
     deeply rooted in America's legal traditions and conscience. 
     There is no case in which ``a state court's incorrect legal 
     determination has ever been allowed to stand because it was 
     reasonable,'' Justice O'Connor found in Wright v. West, 112 
     S.Ct. 2482, 2497; ``We have always held that federal courts, 
     even on habeas, have an independent obligation to say what 
     the law is.'' Indeed, Alexander Hamilton argued, in The 
     Federalist No. 84, that the existence of just two 
     protections--habeas corpus and the prohibition against ex 
     post facto laws--obviated the need to add a Bill of Rights to 
     the Constitution.
       The deference requirement may also violate the powers 
     granted to the judiciary

[[Page S486]]

     under Article III. By stripping the federal courts of 
     authority to exercise independent judgment and forcing them 
     to defer to previous judgments made by state courts, the 
     provision runs afoul of the oldest constitutional mission of 
     the federal courts: ``the duty . . . to say what the law 
     is.'' Marbury v. Madison, 5 U.S. (1 Cranch) 137, 177 (1803). 
     Although Congress is free to alter the federal courts' 
     jurisdiction, it cannot order them how to interpret the 
     Constitution, or dictate any outcome on the merits. United 
     States v. Klein, 80 U.S. (13 Wall.) 128 (1871). In 1996, the 
     Supreme Court reiterated that Congress has no power to assign 
     ``rubber stamp work'' to an Article III court. ``Congress may 
     be free to establish a . . . scheme that operates without 
     court participation,'' the Court said, ``but that is a matter 
     quite different from instructing a court automatically to 
     enter a judgment pursuant to a decision the court has not 
     authority to evaluate.'' Gutierrez de Martinez v. Lamagno, 
     115 S. Ct 2227, 2234.
       Finally, in prohibiting evidentiary hearings where the 
     constitutional issue raised does not go to guilt or 
     innocence, the legislation again violates Due Process. A 
     violation of constitutional rights cannot be judged in a 
     vacuum. The determination of the facts assumes ``and 
     importance fully as great as the validity of the substantive 
     rule of law to be applied.'' Wingo v. Wedding, 418 U.S. 461, 
     474 (1974).
       Prior to 1996, the last time habeas corpus legislation was 
     debated at length in constitutional terms was in 1968. A bill 
     substantially eliminating federal habeas corpus review for 
     state prisoners was defeated because, as Republican Senator 
     Hugh Scott put it at the end of debate, ``if Congress tampers 
     with the great writ, its action would have about as much 
     chance of being held constitutional as the celebrated 
     celluloid dog chasing the asbestos cat through hell.''
       In more recent years, the habeas reform debate has been 
     viewed as a mere adjunct of the debate over the death 
     penalty. But when the Senate took up the terrorism bill this 
     year, Senator Moynihan sought to reconnect with the large 
     framework of constitutional liberties: ``If I had to live in 
     a country which had habeas corpus but not free elections,'' 
     he said, ``I would take habeas corpus every time.'' Senator 
     Chafee noted that his uncle, a Harvard law scholar, has 
     called habeas corpus ``the most important human rights 
     provision in the Constitution.'' With the debate back on 
     constitutional grounds, Senator Biden's amendment to delete 
     the deference requirement nearly passed, with 46 votes.
       We respectfully ask that you insist, first and foremost, on 
     the preservation of independent federal review, i.e., on the 
     rejection of any requirement that federal courts defer to 
     state court judgments on federal constitutional questions. We 
     also urge that separate time limits be set for filing federal 
     and state habeas corpus petitions--a modest change which need 
     not interfere with the setting of strict time limits--and 
     that they begin to run only upon the appointment of competent 
     counsel. And we urge that evidentiary hearings be permitted 
     wherever the factual record is deficient on an important 
     constitutional issue. Congress can either fix the 
     constitutional flaws now, or wait through several years of 
     litigation and confusion before being sent back to the 
     drawing board. Ultimately, it is the public's interest in the 
     prompt and fair disposition of criminal cases which 
     will suffer. The passage of an unconstitutional bill helps 
     no one.
       We respectfully urge you, as both President and a former 
     professor of constitutional law, to call upon Congress to 
     remedy these flaws before sending the terrorism bill to your 
     desk. We request an opportunity to meet with you personally 
     to discuss this matter so vital to the future of the Republic 
     and the liberties we all hold dear.
           Sincerely,
     Benjamin R. Civiletti, Jr.,
                                                    Baltimore, MD.
     Edward H. Levi,
                                                      Chicago, IL.
     Nicholas deB. Katzenbach,
                                                    Princeton, NJ.
     Elliot L. Richardson,
                                                   Washington, DC.

  Let me read excerpts from the letter:

       ``The habeas corpus provisions in the Senate bill . . . are 
     unconstitutional. Though intended in large part to expedite 
     the death penalty review process, the litigation and 
     constitutional rulings will in fact delay and frustrate the 
     imposition of the death penalty . . .
       The constitutional infirmities . . . violate the Habeas 
     Corpus Suspension Clause, the judicial powers of Article III, 
     and due process . . .
       . . . A measure is subject to proscription under the due 
     process clause if it ``offends some principle of justice so 
     rooted in the traditions and conscience of our people as to 
     be ranked as fundamental,'' as viewed by ``historical 
     practice.''

  That language is Medina versus California, a 1992 decision. To 
continue,

       Independent federal court review of the constitutionality 
     of state criminal judgments has existed since the founding of 
     the Nation, first by writ of error, and since 1867 by writ of 
     habeas corpus.
       Nothing else is more deeply rooted in America's legal 
     traditions and conscience. There is no clause in which ``a 
     state court's incorrect legal determination has ever been 
     allowed to stand because it was reasonable.''

  That is Justice O'Connor, in Wright versus West. She goes on, as the 
attorneys general quote. ``We have always held that federal courts, 
even on habeas, have an independent obligation to say what the law 
is.''
  If I may interpolate, she is repeating the famous injunction of 
Justice Marshall in Marbury versus Madison.
  The attorneys general go on to say,

       Indeed, Alexander Hamilton argued, in The Federalist No. 
     84, that the existence of just two protections--habeas corpus 
     and the prohibition against ex post facto laws--obviated the 
     need to add a Bill of Rights to the Constitution.

  The letter from the Attorneys General continues, but that is the gist 
of it. I might point out that there was, originally, an objection to 
ratification of the Constitution, with those objecting arguing that 
there had to be a Bill of Rights added. Madison wisely added one during 
the first session of the first Congress. But he and Hamilton and Jay, 
as authors of The ``Federalist Papers,'' argued that with habeas corpus 
and the prohibition against ex post facto laws in the Constitution, 
there would be no need even for a Bill of Rights. We are glad that, in 
the end, we do have one. But their case was surely strong, and it was 
so felt by the framers.
  To cite Justice O'Connor again: ``A state court's incorrect legal 
determination has never been allowed to stand because it was 
reasonable.''
  Justice O'Connor went on: ``We have always held that Federal courts, 
even on habeas, have an independent obligation to say what the law 
is.''
  Mr. President, we can fix this now. Or, as the Attorneys General 
state, we can ``wait through several years of litigation and confusion 
before being sent back to the drawing board.'' I fear that we will not 
fix it now.
  We Americans think of ourselves as a new nation. We are not. Of the 
countries that existed in 1914, there are only eight which have not had 
their form of government changed by violence since then. Only the 
United Kingdom goes back to 1787 when the delegates who drafted our 
Constitution established this Nation, which continues to exist. In 
those other nations, sir, a compelling struggle took place, from the 
middle of the 18th century until the middle of the 19th century, and 
beyond into the 20th, and even to the end of the 20th in some 
countries, to establish those basic civil liberties which are the 
foundation of political liberties and, of those, none is so precious as 
habeas corpus, the ``Great Writ.''

  Here we are trivializing this treasure, putting in jeopardy a 
tradition of protection of individual rights by Federal courts that 
goes back to our earliest foundation. And the virus will spread. Why 
are we in such a rush to amend our Constitution? Why do we tamper with 
provisions as profound to our traditions and liberty as habeas corpus? 
The Federal courts do not complain. It may be that because we have 
enacted this, there will be some prisoners who are executed sooner than 
they otherwise would have been. You may take satisfaction in that or 
not, as you choose, but we have begun to weaken a tenet of justice at 
the very base of our liberties. The virus will spread.
  This is new. It is profoundly disturbing. It is terribly dangerous. 
If I may have the presumption to join in the judgment of four Attorneys 
Generals, Mr. Civiletti, Mr. Levi, Mr. Katzenbach, and Mr. Richardson--
and I repeat that I have served in administrations with three of them--
this matter is unconstitutional and should be repealed from law.
  Fifteen years ago, June 6, 1982, to be precise, I gave the 
commencement address at St. John University Law School in Brooklyn. I 
spoke of the proliferation of court-curbing bills at that time. I 
remarked:

       * * * some people--indeed, a great many people--have 
     decided that they do not agree with the Supreme Court and 
     that they are not satisfied to Debate, Legislate, Litigate.
       They have embarked upon an altogether new and I believe 
     quite dangerous course of action. A new triumvirate hierarchy 
     has emerged. Convene (meaning the calling of a constitutional 
     convention), Overrule (the passage of legislation designed to 
     overrule a particular Court ruling, when the Court's ruling 
     was based on an interpretation of the Constitution), and 
     Restrict (to restrict the jurisdiction of certain courts to 
     decide particular kinds of cases).
       Perhaps the most pernicious of these is the attempt to 
     restrict courts' jurisdictions, for it is * * * profoundly at 
     odds with our Nation's customs and political philosophy.

[[Page S487]]

       It is a commonplace that our democracy is characterized by 
     majority rule and minority rights. Our Constitution vests 
     majority rule in the Congress and the President while the 
     courts protect the rights of the minority.
       While the legislature makes the laws, and the executive 
     enforces them, it is the courts that tell us what the laws 
     say and whether they conform to the Constitution.
       This notion of judicial review has been part of our 
     heritage for nearly two hundred years. There is not a more 
     famous case in American jurisprudence than Marbury v. Madison 
     and few more famous dicta than Chief Justice Marshall's that
       ``It is emphatically the province and the duty of the 
     judicial department to say what the law is.''
       But in order for the court to interpret the law, it must 
     decide cases. If it cannot hear certain cases, then it cannot 
     protect certain rights.

  We need to deal resolutely with terrorism. And we have. But the guise 
of combating terrorism, we have diminished the fundamental civil 
liberties that Americans have enjoyed for two centuries; therefore the 
terrorists will have won.
  My bill will repeal this dreadful, unconstitutional provision now in 
public law. I ask unanimous consent that the article entitled ``First 
in Damage to Constitutional Liberties,'' by Nat Hentoff from the 
Washington Post of November 16, 1996; and the article entitled 
``Clinton's Sorriest Record'' from the New York Times of October 14, 
1996; be printed in the Record at the conclusion of my remarks.
  There being no objection, the articles were ordered to be printed in 
the Record, as follows:

               [From the Washington Post, Nov. 16, 1996]

              First in Damage to Constitutional Liberties

                            (By Nat Hentoff)

       There have been American presidents to whom the 
     Constitution has been a nuisance to be overruled by an means 
     necessary. In 1798, only seven years after the Bill of Rights 
     was ratified, John Adams triumphantly led Congress in the 
     passage of the Alien and Sedition Acts, which imprisoned a 
     number of journalists and others for bringing the president 
     or Congress into ``contempt or disrepute.'' So much for the 
     First Amendment.
       During the Civil War, Abraham Lincoln actually suspended 
     the writ of habeas corpus. Alleged constitutional guarantees 
     of peaceful dissent were swept away during the First World 
     War--with the approval of Woodrow Wilson. For example, there 
     were more than 1,900 prosecutions for anti-war books, 
     newspaper articles, pamphlets and speeches. And Richard Nixon 
     seemed to regard the Bill of Rights as primarily a devilish 
     source of aid to his enemy.
       No American president, however, has done so much damage to 
     constitutional liberties as Bill Clinton--often with the 
     consent of Republicans in Congress. But it has been Clinton 
     who had the power and the will to seriously weaken our 
     binding document in ways that were almost entirely ignored by 
     the electorate and the press during the campaign.
       Unlike Lincoln, for example, Clinton did a lot more than 
     temporarily suspend habeas corpus. One of his bills that has 
     been enacted into law guts the rights that Thomas Jefferson 
     insisted be included in the Constitution. A state prisoner on 
     death row now has only a year to petition a federal court to 
     review the constitutionality of his trial or sentence. In 
     many previous cases of prisoners eventually freed after years 
     of waiting to be executed, proof of their innocence has been 
     discovered long after the present one year limit.
       Moreover, the Clinton administration is--as the ACLU's 
     Laura Murphy recently told the National Law Journal--``the 
     most wire-tap-friendly administration in history.''
       And Clinton ordered the Justice Department to appeal a 
     unanimous 3rd circuit Court of Appeals decision declaring 
     unconstitutional the Communications Decency Act censoring the 
     Internet, which he signed into law.
       There is a chilling insouciance in Clinton's elbowing the 
     Constitution out of the way. He blithely, for instance, has 
     stripped the courts of their power to hear certain kinds of 
     cases. As Anthony Lewis points out in the New York Times, 
     Clinton has denied many people their day in court.
       For one example, says Lewis. ``The new immigration law * * 
     * takes away the rights of thousands of aliens who may be 
     entitled to legalize their situation under a 1986 statute 
     giving amnesty to illegal aliens.'' Cases involving as many 
     as 300,000 people who may still qualify for amnesty have been 
     waiting to be decided. All have now been thrown out of court 
     by the new immigration law.
       There have been other Clinton revisions of the 
     Constitution, but in sum--as David Boaz of the Cato Institute 
     has accurately put it--Clinton has shown ``a breathtaking 
     view of the power of the Federal government, a view directly 
     opposite the meaning of `civil libertarian.' ''
       During the campaign there was no mention at all of this 
     breathtaking exercise of federal power over constitutional 
     liberties. None by former senator Bob Dole who has largely 
     been in agreement with this big government approach to 
     constitutional ``guarantees.'' Nor did the press ask the 
     candidates about the Constitution.
       Laura Murphy concludes that ``both Clinton and Dole are 
     indicative of how far the American people have slipped away 
     from the notions embodied in the Bill of Rights.'' She 
     omitted the role of the press, which seems focused primarily 
     on that part of the First Amendment that protects the press.
       Particularly revealing were the endorsements of Clinton by 
     the New York Times, The Washington Post and the New Republic, 
     among others. In none of them was the president's civil 
     liberties record probed. (The Post did mention the FBI files 
     at the White House.) Other ethical problems were cited, but 
     nothing was mentioned about habeas corpus, court-stripping, 
     lowering the content of the Internet to material suitable for 
     children and the Clinton administration's decided lack of 
     concern for privacy protections of the individual against 
     increasingly advanced government technology.
       A revealing footnote to the electorate's ignorance of this 
     subverting of the Constitution is a statement by N. Don 
     Wycliff, editorial page editor of the Chicago Tribune. He 
     tells Newsweek that ``people are not engaged in the 
     [political] process because there are no compelling issues 
     driving them to participate. It would be different if we 
     didn't have peace and prosperity.''
       What more could we possibly want?
                                                                    ____


                [From the New York Times, Oct. 14, 1996]

               Abroad at Home; Clinton's Sorriest Record

                           (By Anthony Lewis)

       Bill Clinton has not been called to account in this 
     campaign for the worst aspect of his Presidency. That is his 
     appalling record on constitutional rights.
       The Clinton years have seen, among other things, a series 
     of measures stripping the courts of their power to protect 
     individuals from official abuse--the power that has been the 
     key to American freedom. There has been nothing like it since 
     the Radical Republicans, after the Civil War, acted to keep 
     the courts from holding the occupation of the South to 
     constitutional standards.
       The Republican Congress of the last two years initiated 
     some of the attacks on the courts. But President Clinton did 
     not resist them as other Presidents have. And he proposed 
     some of the measures trampling on constitutional protections.
       Much of the worst has happened this year. President Clinton 
     sponsored a counterterrorism bill that became law with a 
     number of repressive features in it. One had nothing to do 
     with terrorism: a provision gutting the power of Federal 
     courts to examine state criminal convictions, on writs of 
     habeas corpus, to make sure there was no violation of 
     constitutional rights.
       The Senate might well have moderated the habeas corpus 
     provision if the President had put up a fight. But he broke a 
     promise and gave way.
       The counterterrorism law also allows the Government to 
     deport a legally admitted alien, on the ground that he is 
     suspected of a connection to terrorism, without letting him 
     see or challenge the evidence. And it goes back to the 
     McCarthy period by letting the Government designate 
     organizations as ``terrorist''--a designation that could have 
     included Nelson Mandela's African National Congress before 
     apartheid gave way to democracy in South Africa.
       The immigration bill just passed by Congress has many 
     sections prohibiting review by the courts of decisions by the 
     Immigration and Naturalization Service or the Attorney 
     General. Some of those provisions have drastic retroactive 
     consequences.
       For example, Congress in 1986 passed an amnesty bill that 
     allowed many undocumented aliens to legalize their presence 
     in this country. They had to file by a certain date, but a 
     large number said they failed to do so because improper 
     I.N.S. regulations discouraged them.
       The Supreme Court held that those who could show they were 
     entitled to amnesty but were put off by the I.N.S. rules 
     could file late. Lawsuits involving thousands of people are 
     pending. But the new immigration law throws all those cases--
     and individuals--out of court.
       Another case, in the courts for years, stems from an 
     attempt to deport a group of Palestinians. Their lawyer sued 
     to block the deportation action; a Federal district judge, 
     Stephen V. Wilson, a Reagan appointee, found that it was an 
     unlawful selective proceeding against people for exercising 
     their constitutional right of free speech. The new 
     immigration law says the courts may not hear such cases.
       The immigration law protects the I.N.S. from judicial 
     scrutiny in a broader way. Over the years the courts have 
     barred the service from deliberately discriminatory policies, 
     for example the practice of disallowing virtually all asylum 
     claims by people fleeing persecution in certain countries. 
     The law bars all lawsuits of that kind.
       Those are just a few examples of recent incursions on due 
     process of law and other constitutional guarantees. A 
     compelling piece by John Heilemann in this month's issue of 
     Wired, the magazine on the social consequences of the 
     computer revolution, concludes that Mr. Clinton's record on 
     individual rights is ``breathtaking in its awfulness.'' He 
     may be, Mr. Heilemann says, ``the worst civil liberties 
     President since Richard Nixon.'' And even President Nixon did 
     not leave a legacy of court-stripping statutes.

[[Page S488]]

       It is by no means clear that Bob Dole would do better. He 
     supported some of the worst legislation in the Senate, as the 
     Gingrich Republicans did in the House.
       Why? The Soviet threat, which used to be the excuse for 
     shoving the Constitution aside, is gone. Even in the worst 
     days of the Red Scare we did not strip the courts of their 
     protective power. Why are we legislating in panic now? Why, 
     especially, is a lawyer President indifferent to 
     constitutional rights and their protection by the courts?
                                 ______
                                 
      By Mrs. BOXER.
  S. 106. A bill to require that employees who participate in cash or 
deferred arrangements are free to determine whether to be invested in 
employer real property and employer securities, and if not, to protect 
such employees by applying the same prohibited transaction rules that 
apply to traditional defined benefit pension plans, and for other 
purposes; to the Committee on Finance.
  S. 107. A bill to require the offer in every defined benefit plan of 
a joint and \2/3\ survivor benefit annuity option and to require 
comparative disclosure of all benefit options to both spouses; to the 
Committee on Finance.
  S. 108. A bill to require annual, detailed investment reports by 
plans with qualified cash or deferred arrangements, and for other 
purposes; to the Committee on Labor and Human Resources.


             legislation to protect american pension funds

  Mrs. BOXER. Mr. President, today I am introducing three bills 
designed to protect Americans' pension funds.


               i. the 401(k) pension plan protection act

  The first bill, the ``401(k) Pension Plan Protection Act of 1997'', 
would give employees who participate in a 401(k) plan the assurance 
that their employer cannot force them to invest their employee 
contributions in the company.
  The 401(k) Pension Protection Act will increase employees' investment 
freedom and protect employees against low yielding and undiversified 
401(k) investments in their employer. It allows employees to protect 
themselves against loss of jobs and pensions if their employer becomes 
bankrupt.
  Unfortunately, such losses have already occurred. A year ago, Color 
Tile, -Inc., a nationwide retailer of floor and counter coverings, 
filed bankruptcy. Color Tile had one pension plan, a 401(k) plan. The 
401(k) allowed employees no choice of investments. All investment 
decisions were made by Color Tile.
  At the time of bankruptcy, 83 percent of the 401(k)'s investments 
were in 44 Color Tile stores. Many of those stores were closed in the 
bankruptcy. Those investments--and the employees retirement savings--
are now at risk of a large, possibly total loss.
  In 1991, in my own State, another bankruptcy resulted in a 
substantial loss to a 401(k) plan enrolling 10,000 employees. Carter 
Hawley Hales stores went bankrupt with more than 50 percent of its 
assets invested in Carter Hawley Hale stock. As a result of the 
bankruptcy, the stock lost 92 percent of its value. Many employees lost 
a pension and a job simultaneously.
  The 401(k) Pension Protection Act is designed to prevent situations 
such as Color Tile and Carter Hawley Hale from reoccurring. The act 
would prevent a company from requiring that more than 10 percent of 
employee contributions to a 401(k) plan, contributions known as salary 
deferrals, be invested in the employer stock or employer real estate.

  The act exempts a certain type of 401(k) plan from the 10 percent 
limit--where employees are free to direct how their contributions are 
invested and to move their investments in the 401(k) with reasonable 
frequency. In such situations, the 10 percent limitation does not apply 
and employees are free to assume the risk of undiversified investment 
in their employer.
  The 401(k) Pension Protection Act would protect 23 million employees 
in 401(k) plans investing more than 675 million dollars in assets.
  All 401(k) members need the 401(k) Pension Protection Act. Unlike 
traditional pension plans, companies sponsoring 401(k)s do not 
guarantee that investments will provide the promised pension. Instead, 
401(k) participants bear all risk of undiversified investment in the 
employer.
  Participants in 401(k)s also need the protections of the act 
because--unlike traditional pension plans--401(k)s are not insured 
against bankruptcy of the plan sponsor by the Pension Benefit Guaranty 
Corp., or PBGC.


             ii. the pension benefits fairness act of 1997

  The second bill that I offer today is the Pension Benefits Fairness 
Act of 1997. The act would require that traditional pension plans offer 
equal survivor retirement benefits to both spouses.
  Current Federal law requires an unequal survivors retirement benefit 
option. Unless they voluntarily offer a better benefit, traditional 
pension plans are required to offer a benefit option that pays one 
spouse double the amount paid to other spouse, when one spouse dies. 
Many plans do not voluntarily offer an equal benefit.
  Current law also requires that only one spouse be given a description 
of the retirement benefit option or options offered by the plan. This 
leaves one spouse in a marriage uninformed of a decision that affects 
their income for the rest of their life. It is doubly important that 
they understand the decision to accept a particular benefit because 
they can never change their decision.
  Under current law, the spouse who gets the required description is 
also the spouse who gets a survivor benefit that is twice as large.
  The preferred spouse is the spouse who participated in the retirement 
plan. This means that the unequal treatment disproportionately impacts 
women because women's jobs are less often covered by a pension plan. 
Women need better pension survivor benefits because three out of four 
marriages they outlive their husbands
  The Pension Benefits Fairness Act would correct this problem by 
requiring that pension plans treat spouses equally with regard to 
benefits and disclosure of benefit options.
  The act imposes no additional pension costs on plans, employers, or 
participants. The act would increase the benefits paid to the many 
surviving spouses while resulting in no material reduction in the 
pension paid to a typical couple.


       iii. the small 401(k) pension plan disclosure act of 1997

  The third pension bill that I introduce today is the Small 401(k) 
Pension Plan Disclosure Act of 1997.
  Current Federal law requires that pension plans file an annual 
investment report with the Department of Treasury and make the report 
available if a participant asks for it. Participants in small 401(k)s 
should not be required to ask where their pension contributions are 
invested. Participants in small 401(k)s are often hesitant to request 
the information for fear of being identified as questioning their 
employer's handling of a 401(k). Participants in large plans, where 
there is greater anonymity, are less hesitant.
  Participants in 401(k)s should know where their plan is invested. 
Unlike traditional, defined pension plan participants, 401(k) 
participants have neither a plan sponsor's guarantee nor PBGC insurance 
against poor investment return. Participants bear the risk themselves.
  It is only fair that 401(k) participants be informed how their money 
is invested.
  The Small 401(k) Pension Plan Disclosure Act of 1997 eliminates the 
need to ask. It requires that the Secretary of Labor issue regulations 
requiring that small 401(k)s to provide each participant with an annual 
investment report. The details of the report are left to the Secretary, 
but certain details are suggested as a guide.
  The act also encourages the Secretary to provide for the delivery of 
reports through company e-mail. This should help minimize the cost of 
providing reports.
  The act exempts 401(k) accounts where participants direct their 
investments because current law already requires that those 
participants receive investment descriptions and reports.
  Mr. President, these bills increase the retirement security of the 
American work force, diversify 401(k) investments, require equal 
benefits for husband and wife, and inform employees in small 401(k) 
plans where their money is invested.
                                 ______
                                 
      By Mr. INOUYE (for himself and Mr. Akaka):
  S. 109. A bill to provide Federal housing assistance to Native 
Hawaiians; to the Committee on Indian Affairs.

[[Page S489]]

           the native hawaiian housing assistance act of 1997

  Mr. INOUYE. Mr. President, I rise today to introduce the native 
Hawaiian Housing Assistance Act of 1997--a measure which seeks to 
provide housing assistance to those families most in need, both 
nationally and in my home state of Hawaii--native Hawaiians.

  Less than 2 years ago, in 1995, the U.S. Department of Housing and 
Urban Development released a report entitled, ``Housing Problems and 
Needs of Native Hawaiians.'' This report found, astoundingly, that 
native Hawaiians experience the highest percentage of housing problems 
in the Nation--49 percent--higher than even that of American Indians 
and Alaska Natives residing on reservation--44 percent--and 
substantially higher than that of all U.S. households--27 percent.
  These findings, taken in conjunction with those of two other reports: 
The final report of the National Commission on American Indian, Alaska 
Native, and native Hawaiian Housing, ``Building the Future: a Blueprint 
for Change'' (1992) and the State Department of Hawaiian home lands 
report, ``Department of Hawaiian Homelands Beneficiary Needs Study'' 
(1995), document that:
  Native Hawaiians have the worst housing conditions in the State of 
Hawaii and are seriously overrepresented in the Stat's homeless 
population, representing over 30 percent of the homeless population.
  Among the native Hawaiian population, the needs of the native 
Hawaiians eligible to reside on lands set aside under the Hawaiian 
Homes Commission Act are the most severe. Ninety-five percent of the 
current applicants, approximately 13,000 native Hawaiians, are in need 
of housing, with one half of those applicant households facing 
overcrowding and one third paying more than 30 percent of their income 
for shelter; and under the Department of Housing and Urban Development 
[HUD] guidelines, 70.8 percent of the Department of Hawaiian Home Lands 
(DHHL) lessees and applicants fall below the HUD median family income, 
with more than half having incomes below 30 percent.
  Mr. President, I find these statistics deplorable and unconscionable. 
They are the direct result of a pattern of purposeful neglect on the 
part of our Federal Government.
  At the time of the arrival of Captain Cook to Hawaii's shores in 
1778, there was a thriving community of nearly 1 million indigenous 
inhabitants. But over time, introduced diseases and the devastating 
physical, cultural, social, and spiritual effects of Western contact 
nearly decimated the native Hawaiian population. In 1826, less than 50 
years later, the native Hawaiian population had decreased to an 
estimated 142,650, and by 1919, this number had dropped to 22,600.
  In recognition of this catastrophic decline, and of the role the 
Federal Government played in facilitating such a decline, the Congress 
enacted The Hawaiian Homes Commission Act [HHCA], which set aside 
200,000 acres of CEDED public lands for homesteading by native 
Hawaiians. As then Secretary of the Interior Franklin K. Lane was 
quoted in the committee report to the HHCA as saying: ``One thing that 
impressed me--was the fact that the natives of the islands who are our 
wards, I should say, and for whom in a sense we are trustees, are 
falling off rapidly in numbers, and many are in poverty.'' Congress 
thus sought to return the Hawaiian people to the land, thereby 
revitalizing a dying race.
  And yet, despite what arguably were good intentions, the Congress 
subsequently and systematically failed to appropriate sufficient funds 
for the administration of the HHCA. Faced with no means of securing the 
necessary funding which would enable the development of infrastructure 
or housing, the administrators were forced to lease large tracts of the 
homelands to non-Hawaiians for commercial and other purposes in order 
to generate revenue to administer and operate the program. Hawaiians 
were thereby denied the benefits of residing on those very lands set 
aside for their survival as the indigenous inhabitants of Hawaii.
  Over the years, I am sad to report, this Government has taken the 
anomalous legal position that native Hawaiians residing on these home 
lands must be excluded from access to existing Federal Housing and 
Infrastructure Development programs because the expenditure of Federal 
funds to benefit these lands was somehow deemed unconstitutional.
  While the Clinton administration has reversed this position--arguing 
before the Ninth Circuit Court of Appeals that the home lands were not 
set aside exclusively for native Hawaiians--there are those who 
nonetheless seem to want it both ways. They want to deny that any 
Federal responsibility flows from the provisions of a Federal law, and 
yet they want to bar native people from their rights of access to 
existing Federal housing programs.

  It is this reverse discrimination that I find repugnant and 
unacceptable. It is a mentality that enables the Federal Government to 
set aside lands for native Hawaiians, retain certain powers over the 
administration of these lands, and then deny those native Hawaiians 
residing on these lands access to programs made available to all 
others, including Indians residing on reservations, on the basis that 
the lands set aside by the United States only benefit native Hawaiians.
  I am happy to report that, with the assistance of outgoing HUD 
Secretary Cisneros, we have worked to identify and remove some barriers 
which have prevented native Hawaiians residing on the home lands, from 
securing access to existing federally-assisted housing programs. For 
his understanding of and dedication toward these matters, I am most 
grateful. However, I would be the first to admit that much more remains 
to be done.
  When the National Commission of American Indian, Alaska Native, and 
Native Hawaiian Housing issued its report, after full consideration of 
the deplorable housing conditions native Hawaiian families face, they 
submitted the following recommendation: That Congress enact a ``Native 
Hawaiian Housing and Infrastructure Assistance Program'' to alleviate 
and address the severe housing needs of native Hawaiians by extending 
to them the same Federal housing assistance available to American 
Indians and Alaska Natives.
  This, Mr. President, is exactly what this bill is designed to 
accomplish. It amends the Native American Housing and Self-
Determination Act of 1996 by creating a separate title to establish a 
parallel housing program for native Hawaiians. This program would not 
benefit all native Hawaiians, but is limited in scope to those most in 
need because this Government has consistently denied them access to 
existing housing programs--those native Hawaiians eligible to reside on 
the home lands.
  This bill would provide funding, in the form of a block grant, to the 
department of Hawaiian Home Lands, to carry out affordable housing 
activities which are identical to those activities authorized under the 
Native American Housing Assistance and Self-Determination Act. The bill 
provides that, to the extent practicable, the Department shall employ 
private nonprofit organizations experienced in the planning and 
development of affordable housing for native Hawaiians. In addition, 
the bill authorizes the Secretary to adopt modifications which are 
deemed necessary in order to meet the unique needs of native Hawaiians.
  Finally, an additional section of the bill creates a loan guarantee 
program similar to that which exists for American Indians. Neither of 
these programs would tap into existing tribal monies, but instead would 
authorize a separate funding stream.
  Mr. President, this is a bill whose foundation is a dual one--one 
based on need, on statistics which show that native Hawaiians face the 
highest incidence of housing needs in the nation, and that among the 
native Hawaiian population, those native Hawaiians eligible to reside 
on the home lands are the most in need, and one based on the special 
historical relationship between the United States and the native 
Hawaiian people.
  While history has shown that the Congress has fallen far short of its 
commitment to provide sufficient funding for the administration of the 
Hawaiian Homes Commission Act, let history also reflect, that in this, 
the 105th Congress, we sought to finally, balance the scales, by 
creating housing opportunities for native Hawaiians similar to those 
provided to other native Americans.

[[Page S490]]

  Mr. President, I thank you for your consideration of this most 
important measure and ask unanimous consent that the bill be printed in 
the Record in its entirety. I urge my colleagues to act favorably and 
expeditiously on this measure.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 109

       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 ``Native Hawaiian Housing 
     Assistance Act of 1997''.

     SEC. 2. FINDINGS AND PURPOSES.

       (a) Findings.--Congress makes the following findings:
       (1) The Federal Government has a responsibility to promote 
     the general welfare of the Nation by employing its resources 
     to remedy the unsafe and unsanitary housing conditions and 
     the acute shortage of decent, safe, and sanitary dwellings 
     for families of lower income and by developing effective 
     partnerships with governmental and private entities to 
     accomplish these objectives.
       (2) Based upon the status of the Kingdom of Hawaii as an 
     internationally recognized and independent sovereign and the 
     unique historical and political relationship between the 
     United States and Native Hawaiians, the Native Hawaiian 
     people have a continuing right to local autonomy in 
     traditional and cultural affairs and an ongoing right of 
     self-determination and self-governance that has never been 
     extinguished.
       (3) The authority of Congress under the Constitution of the 
     United States to legislate and address matters affecting the 
     rights of indigenous peoples of the United States includes 
     the authority to legislate in matters affecting Native 
     Hawaiians.
       (4) In 1921, in recognition of the severe decline in the 
     Native Hawaiian population, Congress enacted the Hawaiian 
     Homes Commission Act, 1920, which set aside approximately 
     200,000 acres of the ceded public lands for homesteading by 
     Native Hawaiians, thereby affirming the special relationship 
     between the United States and the Native Hawaiians.
       (5) In 1959, under the Act entitled ``An Act to provide for 
     the admission of the State of Hawaii into the Union'', 
     approved March 18, 1959 (73 Stat. 4), the United States 
     reaffirmed the special relationship between the United States 
     and the Native Hawaiian people--
       (A) by transferring what the United States deemed to be a 
     trust responsibility for the administration of the Hawaiian 
     Home Lands to the State of Hawaii, but continuing Federal 
     superintendence by retaining the power to enforce the trust, 
     including the exclusive right of the United States to consent 
     to land exchanges and any amendments to the Hawaiian Homes 
     Commission Act, 1920, enacted by the legislature of the State 
     of Hawaii affecting the rights of beneficiaries under such 
     Act; and
       (B) by ceding to the State of Hawaii title to the public 
     lands formerly held by the United States, mandating that such 
     lands be held ``in public trust'' for ``the betterment of the 
     conditions of Native Hawaiians, as defined in the Hawaiian 
     Homes Commission Act, 1920'', and continuing Federal 
     superintendence by retaining the exclusive legal 
     responsibility to enforce this public trust.
       (6) In recognition of the special relationship that exists 
     between the United States and the Native Hawaiian people, 
     Congress has extended to Native Hawaiians the same rights and 
     privileges accorded to American Indians and Alaska Natives 
     under the Native American Programs Act of 1974, the American 
     Indian Religious Freedom Act, the National Museum of the 
     American Indian Act, the Native American Graves Protection 
     and Repatriation Act, the National Historic Preservation Act, 
     the Native American Languages Act, the American Indian, 
     Alaska Native and Native Hawaiian Culture and Arts 
     Development Act, the Job Training and Partnership Act, and 
     the Older Americans Act of 1965.
       (7) The special relationship has been recognized and 
     reaffirmed by the United States in the area of housing--
       (A) through the authorization of mortgage loans insured by 
     the Federal Housing Administration for the purchase, 
     construction, or refinancing of homes on Hawaiian Home Lands 
     under the National Housing Act;
       (B) by mandating Native Hawaiian representation on the 
     National Commission on American Indian, Alaska Native, and 
     Native Hawaiian Housing;
       (C) by the inclusion of Native Hawaiians in the Native 
     American Veterans' Home Loan Equity Act; and
       (D) by enactment of the Hawaiian Home Lands Recovery Act, 
     which establishes a process that enables the Federal 
     Government to convey lands to the Department of Hawaiian Home 
     Lands equivalent in value to lands acquired by the Federal 
     Government.
       (b) Purposes.--The purposes of this Act are as follows:
       (1) To implement the recommendation of the National 
     Commission on American Indian, Alaska Native, and Native 
     Hawaiian Housing (in this Act referred to as the 
     ``Commission'') that Congress establish a Native Hawaiian 
     Housing and Infrastructure Assistance Program to alleviate 
     and address the severe housing needs of Native Hawaiians by 
     extending to them the same Federal housing assistance 
     available to American Indians and Alaska Natives.
       (2) To address the following needs of the Native Hawaiian 
     population, as documented in the Final Report of the 
     Commission, ``Building the Future: A Blueprint for Change'' 
     (1992); the United States Department of Housing and Urban 
     Development report, ``Housing Problems and Needs of Native 
     Hawaiians (1995);'' and the State Department of Hawaiian Home 
     Lands report ``Department of Hawaiian Home Lands Beneficiary 
     Needs Study'' (1995):
       (A) Native Hawaiians experience the highest percentage of 
     housing problems in the Nation: 49 percent, compared to 44 
     percent for American Indian and Alaska Native households in 
     tribal areas, and 27 percent for all United States 
     households, particularly in the area of overcrowding (27 
     percent versus 3 percent nationally) with 36 percent of 
     Hawaiian homelands households experiencing overcrowding.
       (B) Native Hawaiians have the worst housing conditions in 
     the State of Hawaii and are seriously over represented in the 
     State's homeless population, representing over 30 percent.
       (C) Among the Native Hawaiian population, the needs of the 
     native Hawaiians eligible for Hawaiian homelands are the most 
     severe. 95 percent of the current applicants, approximately 
     13,000 Native Hawaiians, are in need of housing, with one-
     half of those applicant households facing overcrowding and 
     one-third paying more than 30 percent of their income for 
     shelter. Under Department of Housing and Urban Development 
     guidelines, 70.8 percent of Department of Hawaiian Homelands 
     lessees and applicants fall below the Department of Housing 
     and Urban Development median family income, with more than 
     half having incomes below 30 percent.

     SEC. 3. HOUSING ASSISTANCE.

       The Native American Housing Assistance and Self-
     Determination Act of 1996 (Public Law 104-330) is amended by 
     adding at the end the following new title:
         ``TITLE VIII--HOUSING ASSISTANCE FOR NATIVE HAWAIIANS

     ``SEC. 801. DEFINITIONS.

       ``In this title--
       ``(1) the term `Department of Hawaiian Home Lands' means 
     the department of the State of Hawaii that is responsible for 
     the administration of the Hawaiian Homes Commission Act, 
     1920;
       ``(2) the term `Hawaiian Home Lands' means those lands set 
     aside by the United States for homesteading by Native 
     Hawaiians under the Hawaiian Homes Commission Act, 1920, and 
     any other lands acquired pursuant to that Act; and
       ``(3) the term `Native Hawaiian' has the same meaning as in 
     section 201 of the Hawaiian Homes Commission Act, 1920.

     ``SEC. 802. BLOCK GRANTS FOR AFFORDABLE HOUSING ACTIVITIES.

       ``(a) Authority.--For each fiscal year, the Secretary shall 
     (to the extent amounts are made available to carry out this 
     title) make grants under this section on behalf of Native 
     Hawaiian families to carry out affordable housing activities 
     in the State of Hawaii. Under such a grant, the Secretary 
     shall provide the grant amounts directly to the Department of 
     Hawaiian Home Lands. The Department of Hawaiian Home Lands 
     shall, to the maximum extent practicable, employ private 
     nonprofit organizations experienced in the planning and 
     development of affordable housing for Native Hawaiians, in 
     order to carry out such activities.
       ``(b) Applicability of Other Provisions.--
       ``(1) In general.--Subject to paragraph (2), titles I 
     through IV apply to assistance provided under this section in 
     the same manner as titles I through IV apply to assistance 
     provided on behalf of an Indian tribe under title I.
       ``(2) Exception.--The Secretary may by regulation provide 
     for such modifications to the applicability of titles I 
     through IV to assistance provided under this section as the 
     Secretary determines to be necessary to meet the unique 
     housing needs of Native Hawaiians.

     ``SEC. 803. AUTHORIZATION OF APPROPRIATIONS.

       ``There are authorized to be appropriated such sums as may 
     be necessary to carry out this title for each of fiscal years 
     1997, 1998, 1999, 2000, and 2001.''.

     SEC. 4. LOAN GUARANTEES FOR NATIVE HAWAIIAN HOUSING.

       Section 184 of the Housing and Community Development Act of 
     1992 (12 U.S.C. 1715z-13a) is amended--
       (1) in subsection (k), by adding at the end the following 
     new paragraphs:
       ``(10) The term `Hawaiian Home Lands' means those lands set 
     aside by the United States for homesteading by Native 
     Hawaiians under the Hawaiian Homes Commission Act, 1920, and 
     any other lands acquired pursuant to that Act.
       ``(11) The term `Native Hawaiian' has the same meaning as 
     in section 201 of the Hawaiian Homes Commission Act, 1920.
       ``(12) The term `Native Hawaiian housing authority' means 
     any public body (or agency or instrumentality thereof) 
     established under the laws of the State of Hawaii, that is 
     authorized to engage in or assist in the development or 
     operation of low-income housing for Native Hawaiians, and 
     includes the Department of Hawaiian Home Lands and the Office 
     of Hawaiian Affairs.''; and
       (2) by adding at the end the following new subsection:
       ``(l) Applicability to Native Hawaiian Housing.--

[[Page S491]]

       ``(1) In general.--Subject to paragraphs (2) and (3), 
     subsections (a) through (k) apply to Native Hawaiian 
     families, Native Hawaiian housing authorities, and private 
     nonprofit organizations experienced in the planning and 
     development of affordable housing for Native Hawaiians, in 
     the same manner as those subsections apply to Indian families 
     and to Indian housing authorities, respectively.
       ``(2) Exception.--The Secretary may by regulation provide 
     for such modifications to the applicability of subsections 
     (a) through (k) to Native Hawaiian families, Native Hawaiian 
     housing authorities, and private nonprofit organizations 
     experienced in the planning and development of affordable 
     housing for Native Hawaiians as the Secretary determines to 
     be necessary to meet the unique housing needs of Native 
     Hawaiians.
       ``(3) Limitation.--Any assistance provided under this 
     subsection, including any assistance provided to Native 
     Hawaiians not residing on the Hawaiian Home Lands, shall be 
     limited to the State of Hawaii.
       ``(4) Authorization of appropriations.--There are 
     authorized to be appropriated such sums as may be necessary 
     to carry out this subsection.''.
                                 ______
                                 
      By Mr. INOUYE (for himself and Mr. Akaka):
  S. 110. A bill to amend the Native American Graves Protection and 
Repatriation Act to provide for improved notification and consent, and 
for other purposes; to the Committee on Indian Affairs.


 THE NATIVE AMERICAN GRAVES PROTECTION AND REPATRIATION ACT AMENDMENT 
                              ACT OF 1997

  Mr. INOUYE. Mr. President, I rise today to introduce a bill to amend 
the Native American Graves Protection and Repatriation Act to clarify 
certain provisions of that act as they pertain to Indian tribes and 
native Hawaiian organizations. This bill is similar to the bill I 
introduced in the last session of the Congress--a bill which passed 
this body by unanimous consent on September 13, 1996. Unfortunately, 
the House of Representatives failed to act on the measure prior to the 
adjournment of the 104th Congress.
  In 1990, the Congress enacted the Native American Graves Protection 
and Repatriation Act [NAGPRA] to address the growing concern among 
Indian tribes, Alaska Native villages, and native Hawaiian 
organizations regarding the proper disposition of thousands of Native 
American human remains and sacred objects in the possession and control 
of museums and Federal agencies.
  NAGPRA requires museums and Federal agencies to compile summaries and 
inventories of human remains, associated and unassociated funerary 
objects, sacred objects, and cultural patrimony, to notify an Indian 
tribe or native Hawaiian organization that have an ownership or 
possessory interest in the remains, objects or patrimony, and, upon 
request, to repatriate those remains or cultural items to the 
appropriate Indian tribe or native Hawaiian organization.
  NAGPRA further provides a process governing the treatment of human 
remains or cultural items inadvertently discovered and intentionally 
excavated from Federal or tribal lands.
  In the years since the enactment of NAGPRA, native Hawaiians have 
been at the forefront in the repatriation of ancestral remains and the 
treatment of ancestral remains inadvertently discovered on Federal 
lands.
  Hundreds of native Hawaiian kupuna--ancestors--have been returned to 
Hawaii--released from the confines of more than 25 museums in the 
Untied States, Canada, Switzerland, and Austrialia--and returned to the 
land of their birth.
  Despite these accomplishments, native Hawaiian organizations have 
experienced difficulty in ensuring the implementation of the act--
ironically, not abroad, but in Hawaii.
  In written testimony submitted to the Committee on Indian Affairs by 
Hui Malama I Na Kupuna O Hawaii Nei, a native Hawaiian organization 
recognized under NAGRPA, for a December 9, 1995 oversight hearing on 
the act, a number of concerns were raised--concerns which this bill 
seeks to address, namely: The lack of written consent where native 
American remains are excavated or removed from Federal lands for 
purposes of study; following an inadvertent discovery of Native 
American remains, the lack of assurances that the process for removal 
complies with the requirements that are associated with an intentional 
excavation; and the lack of required notification to native Hawaiian 
organizations when inadvertent discoveries of Native American human 
remains are made on Federal lands.
  In addition to amendments which address these concerns, this bill 
also incorporates two technical amendments requested by the 
administration: a provision expanding the responsibility of the NAGPRA 
Review Committee to include associated funerary objects in the 
compilation of an inventory of culturally unidentifiable human remains; 
and provisions providing the Secretary of The Interior with authority 
to use fines collected to supplement the cost of enforcement-related 
activities.
  As one of the original sponsors of the act, it is my view that these 
amendments are consistent with the original purpose, spirit, and intent 
of NAGPRA, and are necessary to clarify the existing law.
  It is my expectation that if adopted, these amendments will ensure 
better cooperation by Federal agencies in the implementation of the act 
in the State of Hawaii and the rest of the United States. For while 
these amendments address concerns raised by the native Hawaiian people, 
they will also serve to benefit Indian country.
  The responsibility borne by those who choose, or who are called upon 
to care for the remains of their ancestors is a heavy one. By acting 
favorably on this measure, I hope that we can assist these individuals 
and organizations as they continue in their efforts to bring their 
ancestors home and provide them with proper treatment when they are 
disturbed from sacred burial sites.
  Mr. President, I thank you for this time today, and I urge my 
colleagues to support this bill when it comes before the Senate for 
consideration.
  Mr. President, I ask unanimous consent that the test of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 110

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

     SECTION 1. AMENDMENTS TO THE NATIVE AMERICAN GRAVES 
                   PROTECTION AND REPATRIATION ACT.

       (a) Written Consent Required if Native American Remains Are 
     Excavated or Removed for Purposes of Study.--Section 3(c) of 
     the Native American Graves Protection and Repatriation Act 
     (25 U.S.C. 3002(c)) is amended--
       (1) in paragraph (3), by striking ``and'' at the end of the 
     paragraph;
       (2) in paragraph (4), by striking the period and inserting 
     ``; and''; and
       (3) by adding at the end the following:
       ``(5) in the case of any intentional excavation or removal 
     of Native American human remains for purposes of study, such 
     remains are excavated or removed after written consent is 
     obtained from--
       ``(A) lineal descendants, if known or readily 
     ascertainable; or
       ``(B) each appropriate Indian tribe or Native Hawaiian 
     organization.
     The requirement under paragraph (1) shall not be interpreted 
     as allowing or requiring, in the absence of the consent of 
     each appropriate Indian tribe or Native Hawaiian 
     organization, any recordation or analysis that is in addition 
     to any recordation or analysis that is otherwise allowed or 
     required under this Act.''.
       (b) Requirements for Inadvertent Discoveries.--Section 3(d) 
     of the Native American Graves Protection and Repatriation Act 
     (25 U.S.C. 3002(d)) is amended--
       (1) in paragraph (1)--
       (A) in the first sentence, by striking ``with respect to 
     Federal lands'' and inserting ``with respect to those Federal 
     lands'';
       (B) by inserting after the first sentence the following: 
     ``In any case in which a Federal agency or instrumentality 
     receives notice of a discovery of Native American cultural 
     items on lands with respect to which the Federal agency or 
     instrumentality has management authority, the appropriate 
     official of the Federal agency or instrumentality shall 
     notify each appropriate Indian tribe or Native Hawaiian 
     organization. The notification required under the preceding 
     sentence shall be provided not later than 3 business days 
     after the date on which the Federal agency or instrumentality 
     receives notification of the discovery.''; and
       (C) in the last sentence, by inserting ``, and, in the case 
     of Federal lands, the appropriate official of the Federal 
     agency or instrumentality with management authority over 
     those lands notified each appropriate Indian tribe or Native 
     Hawaiian organization by the date specified in this 
     paragraph,'' after ``that notification has been received,''; 
     and
       (2) in paragraph (2), by adding at the end the following 
     new sentence: ``Any person or entity that disposes of, or 
     controls, a cultural item referred to in the preceding 
     sentence shall comply with the applicable requirements of 
     subsection (c).''.
       (c) Review Committee.--Section 8(c)(5) of the Native 
     American Graves Protection and

[[Page S492]]

     Repatriation Act (25 U.S.C. 3006(c)(5)) is amended--
       (1) by inserting ``and associated funerary objects'' after 
     ``culturally unidentifiable human remains''; and
       (2) by striking ``for developing a process for disposition 
     of such remains'' and inserting ``for developing a process 
     for the disposition of the remains and associated funerary 
     objects''.
       (c) Enforcement.--Section 9 of the Native American Graves 
     Protection and Repatriation Act (25 U.S.C. 3007) is amended 
     by adding at the end the following:
       ``(e) Enforcement.--
       ``(1) In general.--Subject to paragraph (2), the amounts 
     collected by the Secretary as penalties under this section 
     shall be used to supplement the amounts made available by 
     appropriations for conducting enforcement activities related 
     to this section.
       ``(2) Authority of Secretary.--In carrying out enforcement 
     activities related to this section, the Secretary may--
       ``(A) pay any person who furnishes information that leads 
     to the assessment of a civil penalty under this section 
     (other than an officer or employee of the Federal Government 
     or a State or local government (including a tribal 
     government) who furnishes or who renders service in the 
     performance of official duties) the lesser of--
       ``(i) half of the amount of the civil penalty; or
       ``(ii) $1,000; and
       ``(B) reduce the amount of a civil penalty that would 
     otherwise be assessed under this section if the violator 
     against whom the civil penalty is assessed agrees to pay to 
     the aggrieved parties involved an aggregate amount of 
     restitution not to exceed the amount of the reduction.''.
                                 ______
                                 
      By Mr. INOUYE:
  S. 111. A bill to amend the Immigration and Nationality Act to 
facilitate the immigration to the United States of certain aliens born 
in the Philippines or Japan who were fathered by United States 
citizens; to the Committee on the Judiciary.


          THE AMERASIAN IMMIGRATION ACT AMENDMENT ACT OF 1997

  Mr. INOUYE. Mr. President, today, I rise to introduce legislation 
which amends Public Law 97-359, the Amerasian Immigration Act, to 
include Amerasian children from the Philippines and Japan as eligible 
applicants. This legislation also expands the eligibility period for 
the Philippines to November 24, 1992, the date of the last United 
States military base closure and the date of enactment of the proposed 
legislation for Japan.

  Under the Amerasian Immigration Act (Public Law 97-359) children born 
in Korea, Laos, Kampuchea, Thailand, and Vietnam after December 31, 
1950, and before October 22, 1982, who were fathered by United States 
citizens, are allowed to immigrate to the United States. The initial 
legislation introduced in the 97th Congress included Amerasians born in 
the Philippines and Japan with no time limits concerning their births. 
The final version as enacted by the Congress included only those areas 
where the U.S. had engaged in active military combat from the Korea War 
onward. Consequently, Amerasians from the Philippines and Japan were 
excluded from eligibility.
  Although the Philippines and Japan were not considered war zones from 
1950 to 1982, the extent and nature of U.S. military involvement in 
both countries are not dissimilar to U.S. military involvement in other 
Asian countries during the Korean and Vietnam conflicts. The role of 
the Philippines and Japan as vital supply and stationing bases brought 
tens of thousands of U.S. military personnel to these countries. As a 
result, interracial relations in both countries were common, leading to 
a significant number of Amerasian children being fathered by U.S. 
citizens. There are now over 50,000 Amerasian children in the 
Philippines. According to the Embassy of Japan, there are 6,000 
Amerasian children in Japan born between 1987 and 1992.
  Public Law 97-359 was passed in the hope of redressing the situation 
of Amerasian children in Korea, Laos, Kampuchea, Thailand, and Vietnam 
who, due to their illegitimate or mixed ethnic make-up, their lack of a 
father or stable mother figure, or impoverished state, have little hope 
of escaping their plight. It became the ethical and social obligation 
of the United States to care for these children.
  The stigmatization and ostracism felt by Amerasian children in those 
countries covered by the Amerasian Immigration Act also is felt by 
Amerasian children in the Philippines and Japan. These children of 
American citizens deserve the same viable opportunities of employment, 
education, and family life that is afforded their counterparts from 
Korea, Laos, Kampuchea, Thailand, and Vietnam.
  Mr. President, I ask unanimous consent that the text of my bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 111

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled, That 
     section 204(f)(2)(A) of the Immigration and Nationality Act 
     (8 U.S.C. 1154(f)(2)(A)) is amended--
       (1) by inserting ``(I)'' after ``born''; and
       (2) by inserting after ``subsection,'' the following: 
     ``(II) in the Philippines after 1950 and before November 24, 
     1992, or (III) in Japan after 1950 and before the date of 
     enactment of this subclause,''.
                                 ______
                                 
      By Mr. MOYNIHAN:
  S. 112. A bill to amend title 18, United States Code, to regulate the 
manufacture, importation, and sale of ammunition capable of piercing 
police body armor; to the Committee on the Judiciary.


            law enforcement officers protection act of 1997

  Mr. MOYNIHAN. Mr. President, I am introducing legislation today to 
amend Title 18 of the United States Code to strengthen the existing 
prohibition on handgun ammunition capable of penetrating policy body 
armor, commonly referred to as bullet-proof vests. This provision would 
require the Secretary of the Treasury and the Attorney General to 
develop a uniform ballistics test to determine with precision whether 
ammunition is capable of penetrating police body armor. The bill also 
prohibits the manufacture and sale of any handgun ammunition determined 
by the Secretary of the Treasury and the Attorney General to have 
armor-piercing capability.
  I am encouraged that, on behalf of its 277,000 members, the Fraternal 
Order of Police has decided to support this bill. In addition the Law 
Enforcement Steering Committee, which represents eight of the largest 
Associations of law enforcement officers, has also indicated that they 
are in support of this bill.
  I am also pleased that President Clinton has taken an avid interest 
in this subject. In a statement similar to remarks he made many times 
at campaign appearances around the country, President Clinton said to 
an audience in Cincinnati, Ohio on September 16, 1996:

       So that's my program for the future--do more to break the 
     gangs, ban those cop killer bullets, drug testing for 
     parolees, improve the opportunities for community-based 
     strategies that lower crime and give our kids something to 
     say yes to.

  Mr. President, it has been fifteen years since I first introduced 
legislation in the Senate to outlaw armor-piercing, or ``cop-killer,'' 
bullets. In 1982, Phil Caruso of the Patrolman's Benevolent Association 
of New York City alerted me to the existence of a Teflon-coated bullet 
capable of penetrating the soft body armor police officers were then 
beginning to wear. Shortly thereafter, I introduced the Law Enforcement 
Officers Protection Act of 1982 to prohibit the manufacture, 
importation, and sale of such ammunition.
  At that time, armor-piercing bullets--most notably the infamous 
``Green Hornet''--were manufactured with a solid steel core. Unlike the 
softer lead composition of most other ammunition, this hard steel core 
prevented these rounds from deforming at the point of impact--thus 
permitting the rounds to penetrate the 18 layers of Kevlar in a 
standard-issue police vest or ``flak-jacket.'' These bullets could go 
through a bullet-proof vest like a hot knife through butter. My 
legislation simply banned any handgun ammunition made with a core of 
steel or other hard metals.

  Despite the strong support of the law enforcement community, it took 
four years before this seemingly non-controversial legislation was 
enacted into law. The National Rifle Association initially opposed it--
that is, until the NRA realized that a large number of its members were 
themselves police officers who strongly supported banning these 
insidious bullets. Only then did the NRA lend its grudging support. The 
bill passed the Senate on March 6, 1986 by a vote of 97-1, and was 
signed by President Reagan on August 8, 1986 (Public Law 99-408).

[[Page S493]]

  That 1986 Act served us in good stead for 7 years. To the best of my 
knowledge, not a single law enforcement officer was shot with an armor-
piercing bullet. Unfortunately, the ammunition manufacturers eventually 
found a way around the 1986 law. By 1993, a new Swedish-made armor-
piercing round, the M39B, had appeared. This pernicious bullet evaded 
the 1986 statute's prohibition because of its unique composition. Like 
most common ammunition, it had a soft lead core, thus exempting it from 
the 1986 law. But this core was surrounded by a heavy steel jacket, 
solid enough to allow the bullet to penetrate body armor. Once again, 
our nation's law enforcement officers were at risk. Immediately upon 
learning of the existence of the new Swedish round, I introduced a bill 
to ban it.
  Another protracted series of negotiations ensued before we were able 
to update the 1986 statute to cover the M39B. We did it with the 
support of law enforcement organizations, and with technical assistance 
from the Bureau of Alcohol, Tobacco and Firearms. In particular, James 
O. Pasco, Jr., then the Assistant Director of Congressional Affairs at 
BATF, worked closely with me and may staff to get it done. The bill 
passed the Senate by unanimous consent on November 19, 1993 as an 
amendment to the 1994 Crime Bill.
  Despite these legislative successes, it was becoming evident that 
continuing ``innovations'' in bullet design would result in new armor-
piercing rounds capable of evading the ban. It was at this time that 
some of us began to explore in earnest the idea of developing a new 
approach to banning these bullets based on their performance, rather 
than their physical characteristics. Mind, this concept was not 
entirely new; the idea had been discussed during our efforts in 1986, 
but the NRA had been immovable on the subject. The NRA's leaders, and 
their constituent ammunition manufacturers, felt that any such broad-
based ban based on a bullet ``performance standard'' would inevitably 
lead to the outlawing of additional classes of ammunition. They viewed 
it as a slippery slope, much as they have regarded the assault weapons 
ban as a slippery slope. The NRA had agreed to the 1986 and 1993 laws 
only because they were narrowly drawn to cover individual types of 
bullets.
  And so in 1993 I asked the ATF for the technical assistance necessary 
to write into law an armor-piercing bullet ``performance standard.'' At 
the time, however, the experts at the ATF informed us that this could 
not be done. They argued that it was simply too difficult to control 
for the many variables that contribute to a bullet's capability to 
penetrate police body armor. We were told that it might be possible in 
the future to develop a performance-based test for armor-piercing 
capability, but at the time we had to be content with the existing 
content-based approach.
  Well. Two years passed and the Office of Law Enforcement Standards of 
the National Institute of Standards and Technology wrote a report 
describing the methodology for just such a armor-piercing bullet 
performance test. The report concluded that a test to determine armor-
piercing capability could be developed within six months.
  So we know it can be done, if only the agencies responsible for 
enforcing the relevant laws have the will. The legislation I am 
introducing requires the Secretary of the Treasury, in consultation 
with the Attorney General, to establish performance standards for the 
uniform testing of handgun ammunition. Such an objective standard will 
ensure that no rounds capable of penetrating police body armor, 
regardless of their composition, will ever be available to those who 
would use them against our law enforcement officers.
  I wish to assure the Senate that this measure would in no way 
infringe upon the rights of legitimate hunters and sportsmen. It would 
not affect legitimate sporting ammunition used in rifles. It would only 
restrict the availability of armor-piercing rounds, for which no one 
can seriously claim there is a genuine sporting use. These cop-killer 
rounds have no legitimate uses, and they have no business being in the 
arsenals of criminals. They are designed for one purpose: to kill 
police officers.
  The 1986 and 1993 cop-killer bullet laws I sponsored kept us one step 
ahead of the designers of new armor-piercing rounds. When the 
legislation I have introduced today is enacted--and I hope it will be 
early in the 105th Congress--it will put them out of the cop-killer 
bullet business permanently.
  Mr. President, I ask unanimous consent that the letter of support 
from the Fraternal Order of Police be printed in the Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:
                                                 January 16, 1997.
     Hon. Daniel P. Moynihan,
     U.S. Senate,
     Washington, DC.
       Dear Senator Moynihan: On behalf of the 277,000 members of 
     the Fraternal Order of Police, I am writing to advise you of 
     our support of legislation which you plan to introduce 
     banning ``cop-killer'' bullets.
       Continuing innovations in the construction of ammunition 
     place the vest-wearing police officer in jeopardy. Your bill 
     requiring performance-based evaluations in order to restrict 
     the availability of armor-piercing bullets for hand-guns will 
     secure a greater measure of safety for all of America's law 
     enforcement officers. And though no bill or piece of 
     legislation can protect them fully from the dangers inherent 
     to police work, your bill will enhance the value of the body 
     armor, which, sometimes, is all that stands between life and 
     death.
       The F.O.P. supports this effort to quantify and identify 
     ``cop-killer'' bullets for handguns based on their ability to 
     penetrate body armor, to prevent them from being used against 
     law enforcement officers. If I can be of assistance in 
     working to pass this legislation, please do not hesitate to 
     contact me, or Executive Director Jim Pasco, at (202) 547-
     8189.
       Again, thank you for continued concern and support for the 
     safety and protection of America's law enforcement officers.
           Sincerely,
                                              Gilbert G. Gallegos,
                                               National President.
                                 ______
                                 
      By Mr. INOUYE:
  S. 113. A bill to amend title VII of the Public Health Service Act to 
establish a psychology post-doctoral fellowship program, and for other 
purposes; to the Committee on Labor and Human Resources.


          The Public Health Service Act Amendment Act of 1997

  Mr. INOUYE. Mr. President, I am introducing legislation today to 
amend Title VII of the Public Health Service Act to establish a 
psychology post-doctoral program.
  Psychologists have made a unique contribution in serving the Nation's 
medically undeserved populations. Expertise in behavorial science is 
useful in addressing many of our most distressing concerns such as 
violence, addiction, mental illness, children's behavior disorders, and 
family disruption. Establishment of a psychology post-doctoral program 
could be most effective in finding solutions to these pressing societal 
issues.
  Similar programs supporting additional, specialized training in 
traditionally undeserved settings or with specific undeserved 
populations have been demonstrated to be successful in providing 
services to those same undeserved populations during the years 
following the training experience. That is, mental health professionals 
who have participated in these specialized federally funded programs 
have tended not only to meet their payback obligations, but have 
continued to work in the public sector or with the undeserved 
populations with whom they have been trained to work.
  While the doctorate in psychology provides broad-based knowledge and 
mastery in a wide variety of clinical skills, the specialized post-
doctoral fellowship programs provide particular diagnostic and 
treatment skills required to effectively respond to these underserved 
populations. For example, what looks like severe depression in an 
elderly person might be a withdrawal related to hearing loss, or what 
looks like poor academic motivation in a child recently relocated from 
Southeast Asia might be reflective of a cultural value of reserve 
rather than a disinterest in academic learning. Each Of these 
situations requires very different interventions, of course, and 
specialized assessment skills.
  Domestic violence is not just a problem for the criminal justice 
system, it is a significant public health problem. A single aspect of 
the issue, domestic violence against women results in almost 100,000 
days of hospitalization, 30,000 emergency room visits, and 40,000 
visits to physicians each year. Rates of child and spouse abuse in 
rural areas are particularly high as are the rates of

[[Page S494]]

alcohol abuse and depression in adolescents. A post-doctoral fellowship 
program in the psychology of rural populations could be of special 
benefit in addressing these problems.
  Given the changing demographics of the Nation--the increasing life 
span and numbers of the elderly, the rising percentage of minority 
populations within the country, as well as an increased recognition on 
the long-term sequel of violence and abuse--and given the demonstrated 
success and effectiveness of these kinds of specialized training 
programs, it is incumbent upon us to encourage participation in post-
doctoral fellowship programs that respond to the needs of the Nation's 
underserved.
  Mr. President, I ask unanimous consent that the text of this bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record as follows:

                                 S. 113

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

     SECTION 1. GRANTS FOR FELLOWSHIPS IN PSYCHOLOGY.

       Part E of title VII of the Public Health Service Act (42 
     U.S.C. 294o) is amended by adding at the end thereof the the 
     following:

     ``SEC. 779. GRANTS FOR FELLOWSHIPS IN PSYCHOLOGY.

       ``(a) In General.--The Secretary shall establish a 
     psychology post-doctoral fellowship program to make grants to 
     and enter into contracts with eligible entities to encourage 
     the provision of psychological training and services in 
     underserved treatment areas.
       ``(b) Eligible Entities.--
       ``(1) Individuals.--In order to receive a grant under this 
     section an individual shall submit an application to the 
     Secretary at such time, in such form, and containing such 
     information as the Secretary shall require, including a 
     certification that such individual--
       ``(A) has received a doctoral degree through a graduate 
     program in psychology provided by an accredited institution 
     at the time such grant is awarded;
       ``(B) will provide services in a medically underserved 
     population during the period of such grant;
       ``(C) will comply with the provisions of subsection (c); 
     and
       ``(D) will provide any other information or assurances as 
     the Secretary determines appropriate.
       ``(2) Institutions.--In order to receive a grant or 
     contract under this section, an institution shall submit an 
     application to the Secretary at such time, in such form, and 
     containing such information as the Secretary shall require, 
     including a certification that such institution--
       ``(A) is an entity, approved by the State, that provides 
     psychological services in medically underserved areas or to 
     medically underserved populations (including entities that 
     care for the mentally retarded, mental health institutions, 
     and prisons);
       ``(B) will use amounts provided to such institution under 
     this section to provide financial assistance in the form of 
     fellowships to qualified individuals who meet the 
     requirements of subparagraphs (A) through (C) of paragraph 
     (2);
       ``(C) will not use in excess of 10 percent of amounts 
     provided under this section to pay for the administrative 
     costs of any fellowship programs established with such funds; 
     and
       ``(D) will provide any other information or assurance as 
     the Secretary determines appropriate.
       ``(c) Continued Provision of Services.--Any individual who 
     receives a grant or fellowship under this section shall 
     certify to the Secretary that such individual will continue 
     to provide the type of services for which such grant or 
     fellowship is awarded for at least 1 year after the term of 
     the grant or fellowship has expired.
       ``(d) Regulations.--Not later than 180 days after the date 
     of enactment of this section, the Secretary shall promulgate 
     regulations necessary to carry out this section, including 
     regulations necessary to carry out this section, including 
     regulations that define the terms `medically underserved 
     areas' or `medically unserved populations'.
       ``(e) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section, 
     $5,000,000 for each of the fiscal years 1998 through 2000.''.
                                 ______
                                 
      By Mr. INOUYE (for himself, Mr. Thomas, Mr. Cochran, and Mr. 
        Stevens):
  S. 114. A bill to repeal the reduction in the deductible portion of 
expenses for business meals and entertainment; to the Committee on 
Finance.
  Mr. INOUYE. Mr. President, I rise to introduce legislation to restore 
the business meals and entertainment tax deduction to 80 percent. I am 
joined by Senators Thomas, Cochran, and Stevens. Restoration of this 
deduction is essential to the livelihood of the food service, travel 
and tourism, and entertainment industries throughout the United States. 
These industries are being economically harmed as a result of this 
reduction. All are major industries which employ millions of people. 
many of whom are already feeling the effects of the reduction.
  The deduction for business meals and entertainment was reduced from 
80 to 50 percent under the Omnibus budget Reconciliation Act of 1993, 
and went into effect on January 1, 1994. Many companies, small and 
large, have changed their policies and guidelines on travel and 
entertainment expenses as a result of the tax reduction in the business 
meals and entertainment expenses deduction. Businesses have also been 
forced to curtail company reimbursement policies because of the 
reduction in the business meals and entertainment expenses deduction. 
In some cases, businesses have eliminated their expense accounts. 
Consequently, restaurant establishments, which have replied heavily on 
business lunch and dinner services, are being adversely affected by the 
reduction in business meals. For example:
  Jay's Restaurant in Dayton, Ohio, closed its lunch service on July 
14, 1994, following a 15 percent decrease in lunch business. This 
decision was based on 2,000 fewer lunch customers from January through 
June 1994 as compared to the same period in 1993.
  The Wall Street Restaurant in Des Moines, Iowa, an upscale restaurant 
serving American and Continental cuisine, has seen its revenues decline 
40 percent since the beginning of 1994. Owner Joey Fasano reduced his 
staff from 50 to 35 employees.
  The Boca in Middlesex County, New Jersey, averaged 40 to 60 lunches 
per day prior to 1994. The restaurant now serves between 5 to 15 
lunches per day. Owner Robert Campione reduced his staff from 18 to 14 
employees.
  The 37th Street Hideaway Restaurant in New York City did 150 lunches 
a day prior to 1994. Owner Van Panopoulos now serves 40 lunches and his 
dinner business has dropped 30 to 40 percent. Mr. Panopoulos reduced 
his staff from 20 to 10 employees.
  Bianco's in Denver, Colorado, closed its lunch service in April 1994 
because of the decline in business. Owner Fred White reduced his staff 
from 26 to 15 employees.
  Edward's at Kanoloa in Hawaii has seen its revenues decline by 15 
percent since 1994. Owner Edward Frady attributes the decline in his 
business to the reduction in business meals and entertainment expense 
deduction.
  I sincerely hope that the business meals reduction to 50 percent does 
not become a Luxury Tax Two, in which the Congress moves toward 
restoration only after the damage has been done and huge job losses 
have occurred. Accordingly, I urge my colleagues to join me in 
cosponsoring this important legislation.
  Mr. President, I ask unanimous consent that the bill text be printed 
in the Record.

                                 S. 114

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

     SECTION 1. REPEAL OF REDUCTION IN BUSINESS MEALS AND 
                   ENTERTAINMENT TAX DEDUCTION.

       (a) In General.--Paragraph (1) of section 274(n) of the 
     Internal Revenue Code of 1986 (relating to only 50 percent of 
     meal and entertainment expenses allowed as deduction) is 
     amended by striking ``50 percent'' and inserting ``80 
     percent''.
       (b) Conforming Amendment.--The heading for section 274(n) 
     is amended by striking ``50'' and inserting ``80''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December, 31, 
     1996.
                                 ______
                                 
      By Mr. INOUYE:
  S. 115. A bill to increase the role of the Secretary of 
Transportation in administering section 901 of the Merchant Marine Act, 
1936, and for other purposes; to the Committee on Commerce, Science, 
and Transportation.


                      merchant marine legislation

  Mr. INOUYE. Mr. President, the legislation I am introducing today 
would centralize the authority in the Secretary of Transportation for 
administering our cargo preference laws. The background of these laws, 
the need for them, and the problems with, in my view, necessitate the 
legislation, are succinctly stated in a Journal of Commerce article 
dated November 18, 1988. While the printing of this article was several 
years ago, the background it provides and the light it sheds on our

[[Page S495]]

present needs are still pertinent. I ask unanimous consent that the 
text of the bill and the article be printed in the Record.
  There being no objection, the items were ordered to be printed in the 
Record, as follows:

                                 S. 115

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

     SECTION 1. TRANSPORTATION IN AMERICAN VESSELS OF GOVERNMENT 
                   PERSONNEL AND CERTAIN CARGOES.

       Section 901(b)(2) of the Merchant Marine Act, 1936 (46 
     U.S.C. App. 1241 (b)(2)), is amended to read as follows:
       ``(2)(A) The Secretary of Transportation shall have the 
     sole responsibility for determining and designating the 
     programs that are subject to the requirements of this 
     subsection. Each department or agency that has responsibility 
     for a program that is designated by the Secretary of 
     Transportation pursuant to the preceding sentence shall, for 
     the purposes of this subsection, administer such program 
     pursuant to regulations promulgated by such Secretary.
       ``(B) The Secretary of Transportation shall--
       ``(i) review the administration of the programs referred to 
     in subparagraph (A); and
       ``(ii) on an annual basis, submit a report to Congress 
     concerning the administration of such programs.''.
                                                                    ____


           [From the Journal of Commerce, November 18, 1988]

                            Cargo Preference

       What It Is: A series of statutes, going back to 1904, 
     intended to assure U.S.-flag ships a minimum share of cargoes 
     produced by U.S. government programs. It is the oldest U.S. 
     maritime promotional program and while subsidies and 
     financing aids have shrunk over the years, preference has 
     survived.
       Background: The preference laws began by tracking this 
     country's extension of its military and naval power, starting 
     with the Spanish-American War. More recently, they have come 
     to reflect the expansion of government programs extending 
     U.S. economic power and interest abroad.
       The Military Transportation Act of 1904 was the first of 
     the preference statutes and its requirement for U.S.-flag 
     vessel use, 100 percent, is the highest.
       In 1934 Congress adopted Public Resolution 17 to require 
     that half of the exports financed by the Reconstruction 
     Finance Corp. were to move in U.S.-flag vessels. Later that 
     resolution was made to apply to financing of the Export-
     Import Bank, established originally to facilitate trade with 
     the Soviet Union.
       In the early postwar period, Congress acted each year to 
     apply the resolution's 50 percent U.S.-flag share to foreign 
     aid shipments. It permanently inserted the requirements into 
     the 1954 Agricultural Trade Development and Assistance Act, 
     better known as Food for Peace and PL-480.
       Public Law 664 in 1961 made clear that preference should 
     benefit and protect all U.S.-flag vessels, not just liners, 
     and that all U.S. programs, including those where non-
     military agencies procured equipment, materials or 
     commodities for themselves or foreign governments, had to use 
     U.S. flags to the extent of 50 percent.
       Importance to Carriers: In the last year for which 
     statistics are available, calendar 1986, U.S.-flag carriers 
     hauled more than 33 million metric tons of ****preference**** 
     ****cargo****, somewhat more than the 28.5 million tons of 
     commercial shipments carried that year. As an industry, the 
     revenue amounted to about $502 million.
       Necessity for Preference: Preference statutes are formally 
     predicated on the need for assured cargoes to encourage the 
     existence of a U.S.-flag merchant fleet to act as a military 
     auxiliary in times of national emergencies.
       Past efforts to apply preference to commercial cargoes have 
     failed, reflecting U.S. governmental sensitivity to 
     objections by this country's trading partners as well as 
     stern opposition form U.S. exporters, importers and 
     agricultural interests. The availability of preference 
     cargoes has unquestionably kept some U.S. carriers in 
     business but critics argue that preference has encouraged 
     keeping obsolete vessels in operation long after they should 
     have been scrapped.
       Extent of Program: The Defense Department, the Agriculture 
     Department and the Agency for International Development are 
     the agencies most heavily involved in utilizing shipping and 
     observing cargo preference. But there are at least 10 others 
     with the same cargo preference responsibilities although 
     smaller volumes. The Export-Import Bank in 1987 reported an 
     unusually high, 91 percent rate of U.S.-flag vessel use. It 
     brought participating carriers some $14.5 million in revenue.
       Problems: The Maritime Administration is responsible for 
     monitoring other government agencies to try to make sure they 
     live up to preference requirements. In fiscal year 1987, 
     those agencies met the cargo share minimums for the most 
     part. Among the exceptions were cases in which the cargo 
     origins and destinations were such that U.S.-flag vessels 
     were simply not available.
       Despite Reagan administration pledges to honor cargo 
     preference requirements, the Navy and the Agriculture 
     Department have had a number of preference fights with the 
     maritime industry.
       One produced an agreement by which the carriers agreed to 
     forgo preference claims on new Agriculture Department-
     supported export programs with commercial-like terms in 
     return for increasing to 75 percent their share of giveaway 
     relief food shipments.
       In another such dispute, the Navy and the U.S. State 
     Department were forced to negotiate a cargo-sharing agreement 
     with Iceland for military shipments there. Iceland threatened 
     the future of U.S. bases in that country if the United States 
     didn't agree to a departure from 100 percent U.S.-flag 
     carriage of defense shipments.
       There have been other, largely budget-driven attempts to 
     bypass preference, but carriers and their supporters in 
     Congress generally have managed to forestall them.
       Comment: Budgetary austerity and the Defense Department's 
     strict insistence of competitive procurement have combined to 
     make for increasing carrier dissatisfaction, especially with 
     the Navy's Military Sealift Command.
       Efforts already are under way to change the competitive 
     procurement system the command uses. Carriers hope generally, 
     to end the pressures they believe force rates downward to 
     depressed levels.
       The presidentially appointed Commission on Merchant Marine 
     and Defense has recommended that all U.S.-flag preference 
     requirements programs be raised to 100 percent but the tight 
     budget and such interests as farmers and traders will work 
     against such a step. Agricultural interests have tried 
     unsuccessfully to have existing preference removed from 
     government programs in the belief that they inhibit U.S. farm 
     exports.
                                 ______
                                 
      By Mr. INOUYE:
  S. 116. A bill to restore the traditional day of observance of 
Memorial Day; to the Committee on the Judiciary.


                        memorial day legislation

  Mr. INOUYE. Mr. President, in our effort to accommodate many 
Americans by making the last Monday in May, Memorial Day, we have lost 
sight of the significance of this day to our nation. My bill would 
restore Memorial Day to May 30 and authorize our flag to fly at half 
mast on that day. In addition, this legislation would authorize the 
President to issue a proclamation designating Memorial Day and Veterans 
Day as days for prayer and ceremonies. This legislation would help 
restore the recognition our veterans deserve for the sacrifices they 
have made on behalf of our nation.

  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. 116

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

     SECTION 1. RESTORATION OF TRADITIONAL DAY OF OBSERVANCE OF 
                   MEMORIAL DAY.

       (a) In General.--Section 6103(a) of title 5, United States 
     Code, is amended in the item relating to Memorial Day by 
     striking out ``the last Monday in May.'' and inserting in 
     lieu thereof ``May 30.''.
       (b) Display of Flag.--Section 2(d) of the joint resolution 
     entitled ``An Act to codify and emphasize existing rules and 
     customs pertaining to the display and use of the flag of the 
     United States of America'', approved June 22, 1942 (36 U.S.C. 
     174(d)), is amended by striking out ``the last Monday in 
     May;'' and inserting in lieu thereof ``May 30;''.
       (c) Proclamation.--The President is authorized and 
     requested to issue a proclamation calling upon the people of 
     the United States to observe Memorial Day as a day for prayer 
     and ceremonies showing respect for American veterans of wars 
     and other military conflicts.
                                 ______
                                 
      By Mr. Inouye:
  S. 117. A bill to amend the Internal Revenue Code of 1986 to provide 
for the tax treatment of residential ground rents, and for other 
purposes; to the Committee on Finance.


                  residential ground rents legislation

  Mr. Inouye. Mr. President, I rise today to speak on an issue of great 
importance to Hawaii's leasehold homeowners. In fiscal year 1992, at my 
request, the Congress appropriated $400,000 to study the feasibility of 
reforming the Internal Revenue Code to address ground lease rent 
payments and to determine what role, if any, the Federal Government 
should play in encouraging lease to fee conversions. The nationwide 
study was conducted by the Hawaii Real Estate and Research Center.
  The legislation I am introducing today is based on the 
recommendations of this study. The bill would: First, provide a 
mortgage interest deduction for residential leasehold properties by 
allowing the nonredeemable ground

[[Page S496]]

lease rents to be claimed as an interest deduction; and second, include 
a tax credit for up to $5,000 for certain transaction costs on the 
transfer of certain residential leasehold land for a 5-year period, 
ending on December 31, 2001. Transaction costs include closing costs, 
attorneys' fees, surveys and appraisals, and telephone, office, and 
travel expenses.
  In most private home ownership situations in this country, a 
homeowner owns both the building and land. Under a leasehold 
arrangement a homeowner owns the building--single-family home, 
condominium, or cooperative apartment--on leased land. The research 
conducted under the leasehold study shows that residential leaseholds 
are not uncommon in other parts of the United States and elsewhere in 
the world. Residential leaseholds exist in places such as Baltimore, 
MD, Irvine, CA, native American lands in Palm Springs, CA, Fairhope, 
AL, Pearl River Basin, MS, and New York, NY.
  The study further indicates that there are few States that regulate 
residential leaseholds. Of those that do, the most common requirement 
applies only to condominium or time share units and is one requiring 
adequate disclosure of the lease terms. For the most part, States are 
unaware of any leasehold problems in their jurisdictions. However, 
residential leaseholds have proven to be problematic for the State of 
Hawaii.
  The formation of Hawaii's land tenure system can be traced back to 
1778 when British Capt. James Cook made his first contact with the 
Hawaiian civilization. Leasing was the preferred system to maintain 
control and retain a portfolio asset value. Residential leaseholds were 
first developed on the Island of Oahu after World War II. Population 
increases created a demand for housing and other types of real estate 
development. Federal income tax policy encouraged the retention of land 
to avoid payment of large capital gains taxes.
  Hawaii's land tenure system is now anomalous to the rest of the 
United States because of the concentration of land in the hands of 
government, large charitable trusts, large agriculturally based 
companies and owners of small parcels or urban properties. High land 
prices and high renegotiated rents continue to create instability in 
Hawaii's residential leasehold system. In 1967, the Hawaii State 
Legislature enacted a Land Reform Act which did not become effective 
until the U.S. Supreme Court issued its 1984 decision in Hawaii Housing 
Authority v. Midkiff, 104 S. Ct. 231 (1984). The act and the Supreme 
Court decision basically divided the market into a ``single-family home 
market in which leaseholds were subject to mandatory conversion, and a 
leasehold condominium market which did not come within the scope of the 
law.''
  Mandatory conversions on the single-family home market occurred from 
1979 to 1982, and 1986 to 1990. As of 1992, there are approximately 
4,600 single-family homes remaining in residential leaseholds. However, 
resolution over condominium leasehold reform remains uncertain. In 
1990, the Honolulu City Council enacted legislation that would cap 
lease rent increases. The constitutionality of the law as challenged in 
U.S. District Court, District of Hawaii. The court found the law 
unconstitutional because the formula it used to arrive at permitted 
lease rent was illogical.
  In 1991, due to the Hawaii State Legislature's unwillingness to 
address the leasehold problems, the Honolulu City Council again enacted 
a mandatory leasehold conversion law for leasehold condominiums, 
Ordinance 01-95. The constitutionality of this law is currently being 
challenged in the Federal court. Another bill which linked lease rent 
increases with the Consumer Price Index and the level of disposable 
income available to condominium owners was also considered. This bill, 
similar to the one enacted in 1990, was found to be unconstitutional.
  The uncertainty in the residential leasehold market continues to 
create economic and emotional distress for the leasehold residents of 
Hawaii. Voluntary conversion has helped to ease the situation and 
substantially reduce the stock of leasehold residential units in 
Hawaii. Yet, voluntary conversion is not enough to resolve the 
residential leasehold problems.
  My legislation will help reduce the economic hardship due to the 
uncertainty in Hawaii's residential leasehold system. The leasehold 
study contains an analysis of the tax revenue effects of this 
legislation by allowing individual tax deductions for residential 
ground rent. The analysis suggests that there are potential revenues to 
the Federal Government if this legislation is enacted into law.
  Mr. President, I ask unanimous consent that the text of my bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 117

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

     SECTION 1. MORTGAGE INTEREST DEDUCTION FOR QUALIFIED NON-
                   REDEEMABLE GROUND RENTS.

       (a) In General.--Section 163(c) of the Internal Revenue 
     Code of 1986 is amended to read as follows:
       ``(c) Ground Rents.--For purposes of this subtitle, any 
     annual or periodic rental under a redeemable ground rent 
     (excluding amounts in redemption thereof) or a qualified non-
     redeemable ground rent shall be treated as interest on an 
     indebtedness secured by a mortgage.''
       (b) Treatment of Qualified Non-Redeemable Ground Rents.--
       (1) In general.--Subsections (a), (b), and (d) of section 
     1055 of the Internal Revenue Code of 1986 (relating to 
     redeemable ground rents) are amended by inserting ``or 
     qualified non-redeemable'' after ``redeemable'' each place it 
     appears.
       (2) Definition.--Section 1055 of such Code is amended by 
     redesignating subsection (d) as subsection (e) and by 
     inserting after subsection (c) the following new subsection:
       ``(d) Qualified Non-Redeemable Ground Rent.--For purposes 
     of this subtitle, the term `qualified non-redeemable ground 
     rent' means a ground rent with respect to which--
       ``(1) there is a lease of land which is for a term in 
     excess of 15 years,
       ``(2) no portion of any payment is allocable to the use of 
     any property other than the land surface,
       ``(3) the lessor's interest in the land is primarily a 
     security interest to protect the rental payments to which the 
     lessor is entitled under the lease, and
       ``(4) the leased property must be used as the taxpayer's 
     principal residence (within the meaning of section 1034).''
       (3) Conforming amendments.--
       (A) The heading for section 1055 of such Code is amended by 
     striking ``redeemable''.
       (B) The item relating to section 1055 in the table of 
     sections for part IV of subchapter O of chapter 1 of subtitle 
     A of such Code is amended by striking ``Redeemable ground'' 
     and inserting ``Ground''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on the date of the enactment of this Act, 
     with respect to taxable years ending after such date.

     SEC. 2. CREDIT FOR TRANSACTION COSTS ON THE TRANSFER OF LAND 
                   SUBJECT TO CERTAIN GROUND RENTS.

       (a) In General.--Subpart B of part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 (relating to 
     foreign tax credit, etc.) is amended by inserting after 
     section 30A the following new section:

     ``SEC. 30B. CREDIT FOR TRANSACTION COSTS.

       ``(a) Allowance of Credit.--
       ``(1) In general.--At the election of the taxpayer, there 
     shall be allowed as a credit against the tax imposed by this 
     chapter for the taxable year an amount equal to the 
     transaction costs relating to any sale or exchange of land 
     subject to ground rents with respect to which immediately 
     after and for at least 1 year prior to such sale or 
     exchange--
       ``(A) the transferee is the lessee who owns a dwelling unit 
     on the land being transferred, and
       ``(B) the transferor is the lessor.
       ``(2) Credit allowed to both transferor and transferee.--
     The credit allowed under paragraph (1) shall be allowed to 
     both the transferor and the transferee.
       ``(b) Limitations.--
       ``(1) Limitation per dwelling unit.--The amount of the 
     credit allowed to a taxpayer under subsection (a) for any 
     taxable year shall not exceed the lesser of--
       ``(A) $5,000 per dwelling unit, or
       ``(B) 10 percent of the sale price of the land.
       ``(2) Limitation based on taxable income.--The amount of 
     the credit allowed to a taxpayer under subsection (a) for any 
     taxable year shall not exceed the sum of--
       ``(A) 20 percent of the regular tax for the taxable year 
     reduced by the sum of the credits allowable under subpart A 
     and sections 27, 28, 29, 30, and 30A plus
       ``(B) the alternative minimum tax imposed by section 55.
       ``(c) Definitions and Special Rules.--For purposes of this 
     section--
       ``(1) Transaction costs.--
       ``(A) In General.--The term `transaction costs' means any 
     expenditure directly associated with a transaction, the 
     purpose of which is to convey to the lessee, by the lessor, 
     land subject to ground rents.
       ``(B) Specific expenditures.--Such term includes closing 
     costs, attorney fees, surveys

[[Page S497]]

     and appraisals, and telephone, office, and travel expenses 
     incurred in negotiations with respect to such transaction.
       ``(C) Lost rents not included.--Such term does not include 
     lost rents due to the premature termination of an existing 
     lease.
       ``(2) Dwelling unit.--A dwelling unit shall include any 
     structure or portion of any structure which serves as the 
     principal residence (within the meaning of section 1034) for 
     the lessee.
       ``(3) Reduction in basis.--The basis of property acquired 
     in a transaction to which this section applies shall be 
     reduced by the amount of credit allowed under subsection (a).
       ``(4) Election.--This section shall apply to any taxpayer 
     for the taxable year only if such taxpayer elects to have 
     this section so apply.
       ``(d) Carryover of Credit.--
       ``(1) Carryover period.--If the credit allowed to the 
     taxpayer under subsection (a) for any taxable year exceeds 
     the amount of the limitation imposed by subsection (b)(2) for 
     such taxable year (hereafter in this subsection referred to 
     as the `unused credit year'), such excess shall be a 
     carryover to each of the 5 succeeding taxable years.
       ``(2) Amount carried to each year.--
       ``(A) Entire amount carried to first year.--The entire 
     amount of the unused credit for an unused credit year shall 
     be carried to the earliest of the 5 taxable years to which 
     (by reason of paragraph (1)) such credit may be carried.
       ``(B) Amount carried to other 4 years.--The amount of 
     unused credit for the unused credit year shall be carried to 
     each of the remaining 4 taxable years to the extent that such 
     unused credit may not be taken into account for a prior 
     taxable year because of the limitation imposed by subsection 
     (b)(2).
       ``(e) Termination.--This section shall not apply to any 
     transaction cost paid or incurred in taxable years beginning 
     after December 31, 2001.''
       (b) Clerical Amendment.--The table of sections for such 
     subpart B is amended by inserting after the item relating to 
     section 30A the following new item:

``Sec. 30B. Credit for transaction costs on the transfer of land 
              subject to certain ground rents.''
       (c) Effective Date.--The amendments made by this section 
     shall apply to expenditures paid or incurred in taxable years 
     beginning after December 31, 1996.
                                 ______
                                 
      By Mr. INOUYE:
  S. 118. A bill to provide for the completion of the naturalization 
process for certain nationals of the Philippines; to the Committee on 
the Judiciary.


                  Filipino Naturalization Legislation

  Mr. INOUYE.
  Mr. President, section 405 of the Immigration Act of 1990 was enacted 
to make naturalization under section 329 of the Immigration and 
Nationality Act available to those Filipino World War II veterans whose 
military service during the liberation of the Philippines makes them 
deserving of United States citizenship. The naturalization authority to 
allow the veterans to be naturalized in the Philippines was first 
granted under Section 113 of the fiscal year 1993 Departments of 
Commerce, Justice, State, Judiciary and related agencies appropriations 
bill.
  The original intent of Congress in providing the Immigration and 
Naturalization Service [INS] with the authority to naturalize 
applicants in the Philippines was to relieve the unnecessary hardships 
that section 405 applicants would encounter by having to travel to the 
United States for an interview and naturalization ceremony, since many 
are elderly and have no relatives in the United States. The initial 
period for filing an application under this provision was from November 
29, 1990 to November 30, 1992. Section 113 further extended the filing 
period to February 3, 1995.
  Unfortunately, the authority to naturalize applicants in the 
Philippines has now expired. The legislation I am introducing today 
would immediately restore, for a 5-year period, the authority for the 
U.S. Embassy in Manila to complete the naturalization process of 
approximately 12,000 remaining applications which were properly filed 
under section 405 of the 1990 Act. The legislation does not extend the 
application period. The legislation also makes clear that 
naturalization is available only to those applicants who were found by 
the Recovered Personnel Division of the U.S. Army and the Guerrilla 
Affairs Division of the U.S. Army to deserve benefits from the U.S. 
Government.
  Mr. President, I ask unanimous consent that the bill text be printed 
in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 118

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

     SEC. ____. COMPLETION OF THE NATURALIZATION PROCESS FOR 
                   CERTAIN NATIONALS OF THE PHILIPPINES.

       (a) In General.--Section 405 of the Immigration and 
     Nationality Act of 1990 (8 U.S.C. 1440 note) is amended--
       (1) by striking subparagraph (B) of subsection (a)(1) and 
     inserting the following:
       ``(B) who--
       ``(i) is listed on the final roster prepared by the 
     Recovered Personnel Division of the United States Army of 
     those who served honorably in an active duty status within 
     the Philippine Army during the World War II occupation and 
     liberation of the Philippines,
       ``(ii) is listed on the final roster prepared by the 
     Guerrilla Affairs Division of the United States Army of those 
     who received recognition as having served honorably in an 
     active duty status within a recognized guerrilla unit during 
     the World War II occupation and liberation of the 
     Philippines, or
       ``(iii) served honorably in an active duty status within 
     the Philippine Scouts or within any other component of the 
     United States Armed Forces in the Far East (other than a 
     component described in clause (i) or (ii)) at any time during 
     the period beginning September 1, 1939, and ending December 
     31, 1946;'';
       (2) by adding at the end of subsection (a) the following 
     new paragraph:
       ``(3)(A) For purposes of the second sentence of section 
     329(a) and section 329(b)(3) of the Immigration and 
     Nationality Act, the executive department under which a 
     person served shall be--
       ``(i) in the case of an applicant claiming to have served 
     in the Philippine Army, the United States Department of the 
     Army;
       ``(ii) in the case of an applicant claiming to have served 
     in a recognized guerrilla unit, the United States Department 
     of the Army or, in the event the Department of the Army has 
     no record of military service of such applicant, the General 
     Headquarters of the Armed Forces of the Philippines; or
       ``(iii) in the case of an applicant claiming to have served 
     in the Philippine Scouts or any other component of the United 
     States Armed Forces in the Far East (other than a component 
     described in clause (i) or (ii)) at any time during the 
     period beginning September 1, 1939, and ending December 31, 
     1946, the United States executive department (or successor 
     thereto) that exercised supervision over such component.
       ``(B) An executive department specified in subparagraph (A) 
     may not make a determination under the second sentence of 
     section 329(a) with respect to the service or separation from 
     service of a person described in paragraph (1) except 
     pursuant to a request from the Service.''; and
       (3) by adding at the end the following new subsection:
       ``(d) Implementation.--(1) Notwithstanding any other 
     provision of law, for purposes of the naturalization of 
     natives of the Philippines under this section--
       ``(A) the processing of applications for naturalization, 
     filed in accordance with the provisions of this section, 
     including necessary interviews, shall be conducted in the 
     Philippines by employees of the Service designated pursuant 
     to section 335(b) of the Immigration and Nationality Act; and
       ``(B) oaths of allegiance for applications for 
     naturalization under this section shall be administered in 
     the Philippines by employees of the Service designated 
     pursuant to section 335(b) of that Act.
       ``(2) Notwithstanding paragraph (1), applications for 
     naturalization, including necessary interviews, may continue 
     to be processed, and oaths of allegiance may continue to be 
     taken in the United States.''.
       (b) Repeal.--Section 113 of the Departments of Commerce, 
     Justice, and State, the Judiciary, and Related Agencies 
     Appropriations Act, 1993 (8 U.S.C. 1440 note), is repealed.
       (c) Effective Date; Termination Date.--
       (1) Application to pending applications.--The amendment 
     made by subsection (a) shall apply to applications filed 
     before February 3, 1995.
       (2) Termination date.--The authority provided by the 
     amendment made by subsection (a) shall expire February 3, 
     2001.
                                 ______
                                 
      By Mr. INOUYE:
  S. 119. A bill to amend title VII of the Public Health Service Act to 
ensure that social work students or social work schools are eligible 
for support under the Health Careers Opportunity Program, the Minority 
Centers of Excellence Program, and programs of grants for training 
projects in geriatrics, and to establish a social work training 
program; to the Committee on Labor and Human Resources.


                  PUBLIC HEALTH SERVICE ACT AMENDMENTS

  Mr. INOUYE. Mr. President, on behalf of our Nation's clinical social 
workers, I am introducing legislation to amend the Public Health 
Service Act. This legislation will: First, establish a new social work 
training program; second, ensure that social work students are eligible 
for support under the Health Careers Opportunity Program and that 
social work schools are eligible for support under the Minority Centers 
for Excellence programs;

[[Page S498]]

Third, permit schools offering degrees in social work to obtain grants 
for training projects in geriatrics; and fourth, ensure that social 
work is recognized as a profession under the Public Health Maintenance 
Organization [HMO] Act.
  Despite the impressive range of services social workers provide to 
the people of this Nation, particularly our elderly, disadvantaged, and 
minority populations, few Federal programs exist to provide 
opportunities for social work training in health and mental health 
care. This legislation builds on the health professions education 
legislation enacted by the 102d Congress enabling schools of social 
work to apply for AIDS training funding and resources to establish 
collaborative relationships with rural health care providers and 
schools of medicine or osteopathic medicine. This bill provides funding 
for traineeships and fellowships for individuals who plan to specialize 
in, practice, or teach social work, or for operating approved social 
work training programs; it assists disadvantaged students to earn 
graduate degrees in social work with concentrations in health or mental 
health; it provides new resources and opportunities in social work 
training for minorities; and it encourages schools of social work to 
expand programs in geriatrics. Finally, the recognition of social work 
as a profession merely codifies current social work practice and 
reflects the modifications made by the Medicare HMO legislation.
  I believe it is important to ensure that the special expertise and 
skills social workers possess continue to be available to the citizens 
of this Nation. This legislation, by providing financial assistance to 
schools of social work and social work students, recognizes the long 
history and critical importance of the services provided by social work 
professionals. In addition since social workers have provided quality 
mental health services to our citizens for a long time and continue to 
be at the forefront of establishing innovative programs to serve our 
disadvantaged populations, I believe that it is time to provide them 
with the proper recognition of their profession that they have clearly 
earned and deserve.
  Mr. President, I ask unanimous consent that the text of this bill be 
printed in the Congression Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 119

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

     SECTION 1. SOCIAL WORK STUDENTS.

       (a) Scholarships, Generally.--Section 737(a)(3) of the 
     Public Health Service Act (42 U.S.C. 293a(a)(3)) is amended 
     by striking ``offering graduate programs in clinical 
     psychology'' and inserting ``offering graduate programs in 
     clinical psychology, graduate programs in clinical social 
     work, or programs in social work''.
       (b) Faculty Positions.--Section 738(a)(3) of the Public 
     Health Service Act (42 U.S.C. 293b(a)(3)) is amended by 
     striking ``offering graduate programs in clinical 
     psychology'' and inserting ``offering graduate programs in 
     clinical psychology, graduate programs in clinical social 
     work, or programs in social work''.
       (c) Health Professions School.--Section 739(h)(1)(A) of the 
     Public Health Service Act (42 U.S.C. 293c(h)(1)(A)) is 
     amended by striking ``or a school of pharmacy'' and inserting 
     ``a school of pharmacy, or a school offering graduate 
     programs in clinical social work, or programs in social 
     work''.
       (d) Health Careers Opportunities Program.--Section 
     740(a)(1) of the Public Health Service Act (42 U.S.C. 
     293d(a)(1)) is amended by striking ``which offer graduate 
     programs in clinical psychology'' and inserting ``offering 
     graduate programs in clinical psychology or programs in 
     social work''.

     SEC. 2. GERIATRICS TRAINING PROJECTS.

       Section 777(b)(1) of the Public Health Service Act (42 
     U.S.C. 294o(b)(1)) is amended by inserting ``schools offering 
     degrees in social work,'' after ``teaching hospitals,''.

     SEC. 3. SOCIAL WORK TRAINING PROGRAM.

       Part E of title VII of the Public Health Service Act (42 
     U.S.C. 294n et seq.) is amended by adding at the end the 
     following:

     ``SEC. 779. SOCIAL WORK TRAINING PROGRAM.

       ``(a) Training Generally.--The Secretary may make grants 
     to, or enter into contracts with, any public or nonprofit 
     private hospital, school offering programs in social work, or 
     to or with a public or private nonprofit entity (which the 
     Secretary has determined is capable of carrying out such 
     grant or contract)--
       ``(1) to plan, develop, and operate, or participate in, an 
     approved social work training program (including an approved 
     residency or internship program) for students, interns, 
     residents, or practicing physicians;
       ``(2) to provide financial assistance (in the form of 
     traineeships and fellowships) to students, interns, 
     residents, practicing physicians, or other individuals, who 
     are in need thereof, who are participants in any such 
     program, and who plan to specialize or work in the practice 
     of social work;
       ``(3) to plan, develop, and operate a program for the 
     training of individuals who plan to teach in social work 
     training programs; and
       ``(4) to provide financial assistance (in the form of 
     traineeships and fellowships) to individuals who are 
     participants in any such program and who plan to teach in a 
     social work training program.
       ``(b) Academic Administrative Units.--
       ``(1) In general.--The Secretary may make grants to or 
     enter into contracts with schools offering programs in social 
     work to meet the costs of projects to establish, maintain, or 
     improve academic administrative units (which may be 
     departments, divisions, or other units) to provide clinical 
     instruction in social work.
       ``(2) Preference in making awards.--In making awards of 
     grants and contracts under paragraph (1), the Secretary shall 
     give preference to any qualified applicant for such an award 
     that agrees to expend the award for the purpose of--
       ``(A) establishing an academic administrative unit for 
     programs in social work; or
       ``(B) substantially expanding the programs of such a unit.
       ``(c) Duration of Award.--The period during which payments 
     are made to an entity from an award of a grant or contract 
     under subsection (a) may not exceed 5 years. The provision of 
     such payments shall be subject to annual approval by the 
     Secretary of the payments and subject to the availability of 
     appropriations for the fiscal year involved to make the 
     payments.
       ``(d) Funding.--
       ``(1) Authorization of appropriations.--For the purpose of 
     carrying out this section, there is authorized to be 
     appropriated $10,000,000 for each of the fiscal years 1998 
     through 2000.
       ``(2) Allocation.--Of the amounts appropriated under 
     paragraph (1) for a fiscal year, the Secretary shall make 
     available not less than 20 percent for awards of grants and 
     contracts under subsection (b).''.

     SEC. 4. CLINICAL SOCIAL WORKER SERVICES.

       Section 1302 of the Public Health Service Act (42 U.S.C. 
     300e-1) is amended--
       (1) in paragraphs (1) and (2), by inserting ``clinical 
     social worker,'' after ``psychologist,'' each place it 
     appears;
       (2) in paragraph (4)(A), by striking ``and psychologists'' 
     and inserting ``psychologists, and clinical social workers''; 
     and
       (3) in paragraph (5), by inserting ``clinical social 
     work,'' after ``psychology,''.
                                 ______
                                 
      By Mr. INOUYE:
  S. 120. A bill to amend title VII of the Public Health Service Act to 
make certain graduate programs in clinical psychology eligible to 
participate in various health professions loan programs; to the 
Committee on Labor and Human Resources.


                  public health service act amendments

  Mr. INOUYE. Mr. President, I am introducing legislation today to 
modify Title VII of the U.S. Public Health Service Act in order to 
provide students enrolled in graduate psychology programs with the 
opportunity to participate in various health professions loan programs.

  Providing students enrolled in graduate psychology programs with 
eligibility for financial assistance in the form of loans, loan 
guarantees, and scholarships will facilitate a much needed infusion of 
behavioral science expertise into our public health efforts. There is a 
growing recognition of the valuable contribution that is being made by 
our nation's psychologists toward solving some of our Nation's most 
distressing problems such as domestic violence, addictions, 
occupational stress, child abuse, and depression.
  The participation of students of all kinds is vital to the success of 
health care training. The Title VII programs play a significant role in 
providing financial support for the recruitment of minorities, women, 
and individuals from economically disadvantaged backgrounds. Minority 
therapists, for example, have an advantage in the provision of critical 
services to minority populations because they are more likely to 
understand or, perhaps, share the cultural background of their clients 
and are often able to communicate to them in their own language. Also 
significant is the fact that, when compared with non-minority 
graduates, ethnic minority graduates are less likely to work in private 
practice and more likely to work in community or non-profit settings, 
where ethnic minority and economically disadvantaged individuals are 
more likely to seek care.

[[Page S499]]

  It is important that a continued emphasis be placed on the needy 
populations of our nation and that continued support be provided for 
the training of individuals who are most likely to provide services in 
underserved areas.
  Mr. President, I ask unanimous consent that the text of this bill be 
printed in the Congressional Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 120

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

     SECTION 1. PARTICIPATION IN VARIOUS HEALTH PROFESSIONS LOAN 
                   PROGRAMS.

       (a) Loan Agreements.--Section 721 of the Public Health 
     Service Act (42 U.S.C. 292q) is amended--
       (1) in subsection (a), by inserting ``, or any public or 
     nonprofit schools that offer graduate programs in clinical 
     psychology'' after ``veterinary medicine'';
       (2) in subsection (b)(4), by striking ``or doctor of 
     veterinary medicine or an equivalent degree'' and inserting 
     ``doctor of veterinary medicine or an equivalent degree, or a 
     graduate degree in clinical psychology''; and
       (3) in subsection (c)(1), by inserting ``, or schools that 
     offer graduate programs in clinical psychology'' after 
     ``veterinary medicine''.
       (b) Loan Provisions.--Section 722 of the Public Health 
     Service Act (42 U.S.C. 292r) is amended--
       (1) in subsection (b)(1), by striking ``or doctor of 
     veterinary medicine or an equivalent degree'' and inserting 
     ``doctor of veterinary medicine or an equivalent degree, or a 
     graduate degree in clinical psychology''; and
       (2) in subsection (k)--
       (A) in the matter preceding paragraph (1), by striking ``or 
     podiatry'' and inserting ``podiatry, or clinical 
     psychology''; and
       (B) in paragraph (4), by striking ``or podiatric medicine'' 
     and inserting ``podiatric medicine, or clinical psychology''.
                                 ______
                                 
      By Mr. MOYNIHAN (for himself, Mr. CHAFEE, Mr. KENNEDY, and Ms. 
        MOSELEY-BRAUN):
  S. 121. A bill to amend the Internal Revenue Code of 1986 to provide 
for 501(c)(3) bonds a tax treatment similar to governmental bonds, and 
for other purposes; to the Committee on Finance.


                  the higher education bond parity act

  S. 122. A bill to amend the Internal Revenue Code of 1986 to correct 
the treatment of tax-exempt financing of professional sports 
facilities; to the Committee on Finance.


              the stop tax-exempt arena debt issuance act

  Mr. MOYNIHAN. Mr. President, I rise today to introduce two tax bills 
which I introduced together for the first time last summer. The two 
bills are both significant in their own rights. Yet, when taken 
together, they correct a serious misallocation of our limited resources 
under present law: a tax subsidy that inures largely to the benefit of 
wealthy sports franchise owners and their players would be replaced 
with increased for higher education and research.
  The first bill, the Higher Education Bond Parity Act of 1997, has 
been introduced several times previously by this Senator, with several 
of my distinguished colleagues as cosponsors. It would undo what ought 
never have been done. It would remove the ``private activity'' label 
from the tax-exempt bonds of private, nonprofits higher education 
institutions and other organizations, and thereby eliminate the 
arbitrary $150 million cap on the amount of tax-exempt bonds that such 
as institution may have outstanding.
  The Tax Reform Act of 1986 imposed the ``private activity'' label 
(and a $150 million cap) on bonds issued on behalf on nonprofit 
institutions, collectively known as section 501(c)(3) organizations. 
This was a serious error. The cap has relegated private, higher 
education institutions to a diminished, restricted status, relative to 
their public counterparts.
  Already, this has caused observable, harmful effects on many of our 
Nation's leading colleges and universities. Thirty-four of them 
presently are at or near the $150 million cap, and unlike their public 
counterparts are precluded from using tax-exempt to finance classrooms, 
libraries, research laboratories, and the like. A few years ago, as the 
$150 million cap was bargaining to take effect, 19 of the universities 
that ranked in the top 50 in research undertaking were private 
institutions. Today, only 14 of those 19 private institutions remain in 
the top 50, and all but one are foreclosed form tax-exempt financing as 
a result of the $150 million per institution limit.
  We must act soon to restore the access of private colleges and 
universities to tax-exempt financing equal to that of their pubic 
counterparts. Otherwise, the vitality of our private institutions in 
higher education and research will be at risk. And we will lose a 
distinguishing feature of American society of inestimable value--the 
singular degree to which we maintain an independent sector--``private 
universit[ies] in the public service,'' to paraphrase the motto of New 
York University. This is no longer so in most of the democratic world; 
it never was so in the rest. It is a treasure and a phenomenon that has 
clearly produced excellence--indeed, the envy of the world--and it must 
be sustained.
  The practical effect of the $150 million cap is to deny tax-exempt 
financing to large, private, research-oriented educational institutions 
most in need of capital to carry out their research mission. This will 
have a predictable impact over a generation: the distribution of major 
research in this country will inevitably shift to public institutions. 
If I may use California as an example, we could look up one day and 
find Stanford to be still an institution of the greatest quality as an 
undergraduate teaching facility--with a fine law school and excellent 
liberal arts degree program--but with all the big science projects at 
Berkeley, the State institution.

  By removing the ``private activity'' label, this legislation will 
restore the parity of treatment of private nonprofit institutions and 
their public counterparts, and reinstate proper recognition in the tax 
code of the essential public purposes served by such private 
institutions.
  The capital needs of private colleges and universities merit the 
close attention of this body. The cost of these changes is modest, 
given their importance. The staff of the Joint Committee on Taxation 
has estimated the revenue loss previously at $308 million over 5 years. 
The Senate has twice passed legislation to remove the ``private 
activity'' label and the $150 million bond cap--in the Family Tax 
Fairness, Economic Growth, and Health Care Access Act of 1992 (H.R. 
4210) and the Revenue Act of 1992 (H.R. 11)--only to have both bills 
vetoed for other reasons by President Bush. We should correct this 
error before it is too late. Otherwise, we will soon look up and find 
that we do not recognize the higher education sector.
  Mr. President, the second tax bill I introduce today--the Stop Tax-
exempt Arena Debt Issuance Act (or STADIA for short)--was introduced by 
this Senator for the first time last summer. Since that time, the bill 
has attracted the close scrutiny of bond counsel and their clients and 
has received much attention in the press almost all of which has been 
favorable.
  Mr. Keith Olbermann, anchor of ESPN's Sportscenter program, even 
declared that the introduction of the bill was ``paramount among all 
other sports stories'' last year. Mr. Olbermann's support for this 
legislation is so emphatic that he compared its author to Dr. Jonas 
Salk. Passage of the bill, Mr. Olbermann says, is ``the vaccine that * 
* * could conceivably at least towards the cure, if not cure 
immediately, almost all the ills of sports.''
  Mr. Olbermann is far too generous to this Senator, but he is right 
about the importance of this bill, both to sports fans and to 
taxpayers. This bill closes a big loophole, a loophole that ultimately 
injures State and local governments and other issuers of tax-exempt 
bonds, that provides an unintended Federal subsidy (in fact, 
contravenes Congressional intent), that underwrites bidding wars among 
cities battling for professional sports franchises, and that 
contributes to the enrichment of persons who need no Federal assistance 
whatsoever.
  A decade ago, I was much involved in the drafting of the Tax Reform 
Act of 1986. A major objective of that legislation was to simplify the 
Tax Code by eliminating a large number of loopholes that had come to be 
viewed as unfair because they primarily benefited small groups of 
taxpayers. One of the loopholes we sought to close in 1986 was one that 
permitted builders of professional sports facilities to use tax-exempt 
bonds. Mind, we had nothing

[[Page S500]]

against new stadium construction, but we made the judgment that scarce 
Federal resources could surely be used in ways that would better serve 
the public good. The increasing proliferation of tax-exempt bonds had 
driven up interest costs for financing roads, schools, libraries, and 
other governmental purposes, led to mounting revenue losses to the U.S. 
Treasury, caused an inefficient allocation of capital, and allowed 
wealthy taxpayers to shield a growing amount of their investment income 
from income tax by purchasing tax-exempt bonds. Thus, we expressly 
forbade use of ``private activity'' bonds for sports facilities, 
intending to eliminate tax-exempt financing of these facilities 
altogether.
  Unfortunately, our effort in 1986 backfired. Team owners, with help 
from clever tax counsel, soon recognized that the change could work to 
their advantage. As columnist Neal R. Pierce wrote recently, team 
owners ``were not checkmated for long. They were soon exhibiting the 
gall to ask mayors to finance their stadiums with [governmental] 
purpose bonds.'' Congress did not anticipate this. After all, by law, 
governmental bonds used to build stadiums would be tax-exempt only if 
no more than 10 percent of the debt service is derived from stadium 
revenue sources. In other words, non-stadium governmental revenues 
(i.e., tax revenues, lottery proceeds, and the like) must be used to 
repay the bulk of the debt, freeing team owners to pocket stadium 
revenues. Who would have thought that local officials, in order to keep 
or get a team, would capitulate to team owners--granting concessionary 
stadium leases and committing limited government revenues to repay 
stadium debt, thereby hindering their own ability to provide schools, 
roads and other public investments?
  The result has been a stadium construction boom unlike anything we 
have ever seen. In the last 6 years alone, over $4 billion has been 
spent on building 30 professional sports stadiums. According to Prof. 
Robert Baade, an economist at Lake Forest College in Illinois and a 
stadium finance expert, that amount could ``completely refurbish the 
physical plants of the nation's public elementary and secondary 
schools.'' An additional $7 billion of stadiums are in the planning 
stages, and no end is in sight.

  What is driving the demand for new stadiums? Mainly, team owners' 
bottom lines and rising player salaries. Although our existing stadiums 
are generally quite serviceable, team owners can generate greater 
income, increase their franchise values dramatically, and compete for 
high-priced free agents with new tax-subsidized, single-purpose 
stadiums equipped with luxury skyboxes, club seats and the like. Thus, 
using their monopoly power, owners threaten to move, forcing bidding 
wars among cities. End result: new, tax-subsidized stadiums with fancy 
amenities and sweetheart lease deals.
  To cite a case in point, Mr. Art Modell recently moved the Cleveland 
Browns professional football team from Cleveland to Baltimore to become 
the Ravens. Prior to relocating, Mr. Modell had said, ``I am not about 
to rape the city [of Cleveland] as others in my league have done. You 
will never hear me say `if I don't get this I'm moving.' You can go to 
press on that one. I couldn't live with myself if I did that.'' 
Obviously, Mr. Modell changed his mind. And why? An extraordinary 
stadium deal with the State of Maryland.
  The State of Maryland (and the local sports authority) provided the 
land on which the stadium is located, issued $87 million in tax-exempt 
bonds (yielding interest savings of approximately $60 million over a 30 
year period as compared to taxable bonds), and contributed $30 million 
in cash and $64 million in state lottery revenues toward construction 
of the stadium. Mr. Modell agreed to contribute $24 million toward the 
project and, in return, receives rent-free use of the stadium (the 
franchise pays only for the operating and maintenance costs), $65 
million in sales of rights to purchase season tickets (so called 
``personal seat licenses''), all revenues from selling the right to 
name the stadium luxury suites, premium seats, in-park advertising, and 
concessions, and 50 percent of all revenues from stadium events other 
than Ravens' games (with the right to control the booking of those 
events).
  Financial World reports that the value of the Baltimore Ravens' 
franchise increased from $165 million in 1992 (i.e., before the move 
from Cleveland) to an estimated $250 million, after its first season in 
the new stadium. It's little wonder that Mr. Modell recently stated: 
``The pride and presence of a professional football team is far more 
important than 30 libraries, and I say that with all due respect to the 
learning process.''
  Meanwhile, the City of Cleveland has agreed to construct a new, $225 
million stadium to house an expansion football team. When Mr. Modell 
decided to move his team to Baltimore, the NFL agreed to create a new 
Cleveland football team with the same name: the Cleveland Browns. Most 
cities are not as fortunate when a team leaves.
  We are even reaching a point at which stadiums are being abandoned 
before they have been used for 10 or 15 years. A recent article in 
Barron's reports that this owner-perceived ``economic obsolescence'' 
has doomed even recently-built venues:

       The eight-year-old Miami Arena is facing a future without 
     its two major tenants, the Florida Panthers hockey team and 
     the Miami Heat basketball franchise, because of inadequate 
     seating capacity and a paucity of luxury suites. The Panthers 
     have already cut a deal to move to a new facility that nearby 
     Broward County is building for them at a cost of around $200 
     million. Plans call for Dade County to build a new $210 
     million arena before the end of the decade, despite the fact 
     that the move will leave local taxpayers stuck with servicing 
     the debt on two Miami arenas rather than just one.

  How do taxpayers benefit from all this? They don't. Tickets prices go 
way up--and stay up--after a new stadium opens. So while fans are asked 
to foot the bills through tax subsides, many no longer can afford the 
price of admission. A study of Newsday recently found that tickets 
prices rose by 32 percent in five new baseball stadiums, as compared to 
a major league average of 8 percent. Not to mention the refreshments 
and other concessions, which also cost more in the new venues.
  According to Barron's the projects ``cater largely to well-heeled 
fans, meaning the folks who can afford to pay for seats in glassed-in 
luxury boxes. While the suit-and-cell-phone crowd get all the best 
seats, the average taxpayer is consigned to `cheap seats' in nosebleed 
land or, more often, for following his favorite team on television.''
  Nor do these new stadiums provide much, if any, economic benefit to 
their local communities. Professor Baade studied new stadiums in 30 
metropolitan areas. He found no discernible positive impact on economic 
development in 27 of the areas, and a negative impact in the other 3.
  Any job growth that does result is extremely expensive. The 
Congressional Research Service [CRS] reports that the new $177 million 
football stadium for the Baltimore Ravens is expected to cost $127,000 
per job created. By contrast, the cost per job generated by Maryland's 
economic development program is just $6,250. Another recent study in 
New York found that a proposed $1 billion stadium for the Yankees would 
cost over $500,000 for every job created.
  Finally, Federal taxpayers receive absolutely no economic benefit for 
providing this subsidy. As CRS points out, ``Almost all stadium 
spending is spending that would have been made on other activities 
within the United States, which means that benefits to the nation as a 
whole are near zero.'' After all, these teams will invariably locate 
somewhere in the United States, it is just a matter of where. And 
should the Federal taxpayers in the team's current home town be forced 
to pay for the team's new stadium in the new city? The answer is 
unmistakably no.
  The STADIA bill would save about $50 million a year now spent to 
subsidize professional sports stadiums. So I ask you once again this 
year, should we subsidize the commercial pursuits of wealthy team 
owners, encourage escalating player salaries, and underwrite bidding 
wars among cities seeking (or fighting to keep) professional sports 
teams, or, would our scarce resources be put to better use for public 
needs, like higher education and research? To my mind, this is not a 
difficult choice.
  Mr. President, I ask unanimous consent that the two bills be printed 
in the Record, along with explanatory statements. I also ask unanimous 
consent that the following articles be printed

[[Page S501]]

in the Record following the bills and explanatory statements.
  There being no objection, the items were ordered to be printed in the 
Record, as follows:

                                 S. 121

       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 ``Higher Education Bond Parity 
     Act''.

     SEC. 2. TAX TREATMENT OF 501(c)(3) BONDS SIMILAR TO 
                   GOVERNMENTAL BONDS.

       (a) In General.--Section 150(a) of the Internal Revenue 
     Code of 1986 (relating to definitions and special rules) is 
     amended by striking paragraphs (2) and (4), by redesignating 
     paragraphs (5) and (6) as paragraphs (4) and (5), 
     respectively, and by inserting after paragraph (1) the 
     following:
       ``(2) Exempt person.--
       ``(A) In general.--The term `exempt person' means--
       ``(i) a governmental unit, or
       ``(ii) a 501(c)(3) organization, but only with respect to 
     its activities which do not constitute unrelated trades or 
     businesses as determined by applying section 513(a).
       ``(B) Governmental unit not to include federal 
     government.--The term `governmental unit' does not include 
     the United States or any agency or instrumentality thereof.
       ``(C) 501(c)(3) organization.--The term `501(c)(3) 
     organization' means any organization described in section 
     501(c)(3) and exempt from tax under section 501(a).''.
       (b) Repeal of Qualified 501(c)(3) Bond Designation.--
     Section 145 of the Internal Revenue Code of 1986 (relating to 
     qualified 501(c)(3) bonds) is repealed.
       (c) Conforming Amendments.--
       (1) Section 141(b)(3) of the Internal Revenue Code of 1986 
     is amended--
       (A) in subparagraphs (A)(ii)(I) and (B)(ii), by striking 
     ``government use'' and inserting ``exempt person use'';
       (B) in subparagraph (B), by striking ``a government use'' 
     and inserting ``an exempt person use'';
       (C) in subparagraphs (A)(ii)(II) and (B), by striking 
     ``related business use'' and inserting ``related private 
     business use'';
       (D) in the heading of subparagraph (B), by striking 
     ``related business use'' and inserting ``related private 
     business use''; and
       (E) in the heading thereof, by striking ``government use'' 
     and inserting ``exempt person use''.
       (2) Section 141(b)(6)(A) of such Code is amended by 
     striking ``a governmental unit'' and inserting ``an exempt 
     person''.
       (3) Section 141(b)(7) of such Code is amended--
       (A) by striking ``government use'' and inserting ``exempt 
     person use''; and
       (B) in the heading thereof, by striking ``Government use'' 
     and inserting ``Exempt person use''.
       (4) Section 141(b) of such Code is amended by striking 
     paragraph (9).
       (5) Section 141(c)(1) of such Code is amended by striking 
     ``governmental units'' and inserting ``exempt persons''.
       (6) Section 141 of such Code is amended by redesignating 
     subsection (e) as subsection (f) and by inserting after 
     subsection (d) the following:
       ``(e) Certain Issues Used To Provide Residential Rental 
     Housing for Family Units.--
       ``(1) In general.--Except as provided in paragraph (2), for 
     purposes of this title, the term `private activity bond' 
     includes any bond issued as part of an issue if any portion 
     of the net proceeds of the issue are to be used (directly or 
     indirectly) by an exempt person described in section 
     150(a)(2)(A)(ii) to provide residential rental property for 
     family units. This paragraph shall not apply if the bond 
     would not be a private activity bond if the section 501(c)(3) 
     organization were not an exempt person.
       ``(2) Exception for bonds used to provide qualified 
     residential rental projects.--Paragraph (1) shall not apply 
     to any bond issued as part of an issue if the portion of such 
     issue which is to be used as described in paragraph (1) is to 
     be used to provide--
       ``(A) a residential rental property for family units if the 
     first use of such property is pursuant to such issue,
       ``(B) qualified residential rental projects (as defined in 
     section 142(d)), or
       ``(C) property which is to be substantially rehabilitated 
     in a rehabilitation beginning within the 2-year period ending 
     1 year after the date of the acquisition of such property.
       ``(3) Substantial rehabilitation.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     rules similar to the rules of section 47(c)(1)(C) shall apply 
     in determining for purposes of paragraph (2)(C) whether 
     property is substantially rehabilitated.
       ``(B) Exception.--For purposes of subparagraph (A), clause 
     (ii) of section 47(c)(1)(C) shall not apply, but the 
     Secretary may extend the 24-month period in section 
     47(c)(1)(C)(i) where appropriate due to circumstances not 
     within the control of the owner.
       ``(4) Certain property treated as new property.--Solely for 
     purposes of determining under paragraph (2)(A) whether the 
     1st use of property is pursuant to tax-exempt financing--
       ``(A) In general.--If--
       ``(i) the 1st use of property is pursuant to taxable 
     financing,
       ``(ii) there was a reasonable expectation (at the time such 
     taxable financing was provided) that such financing would be 
     replaced by tax-exempt financing, and
       ``(iii) the taxable financing is in fact so replaced within 
     a reasonable period after the taxable financing was provided,
     then the 1st use of such property shall be treated as being 
     pursuant to the tax-exempt financing.
       ``(B) Special rule where no operating state or local 
     program for tax-exempt financing.--If, at the time of the 1st 
     use of property, there was no operating State or local 
     program for tax-exempt financing of the property, the 1st use 
     of the property shall be treated as pursuant to the 1st tax-
     exempt financing of the property.
       ``(C) Definitions.--For purposes of this paragraph--
       ``(i) Tax-exempt financing.--The term `tax-exempt 
     financing' means financing provided by tax-exempt bonds.
       ``(ii) Taxable financing.--The term `taxable financing' 
     means financing which is not tax-exempt financing.''.
       (7) Section 141(f) of such Code, as redesignated by 
     paragraph (6), is amended--
       (A) at the end of subparagraph (E), by adding ``or'';
       (B) at the end of subparagraph (F), by striking ``, or'' 
     and inserting a period; and
       (C) by striking subparagraph (G).
       (8) The last sentence of section 144(b)(1) of such Code is 
     amended by striking ``(determined'' and all that follows to 
     the period.
       (9) Section 144(c)(2)(C)(ii) of such Code is amended by 
     striking ``a governmental unit'' and inserting ``an exempt 
     person''.
       (10) Section 146(g) of such Code is amended--
       (A) by striking paragraph (2);
       (B) by redesignating paragraphs (3) and (4) as paragraphs 
     (2) and (3), respectively; and
       (C) by striking ``Paragraph (4)'' and inserting ``Paragraph 
     (3)''.
       (11) The heading of section 146(k)(3) of such Code is 
     amended by striking ``governmental'' and inserting ``exempt 
     person''.
       (12) The heading of section 146(m) of such Code is amended 
     by striking ``Government'' and inserting ``Exempt Person''.
       (13) Section 147(b) of such Code is amended by striking 
     paragraph (4) and by redesignating paragraph (5) as paragraph 
     (4).
       (14) Section 147(h) of such Code is amended to read as 
     follows:
       ``(h) Certain Rules Not To Apply to Mortgage Revenue Bonds 
     and Qualified Student Loan Bonds.--Subsections (a), (b), (c), 
     and (d) shall not apply to any qualified mortgage bond, 
     qualified veterans' mortgage bond, or qualified student loan 
     bond.''.
       (15) Section 148(d)(3)(F) of such Code is amended--
       (A) by striking ``or which is a qualified 501(c)(3) bond''; 
     and
       (B) in the heading thereof, by striking ``governmental use 
     bonds and qualified 501(c)(3)'' and inserting ``exempt 
     person''.
       (16) Section 148(f)(4)(B)(ii)(II) of such Code is amended 
     by striking ``(other than a qualified 501(c)(3) bond)''.
       (17) Section 148(f)(4)(C)(iv) of such Code is amended--
       (A) by striking ``a governmental unit or a 501(c)(3) 
     organization'' both places it appears and inserting ``an 
     exempt person'';
       (B) by striking ``qualified 501(c)(3) bonds,''; and
       (C) by striking the comma after ``private activity bonds'' 
     the first place it appears.
       (18) Section 148(f)(7)(A) of such Code is amended by 
     striking ``(other than a qualified 501(c)(3) bond)''.
       (19) Section 149(d)(2) of such Code is amended--
       (A) by striking ``(other than a qualified 501(c)(3) 
     bond)''; and
       (B) in the heading thereof, by striking ``Certain private'' 
     and inserting ``Private''.
       (20) Section 149(e)(2) of such Code is amended--
       (A) in the second sentence, by striking ``which is not a 
     private activity bond'' and inserting ``which is a bond 
     issued for an exempt person described in section 
     150(a)(2)(A)(i)''; and
       (B) by adding at the end the following: ``Subparagraph (D) 
     shall not apply to any bond which is not a private activity 
     bond but which would be such a bond if the 501(c)(3) 
     organization using the proceeds thereof were not an exempt 
     person.''.
       (21) The heading of section 150(b) of such Code is amended 
     by striking ``Tax-Exempt Private Activity Bonds'' and 
     inserting ``Certain Tax-Exempt Bonds''.
       (22) Section 150(b)(3) of such Code is amended--
       (A) in subparagraph (A), by inserting ``owned by a 
     501(c)(3) organization'' after ``any facility'';
       (B) in subparagraph (A), by striking ``any private activity 
     bond which, when issued, purported to be a tax-exempt 
     qualified 501(c)(3) bond'' and inserting ``any bond which, 
     when issued, purported to be a tax-exempt bond, and which 
     would be a private activity bond if the 501(c)(3) 
     organization using the proceeds thereof were not an exempt 
     person''; and
       (C) by striking the heading thereof and inserting ``Bonds 
     for exempt persons other than governmental units.--''.
       (23) Section 150(b)(5) of such Code is amended--
       (A) in subparagraph (A), by striking ``private activity'';
       (B) in subparagraph (A), by inserting ``and which would be 
     a private activity bond if the 501(c)(3) organization using 
     the proceeds

[[Page S502]]

     thereof were not an exempt person'' after ``tax-exempt 
     bond'';
       (C) by striking subparagraph (B) and inserting the 
     following:
       ``(B) such facility is required to be owned by an exempt 
     person, and''; and
       (D) in the heading thereof, by striking ``governmental 
     units or 501(c)(3) organizations'' and inserting ``exempt 
     persons''.
       (24) Section 150 of such Code is amended by adding at the 
     end the following:
       ``(f) Certain Rules To Apply to Bonds for Exempt Persons 
     Other Than Governmental Units.--
       ``(1) In general.--Nothing in section 103(a) or any other 
     provision of law shall be construed to provide an exemption 
     from Federal income tax for interest on any bond which would 
     be a private activity bond if the 501(c)(3) organization 
     using the proceeds thereof were not an exempt person unless 
     such bond satisfies the requirements of subsections (b) and 
     (f) of section 147.
       ``(2) Special rule for pooled financing of 501(c)(3) 
     organization.--
       ``(A) In general.--At the election of the issuer, a bond 
     described in paragraph (1) shall be treated as meeting the 
     requirements of section 147(b) if such bond meets the 
     requirements of subparagraph (B).
       ``(B) Requirements.--A bond meets the requirements of this 
     subparagraph if--
       ``(i) 95 percent or more of the net proceeds of the issue 
     of which such bond is a part are to be used to make or 
     finance loans to 2 or more 501(c)(3) organizations or 
     governmental units for acquisition of property to be used by 
     such organizations,
       ``(ii) each loan described in clause (i) satisfies the 
     requirements of section 147(b) (determined by treating each 
     loan as a separate issue),
       ``(iii) before such bond is issued, a demand survey was 
     conducted which shows a demand for financing greater than an 
     amount equal to 120 percent of the lendable proceeds of such 
     issue, and
       ``(iv) 95 percent or more of the net proceeds of such issue 
     are to be loaned to 501(c)(3) organizations or governmental 
     units within 1 year of issuance and, to the extent there are 
     any unspent proceeds after such 1-year period, bonds issued 
     as part of such issue are to be redeemed as soon as possible 
     thereafter (and in no event later than 18 months after 
     issuance).
     A bond shall not meet the requirements of this subparagraph 
     if the maturity date of any bond issued as part of such issue 
     is more than 30 years after the date on which the bond was 
     issued (or, in the case of a refunding or series of 
     refundings, the date on which the original bond was 
     issued).''.
       (25) Section 1302 of the Tax Reform Act of 1986 is 
     repealed.
       (26) Section 57(a)(5)(C) of such Code is amended by 
     striking clause (ii) and by redesignating clauses (iii) and 
     (iv) as clauses (ii) and (iii), respectively.
       (27) Section 103(b)(3) of such Code is amended by inserting 
     ``and section 150(f)'' after ``section 149''.
       (28) Section 265(b)(3) of such Code is amended--
       (A) in subparagraph (B), by striking clause (ii) and 
     inserting the following:
       ``(ii) Certain bonds not treated as private activity 
     bonds.--For purposes of clause (i)(II), there shall not be 
     treated as a private activity bond any obligation issued to 
     refund (or which is part of a series of obligations issued to 
     refund) an obligation issued before August 8, 1986, which was 
     not an industrial development bond (as defined in section 
     103(b)(2) as in effect on the day before the date of the 
     enactment of the Tax Reform Act of 1986) or a private loan 
     bond (as defined in section 103(o)(2)(A), as so in effect, 
     but without regard to any exemption from such definition 
     other than section 103(o)(2)(A)).''; and
       (B) in subparagraph (C)(ii)(I), by striking ``(other than a 
     qualified 501(c)(3) bond, as defined in section 145)''.
       (d) Effective Dates.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to bonds 
     (including refunding bonds) issued with respect to capital 
     expenditures made on or after the date of the enactment of 
     this Act.
       (2) Exception.--The amendments made by this section shall 
     not apply to bonds issued before January 1, 1997, for 
     purposes of applying section 148(f)(4)(D) of the Internal 
     Revenue Code of 1986.
                                                                    ____


                Higher Education Bond Parity Act of 1997


                              present law

       Interest on State and local governmental bonds generally is 
     excluded from income if the bonds are issued to finance 
     direct activities of these governments (sec. 103). Interest 
     on bonds issued by these governments to finance activities of 
     other persons, e.g., private activity bonds, is taxable 
     unless a specific exception is included in the Code. One such 
     exception is for private activity bonds issued to finance 
     activities of private, charitable organizations described in 
     Code section 501(c)(3) (``section 501(c)(3) organizations'') 
     when the activities do not constitute an unrelated trade 
     business (sec. 141(e)(1)(G)).

   Classification of section 501(c)(3) organization bonds as private 
                             activity bonds

       Before enactment of the Tax Reform Act of 1986, States and 
     local governments and section 501(c)(3) organizations were 
     defined as ``exempt persons,'' under the Code bond 
     provisions. As exempt persons, section 501(c)(3) 
     organizations were not treated as `'private'' persons, and 
     their bonds were not ``industrial development bonds'' or 
     ``private loan bonds'' (the predecessor categories to current 
     private activity bonds). Under present law, a bond is a 
     private activity bond if its proceeds are used in a manner 
     violating either (a) a private business test or (b) a private 
     loan test. The private business test is a conjunctive two-
     pronged test. First, the test limits private business use of 
     governmental bonds to no more than 10 percent of the 
     proceeds.\1\ Second, no more than 10 percent of the debt 
     service on the bonds may be secured by or derived from 
     private business users of the proceeds. The private loan test 
     limits to the lesser of 5 percent or $5 million the amount of 
     governmental bond proceeds that may be used to finance loans 
     to persons other than governmental units.
---------------------------------------------------------------------------
     Footnotes at end of article.
---------------------------------------------------------------------------

      Special restrictions on tax-exemption for section 501(c)(3) 
                           organization bonds

       Present law treats section 501(c)(3) organizations as 
     private persons; thus, bonds for their use may only be issued 
     as private activity ``qualified 501(c)(3) bonds,'' subject to 
     the restrictions of Code section 145. The most significant of 
     these restrictions limits the amount of outstanding bonds 
     from which a section 501(c)(3) organization may benefit to 
     $150 million. In applying this ``$150 million limit,'' all 
     section 501(c)(3) organizations under common management or 
     control are treated as a single organization. The limit does 
     not apply to bonds for hospital facilities, defined to 
     include only acute care, primarily impatient, organizations. 
     A second restriction limits to no more than five percent the 
     amount of the net proceeds of a bond issue that may be used 
     to finance any activities (including all costs of issuing the 
     bonds) other than the exempt purposes of the section 
     501(c)(3) organization.
       Legislation enacted in 1988 imposed low-income tenant 
     occupancy restrictions on existing residential rental 
     property that is acquired by section 501(c)(3) 
     organizations in tax-exempt-bond-financed transactions. 
     These restrictions required that a minimum number of the 
     housing units comprising the property be continuously 
     occupied by tenants having a family incomes of 50 percent 
     (60 percent in certain cases) of area median income for 
     periods of up to 15 years. These same low-income tenant 
     occupancy requirements apply to for-profit developers 
     receiving tax-exempt private activity bond financing.

                           Other restrictions

       Several restrictions are imposed on private activity bonds 
     generally that do not apply to bonds used to finance State 
     and local government activities. Many of these restrictions 
     also apply to qualified 501(c)(3) bonds. No more than two 
     percent of the proceeds of a bond issue may be used to 
     finance the costs of issuing the bonds, and these monies are 
     not counted in determining whether the bonds satisfy the 
     requirement that at least 95 percent of the net proceeds of 
     each bond issue be used for the exempt activities qualifying 
     the bonds for tax-exemption.
       The weighted average maturity of a bond issue may not 
     exceed 120 percent of the average economic life of the 
     property financed with the proceeds. A public hearing must be 
     held and an elected public official must approve the bonds 
     before they are issued (or the bonds must be approved by 
     voter referendum).
       If property financed with private activity bonds is 
     converted to use not qualifying for tax-exempt financing, 
     certain loan interest penalties are imposed.
       Both governmental and private activity bonds are subject to 
     numerous other Code restrictions, including the following:
       1. The amount of arbitrage profits that may be earned on 
     tax-exempt bonds is strictly limited, and most such profits 
     must be rebated to the Federal Government;
       2. Banks may not deduct interest they pay to the extent of 
     their investments in most tax-exempt bonds; and
       3. Interest on private activity bonds, other than qualified 
     501(c)(3) bonds, is a preference item in calculating the 
     alternative minimum tax.


                           Reasons for Change

       A distinguishing feature of American society is the 
     singular degree to which the United States maintains a 
     private, non-profit sector of private higher education, 
     health care, and other charitable institutions in the public 
     service. It is important to assist these private institutions 
     in their advancement of the public good. The restrictions 
     of present law place these section 501(c)(3) organizations 
     at a financial disadvantage relative to substantially 
     identical governmental institutions, and are particularly 
     inappropriate. For example, private, non-profit research 
     universities are subject to the $150 million limitation on 
     outstanding bonds, whereas State-sponsored universities 
     competing for the same research projects do not operate 
     under a comparable restriction. A public hospital 
     generally has unlimited access to tax-exempt bond 
     financing, while a private, non-profit hospital is subject 
     to a $150 million limitation on outstanding bonds to the 
     extent the bonds finance health care facilities that do 
     not qualify under the present-law definition of hospital. 
     These and other restrictions inhibit the ability of 
     America's private, non-profit institutions to modernize 
     their health care facilities and to build state-of-the-art 
     research facilities for the advancement of science, 
     medicine, and other educational endeavors.

[[Page S503]]

       Inhibiting the access of private, non-profit research 
     institutions to sources of capital financing, in relation to 
     their public counterparts, distorts the distribution of major 
     research among the leading institutions, and over time will 
     lead to the decline of research undertakings by private, non-
     profit universities. The tax-exempt bond rules should reduce 
     these distortions by treating more equally State and local 
     governments and those private organizations which are engaged 
     in similar actions advancing the public good.


                        explanation of provision

       The bill amends the tax-exempt bond provisions of the Code 
     to conform generally the treatment of bonds for section 
     501(c)(3) organizations to that provided for bonds issued to 
     finance direct State or local government activities, 
     including construction of public hospitals and university 
     facilities. Certain restrictions, described below, that have 
     been imposed on qualified 501(c)(3) bonds (but not on 
     governmental bonds) since 1986, and that address specialized 
     policy concerns, are retained.

 Repeal of private activity bond classification for bonds for section 
                        501(c)(3) organizations

       The concept of an ``exempt person'' that existed under the 
     Code bond provisions before 1986, is reenacted. An exempt 
     person is defined as (a) a State or local governmental unit 
     or (b) a section 501(c)(3) organization, when carrying out 
     its exempt activities under Code section 501(a). Thus, bonds 
     for section 501(c)(3) organizations are generally no longer 
     classified as private activity bonds. Financing for unrelated 
     business activities of such organizations continue to be 
     treated as a private activity for which tax-exempt financing 
     is not authorized.
       As exempt persons, section 501(c)(3) organizations are 
     subject to the same limits as States and local governments on 
     using their bond proceeds to finance private business 
     activities or to make private loans. Thus, generally no more 
     than 10 percent of the bond proceeds\2\ can be used in a 
     business use of a person other than an exempt person if 
     the Code private payment test is satisfied, and no more 
     than 5 percent ($5 million if less) can be used to make 
     loans to such ``nonexempt'' persons.

  Repeal of most additional special restrictions on section 501(c)(3) 
                           organization bonds

       Persent Code section 145, which establishes additional 
     restrictions on qualified 501(c)(3) bonds, is repealed, along 
     with the restriction on bond-financed costs of issuance for 
     section 501(c)(3) organization bonds (sec. 147(h)). This 
     eliminates the $150 million limit on non-hospital bonds for 
     section 501(c)(3) organizations.

  Retention of certain specialized requirements for section 501(c)(3) 
                           organization bonds

       The bill retains certain specialized restrictions on bonds 
     for section 501(c)(3) organizations. First, the bill retains 
     the requirement that existing residential rental property 
     acquired by a section 501(c)(3) organization in a tax-exempt-
     bond-financed transaction satisfy the same low-income tenant 
     requirements as similar housing financing for for-profit 
     developers. Second, the bill retains the present-law maturity 
     limitations applicable to bonds for section 501(c)(3) 
     organizations, and the public approval requirements 
     applicable generally to private activity bonds. Third, the 
     bill continues to apply the penalties on changes in use of 
     tax-exempt-bond-financed section 501(c)(3) organization 
     property to a use not qualified for such financing.
       Finally, the bill makes no amendments, other than technical 
     conforming amendments, to the tax-exempt arbitrage 
     restrictions, the alternative minimum tax tax-exempt bond 
     preference, or the provisions generally disallowing interest 
     paid by banks on monies used to acquire or carry tax-exempt 
     bonds.


                             effective date

       The provision is generally effective for bonds issued with 
     respect to capital expenditures made after the date of 
     enactment. The provision does not apply to bonds issued prior 
     to January 1, 1997 for the purposes of applying the rebate 
     requirements under Section 148(f)(4)(D).


                               footnotes

     \1\ No more than 5 percent of bond proceeds may be used in a 
     private business use that is unrelated to the governmental 
     purpose of the bond issue. the 10-percent debt service test, 
     described below, likewise is reduced to 5 percent in the case 
     of such ``disproportionate'' private business use.
     \2\ This limit would be reduced to 5 percent in the case of 
     disproportionate private use as under the present-law 
     governmental bond disproportionate private use limit.
                                                                    ____


                                 S. 122

       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 ``Stop Tax-Exempt Arena Debt 
     Issuance Act''.

     SEC. 2. TREATMENT OF TAX-EXEMPT FINANCING OF PROFESSIONAL 
                   SPORTS FACILITIES.

       (a) In General.--Section 141 of the Internal Revenue Code 
     of 1986 (defining private activity bond and qualified bond) 
     is amended by redesignating subsection (e) as subsection (f) 
     and by inserting after subsection (d) the following new 
     subsection:
       ``(e) Certain Issues Used for Professional Sports 
     Facilities Treated as Private Activity Bonds.--
       ``(1) In general.--For purposes of this title, the term 
     `private activity bond' includes any bond issued as part of 
     an issue if the amount of the proceeds of the issue which are 
     to be used (directly or indirectly) to provide professional 
     sports facilities exceeds the lesser of--
       ``(A) 5 percent of such proceeds, or
       ``(B) $5,000,000.
       ``(2) Bond not treated as a qualified bond.--For purposes 
     of this title, any bond described in paragraph (1) shall not 
     be a qualified bond.
       ``(3) Professional sports facilities.--For purposes of this 
     subsection--
       ``(A) In general.--The term `professional sports 
     facilities' means real property or related improvements used 
     for professional sports exhibitions, games, or training, 
     regardless if the admission of the public or press is allowed 
     or paid.
       ``(B) Use for professional sports.--Any use of facilities 
     which generates a direct or indirect monetary benefit (other 
     than reimbursement for out-of pocket expenses) for a person 
     who uses such facilities for professional sports exhibitions, 
     games, or training shall be treated as a use described in 
     subparagraph (A).
       ``(4) Anti-abuse regulations.--The Secretary shall 
     prescribe such regulations as may be appropriate to carry out 
     the purposes of this subsection, including such regulations 
     as may be appropriate to prevent avoidance of such purposes 
     through related persons, use of related facilities or 
     multiuse complexes, or otherwise.''
       (b) Effective Date.--
       (1) In general.--Except as provided in paragraphs (2), (3), 
     and (5), the amendments made by this section shall apply to 
     bonds issued on or after the first date of committee action.
       (2) Exception for construction, binding agreements, or 
     approved projects.--The amendments made by this section shall 
     not apply to bonds--
       (A) the proceeds of which are used for--
       (i) the construction or rehabilitation of a facility--

       (I) if such construction or rehabilitation began before 
     June 14, 1996, and was completed on or after such date, or
       (II) if a State or political subdivision thereof has 
     entered into a binding contract before June 14, 1996, that 
     requires the incurrence of significant expenditures for such 
     construction or rehabilitation, and some of such expenditures 
     are incurred on or after such date; or

       (ii) the acquisition of a facility pursuant to a binding 
     contract entered into by a State or political subdivision 
     thereof before June 14, 1996, and
       (B) which are the subject of an official action taken by 
     relevant government officials before June 14, 1996--
       (i) approving the issuance of such bonds, or
       (ii) approving the submission of the approval of such 
     issuance to a voter referendum.
       (3) Exception for final bond resolutions.--The amendments 
     made by this section shall not apply to bonds the proceeds of 
     which are used for the construction or rehabilitation of a 
     facility if a State or political subdivision thereof has 
     completed all necessary governmental approvals for the 
     issuance of such bonds before June 14, 1996.
       (4) Significant expenditures.--For purposes of paragraph 
     (2)(A)(i)(II), the term ``significant expenditures'' means 
     expenditures equal to or exceeding 10 percent of the 
     reasonably anticipated cost of the construction or 
     rehabilitation of the facility involved.
       (5) Exception for certain current refundings.--
       (A) In general.--The amendments made by this section shall 
     not apply to any bond the proceeds of which are used 
     exclusively to refund a qualified bond (or a bond which is a 
     part of a series of refundings of a qualified bond) if--
       (i) the amount of the refunding bond does not exceed the 
     outstanding principal amount of the refunded bond,
       (ii) the average maturity date of the issue of which the 
     refunding bond is a part is not later than the average 
     maturity date of the bonds to be refunded by such issue, and
       (iii) the net proceeds of the refunding bond are used to 
     redeem the refunded bond not later than 90 days after the 
     date of the issuance of the refunding bond.
     For purposes of clause (ii), average maturity shall be 
     determined in accordance with section 147(b)(2)(A) of the 
     Internal Revenue Code of 1986.
       (B) Qualified bond.--For purposes of subparagraph (A), the 
     term ``qualified bond'' means any tax-exempt bond to finance 
     a professional sports facility (as defined in section 
     141(e)(3) of such Code, as added by subsection (a)) issued 
     before the first date of committee action.

              The Stop Tax-Exempt Arena Debt Issuance Act


                              present law

       Interest on State and local governmental bonds generally is 
     excluded from income if the bonds are issued to finance 
     direct activities of these governments (sec. 103). Interest 
     on bonds issued by these governments to finance activities of 
     other persons, e.g., private activity bonds, is taxable 
     unless the bonds satisfy certain requirements. Private 
     activity bonds must be within certain statewide volume 
     limitations, must not violate the arbitrage and other 
     applicable restrictions, and must finance activities within 
     one of the categories specified in the Code. The

[[Page S504]]

     Tax Reform Act of 1986 repealed the private activity bond 
     category for sports facilities; therefore no private activity 
     bonds may be issued for this purpose.
       Bonds issued by State and local governments are considered 
     to be government use bonds, unless the bonds are classified 
     as private activity bonds. Bonds are deemed to be private 
     activity bonds if both the (i) private business use test and 
     (ii) private security or payment test are met. The private 
     business use test is met if more than 10 percent of the bond 
     proceeds, including facilities financed with the bond 
     proceeds, is used in a nongovernmental trade or business. The 
     private security or payment test is met if more than 10 
     percent of the bond repayments is secured by privately used 
     property, or is derived from the payments of private business 
     users. Additionally, bonds are deemed to be private activity 
     bonds if more than five percent of the bond proceeds or $5 
     million are used to finance loans to persons other than 
     governmental units.


                           reasons for change

       The use of tax-exempt financing for professional sports 
     facilities provides an indirect and inefficient federal tax 
     subsidy. Congress intended to eliminate this subsidy for 
     professional sports facilities in the Tax Reform Act of 1986, 
     by repealing the private activity bond category for sports 
     facilities. Congress did not intend to continue the subsidy 
     by allowing the use of tax-exempt bonds to finance the 
     identical underlying private business use through alternative 
     financing arrangements.
       In addition, the use of tax-exempt bonds to finance 
     professional sports facilities is particularly inappropriate 
     where the facilities to be built are used to entice 
     professional sports franchises to relocate.


                        explanation of provision

       The bill would provide that bonds issued to finance 
     professional sports facilities are private activity bonds, 
     and that such bonds are not qualified bonds. Therefore, 
     professional sports facilities will not qualify for tax-
     exempt bond financing.
       A professional sports facility is defined to include real 
     property and related improvements which are used for 
     professional sports exhibitions, games, or training, whether 
     or not admission of the public or press is allowed or paid. 
     In addition, a facility that is used for a purpose other than 
     professional sports will nevertheless be treated as being 
     used for professional sports if the facility generates a 
     direct or indirect monetary benefit (other than reimbursement 
     for out-of-pocket expenses) for a person who uses the 
     facility for professional sports. These benefits are intended 
     to include an interest in revenues from parking fees, food 
     and beverage sales, advertising and sports facility naming 
     rights, television rights, ticket sales, private suites and 
     club seats, and concessions.
       Public use infrastructure improvements that connect to 
     larger public-use systems, such as highway access ramps and 
     sewer and water connections, are not intended to be subject 
     to the bill. Thus, bonds issued to finance such improvements 
     could still qualify for tax-exempt status., if such bonds 
     otherwise qualify for such status under applicable tax-exempt 
     bond rules. Improvements which generate a direct or indirect 
     monetary benefit for a person who uses the facility for 
     professional sports are meant to be covered by the bill. For 
     example, if a professional sports team owner receives 
     revenues from the use of a parking garage, the garage is not 
     eligible for tax-exempt financing under the bill.
       The Secretary of the Treasury is authorized to issue anti-
     abuse regulations to prevent transactions intended to 
     improperly divert the indirect Federal subsidy for 
     traditional governmental uses inherent in tax-exempt bonds 
     for the benefit of professional sports facilities or 
     professional sports teams. It is intended that no tax-exempt 
     bond proceeds may finance a ball park used for professional 
     sports exhibitions, even if the ball park is made a part of a 
     larger multi-use complex used 365 days a year for other 
     purposes. In addition, it is intended that reciprocal usage 
     of sports facilities by professional sports franchises that 
     divide their usage among several facilities in order to avoid 
     the 5% use test be aggregated for purposes of this provision.
       No inference is intended regarding the rules under present 
     law regarding the issuance or holding of, or interest paid or 
     accrued on, any bonds issued prior to the effective date of 
     this bill to finance sports facilities.


                             Effective Date

       The bill is effective with respect to bonds issued on or 
     after the first date of committee action.
       The bill does not apply to bonds issued to finance a 
     professional sports facility if actual construction or 
     rehabilitation of the facility began prior to June 14, 1996 
     (or a State or political subdivision thereof had entered into 
     a binding contract prior to that date to construct, 
     rehabilitate or acquire the facility) and such bonds are the 
     subject of appropriate official action approving the bonds or 
     submitting approval to a voter referendum. In addition, the 
     bill does not apply to bonds issued to finance a professional 
     sports facility if a State or policical subdivision thereof 
     has completed all necessary governmental approvals for the 
     issuance of such bonds.
       The bill does not apply to the issuance of certain current 
     refunding bonds, where the refunded bonds are qualified bonds 
     issued prior to the first date of committee action, the 
     average maturity and outstanding principal amount of the 
     refunding bonds do not exceed that of the refunded bonds, the 
     proceeds of the refunding bonds are used to redeem the 
     refunded bonds within 90 days, and the refunding bonds are 
     otherwise permissible under applicable provisions of the 
     Code.

                    [From Barron's, August 19, 1996]

                               Foul Play?


        Team owners get sports palaces and fat concession deals.

                   Taxpayers get stuck with the tab.

                         (By Jonathan R. Laing)

       Sports stadiums have come to play an almost religious role 
     in American culture, a fact noted by observers as varied as 
     famed architect Philip Johnson and best-selling author James 
     Michener. Like cathedrals of yore, today's towering sports 
     venues often dazzle the masses with their immense size and 
     evoke fervent emotions with their ritual events. And for some 
     fans, cheering along with a crowd of 60,000 people is about 
     as close to a religious experience as they'll ever get.
       This facet of American life is worth contemplating, if for 
     no other reason than, in the 1990s alone, 30 professional 
     sports palaces have been built in the U.S., at a total cost 
     of over $4 billion. And the trend shows no signs of stopping. 
     Over the next five to seven years, according to Fitch 
     Investors Services, some 40 more major-league teams are 
     likely to get new homes. Total price tag: an added $7 
     billion.
       The surge of building activity is mind-boggling on a number 
     of counts. To begin with, it is being financed mainly by 
     state and local governments in spite of the fact that budgets 
     are tight everywhere, leaving schools and social programs 
     facing deep cutbacks. Yet in referendum after referendum, 
     voters regularly approve large dollops of city and state 
     backing to projects that will cater largely to well-heeled 
     fans, meaning the folks who can afford to pay for seats in 
     glassed-in luxury boxes. While the suit-and-cell-phone crowd 
     get all the best seats for corporate entertaining, the 
     average taxpayer is consigned to ``cheap'' seats in nosebleed 
     land or, more often, to following his favorite team on cable 
     television.
       But voters don't seem to mind. In Cincinnati last March 
     they decided to raise Hamilton County's sales tax to 6% from 
     5.5%, to help pay for a $540 million plan to eventually raze 
     the city's Riverfront Stadium and replace it with separate, 
     state-of-the-art edifices for the Bengals football squad and 
     the Reds baseball team.
       And even in places where referenda have failed, local 
     politicians leap into the fray to rescue beleaguered 
     projects. Example: When a proposal to use proceeds from a 
     statewide lottery to fund a new ballpark for the Milwaukee 
     Brewers went down to defeat, the Wisconsin State Legislature 
     gave the venture new life by approving a hike in the sales 
     tax in the five-county area around Milwaukee to finance the 
     bulk of the proposed $250 million project. Likewise, two 
     defeats for stadium referenda in Seattle were insufficient to 
     keep the Washington State Legislature from meeting in 
     emergency session to approve a financial package clearing 
     the way for a new $300 million baseball stadium for the 
     Seattle Mariners, complete with a retractable roof.
       Even privately financed facilities, of which there are a 
     handful, typically benefit from public subsidies in the form 
     of land donations and free infrastructure improvements. The 
     Carolina Panthers' new $170 million Ericsson Stadium in 
     Charlotte, for instance, received plenty of such goodies, as 
     will a proposed $250 million downtown baseball stadium for 
     San Francisco's Giants.
       Perhaps more bizarre, many of the stadiums that have 
     already been demolished or are slated for abandonment are 
     relatively new and in good condition. The days may be 
     numbered, for example, for the multi-use ovals built in the 
     early 'Seventies such as Veterans Stadium in Philadelphia and 
     Three Rivers Stadium in Pittsburgh. Both of these facilities 
     will likely lose their baseball and football teams. Such 
     stadiums simply lack the skyboxes and other revenue-producing 
     ``fan amenities'' demanded by today's team owners.
       So-called ``economic obsolesence'' may also doom venues of 
     even newer vintage. The eight-year-old Miami Arena is facing 
     a future without its two major tenants, the Florida Panthers 
     hockey team and the Miami Heat basketball franchise, because 
     of inadequate seating capacity and a paucity of luxury 
     suites.
       The Panthers have already cut a deal to move to a new 
     facility that nearby Broward County is building for them at a 
     cost of around $200 million. Plans call for Dade County to 
     build a new $210 million arena for the Heat before the end of 
     the decade, despite the fact that the move will leave local 
     taxpayers stuck with servicing the debt on two Miami arenas 
     rather than just one.
       ``The shelf life on sports facilities seems to be ever-
     compressing as teams force local authorities and 
     municipalities to build them new venues so that every 
     conceivable source of revenue they can identify can be 
     engineered into the new structure,'' observes Robert Baade, 
     an economist at Lake Forest College in Illinois. ``The 
     situation of the Miami Arena and other modern facilities that 
     are being scrapped is crazy. For the more than $4 billion 
     that has so far been spent on new stadiums, we could 
     completely refurbish the physical plants of the nation's 
     public elementary and secondary schools.''

[[Page S505]]

       The new stadiums befit the crass commercialism and endless 
     cross-marketing of the current business era. The games 
     themselves are almost submerged in a sea of collateral 
     activity, including food courts, sports bars, interactive 
     game rooms, private clubs and sports-merchandise stores. 
     Inside the arenas, there are intrusive Jumbotron video 
     systems and lavish corporate entertainment in skyboxes, which 
     run as high as $250,000 a year at Boston's Fleet Arena, where 
     the Celtics and Bruins now play.
       No possible revenue source goes untapped. Corporations like 
     United Airlines, BancOne and Coors buy the rights to put 
     their names on stadiums for more than $1 million a year in 
     some instances. The sensory overload of advertising signage 
     is distracting, to say the least. No area is sacrosanct, 
     including the wall behind homeplate. Teams in the National 
     Basketball Association are now minting advertising revenues 
     by selling ads that silently scroll on computer-controlled 
     signboards at courtside.
       The Portland Trail Blazers, owned by Microsoft billionaire 
     Paul Allen, have taken high-tech amenities to an as-yet-
     unsurpassed level in their new Rose Garden arena. Some of its 
     club seats feature fiber-optic wiring allowing spectators to 
     play music, order food or punch up replays on their own video 
     screens. The arena also plans to experiment with online 
     kiosks that will hawk computer hardware and software.
       Team owners argue that enhanced revenues are essential for 
     acquiring or retaining top athletes in the high-stakes world 
     of professional sports. But there is another factor at work. 
     Unlike fees paid by television networks and general-
     admission revenues, a stadium's income from premium seats, 
     concessions, stadium advertising, parking and the like 
     generally doesn't have to be shared with other teams in 
     the league.
       Yet both the NFL and NBA have attempted to institute some 
     controls on players' salaries by establishing league-wide 
     team salary caps. And scant linkage has been established 
     between the size of team payrolls and performance in baseball 
     and hockey. Otherwise, the New York Yankees of the past two 
     decades, with their bloated salary structure, might have 
     enjoyed the dominance of the Yankee dynasties of yore.
       Even so, a veritable stadium arms race seems only to be 
     intensifying. Even teams in leagues with salary caps claim to 
     need additional stadium revenues because the teams with the 
     highest revenues keep driving up the averages upon which the 
     caps are based. ``This is certainly true in the NBA, where 
     top-grossing teams like the Bulls, the Knicks and the Lakers 
     are creating problems for the rest of the league,'' Jerry 
     Reinsdorf, controlling partner of the Chicago Bulls and White 
     Sox, explains. ``All I can say is that I'm glad I have two 
     new stadiums [the United Center and New Comiskey Park] with 
     strong in-park revenues.''
       What's indisputable, though, is that new venues enrich team 
     owners by fattening the teams' bottom lines and franchise 
     values. It's no accident, for example, that four of the top 
     10 most valuable baseball franchises in Financial World 
     magazine's latest annual survey--the Baltimore Orioles, 
     Toronto blue Jays, Texas Rangers and Colorado Rockies--boast 
     new stadiums, which give them the financial heft to compete 
     with teams in larger advertising markets such as New York, 
     Chicago and Los Angeles. Likewise, new stadiums have helped 
     the Phoenix Suns, Detroit Pistons and Chicago Bulls push the 
     New York Knicks for the top spot among basketball franchises 
     on Financial World's list.
       And in all of professional sports, no team comes close to 
     the Dallas Cowboys franchise, with its estimated value of 
     $272 million. Team owner Jerry Jones was lucky to inherit a 
     stadium already loaded with skyboxes in 1988 to which he 
     added some 80 suites. In addition, he has inked stadium 
     sponsorship agreements with the likes of Nike, PepsiCo. 
     American Express and AT&T. As a result, Financial World 
     estimates that the Cowboys earned revenues of nearly $40 
     million on their stadium, compared with a league average of 
     just $6.2 million. Such riches gave Jones the bucks to 
     exploit loopholes in the salary cap, enabling him to carry a 
     payroll some 50% larger than the NFL average.
       In Jones' case, he financed his own stadium improvements. 
     But in the main, it's the taxpayer who ends up subsidizing 
     the stadiums that shower such wealth on the owners. And these 
     days, teams seem to hold all the cards in their negotiations 
     with local politicians. For the demand for professional 
     franchises from cities wanting the cachet of being ``big 
     league'' far exceeds the supply of teams, even with the big 
     leagues' steady expansion efforts. ``No city can take its 
     teams for granted or they will find another locale in which 
     to realize team value,'' explains Reinsdorf, who cynically 
     played of the state of Illinois against St. Petersburg, Fla, 
     to win a $150 million in tax-exempt funding to build the New 
     Comiskey Park in 1991.
       Observers are still agog at the deal the former Los Angeles 
     Rams football team negotiated to move to St. Louis last year. 
     The city, state and St. Louis County incurred some $262 
     million in debt to provide the team with the 70,000-seat 
     Trans World Dome. Then the city sold instruments called 
     ``personal seat licenses,'' requiring football-crazy fans to 
     pay as much as $4,500 just for the privilege of buying season 
     tickets for the stadium's best 45,000 seats. The $70 million 
     or so in proceeds from these licenses didn't go toward the 
     constructions costs of the new stadium, however, Instead, the 
     Rams were allowed to use the funds to defray some $20 million 
     in moving costs, build a $10 million practice facility and 
     clean up some debts in their old home in Anaheim.
       And that's not all. The Rams were able to lock in an annual 
     rent over a 30-year lease period of just $250,000, the 
     fifth-lowest rent rate in the NFL. Yet the Rams will 
     receive 100% of the revenues from the stadium's 100 luxury 
     suites and 6,250 club seats. On top of that, the team got 
     the option to add 20 more luxury boxes and convert 4,500 
     more seats to club status, plus a guarantee that 85% of 
     all suites and club seats will be sold over the next 15 
     years. The team also gets all concession revenues 
     generated by the stadium, $4.5 million of the first $6 
     million received in stadium advertising and 90% of any ad 
     revenues over $6 million. The Rams also get to pocket the 
     $1.3 million a year that Trans World Airlines is paying 
     for the stadium naming rights. Lastly, St. Louis agreed to 
     build a store for the Rams to sell team merchandise.
       The total package of the stadium construction costs, debt-
     service expense and other goodies doled out by St. Louis will 
     end up costing area taxpayers more than $700 million, 
     according to a reckoning by a St. Louis public-interest 
     group. A consultant who represented the Rams was heard to 
     crow, ``This will be the best stadium deal ever in the NFL, 
     except for the next one.''
       Truer words were never spoken, for the new Baltimore Ravens 
     (formerly the Cleveland Browns) won an extraordinary deal on 
     their $200 million stadium currently under construction in 
     the shadow of Oriole Park at Camden Yards. The new stadium 
     will be financed by state lottery proceeds and revenue bonds. 
     In addition to being able to keep the $65 million in personal 
     seat license fees, the Ravens will be charged no rent over 
     their 30-year lease other than a 10% tax on all tickets. The 
     team will be responsible only for covering operating and 
     maintenance expenses of the facility.
       The Ravens will be able to keep all stadium revenues from 
     the luxury suites, premium seats, concessions and in-park 
     advertising, plus it will garner 50% from all revenues at the 
     stadium from non-football events. No wonder S&P described the 
     deal cooked up by Ravens owner Art Modell as ``Maryland 
     throws the bomb.''
       Financial World estimates that after its first season in 
     the new stadium (1998), the Ravens' franchise value will 
     appreciate some 50%, to around $250 million, and could be 
     second only to the Dallas Cowboys'.
       In the stadium game, spin, bargaining ploys and fancy 
     dancing are difficult to separate from concrete developments. 
     Proposed new stadium packages are leaked to the local press 
     only to go through myriad changes before ground is broken and 
     financing is in place.
       George Steinbrenner wants out of the Bronx. One month he is 
     rumored to be looking at suburban New Jersey for his Yankees, 
     the next he's said to be considering a proposal by New York 
     City to build a facility on Manhattan's West Side that would 
     cost $1 billion. Not to be outdone, the Mets are said to be 
     angling for a new stadium next to Shea that would cost around 
     $450 million and, perhaps, include a theme park in the 
     complex.
       Rick Horrow, a Miami-based stadium development consultant 
     to the NFL, ticks off the names of 12 football teams that 
     have unsettled stadium situations and are likely to move to 
     new facilities in the years ahead: the Minnesota Vikings, 
     Chicago Bears, Tampa Bay Buccaneers, San Francisco 49ers, 
     Seattle Seahawks, Denver Broncos, Arizona Cardinals, 
     Philadelphia Eagles, Pittsburgh Steelers, Washington 
     Redskins, Detroit Lions and New England Patriots. One 
     proposal calls for the Pats to move from Foxboro, Mass., to a 
     domed stadium in downtown Boston that would be part of a $750 
     million convention-center megaplex.
       These NFL teams should be able to exert plenty of leverage 
     over their local politicians. According to Horrow, cities 
     such as Houston, Los Angeles, Memphis, Orlando, Sacramento, 
     Toronto and Mexico City all hunger for an NFL franchise. 
     Various suburban locations also beckon.
       Likewise, such arenas as the L.A. Forum, Houston's Summit 
     Arena, Dallas's Reunion Arena, Charlotte Coliseum and 
     Indianapolis's Market Square Arena are all likely to lose 
     their NBA tenants despite the recent vintage of many of these 
     facilities. The Detroit Pistons' Palace at Auburn Hills, with 
     its rows of skyboxes encircling the arena, changed the 
     entire economics of indoor venues following its opening in 
     1988.
       Some obstacles could block this torrent of prospective 
     stadium deals. Of greatest moment, perhaps, is a bill that 
     was introduced two months ago by Sen. Daniel Patrick Moynihan 
     (D.-N.Y.) that would outlaw tax-exempt bond financing for 
     professional sports facilities. He argues that such financing 
     in effect constitutes a subsidy by federal taxpayers that 
     largely enriches team owners and serves no legitimate public 
     purpose.
       Even Moynihan concedes that the proposal has no chance of 
     passing in the current session of Congress. Nor are the 
     bill's prospects very bright next year. The U.S. Council of 
     Mayors and other lobbying organizations have already mounted 
     a jihad against the measure. And it doesn't hurt that 
     professional sports has the stature of organized religion 
     these days.
       Nonetheless, the bill has temporarily cast a pall over 
     certain stadium plans that are being considered. The fear is 
     that the bill might someday pass in its current form. 
     Particularly vulnerable would be new football

[[Page S506]]

     and baseball stadiums. They almost always require some tax-
     exempt financing because of their high price tags--$200 
     million and up.
       John Gillespie, a managing director of Bear Stearns's 
     sports facility banking team, estimates that at current 
     spreads, the cost of the typical stadium proposal would rise 
     by 15%-20% if public authorities were forced to switch from 
     the tax-exempt to the taxable public-debt market. Says 
     Gillespie: ``Clearly, a number of stadium deals wouldn't fly 
     under these circumstances because even on a tax-exempt basis 
     they were pushing the envelope on a feasibility basis. I 
     don't think the bill has a prayer of passing, but then, I'm 
     prejudiced.''
       Ironically, past attempts by Congress to curb the use of 
     tax-exempt financing for sports stadiums have only 
     exacerbated the problem. The Tax Reform Act of 1986, for 
     example, declared that public financings of stadiums would 
     lose their tax-exemption if more than 10% of the revenues 
     earned by the facility were subsequently used to service the 
     construction debt.
       Rather than quashing such activity, the stricture left 
     municipalities even more at the mercy of team owners. To 
     retain local franchises or attract new teams, public 
     officials were compelled to tap revenue streams other than 
     the stadium to back construction debt. Today's stadium bonds 
     are backed by general revenue sources as diverse as state 
     lotteries, sales taxes, hotel and motel occupancy imposts, 
     car-rental fees and alcohol and tobacco taxes.
       The balance of power has shifted so dramatically in recent 
     years that public stadium authorities consider themselves 
     fortunate if pro sports teams pay enough rent to cover the 
     operating costs of the facility, let alone contribute 
     anything to debt service.
       ``The new structure is inequitable in that it forces broad 
     categories of people in a given area to finance a facility 
     that only benefits fans, team owners and athletes,'' asserted 
     Dennis Zimmerman, an economist at the Library of Congress's 
     Congressional Research Service, whose study on the subject of 
     tax-exempt stadium financing helped spur the Moynihan bill. 
     ``Certainly federal taxpayers receive no benefits for 
     granting this subsidy.''
       Cities try to make new stadiums more palatable to their 
     electorates by offering up ``economic impact'' studies 
     showing the gains in regional income and employment that the 
     project will produce. The financial benefits trumpeted in 
     such studies are so humongous that he multimillion-dollar 
     cost of the sport palaces seems almost trivial by comparison.
       The University of Cincinnati Center for Economic Education 
     concluded last January, for example, that the $540 million 
     project to build a new football stadium and a new baseball 
     stadium in Cincinnati would generate more than $1.1 billion 
     in economic activity. In subsequent years, the study said the 
     Cincinnati area could count on $73 million annually in added 
     spending by local consumers, $4.4 million a year in taxes and 
     $28 million per year in local spending by out-of-town fans.
       But such impact studies are often flawed. Stanford 
     University economist Roger Noll points out that the majority 
     of fans attending games come from within a 20-mile radius of 
     the venue. Any money they end up dropping at the 
     ballpark would likely have been spent on other modes of 
     local recreation or entertainment. Americans, after all, 
     spend virtually all their income anyway. This 
     ``substitution effect'' means that stadiums may actually 
     represent very little, if any, net economic gain to local 
     businesses.
       The studies also play games with the multiplier or ripple 
     effect of fan spending. They assume that all the munificence 
     earned by the players, owners and concessionaires is 
     repatriated to the local economy. Lake Forest College 
     economist Robert Baade argues that the money frequently 
     doesn't stay put and that this ``leakage'' can actually have 
     a negative impact. He has, in fact, developed econometric 
     models indicating that in some 36 instances new stadiums had 
     a nonexistent or even negative impact on local job and income 
     growth.
       Few stadium projects have been as trumpeted as the Gateway 
     Development in Cleveland. The site encompasses two new 
     facilities, including the Indians' Jacobs Field, with its 
     retro charm, and the Cavaliers' sleek Gund Arena. The two new 
     venues draw sellout crowds totaling five million fans a year, 
     and they are credited with having sparked a revival in the 
     once-sagging fortunes of downtown Cleveland. But as the 
     Indians streak toward their second straight pennant, the 
     project's finances continue to deteriorate. The problem lies 
     in construction cost overruns incurred by both facilities and 
     the fact that Gateway Development Corp., the quasi-public 
     authority that owns both venues, isn't getting enough from 
     its leases with the Indians and Cavs to pay the debt service 
     on some $120 million in bonds that helped finance the Gund 
     project.
       As a result, Cuyahoga County, which guaranteed the debt, 
     has had to ante up some $23 million to cover Gateway's 
     arrears, and will likely to be forced to lay out at least $70 
     million more over the next 16 years. At that point, Gateway 
     will have the opportunity to renegotiate the Indians' lease 
     and perhaps have a prayer of meeting its obligations.
       Meantime, the city of Cleveland is taking a bath on some 
     $40 million in bonds it sold to build two parking garages for 
     the Gateway complex. The city is having to subsidize the debt 
     service on the bonds because of lower-than-projected parking 
     revenues.
       ``The facilities are beautiful, the teams are minting 
     money, and the county and city taxpayers are left holding the 
     bag,'' grouses Steve Letsky, Cuyahoga County's director of 
     accounting. ``We're paying a hell of a price for downtown 
     economic redevelopment.''
       Even more gruesome was the bloodletting the Province of 
     Ontario took on Toronto's Skydome, a combination stadium, 
     hotel and entertainment complex that opened in 1989. Ontario 
     got stuck with the huge cost overruns, and by late 1991 the 
     province ended up taking a nearly $200 million loss when it 
     dumped its controlling interest in the project for $110 
     million.
       Even with that writedown, the Skydome's financial future is 
     by no means secure. Attendance has waned from the halcyon 
     days of the early 'Nineties as the Blue Jays have sunk in the 
     standings. The all-important leases on the stadium's luxury 
     suites are due to expire in two years, and revenues could 
     take a tumble.
       With deals like this going down, it's little wonder that 
     the halo effect of having a new stadium seems to be 
     diminishing. Brian McGough, a J.P. Morgan investment banker 
     involved in stadium deals, reports that a recent study shows 
     that new venues seem to spur attendance for just about three 
     years. Comiskey Park and the Ballpark at Arlington, Texas, 
     aren't packing in fans they way they did only a few years 
     ago, despite the fact that both stadiums have baseball teams 
     that are very much in contention for the pennant.
       Resistance to the stadium-building boom does seem to be 
     mounting. Several politicians have been forced to walk the 
     plank recently for backing sales-tax increases to fund new 
     baseball stadiums. Among the banished were a Maricopa County 
     commissioner from Arizona's Sun City and a Wisconsin state 
     senator from Racine, one of the five counties that will 
     contribute tax revenues for the Milwaukee Brewers' new 
     stadium.
       Nonetheless, new stadium projects seem to have a dynamic 
     that defies all considerations of economic prudence and 
     taxpayer unrest. For when all else fails, public officials 
     invariable justify their reflexive resort to the public purse 
     by prattling on about pro sports' positive impact on civic 
     pride and quality of life.
       Perhaps new stadiums appeal to some deeply-rooted edifice 
     complex-the plaque on the wall of the venue conferring a 
     measure of immortality to the politicians who built it. Maybe 
     it's true that without a vibrant pro sports scene, major 
     corporation won't put their headquarters in certain cities. 
     Or possibility the local citizenry walk just a little taller 
     in burgs that are genuinely big-league. ``Psychic reward,'' 
     as economists call it.
       Whatever the case, the surge in popularity of pro sports is 
     a worldwide phenomenon. Social scientists advance in all 
     kinds of theories to explain the boom. Increasing job 
     specialization is deemed to have robbed modern man of 
     satisfaction in his workaday world, forcing him to turn to 
     sports for tangibility of results. Others commentators claim 
     that pro athletes have become proxies for acting out the 
     aggressions of increasingly alienated populations around the 
     globe.
       Rand Araskog, chairman of ITT Corp., obviously believes in 
     a bright future for pro sports and franchise values. ITT 
     teamed up with Cablevision in 1994 to buy Madison Square 
     Garden, the New York Knicks and the Rangers from Viacom for 
     $1 billion. The operation's cash flow has burgeoned since.
       According to Araskog and ITT President Robert Bowman, a 
     myriad of factors will propel the pro sports boom. More and 
     more media and entertainment companies are buying pro sport 
     franchises because they afford relatively cheap and 
     compellingly dramatic programming. ComCast and Walt Disney 
     are merely the most recent corporate entrants. Women are 
     increasingly hooked on pro sports as a result of federal laws 
     that require schools to spend equal amounts of men's and 
     women's sports.
       As for international interest, the National Basketball 
     Association is just the first pro league in the U.S. to catch 
     the worldwide tidal wave. Others will follow. And finally, 
     technology, with its proliferation of sports delivery 
     mechanisms and its promise of eventually bringing the playing 
     field into the living room, will only enhance the appeal.
       Bear Stearns's Gillespie goes so far as to predict that pro 
     sports franchises will double in value in the next five to 
     six years. One can only hope he's right. Maybe then team 
     owners will stop hitting up taxpayers for new stadiums and 
     pay the freight themselves.

                          Costly Building Boom

       More than $4 billion has been spent on sports arenas, with 
     $7 billion more expected.

----------------------------------------------------------------------------------------------------------------
                                                                  Approx                                        
              Facility                          Team            total cost     Opened           Debt type       
                                                               in millions                                      
----------------------------------------------------------------------------------------------------------------
Skydome.............................  Toronto Blue Jays......         $600         1989  P/P                    

[[Page S507]]

                                                                                                                
TWA Dome at America's Center........  St. Louis Rams.........          290         1995  Public                 
Molson Centre.......................  Montreal Canadians.....          230         1996  Private                
Coors Field.........................  Colorado Rockies.......          215         1995  Public                 
Georgia Dome........................  Atlanta Falcons........          214         1992  Public                 
CoreStates Center...................  Philadelphia Flyers/             210         1996  Private                
                                       76ers.                                                                   
Orioles Park at Camden Yards........  Baltimore Orioles......          210         1992  Public                 
Corel Center (Palladium.............  Ottawa Senators........          200         1996  P/P                    
Ballpark of Arlington...............  Texas Rangers..........          191         1994  P/P                    
Alamodome...........................  San Antonio Spurs......          186         1993  Public                 
GM Place............................  Vancouver Canucks/               180         1995  Private                
                                       Grizzlies.                                                               
United Center.......................  Chicago Blackhawks/              180         1994  Private                
                                       Bulls.                                                                   
Jacobs Field........................  Cleveland Indians......          168         1994  P/P                    
San Jose Arena......................  San Jose Sharks........          163         1993  P/P                    
Fleet Center........................  Boston Celtics/Bruins..          160         1995  Private                
Gund Arena..........................  Cleveland Cavaliers....          155         1994  P/P                    
Comiskey Park.......................  Chicago White Sox......          150         1991  Public                 
Rose Garden.........................  Portland Trail Blazers.          145         1995  P/P                    
Gator Bowl..........................  Jacksonville Jaguars...          136         1995  Public                 
Marine Midland Arena................  Buffalo Sabres.........          128         1996  P/P                    
Arrowhead Pond of Anaheim...........  Anaheim Mighty Ducks...          120         1993  P/P                    
Ice Palace..........................  Tampa Bay Lightning....          120         1996  P/P                    
Target Center.......................  Minnesota Timberwolves.          104         1990  P/P                    
America West Arena..................  Phoenix Suns...........          101         1992  P/P                    
Orlando Arena.......................  Orlando Magic/Solar              100         1989  P/P                    
                                       Bears.                                                                   
Kiel Center.........................  St. Louis Blues........           99         1994  Private                
Bradley Center......................  Milwaukee Bucks........           80         1988  Private                
Ericsson Stadium....................  Carolina Panthers......           70         1996  Private                
Palace of Auburn Hills..............  Detroit Pistons........           70         1988  Private                
Charlotte Coliseum..................  Charlotte Hornets......           58         1988  Public                 
Delta Center........................  Utah Jazz..............           55         1991  Private                
Miami Arena.........................  Miami Heat/Florida                52         1988  P/P                    
                                       Panthers.                                                                
Arco Arena..........................  Sacramento Kings.......           40         1988  Private                
----------------------------------------------------------------------------------------------------------------

                                                                                         
                                                                    ____
                [From the New York Times, July 27, 1996]

                Picking Up the Tab For Fields of Dreams


                taxpayers build stadiums; owners cash in

                           (By Leslie Wayne)

       Washington.--In Baltimore, the Ravens, formerly the 
     Cleveland Browns, are coming to a $200 million football 
     stadium to be built on their behalf. Nashville has lured the 
     Oilers from Houston with the promise of a sparkling new $389 
     million stadium. In New York, there is talk of a new ball-
     park for the Yankees, while discussion continues about 
     replacing venerable Tiger Stadium in Detroit and Fenway Park 
     in Boston, both now celebrating their 84th anniversaries.
       But even as multimillion-dollar sports places are being 
     proposed for assorted Bears, Bengals, Hawks, Vikings and 
     other professional teams, a lot of people in Washington would 
     like to clamp down on lucrative public subsidies that they 
     contend do much more to help already-wealthy professional 
     sports team owners than the communities that support the 
     teams.
       Senator Daniel Patrick Moynihan, a New York Democrat, has 
     fired the opening shot by introducing legislation to end the 
     use of tax-free dollars to build sports stadiums. But, 
     retreating under a hail of lobbying fire, Mr. Moynihan admits 
     his measure has no chance of being enacted this year. Still, 
     that has not stopped him from vigorously arguing that Federal 
     tax dollars would be better devoted to public needs like 
     higher education than subsidizing the current stadium 
     building boom.
       ``Building new professional sports facilities is fine by 
     me,'' Mr. Moynihan said. ``Let the new stadiums be built. 
     But, please, do not ask the American taxpayer to pay for 
     them.''
       With an estimated $6 billion of new sports stadiums and 
     arenas on the drawing boards, the mere introduction of a bill 
     that would prevent local governments from tapping the tax-
     exempt municipal bond market for such projects is sending 
     shock waves through the world of sports finance. ``The 
     Moynihan bill has had an immediate, horrendous impact,'' said 
     Howard Richard, a lawyer at Katten Muchin & Zavis in Chicago. 
     ``There's intense lobbying. No one believes this bill will 
     pass, but it is wreaking havoc with the market''.
       The controversy over stadium financing dates back to the 
     1988 Tax Reform Act, which was though to have eliminated the 
     public subsidies by forcing team owners to finance stadiums 
     with taxable, rather than tax-free dollars.
       That effort, however, backfired. With team owners precluded 
     from tapping the public bond markets and reluctant to use 
     more costly taxable debt, sports-starved cities stepped in to 
     build and own the stadiums themselves, using municipal bonds.
       And since the 1986 tax act prevents stadium revenues from 
     being used to pay off any tax-free, stadium-related debt, a 
     bizarre situation has developed. The municipality is often 
     forced to pay with its own dollars for all of the borrowings, 
     but the team owner virtually alone gets the revenues from the 
     stadium. Under the tax code, only a small portion of the 
     stadium revenues and lease payments--less than 10 percent--
     can be drawn on by municipalities to repay tax-free stadium 
     debt.
       Some of the newest, and most stylish, stadiums rely 
     exclusively on public debt: Camden Yards and Ravens Stadium 
     in Baltimore and the new Comiskey Park in Chicago are just a 
     few of many. To pay off this debt, local governments have had 
     to raise taxes, tap lottery proceeds or use other public 
     revenues. Other stadiums, like the indoor America West Arena 
     in Phoenix, were built as public-private partnerships, with 
     some construction costs footed by the team owner; it all 
     depends on the bargain struck. In all, $3.9 billion in public 
     debt for stadiums has been issued since 1990.
       Teams owners, to bring their franchise to town or to be 
     persuaded to stay put, are demanding not just new and bigger 
     stadiums, but more ways to make money from them: luxury 
     skyboxes that rent for $50,000 to $200,000 a year; ``personal 
     seat licenses,'' which are options bought by ticket holders 
     to insure season tickets in perpetuity; new tiers of ``club 
     seats'' that cost more than regular seats. And then there are 
     ``pouring rights,'' which are paid by beverage companies to 
     peddle their beers and soda; more ``totem'' space to sell 
     advertising, and bigger car-parking concessions.
       ``We thought we shut down public financing to private 
     sports stadiums in 1986,'' said Senator Byron L. Dorgan, a 
     Democrat from North Dakota who is a supporter of the Moynihan 
     measure. ``Now a decade later, we see that the only remaining 
     healthy public housing is in sports stadiums for wealthy team 
     owners. We thought we closed a loophole and they found a way 
     through it.''
       Brian McGough, who specializes in stadium financing for 
     J.P. Morgan & Company, explained the unintended consequences 
     of the legislation; ``Congress forced public officials back 
     into the arms of team owners. It was a sea change 
     difference.''
       The effect of these changes has been to give team owners 
     more financial leverage in bargaining with local governments. 
     And experts say the new-found riches from stadium deals, 
     television contracts and other sources have been an important 
     factor in the escalating salaries in professional sports. 
     When some team owners have more cash in hand, they bid up 
     everyone's prices for top players--witness the $98 million, 
     seven-year contract for the basketball player Juwan Howard to 
     join the Miami Heat or the $121 million, seven-year contract 
     for Shaquille O'Neal to move to the Los Angeles Lakers.
       ``A lot of these financial benefits flow to the talent 
     because talent is key, especially in basketball,'' said Mr. 
     Richard, the Chicago lawyer. ``Look at the Chicago Bulls. You 
     are seeing a $25 million raise for Micheal Jordan and 
     millions for others. They say that this is creating the 
     necessity for a new stadium because they need the skybox 
     revenues to pay for the players. When you see all these 
     salaries and the new stadiums, what is the cause and what is 
     the effect?''
       More troubling to critics is the evidence that the money 
     spent on sports stadiums provides few economic benefits to 
     the surrounding community. Indeed, several studies indicate 
     that communities could benefit more if these investments, 
     which cost taxpayers hundreds of millions of dollars a year, 
     were spent on other forms of economic development.
       ``The economic research on whether these stadiums provide 
     benefits for state and local taxpayers suggest that they do 
     not,'' said Dennis Zimmerman, author of a Congressional 
     Research Service report on stadium financing. ``There are a 
     lot more productive things that state and local governments 
     could have done with this money.''
       Mr. Zimmerman, using data the State of Maryland offered in 
     making the case for building the Ravens' new stadium, found 
     that more jobs could be created by investing the same $177 
     million in the state's ``Sunny Day'' economic development 
     fund. He also concluded that in many cases the money local 
     governments saved by issuing tax-free municipal bonds to 
     build these stadiums ended up costing Federal taxpayers more 
     than the local benefit.
       ``It would be cheaper for the Federal Government to just 
     give a subsidy for these stadiums,'' Mr. Zimmerman said.
       Robert Baade, an economist at Lake Forest College, is one 
     of the strongest critics of

[[Page S508]]

     the present system. ``The distribution of income and benefits 
     is skewed: The owners and the players get the lion's share,'' 
     Mr. Baade said, ``If I've raised taxes to finance a stadium, 
     I can't argue that every dollar of that stadium is a boon to 
     the economy.''
       Opponents of Mr. Moynihan's measure argue that eliminating 
     tax-free dollars for sports stadiums would take decision-
     making away from local officials and increase the costs to 
     municipalities by forcing them to borrow in the taxable 
     markets. Indeed, the only way some of these stadiums can be 
     built, they say, is with lower-cost public debt. Football 
     stadiums, in particular, could become endangered, since they 
     often cost as much as $200 million, yet may be used for only 
     eight to 10 games a year, making it hard to generate enough 
     revenues to repay the debts.
       ``A stadium is not conceptually different from a lot of 
     other public projects,'' said Micah Green, the Washington 
     lobbyist for the Public Securities Association, a trade group 
     representing the municipal bond industry. ``If cities and 
     states decide to raise taxes to pay for these stadiums, then 
     that's O.K. That makes it a governmental bond. The local 
     decision of the electorate is the best test.''
       (Sometimes, however, local sentiment has to be swayed. The 
     Ravens Stadium proposal passed by only two votes amid 
     controversy in the Maryland Senate. Cincinnati voters 
     approved two new stadiums to replace Riverfront Stadium only 
     after a hard-fought campaign by downtown boosters. In 
     Nashville, opponents forced the city's first-ever bond 
     referendum before the new Oilers stadium won approval.)
       Six local government organizations, including the United 
     States Conference of Mayors and the National League of 
     Cities, sent a letter to Mr. Moynihan arguing against his 
     proposal. ``It is simply not good public policy to constrain 
     local flexibility in deciding what projects to undertake on a 
     tax-exempt basis,'' the letter said.
       Cathy Spain, the Washington lobbyist for the Government 
     Finance Officers Association, said her group opposes the 
     strict restrictions that preclude the use of stadium-related 
     revenues from repaying municipal debt. Ms. Spain said the 
     association's warnings to Congress about the problem went 
     unheeded when the tax act was changed in 1986. Now, she said, 
     her group would like to allow, say, 25 percent of stadium 
     revenues to be diverted to municipalities instead of team 
     owners.
       Stadium financing experts say that regardless of the 
     economics, the lure of professional sports is so strong that 
     politicians and communities will still seek to attract and 
     keep the limited number of sports teams available.
       And what about cities that just say no? They may be better 
     off in purely economic terms, but still left with an empty 
     feeling.
       ``St. Louis lost the football Cardinals to Phoenix because 
     they refused to build a new stadium,'' said James Gray, 
     assistant director at the National Sports Law Institute in 
     Milwaukee. ``Now they are paying triple to lure the Rams from 
     Los Angeles. Being part of a major league is something unique 
     in our society. Lots of people believe it's a worth-while 
     investment and will do anything to keep a team there.''
                                                                    ____


                [From ESPNET Sports Zone, ESPN Studios]

                  Your Tax Dollars in Action--For Real

                          (By Keith Olbermann)

       The biggest sports story of the week got about as little 
     publicity as possible.
       Legislation has been introduced in the U.S. Senate that 
     would cripple so-called ``Franchise Free Agency,'' stop the 
     merry-go-round of teams blackmailing cities and cities 
     bribing teams with public funds, and restore a little sanity 
     to the ever decreasingly sane world of sports.
       The ``Stop Tax-Exempt Arena Debt Issuance Act,'' sponsored 
     by Sen. Daniel Patrick Moynihan, D-N.Y., would make it 
     illegal for states, counties or cities to try to float tax-
     free bonds to build new sports stadiums and arenas. It's what 
     we've been crying for here for months, and as pathetic as 
     most of our politicians are, I am ready to nominate Sen. 
     Moynihan for Deity.
       A Congressional Research Service report recently concluded 
     that the most frequently-used justification for building a 
     new park for a ballclub, that the ancillary financial 
     benefits created by such a new facility more than make up for 
     the huge expense, is a falsehood. Just as Stanford economist 
     Roger Moll pointed out several months ago: if stadiums really 
     made money, the teams would build them themselves, wouldn't 
     they?
       If passed, the measure would virtually stop the kind of 
     rapacious marriages of glory-hungry politicians and money-
     hungry owners that greased the skids for the Cleveland Browns 
     move to Baltimore. The Brewers need a new stadium in 
     Milwaukee? Have a lovely time building it, Bud. Oh, you'll 
     move to Charlotte instead: Have a lovely time getting a 
     business loan to build Selig Stadium there. No more endless 
     threats from George Steinbrenner to move the Yankees to New 
     Jersey. No more repeat winners in Owner Blackmail like the 
     Seattle Mariners. No more publicly-funded white elephants 
     like ThunderDome in St. Petersburg or the Alamodome in San 
     Antonio.
       Enactment of this law might go even further toward righting 
     the sports ship. If owners couldn't count on government to 
     pull their chestnuts out of the financial fire, they could 
     not possibly continue to permit salaries to spiral upward. 
     They could not possibly continue to jack ticket prices upward 
     as a prerequisite to not moving elsewhere (see ``Whalers, 
     Hartford''). Some of the less economically-skilled owners 
     might even sell out, and might find that the only 
     corporations willing to take the franchise off their hands 
     would be the same kind of community-based, almost not-for-
     profit group that owns the Green Bay Packers--a team that if 
     owned by a Bill Bidwill or a Georgia Frontiere would have 
     moved out 20 years ago.
       In short, this is genius--and, though I swore I'd never say 
     anything like this about any issue: let your congressman or 
     senator know how you feel. We'll keep you posted on the 
     progress of Sen. Moynihan's measure in this cyberspace.
                                 ______
                                 
      By Mr. INOUYE:
  S. 123. A bill to amend title 10, United States Code, to increase the 
grade provided for the heads of the nurse corps of the Armed Forces; to 
the Committee on Armed Services.


       the u.s. military chief nurse corps amendment act of 1997

  Mr. INOUYE. Mr. President, I rise today to introduce an amendment 
that would change existing law regarding the designated position and 
grade for the Chief Nurses of the United States Army, the United States 
Navy, and the United States Air Force. Currently the Chief Nurses of 
the three branches of the military are one-star level general officer 
grades; this law would change the current grade to Major General in the 
United States Army and Air Force and Rear Admiral (upper half) in the 
United States Navy. Our military Chief Nurses have an awesome 
responsibility--a degree of responsibility that is absolutely deserving 
of this change in grade.
  You might be surprised at how big their scope of duties actually is. 
For example, the Chiefs are responsible for both peacetime and wartime 
health care doctrine, standards and policy for all nursing personnel 
within their respective branches. In fact, the Chief Nurses are 
responsible for more than 80,000 Army, 5,200 Navy, and 26,000 Air Force 
nursing personnel. This includes officer and enlisted nursing 
specialties in the active, reserve and guard components of the 
military. This level of responsibility certainly supports the need to 
change the grade for the Chief Nurses which would insure that they have 
a seat at the corporate table of policy and decision making.
  There has been much discussion about the so-called glass ceilings 
that unfairly impact the ability of women to achieve the same status as 
their male counterparts. While I do not want to make this a gender-
discrimination issue, the reality is that military nurses hit two glass 
ceilings: one as a nurse in a physician-dominated health care system 
and one as a woman in a male-dominated military system. The simple fact 
is that organizations are best served when the leadership is composed 
of a mix of specialty and gender groups--of equal rank--who bring their 
unique talents to the corporate table. For military nurses, the two-
star level of general officer Chief Nurse will insure that nurses 
indeed get to the corporate executive table.
  I strongly believe that it is very important, and past time, that we 
recognize the extensive scope and level of responsibility the military 
Chief Nurses have and make sure that future military health care 
organizations will continue to benefit from their expertise and unique 
contributions.
  Mr. President, I request unanimous consent that the text of this bill 
be printed in the Congressional Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 123

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

     SECTION 1. INCREASED GRADE FOR HEADS OF NURSE CORPS.

       (a) Army.--Section 3069(b) of title 10, United States Code, 
     is amended by striking out ``brigadier general'' in the 
     second sentence and inserting in lieu thereof ``major 
     general''.
       (b) Navy.--The first sentence of section 5150(c) of such 
     title is amended--
       (1) by inserting ``rear admiral (upper half) in the case of 
     an officer in the Nurse Corps or'' after ``for promotion to 
     the grade of''; and
       (2) by inserting ``in the case of an officer in the Medical 
     Service Corps'' after ``rear admiral (lower half)''.
       (c) Air Force.--Section 8069(b) of such title is amended by 
     striking out ``brigadier general'' in the second sentence and 
     inserting in lieu thereof ``major general''.

[[Page S509]]

                                 ______
                                 
      By Mr. Gramm (for himself, Mr. Mack and Mrs.  Hutchinson):
  S. 124. A bill to invest in the future of the United States by 
doubling the amount authorized for basic science and medical research; 
to the Committee on Labor and Human Resources.


              THE NATIONAL RESEARCH INVESTMENT ACT OF 1997

  Mr. GRAMM. Mr. President, in 1965, 5.7 percent of the federal budget 
was spent on non-defense research and development. Thirty-two years 
later, that figure has dropped by two-thirds to 1.9 percent. In no year 
since 1970 has the United States spent as large a percentage of its GDP 
on non-defense research and development as Japan or Germany. 
Unfortunately, recent signs point to this situation becoming worse 
rather than better. From 1992 through 1995, for the first time in 25 
years, real federal spending on research declined for 4 straight years. 
If we don't restore the high priority once afforded science and 
technology in the federal budget and increase federal investment in 
research, it will be impossible to maintain the United States' position 
as the technological leader of the world.
  As a nation, we have an interest in the research funding decisions of 
the private sector. Investing in basic science and medical research can 
provide much needed help to all our technology companies without giving 
any single company a special advantage over its competitors. Our goal 
should be to raise all the boats in the harbor, not just the ones 
belonging to the politically well-connected.
  The United States simply does not spend enough on basic research. 
This bill would double the amount spent by the federal government on 
non-defense research over ten years in a dozen agencies, programs, and 
activities, from $32.5 billion in FY 1997 to $65 billion in FY 2007, 
making sure that within that amount the funding for the National 
Institutes of Health would double from $12.75 billion to $25.5 billion. 
At the same time, in order to be sure the increase in funding is spent 
wisely, the bill gives priority to investments in basic science and 
medical research in order to develop new scientific knowledge which 
will be available in the public domain. The legislation does not allow 
funds to be used for the commercialization of technologies, and 
allocates funds using a peer review system. Expanding the nations's 
commitment to basic research in science and medicine is a critically 
important investment in the future of our Nation.
                                 ______
                                 
      By Mr. Moynihan (for himself and Mr. D'Amato):
  S. 125. A bill to provide that the Federal medical assistance 
percentage for any State or territory shall not be less than 60 
percent; to the Committee on Finance.


                 Federal Medical Assistance Legislation

  Mr. Moynihan. Mr. President, I rise today to introduce a bill, 
cosponsored by Senator D'Amoto, to revise the formula for determining 
the Federal Medical Assistance Percentage.
  Medicaid services and associated administrative costs are financed 
jointly by the Federal government and the States. The formula for the 
Federal share of a State's payments for services, known as the Federal 
Medical Assistance Percentage [FMAP], was established when Medicaid was 
created as part of the Social Security Amendments of 1965. The Federal 
share of administrative costs is 50 percent for all States, though 
higher rates are applicable for specific items.
  The FMAP is an exotic creature, derived from the Hill-Burton Hospital 
Survey and Construction Act of 1946, specifically designed to provide a 
higher Federal matching rate for states with lower per capita income. 
Rather than comparing per capita income directly, the HILL-BURTON 
formula is designed to exaggerate the differences between States' per 
capita income. A Senate colleague once described it to me as the 
South's revenge for the war between the States.
  The Federal government's share depends upon the square of the ratio 
of state per capita income to national per capita income. Per capita 
income is only a proxy but not the only proxy for measuring the States' 
relative fiscal capacity. In March 1982, the Advisory Commission on 
Intergovernmental Relations stated that,

      * * * the use of a single index, resident per capita income, 
     to measure fiscal capacity, seriously misrepresents the 
     actual ability of many governments to raise revenue. Because 
     states tax a wide range of economic activities other than the 
     income of their residents, the per capita income measure 
     fails to account for sources of revenue to which income is 
     only related in part. This misrepresentation results in the 
     systematic over and understatement of the ability of many 
     states to raise revenue. In addition, the recent evidence 
     suggests that per capita income has deteriorated as a measure 
     of capacity.

  Sqaring the ratio of state per capita income to national per capita 
income exaggerates the differences between States with regard to this 
incomplete proxy. Suppose my income is $1 and your income $2. The 
difference we have to make up is $1. If we compare squares, the 
difference we have to make up is $3.
  I proposed a change to the HILL-BURTON formula in June of 1977--at a 
commencement address at Kingsborough Community College in Brooklyn, New 
York--to compare square roots. Going back to our example, if we were to 
compare square roots, the difference would only be 59 cents--better 
than $3. Nonetheless, the idea has not caught on.
  Current law stipulates that no State may have an FMAP lower than 50 
percent or higher than 83 percent. In Fiscal Year 1997, 11 States and 
the District of Columbia receive the minimum 50 percent FMAP while 
Mississippi receives the highest FMAP of 77.22 percent. States are 
responsible for the nonfederal share of Medicaid costs. Meaning that a 
State with a FMAP of 50 percent puts up 50 percent of the money and the 
Federal government puts up 50 percent of the money. A State with a FMAP 
of 80 percent puts up 20 percent of the funds with a Federal match of 
80 percent. This inequity has existed for over 50 years. It is time for 
change.
  The bill I introduce today would change the minimum FMAP from 50 
percent to 60 percent. A modest proposal. As I mentioned before, there 
are 11 States and the District of Columbia which receive 50 percent. An 
additional 14 States have an FMAP between 50 and 60 percent. All other 
States get more.
  The Finance Committee passed this measure as part of its Budget 
Reconciliation Recommendations in 1995 but it never became law.
  This legislation gives high cost States such as New York the 
flexibility to realize savings without cost to the Federal government. 
It does not propose to change the amount of Federal funds such States 
receive. With an FMAP of 50 percent, a State receiving $1000 in Federal 
funds would be required to match it with $1000. With a 60 percent FMAP, 
the same State would still receive $1000 in Federal funds but would 
only be required to put up $667, a one-third reduction in the amount of 
state money required.
  Allocation formulas are designed to target Federal funds to States 
according to need. The FMAP does not. The savings realized by a 60 
percent minimum would provide some relief for States with low matching 
rates and would make the FMAP a bit less regressive. Adjusted for the 
cost-of-living, New York has the fifth highest poverty rate in the 
nation. Yet it has an FMAP of 50 percent. Arkansas has the 24th highest 
poverty rate, yet has an FMAP of 73.29. Our current formula is a 
regressive one that needs repair.
  I urge my colleagues to support this measure.
                                 ______
                                 
      By Mr. INOUYE:
  S. 126. A bill to amend title VII of the Public Health Service Act to 
revise and extend certain programs relating to the education of 
individuals as health professionals, and for other purposes; to the 
Committee on Labor and Human Resources.


     physical therapy and occupation therapy education act of 1997

  Mr. INOUYE. Mr. President, today, I am introducing The Physical 
Therapy and Occupational Therapy Education Act of 1997. This 
legislation will assist in educating physical therapy and occupational 
therapy practitioners to meet the growing demand for the valuable 
services they provide in our communities.
  In its most recent report, the Department of Labor's Bureau of Labor 
Statistics projected that the demand for services provided by physical 
therapy practitioners will increase dramatically over the next decade. 
According

[[Page S510]]

to the Bureau, between 1994 and 2005 the increase in demand will create 
a need for 81,000 additional physical therapists, an 80 percent 
increase over 1994 figures. Demand for physical therapist assistants is 
expected to grow at an even faster rate, experiencing an 83 percent 
increase over the same time period.
  The Bureau also predicts increasing demand for practitioners in the 
field of occupational therapy. Between 1994 and 2005 the increase in 
demand will create a need for 39,000 occupational therapists, a 72 
percent increase over 1994 figures. Demand for occupational therapist 
assistants is projected to experience an 82 percent increase over the 
same time period.
  Several factors contribute to the present need for Federal support in 
this area. The rapid aging of our nation's population, the demands of 
the AIDS crisis, increasing emphasis on health promotion and disease 
prevention, and the growth of home health care have out paced our 
ability to educate an adequate number of physical therapy and 
occupational therapy practitioners. In addition, technological advances 
are allowing injured and disabled individuals to survive conditions 
that in the past would have proven fatal.
  America's inability to educate an adequate number of physical 
therapists and occupational therapists has led to an increased reliance 
on foreign-educated, non-immigrant temporary workers (H-1B visa 
holders). The U.S. Commission on Immigration Reform has identified the 
physical therapy and occupational therapy fields as having among the 
highest number of H-1B visa holders in the U.S., second only to 
computer specialists.
  According to the Immigration and Naturalization Service (INS), we 
know that 1,389 H-1B visa holders sought employment as physical 
therapists in 1994. This number represents 5.9 percent of the 23,500 
arrivals for which the INS can verify their known occupation. An 
additional 82,399 holders of H-1B visas were reported to have entered 
the U.S. in 1994 for which the INS does not have occupation data. If we 
assume that the same percentage of H-1B visa holders are seeking 
employment in physical therapy as in the known-occupation pool, we can 
calculate that an additional 4,861 foreign-educated physical therapists 
were also seeking employment (5.9 percent of 82,399 aliens). Thus, the 
total number of foreign-educated physical therapists seeking employment 
in the U.S. during 1994 was approximately 6,250. In comparison, U.S. 
programs of physical therapy graduated a total of 5,846 physical 
therapists from 141 institutions nationwide in the same year.
  While the INS does not categorize occupational therapy as a separate 
profession when tracking H-1B visa entrants, the National Board for 
Certification in Occupational Therapy documents that the percentage of 
newly certified occupational therapists who are foreign graduates has 
risen from 3 percent in 1985 to more than 20 percent in 1995.
  The legislation I introduce today would provide necessary assistance 
to physical therapy and occupational therapy programs throughout the 
country to meet the health care demands of the 21st century. In 
awarding grants, preference would be given to those applicants that 
seek to educate and train practitioners at clinical sites in either 
rural or urban medically underserved communities.
  In addition to a shortage of practitioners, the present shortage of 
physical therapy and occupational therapy faculty impedes the expansion 
of established programs. The critical shortage of doctoral-prepared 
physical therapists and occupational therapists has resulted in an 
almost nonexistent pool of potential faculty. Presently, there exist 
117 faculty vacancies among the 131 accredited, professional-level 
physical therapy programs in the U.S. Similarly, during the '93-'94 
academic year there existed 51 faculty vacancies among the 85 
accredited, professional-level occupational therapy programs. The 
legislation I introduce today would assist in the development of a pool 
of qualified faculty by giving preference to those grant applicants 
seeking to develop and expand post-professional programs for the 
advanced training of physical therapists and occupational therapists.
  The investment we make through passage of The Physical Therapy and 
Occupational Therapy Education Act of 1997 will help reduce America's 
dependence on foreign labor and help create high-skilled, high-wage 
employment opportunities for American citizens. I look forward to 
working with my colleagues in the Congress to enact this important 
legislation.
  Mr. President, I ask unanimous consent that the text of this bill be 
printed in the Congressional Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 126

       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 ``Physical Therapy and 
     Occupational Therapy Education Act of 1997''.

     SEC. 2. PHYSICAL THERAPY AND OCCUPATIONAL THERAPY.

       Subpart II of part D of title VII of the Public Health 
     Service Act (42 U.S.C. 294d et seq.) is amended by adding at 
     the end the following:

     ``SEC. 768. PHYSICAL THERAPY AND OCCUPATIONAL THERAPY.

       ``(a) In General.--The Secretary may make grants to, and 
     enter into contracts with, programs of physical therapy and 
     occupational therapy for the purpose of planning and 
     implementing projects to recruit and retain faculty and 
     students, develop curriculum, support the distribution of 
     physical therapy and occupational therapy practitioners in 
     underserved areas, or support the continuing development of 
     these professions.
       ``(b) Preference in Making Grants.--In making grants under 
     subsection (a), the Secretary shall give preference to 
     qualified applicants that seek to educate physical therapists 
     or occupational therapists in rural or urban medically 
     underserved communities, or to expand post-professional 
     programs for the advanced education of physical therapy or 
     occupational therapy practitioners.
       ``(c) Peer Review.--Each peer review group under section 
     798(a) that is reviewing proposals for grants or contracts 
     under subsection (a) shall include not fewer than 2 physical 
     therapists or occupational therapists.
       ``(d) Report to Congress.--
       ``(1) In general.--The Secretary shall prepare a report 
     that--
       ``(A) summarizes the applications submitted to the 
     Secretary for grants or contracts under subsection (a);
       ``(B) specifies the identity of entities receiving the 
     grants or contracts; and
       ``(C) evaluates the effectiveness of the program based upon 
     the objectives established by the entities receiving the 
     grants or contracts.
       ``(2) Date certain for submission.--Not later than February 
     1, 2001, the Secretary shall submit the report prepared under 
     paragraph (1) to the Committee on Commerce and the Committee 
     on Appropriations of the House of Representatives, the 
     Committee on Labor and Human Resources and the Committee on 
     Appropriations of the Senate.
       ``(e) Authorization of Appropriations.--For the purpose of 
     carrying out this section, there is authorized to be 
     appropriated $3,000,000 for each of the fiscal years 1997 
     through 2000.''.
                                 ______
                                 
      Mr. MOYNIHAN (for himself, Mr. Roth, Mr. Chafee, Mr. Baucus, Mr. 
        Bingaman, Mrs. Boxer, Mr. Bryan, Mr. Craig, Mr. D'Amato, Mr. 
        Ford, Mr. Glenn, Mr. Grassley, Mr. Hatch, Mr. Kennedy, Mr. 
        Kerry, Mr. Kyl, Mr. Leahy, Mr. Lieberman, Mr. McConnell, Ms. 
        Moseley-Braun, Mrs. Murray, Mr. Robb, Mr. Rockefeller, Mr. 
        Shelby, Mr. Torricelli, and Mr. Wyden):
  S. 127. A bill to amend the Internal Revenue Code of 1986 to make 
permanent the exclusion for employer-provided educational assistance 
programs, and for other purposes; to the Committee on Finance.


                the employee educational assistance act

  Mr. MOYNIHAN. Mr. President, I rise today to introduce legislation 
that will make permanent the tax exclusion for employer-provided 
educational assistance under section 127 of the Internal Revenue Code. 
This bill, which is cosponsored by the distinguished chairman of the 
Committee on Finance, Senator Roth, and by Senators Baucus, Boxer, 
Bryan, Chafee, Craig, D'Amato, Ford, Glenn, Grassley, Hatch, Kennedy, 
Kerry, Kyl, Leahy, Lieberman, McConnell, Moseley-Braun, Murray, Robb, 
Rockefeller, Sarbanes, Shelby, Torricelli, Wyden, and Bingaman ensures 
that employees may receive up to $5,250 annually in tuition 
reimbursements or similar educational benefits for both undergraduate 
and graduate education from their employers on a tax-free basis.

[[Page S511]]

  Section 127 is one of the most successful education programs that the 
Federal Government has ever undertaken. A million persons benefit from 
this provision every year. And they benefit in the most auspicious of 
circumstances. An employer recognizes that the worker is capable of 
doing work at higher levels and skills and says, ``Will you go to 
school and get a degree so we can put you in a higher position than you 
have now--and with better compensation?'' Unlike so many of our job 
training programs that have depended on the hope that in the after-math 
of the training there will be a job, here you have a situation where 
the worker already has a job and the employer agrees that the worker 
should enlarge his or her situation in a manner that is beneficial to 
all concerned.
  This is a program that works. Yet, outside the organizations 
involved, not many people know of this program. It administers itself. 
It has no bureaucracy--there is no bureau in the Department of 
Education for employer-provided educational assistance, no titles, no 
confirmations, no assistant secretaries. There is nothing except 
individual contracts, employee and employer, with a great value-added.
  Since its inception in 1978, section 127 has enabled millions of 
workers to advance their education and improve their job skills without 
incurring additional taxes and a reduction in take-home pay. Without 
section 127, workers will find that the additional taxes or reduction 
in take-home pay impose a significant, even prohibitive, financial 
obstacle to further education. For example, an unmarried clerical 
worker pursuing a college diploma who has income of $21,000 in 1997 and 
who receives tuition reimbursement for two semesters of night courses--
worth approximately $4,000--would owe additional Federal income and 
payroll taxes of $866 on this educational assistance. If the worker has 
children and was receiving the earned income tax credit, the worker 
would owe additional taxes--including loss of the EITC benefits--of up 
to $1,708.
  Section 127 makes an important contribution to simplicity in the tax 
law. Absent section 127, a worker receiving educational benefits from 
an employer is taxed on the value of the education received, unless the 
education is directly related to the worker's current job. Permanent 
reinstatement of section 127 will allow workers to receive employer-
provided educational assistance on a tax-free basis, without the need 
to consult a tax advisor to determine whether the education is directly 
related to their current job.
  A well-trained and educated work force is a key to our Nation's 
competitiveness in the global economy of the 21st century. Pressures 
from international competition and technological change require 
constant adjustment by our work force. Education and retraining will be 
necessary to maintain and strengthen American industry's competitive 
position. Section 127 has an important, perhaps vital, role to play in 
this regard. It permits employees to adapt and retrain without 
incurring additional tax liabilities and a reduction in take-home pay. 
By removing the tax burden from workers seeking education and 
retraining, section 127 helps to maintain American workers as the most 
productive in the industrialized and developing world.
  Section 127 has also helped to improve the quality of America's 
public education system, at a fraction of the cost of direct-aid 
programs. A survey by the National Education Association a few years 
ago found that almost half of all American public school systems 
provide tuition assistance to teachers seeking advanced training and 
degrees. This has enabled thousands of public school teachers to obtain 
advanced degrees, augmenting the quality of instruction in our schools.
  Our most recent extension of section 127 last year excluded expenses 
of pursuing graduate level education for courses beginning after June 
30, 1996. This was a serious mistake. Historically, one quarter of the 
individuals who have used section 127 went to graduate schools. Ask 
major employer about their training systems, and they will say nothing 
is more helpful than being able to send a promising young person, or 
middle management person, to a graduate school to learn a new field 
that has developed since that person had his education.
  When we eliminate graduate level education from section 127, we 
impose a tax increase on many citizens who work and go to graduate 
school at the same time. But not all of them. Only the ones whose 
education does not directly relate to their current jobs. For these 
unlucky persons, we have erected a barrier to their upward mobility. 
Who are these people? The engineer seeking a masters degree in geology 
to enter the field of environmental science. The bank teller seeking an 
MBA in finance or an MPA in accounting. The production line worker 
seeking an MBA in management.
  Simple equity among taxpayers demands that section 127 be made 
permanent. Contrast each of the above examples with the following: The 
environmental geologist seeking a masters in geology, the bank 
accountant seeking an MPA, and the management trainee seeking an MBA 
each qualify for tax-free education. There is no justification for this 
difference in tax treatment.
  Thus, section 127 removes a tax bias against lesser-skilled workers. 
The tax bias arises because lesser-skilled workers have narrower job 
descriptions, and a correspondingly greater difficulty proving that 
educational expenses directly relate to their current jobs. Less-
skilled workers are in greater need of remedial and basic education. 
And they are the ones least able to afford the imposition of tax on 
their educational benefits.
  It is important to note that employer-provided educational assistance 
is not an extravagant benefit for highly paid executives. It largely 
benefits low- and moderate-income employees seeking access to higher 
education and further job training. A study published by the National 
Association of Independent Colleges and Universities in December, 1995 
found that 85 percent of section 127 recipients in the 1992-93 academic 
year earned less than $50,000, with the average recipient earning less 
than $33,000. An earlier Coopers & Lybrand study indicated that over 70 
percent of recipients of section 127 benefits in 1986 were earning less 
than $30,000, and that participation rates decline as salary levels 
increase.
  I hope that Congress will recognize the importance of this provision, 
and enact it permanently. Our on-again, off-again approach to section 
127 creates great practical difficulties for the intended 
beneficiaries. Workers cannot plan sensibly for their educational 
goals, not knowing the extent to which accepting educational assistance 
may reduce their take-home pay. As for employers, the fits and starts 
of the legislative history of section 127 have been a serious 
administrative nuisance: there have been 8 retroactive extensions of 
this provision since 1978. If section 127 is in force, then there is no 
need to withhold taxes on educational benefits provided; if not, the 
job-relatedness of the educational assistance must be ascertained, a 
value assigned, and withholding adjusted accordingly. Uncertainty about 
the program's continuance magnifies this burden, and discourages 
employers from providing educational benefits.
  For example, section 127 expired for a time after 1994. During 1995, 
employers did not know whether to withhold taxes or curtail their 
educational assistance programs. Workers did not know whether they 
would face large tax bills, and possible penalties and interest, and 
thus faced considerable risk in planning for their education. Some of 
my constituents who called my office reported that they were taking 
fewer courses--or no courses--due to this uncertainty. And when we 
failed to extend the provision by the end of 1995, employers had to 
guess as to how to report their worker's incomes on the W-2 tax 
statements, and employees had to guess whether to pay tax on the 
benefits they received. In the Small Business Job Protection Act of 
1996 enacted last August, we finally extended the provision 
retroactively to the beginning of 1995. As a result, we had to instruct 
the IRS to expeditiously issue guidance to employers and workers on how 
to obtain refunds.
  The provision expires after June 30, 1997. Will we subject our 
constituents, once again, to similar confusion? The legislation I 
introduce today would restore certainty to section 127 by extending it 
retroactively--from July 1, 1996--for graduate level education, and 
maintaining it on a permanent basis for all education.

[[Page S512]]

  Thomas Jefferson, as ever, was right to observe that American liberty 
depends on an educated electorate. In 1816, the year in which the 
Senate Committee on Finance was founded, Jefferson warned ``If a nation 
expects to be ignorant and free, in a state of civilization, it expects 
what never was and never will be.''
  Previous efforts to extend this provision have enjoyed broad and 
bipartisan support. Encouraging workers to further their education and 
to improve their job skills is an important national priority. It is 
crucial for preserving our competitive position in the global economy. 
Permitting employees to receive educational assistance on a tax-free 
basis, without incurring significant cuts in take-home pay, is a 
demonstrated, cost-effective means for achieving these objectives. This 
is a wonderful piece of unobtrusive social policy.
  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. 127

       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 ``Employee Educational 
     Assistance Act''.

     SEC. 2. EMPLOYER-PROVIDED EDUCATIONAL ASSISTANCE PROGRAMS.

       (a) Permanent Extension.--Section 127 of the Internal 
     Revenue Code of 1986 (relating to exclusion for educational 
     assistance programs) is amended by striking subsection (d) 
     and by redesignating subsection (e) as subsection (d).
       (b) Repeal of Limitation on Graduate Education.--The last 
     sentence of section 127(c)(1) of such Code is amended by 
     striking ``, and such term also does not include any payment 
     for, or the provision of any benefits with respect to, any 
     graduate level course of a kind normally taken by an 
     individual pursuing a program leading to a law, business, 
     medical, or other advanced academic or professional degree''.
       (c) Effective Dates.--
       (1) Extension.--The amendments made by subsection (a) shall 
     apply to taxable years beginning after December 31, 1996.
       (2) Graduate education.--The amendment made by subsection 
     (b) shall apply with respect to expenses relating to courses 
     beginning after June 30, 1996.
       (3) Expedited procedures.--The Secretary of the Treasury 
     shall establish expedited procedures for the refund of any 
     overpayment of taxes imposed by the Internal Revenue Code of 
     1986 which is attributable to amounts excluded from gross 
     income during 1996 or 1997 under section 127 of such Code, 
     including procedures waiving the requirement that an employer 
     obtain an employee's signature where the employer 
     demonstrates to the satisfaction of the Secretary that any 
     refund collected by the employer on behalf of the employee 
     will be paid to the employee.
                                 ______
                                 
      By Mr. INOUYE:
  S. 128. A bill to amend the Public Health Service Act to provide 
health care practitioners in rural areas with training in preventive 
health care, including both physical and mental care, and for other 
purposes; to the Committee on Labor and Human Resources.


                    Health Care Training Act of 1997

  Mr. INOUYE. Mr. President, I rise today to introduce the Rural 
Preventive Health Care Training Act of 1997, a bill that responds to 
the dire situation our rural communities face in obtaining quality 
health care and disease prevention programs.

  Almost one fourth of Americans live in rural areas and thus 
frequently lack access to adequate physical and mental health care. For 
example, approximately 1,700 rural communities in virtually every state 
of the union suffer critical shortages of health care providers. As 
many as 21 million of the 34 million people living in underserved rural 
areas are without access to a primary care provider. In areas where 
providers exist, there are numerous limits to access, such as geography 
and distance, lack of transportation, and lack of knowledge about 
available resources. Additionally, due to the diversity of rural 
populations, ranging from native Americans to migrant farm workers, 
language and cultural obstacles are often a factor.
  Compound these problems with slim financial resources and many of 
America's rural communities go without vital health care, especially 
preventive care. Children fail to receive immunizations and routine 
checkups. Preventable illnesses and injuries occur needlessly and lead 
to expensive hospitalizations. Early symptoms of emotional problems and 
substance abuse go undetected and often develop into full blown 
disorders.
  An Institute of Medicine (IOM) report from their two-year study 
entitled, ``Reducing Risks for Mental Disorders: Frontiers for 
Preventive Intervention Research'' highlights the benefits of 
preventive care for all health problems. Rural health care providers 
face a lack of training opportunities. Training in prevention is 
crucial in order to meet the demand for care in underserved areas.
  Beyond the scope of simple prevention training, interdisciplinary 
preventive training in rural health is important because of a growing 
array of evidence that links mental disorders to physical ailments. For 
example, it has been estimated that from fifty to seventy percent of 
visits to physicians for medical symptoms are due in part or whole to 
psychosocial problems. By encouraging interdisciplinary training, rural 
communities can integrate the behavioral, biological, and psychological 
sciences to form the most effective preventive care possible.
  The problems with quality, access, and understanding of health care 
in rural areas all suggest that promoting interdisciplinary training of 
psychologists, nurses, and social workers is essential. The need 
becomes clearer when considering that many of the behavior-related 
problems afflicting rural communities are amenable to proven risk 
reduction strategies that are best provided by trained mental health 
care professionals.
  Interdisciplinary team prevention training will facilitate both 
health and mental health clinics sharing single service sites and 
routine consultation between groups. Social workers, psychologists, 
clinical psychiatric nurse specialists, and paraprofessionals play an 
important role in extending rural mental health services to those in 
need. Linkage of these services can provide better utilization of 
existing mental health care personnel, increase awareness and 
understanding of mental health services, and contribute to the overall 
health of rural communities.
  The Rural Preventive Health Care Training Act of 1997, targeted 
specifically toward rural communities, would implement the risk-
reduction model described in the IOM study. This model is based on the 
identification of risk factors for a certain disorder and the 
implementation of specific preventive strategies to target groups with 
those risk factors. The IOM Committee aptly demonstrates that methods 
of risk reduction have proven highly successful in many health-related 
areas, such as cardiovascular disease, smoking reduction, and the 
numerous childhood diseases and conditions that are preventable by 
early prenatal care for pregnant women.
  The cost of human suffering caused by poor health is immeasurable, 
but the huge financial burden placed on communities, families, and 
individuals is evident. By implementing preventive measures, the 
potential for savings in psychological and financial realms is 
enormous. This savings is the goal of the Rural Preventive Health Care 
Training Act of 1997.
  Mr. President, I ask unanimous consent that the text of this bill be 
printed in the Congressional Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 128

       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 ``Rural Preventive Health Care 
     Training Act of 1997''.

     SEC. 2. PREVENTIVE HEALTH CARE TRAINING.

       Section 778 of the Public Health Service Act (42 U.S.C. 
     294p) is amended--
       (1) in subsection (b)(3)(C), by striking ``this section'' 
     and inserting ``subsection (a)'';
       (2) by redesignating subsections (e) and (f) as subsections 
     (f) and (g), respectively;
       (3) by inserting after subsection (d) the following new 
     subsection:
       ``(e) Preventive Health Care Training.--
       ``(1) In general.--The Secretary may make grants to, and 
     enter into contracts with, eligible applicants to enable such 
     applicants to provide preventive health care training, in 
     accordance with paragraph (3), to health care practitioners 
     practicing in rural areas. Such training shall, to the extent 
     practicable, include training in health care to prevent both 
     physical and mental disorders before the initial occurrence 
     of such disorders. In carrying out this paragraph, the 
     Secretary shall encourage, but may not require, the use of

[[Page S513]]

     interdisciplinary training project applications.
       ``(2) Limitation.--To be eligible to receive training using 
     assistance provided under paragraph (1), a health care 
     practitioner shall be determined by the eligible applicant 
     involved to be practicing, or desiring to practice, in a 
     rural area.
       ``(3) Use of assistance.--Amounts received under a grant 
     made or contract entered into under this subsection shall be 
     used--
       ``(A) to provide student stipends to individuals attending 
     rural community colleges or other institutions that service 
     predominantly rural communities, for the purpose of enabling 
     the individuals to receive preventive health care training;
       ``(B) to increase staff support at rural community colleges 
     or other institutions that service predominantly rural 
     communities to facilitate the provision of preventive health 
     care training;
       ``(C) to provide training in appropriate research and 
     program evaluation skills in rural communities;
       ``(D) to create and implement innovative programs and 
     curricula with a specific prevention component; and
       ``(E) for other purposes as the Secretary determines to be 
     appropriate.
       ``(4) Authorization of appropriations.--There are 
     authorized to be appropriated to carry out this subsection, 
     $5,000,000 for each of fiscal years 1998 through 2000.''; and
       (4) in subsection (g) (as so redesignated), by inserting 
     ``except subsection (e),'' after ``section,''.
                                 ______
                                 
      By Mr. INOUYE:
  S. 129. A bill to amend title 10, United States Code, to authorize 
certain disabled former prisoners of war to use Department of Defense 
commissary and exchange stores; to the Committee on Armed Services.


                  former prisoners of war legislation

  Mr. INOUYE. Mr. President, today I am introducing legislation to 
enable those former prisoners of war who have been separated honorably 
from their respective services and who have been rated to have a 30 
percent service-connected disability to have the use of both the 
military commissary and post exchange privileges. While I realize that 
it is impossible to adequately compensate one who has endured long 
periods of incarceration at the hands of our Nation's enemies, I do 
feel that this gesture is both meaningful and important to those 
concerned. It also serves as a reminder that our Nation has not 
forgotten their sacrifices.

  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. 129

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

     SECTION 1. USE OF COMMISSARY AND EXCHANGE STORES BY CERTAIN 
                   DISABLED FORMER PRISONERS OF WAR.

       (a) In General.--Chapter 54 of title 10, United States 
     Code, is amended by inserting after section 1064 the 
     following new section:

     ``Sec. 1064a. Use of commissary stores by certain disabled 
       former prisoners of war

       ``(a) In General.--Under regulations prescribed by the 
     Secretary of Defense, former prisoners of war described in 
     subsection (b) may use commissary and exchange stores.
       ``(b) Covered Individuals.--Subsection (a) applies to any 
     former prisoner of war who--
       ``(1) is separated from active duty in the armed forces 
     under honorable conditions; and
       ``(2) has a service-connected disability rated by the 
     Secretary of Veterans Affairs at 30 percent or more.
       ``(c) Definitions.--In this section:
       ``(1) The term `former prisoner of war' has the meaning 
     given the term in section 101(32) of title 38.
       ``(2) The term `service-connected' has the meaning given 
     the term in section 101(16) of title 38.''.
       (b) Clerical Amendment.--The table of sections at the 
     beginning of such chapter is amended by inserting after the 
     item relating to section 1064 the following new item:

``1064a. Use of commissary stores by certain disabled former prisoners 
              of war.''.
                                 ______
                                 
      By Mr. INOUYE:
  S. 130. A bill to amend the Internal Revenue Code of 1986 to provide 
a credit for the purchase of child restraint systems used in motor 
vehicles; to the Committee on Finance.


             child restraint system amendments act of 1997

  Mr. INOUYE. Mr. President, today I am introducing legislation to 
provide for a federal income tax credit for those families who purchase 
a child restraint system for their automobiles.
  Accidents and injuries continue to cause almost half of the deaths of 
children between the ages of one and four, more than half of the deaths 
of children between five and fifteen, and continue to be the leading 
cause of death among children and young adults.
  It is my understanding that although the Department of Transportation 
has made injury prevention among children a top priority, a significant 
number of parents either do not have adequate child restraint systems 
or do not have them properly installed.
  It is imperative that we create this opportunity to provide America's 
parents with a financially accessible alternative to the insufficient 
level of child safety measures currently available for use in 
automobiles.
  Mr. President, I ask unanimous consent that the text of this bill be 
printed in the Congressional Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 130

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

     SECTION 1. CREDIT FOR PURCHASE OF CHILD RESTRAINT SYSTEMS.

       (a) In General.--Subpart A of part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 (relating to 
     nonrefundable personal credits) is amended by adding at the 
     end the following:

     ``SEC. 25A. PURCHASE OF CHILD RESTRAINT SYSTEM.

       ``(a) General Rule.--In the case of an individual, there 
     shall be allowed as a credit against the tax imposed by this 
     chapter for the taxable year an amount equal to the costs 
     incurred by the taxpayer during such taxable year in 
     purchasing a qualified child restraint system for any child 
     of the taxpayer.
       ``(b) Definitions.--For purposes of this section--
       ``(1) Qualified child restraint system.--The term 
     `qualified child restraint system' means any child restraint 
     system which meets the requirements of section 571.213 of 
     title 49 of the Code of Federal Regulations.
       ``(2) Child.--The term `child' has the meaning given the 
     term in section 151(c)(3).''.
       (b) 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 25 the following:

``Sec. 25A. Purchase of child restraint system.''.

       (c) Effective Date.--The amendments made by this section 
     apply to taxable years beginning after December 31, 1996.
                                 ______
                                 
      By Mr. Moynihan (for himself, Mr. Lieberman, and Mr. Jeffords):
  S. 131. A bill to amend chapter 5 of title 13, United States Code, to 
require that any data relating to the incidence of poverty produced or 
published by the Secretary of Commerce for subnational areas is 
corrected for differences in the cost of living in those areas; to the 
Committee on Governmental Affairs.


                The Poverty Data Correction Act of 1997

  Mr. MOYNIHAN. Mr. President, I rise today to introduce the Poverty 
Data Correction Act of 1997, a bill to require that any data relating 
to the incidence of poverty in subnational areas be corrected for the 
differences in the cost of living in those areas. This legislation, 
cosponsored by Senators Lieberman and Jeffords, would correct a 
longstanding inequity and would provide us with more accurate 
information on the number of Americans living in poverty.
  Mr. President, residents of New York and Connecticut earn more than 
do the residents of Mississippi or Alabama. But they also must spend 
more. The 1990 Census of Population and Housing, for instance, 
determined that homeowner costs with a mortgage averaged $1,096 per 
month in Connecticut, $894 in New York State--not city, $555 in 
Alabama, and $511 in Mississippi. The national average was $737.
  Yet, we have a national poverty threshold adjusted only by family 
size and composition, not by where the family lives. A family of four 
just above the poverty threshold in New York City is demonstrably worse 
off than a family of four just below the threshold in, say, rural 
Arkansas. And yet the family in New York might be ineligible for aid, 
and will not count in the poverty population tallies used to allocate 
funds while the Arkansas family will receive aid, and will be counted.
  An August 7, 1994 New York Times editorial endorsing a version of 
this bill introduced in the 104th Congress sums it up nicely:

       The cost of food, rent and other consumer goods can be 
     twice as high in Manhattan as

[[Page S514]]

     in Little Rock, Ark. Yet the income cutoff for poverty 
     programs is the same in both places, $14,769 for a family of 
     four. That produces the ridiculous and unfair result that a 
     Manhattan family earning $15,000 does not qualify for Federal 
     nutrition or education programs while an Arkansas family 
     earning $14,500--the equivalent of $29,000 in Manhattan--
     does.
       * * * Federal poverty levels are supposed to identify 
     families that cannot buy minimally decent food, clothes and 
     shelter. To act as if living costs do not matter, or as if 
     financially strapped states will pick up where Washington 
     leaves off, amounts to a vicious attack on the poor who 
     happen to live in high-cost states.

  Professor Herman B. ``Dutch'' Leonard and Senior Research Associate 
Monica Friar of the Taubman Center for State and local government at 
Harvard have devised an index of poverty statistics that reflects the 
differences in the cost of living between States. If we look at the 
``Friar-Leonard State Cost-of-Living index,'' as it has come to be 
known, we find that New York has a cost-adjusted poverty rate of 20.4 
percent, the fifth highest in the Nation. Florida has the 12th highest 
adjusted poverty rate; Arkansas drops from 14th to 24th. New York 
fifth; Arkansas 24th. Georgia as the 25th highest. It is no longer the 
case that the incidence of poverty is highest in the Mississippi Delta 
or Appalachia. The fifth highest poverty rate is in New York. We seem 
not to have grasped this.

  In 1995, a National Academy of Sciences (NAS) panel of experts 
released a study on redefining poverty. Our poverty index dates back to 
the work of Social Security Administration economist Mollie Orshansky 
who, in the early 1960s, hit upon the idea of a nutritional standard, 
not unlike the ``pennyloaf'' of bread of the 18th century British poor 
laws. Our poverty standard would be three times the cost of the 
Department of Agriculture-defined minimally adequate ``food basket.'' 
During consideration of the Family Support Act of 1988, I included a 
provision mandating the National Academy of Sciences to determine if 
our poverty measure is outdated and how it might be improved. The 
study, edited by Constance F. Citro and Robert T. Michael, is entitled 
Measuring Poverty: A New Approach. A Congressional Research Service 
review of the report states:

       The NAS panel * * * makes several recommendations which, if 
     fully adopted, could dramatically alter the way poverty in 
     the U.S. is measured, how federal funds are allotted to the 
     States, and how eligibility for many Federal programs is 
     determined. The recommended poverty measure would be based on 
     more items in the family budget, would take major noncash 
     benefits and taxes into account, and would be adjusted for 
     regional differences in living costs.
       * * * Under the current measure the share of the poor 
     population living in each region was: Northeast: 16.9 
     percent; Midwest: 21.7 percent; South: 40.0 percent; and 
     West: 21.4 percent. Under the proposed new measure, the 
     estimated share in each region would be: Northeast: 18.9 
     percent; Midwest: 20.0 percent; South 36.4 percent; and West: 
     24.5 percent.

  Mr. President, our current poverty data are inaccurate. And these 
substandard data are used in allocation formulas used to distribute 
millions of Federal dollars each year. As a result, States with high 
costs of living--States like New York, Connecticut, Vermont, Hawaii, 
and California, just to name a few--are not getting their fair share of 
Federal dollars because differences in the cost of living are ignored. 
And the poor of these high cost States are penalized because they 
happen to live there. It is time to correct this inequity.
  I ask unanimous consent that the New York Times editorial be inserted 
into the Record.
  There being no objection, the item was ordered to be printed in the 
Record, as follows:

                [From the New York Times, Aug. 7, 1994]

                      Poverty Is Unfairly Defined

       The cost of food, rent and other consumer goods can be 
     twice as high in Manhattan as in Little Rock, Ark. Yet the 
     income cutoff for poverty programs is the same in both 
     places, $14,764 for a family of four. That produces the 
     ridiculous and unfair result that a Manhattan family earning 
     $15,000 does not qualify for Federal nutrition or education 
     programs while an Arkansas family earning $14,500--the 
     equivalent of $29,000 in Manhattan--does.
       The Federal definition of poverty is blind to the real 
     costs paid by people struggling to purchase the necessities 
     of life. That is why Senator Joseph Lieberman, Democrat of 
     Connecticut, and Representative Dean Gallo, Republican of New 
     Jersey, have proposed bills that would adjust poverty levels 
     for state differences in the cost of living. That way poor 
     families in Los Angeles and Philadelphia will get their fair 
     share of the $20 billion or more that Congress spends on 
     need-based programs. Senator Daniel Patrick Moynihan of New 
     York, an expert on poverty, says that adjusting poverty 
     levels for living costs will produce poverty rates in New 
     York nearly as high as those in the Deep South.
       The only argument against the bills is that high-income 
     states like New York and California can afford to pay more to 
     help their poor than can low-income states like Mississippi 
     and South Carolina. But the poor in New York are not just the 
     responsibility of taxpayers in New York; helping the poor is 
     every American's duty, best carried out by Federal payments 
     that take account of differences in the cost of living. Of 
     course, wealthy states like New York will pay a 
     disproportionate share of the taxes that support such 
     payments.
       The argument for letting rich states take care of ``their'' 
     own poor fails for another reason: they will shirk. If state 
     governments try to finance generous welfare, they trigger in-
     migration of the poor and out-migration of wealthy taxpayers. 
     Therefore they underfinance welfare; over the past two 
     decades, states welfare benefits have dwindled.
       Federal poverty levels are supposed to identify families 
     that cannot buy minimally decent food, clothes and shelter. 
     To act as if living costs do not matter, or as if financially 
     strapped states will pick up where Washington leaves off, 
     amounts to a vicious attack on the poor who happen to live in 
     high-cost states.
                                 ______
                                 
      By Mr. MOYNIHAN:
  S. 132. A bill to prohibit the use of certain ammunition, and for 
other purposes. A bill to prohibit the use of certain ammunition, and 
for other purposes; to the Committee on the Judiciary.
  S. 133. A bill to amend the Internal Revenue Code of 1986 to increase 
the tax on handgun ammunition, to impose the special occupational tax 
and registration requirements on importers and manufacturers of handgun 
ammunition, and for other purposes; to the Committee on Finance.


             legislation to control destructive ammunition

  Mr. MOYNIHAN. Mr. President, I introduce two measures to help fight 
the epidemic of bullet-related violence in America: the Real Cost of 
Destructive Ammunition Act and the Destructive Ammunition Prohibition 
Act of 1997. The purpose of these bills is to prevent from reaching the 
marketplace some of the most deadly rounds of ammunition ever produced.
  Some of my colleagues may remember the Black Talon. It is a hollow-
tipped bullet, singular among handgun ammunition in its capacity for 
destruction. Upon impact with human tissue, the bullet produces razor-
sharp radial petals that produce a devastating wound. It is the very 
same bullet that a crazed gunman fired at unsuspecting passengers on a 
Long Island Railroad train in December 1993, Killing the husband of now 
Congresswoman Carolyn McCarthy and injuring her son. That same month, 
it was also used in the shooting of Officer Jason E. White of the 
District of Columbia Metropolitan Police Department, just 15 blocks 
from the Capitol.
  I first learned of the Black Talon in a letter I received from Dr. 
E.J. Gallagher, director of Emergency Medicine at Albert Einstein 
College of Medicine at the Municipal Hospital Trauma Center in the 
Bronx. Dr. Gallagher wrote that he has never seen a more lethal 
projectile. On November 3, 1993, I introduced a bill to tax the Black 
Talon at 10,000 percent. Nineteen days later, Olin Corp., the 
manufacturer of the Black Talon, announced that it would withdraw sale 
of the bullet to the general public. Unfortunately, the 103d Congress 
came to a close without the bill having won passage.
  As a result, there is nothing in law to prevent the reintroduction of 
this pernicious bullet, nor is there any existing impediment to the 
sale of similar rounds that might be produced by another manufacturer. 
So today I reintroduce the bill to tax the Black Talon as well as a 
bill to prohibit the sale of the Black Talon to the public. Both bills 
would apply to any bullet with the same physical characteristics as the 
Black Talon. These bullets have no place in the armory of criminals.
  It has been estimated that the cost of hospital services for treating 
bullet-related injuries is $1 billion per year, with the total cost to 
the economy of such injuries approximately $14 billion.

[[Page S515]]

We can ill afford further increases in this number, but this would 
surely be the result if bullets with the destructive capacity of the 
Black Talon are allowed onto the streets.
  Mr. President, despite the fact that the national crime rate has 
decreased in recent months, the number of deaths and injuries caused by 
bullet wounds is still at an unconscionable level. It is time we took 
meaningful steps to put an end to the massacres that occur daily as a 
result of gunshots. How better a beginning than to go after the most 
insidious culprits of this violence? I urge my colleagues to support 
these measures and to prevent these bullets from appearing on the 
market.
                                 ______
                                 
      By Mr. MOYNIHAN:
  S. 134. A bill to amend title 18, United States Code, with respect to 
the licensing of ammunition manufacturers, and for other purposes; to 
the Committee on the Judiciary.


               THE HANDGUN AMMUNITION CONTROL ACT OF 1997

  Mr. MOYNIHAN. Mr. President, I rise today to introduce a measure to 
improve our information about the regulation and criminal use of 
ammunition and to prevent the irresponsible production of ammunition. 
This bill has three components. First, it would require importers and 
manufacturers of ammunition to keep records and submit an annual report 
to the Bureau of Alcohol, Tobacco and Firearms [BATF] on the 
disposition of ammunition, including the amount, caliber and type of 
ammunition imported or manufactured. Second, it would require the 
Secretary of the Treasury, in consultation with the National Academy of 
Sciences, to conduct a study of ammunition use and make recommendations 
on the efficacy of reducing crime by restricting access to ammunition. 
Finally, it would amend title 18 of the United States Code to raise the 
application fee for a license to manufacture certain calibers of 
ammunition.
  While there are enough handguns in circulation to last well into the 
22d century, there is perhaps only a 4-year supply of ammunition. But 
how much of what kind of ammunition? Where does it come from? Where 
does it go? There are currently no reporting requirements for 
manufacturers or importers of ammunition; earlier reporting 
requirements were repealed in 1986. The Federal Bureau of 
Investigation's annual Uniform Crime Reports, based on information 
provided by local law enforcement agencies, does not record the 
caliber, type, or quantity of ammunition used in crime. In short, our 
data base is woefully inadequate.
  I supported the Brady law, which requires a waiting period before the 
purchase of a handgun, and the recent ban on semi-automatic weapons. 
But while the debate over gun control continues, I offer another 
alternative: Ammunition control. After all, as I have said before, guns 
do not kill people; bullets do.
  Ammunition control is not a new idea. In 1982 Phil Caruso of the New 
York City Patrolmen's Benevolent Association asked me do something 
about armor-piercing bullets. Jacketed in tungsten or other materials, 
these rounds could penetrate four police flak jackets and five Los 
Angeles County telephone books. They are of no sporting value. I 
introduced legislation, the Law Enforcement Officers Protection Act, to 
ban the cop-killer bullets in the 97th, 98th, and 99th Congresses. It 
enjoyed the overwhelming support of law enforcement groups and, 
ultimately, tacit support from the National Rifle Association. It was 
finally signed into law by President Reagan on August 28, 1986.
  The crime bill enacted in 1994 contained may amendment to broaden the 
1986 ban to cover new thick steel-jacketed armor-piercing rounds.
  Out cities are becoming more ware of the benefits to be gained from 
ammunition control. The District of Columbia and some other cities 
prohibit a person from possessing ammunition without a valid license 
for a firearm of the same caliber or gauge as the ammunition. Beginning 
in 1990, the city of Los Angeles banned the sale of all ammunition 1 
week prior to Independence Day and New Year's Day in an effort to 
reduce injuries and deaths caused by the firing of guns into the air. 
And in September 1994, the city of Chicago became the first in America 
to ban the sale of all handgun ammunition.

  Such efforts are laudable. But they are isolated attempts to cure 
what is in truth a national disease. We need to do more, but to do so, 
we need information to guide policymaking. This bill would fulfill that 
need by requiring annual reports to BATF by manufacturers and importers 
and by directing a study by the National Academy of Sciences. We also 
need to encourage manufacturers of ammunition to be more responsible. 
By substantially increasing application fees for licenses to 
manufacturer .25 caliber, .32 caliber, and 9-mm ammunition, this bill 
would discourage the reckless production of unsafe ammunition or 
ammunition which causes excesses damage.
  I urge my colleagues to support this measure.
                                 ______
                                 
      By Mr. MOYNIHAN:
  S. 135. A bill to provide for the collection and dissemination of 
information on injuries, death, and family dissolution due to bullet-
related violence, to require the keeping of records with respect to 
dispositions of ammunition and to increase taxes on certain bullets; to 
the Committee on Finance.


                 the violent crime control act of 1997

  Mr. MOYNIHAN. Mr. President, I rise today to introduce a bill that 
comprehensively seeks to control the epidemic proportions of violence 
in America. This legislation, the Violent Crime Control Act of 1997, 
combines most of the provisions of two of the other crime-related bills 
I am introducing today as well.
  By including two different crime-related provisions, my bill attacks 
the crime epidemic on more than just one front. If we are truly serious 
about confronting our Nation's crime problem, we must learn more about 
the nature of the epidemic of bullet-related violence and ways to 
control it. To do this, we must require records to be keep on the 
disposition of ammunition.
  In October 1992, the Senate Finance Committee received testimony that 
public health and safety experts have, independently, concluded that 
there is an epidemic of bullet-related violence. The figures are 
staggering.
  In 1995, bullets were in the murders of 23,673 people in the United 
States. By focusing on bullets, and not guns, we recognize that much 
like nuclear waste, guns remain active for centuries. With minimum 
care, they do not deteriorate. However, bullets are consumed. Estimates 
suggest we have only a 4-years supply of them.
  Not only am I proposing that we tax bullets used disproportionately 
in crimes, 9 millimeter, .25 and .32 caliber bullets, I also believe we 
must set up a Bullet Death and Injury Control Program within the 
Centers for Disease Control's National Center for Injury Prevention and 
Control. This Center will enhance our knowledge of the distribution and 
status of bullet-related death and injury and subsequently make 
recommendations about the extent and nature of bullet-related violence.
  So that the Center would have substantive information to study and 
analyze, this bill also requires importers and manufacturers of 
ammunition to keep records and submit an annual report to the Bureau of 
Alcohol, Tobacco, and Firearms [BATF] on the disposition of ammunition. 
Currently, importers and manufacturers of ammunition are not required 
to do so.
  Clearly, it will take intense effort on all of our parts to reduce 
violent crime in America. We must confront this epidemic from several 
different range, recognizing that there is no simple solution.
                                 ______
                                 
      By Mr. MOYNIHAN:
  S. 136. A bill to amend chapter 44 of title 18, United States Code, 
to prohibit the manufacture, transfer, or importation of .25 caliber 
and .32 caliber and 9 millimeter ammunition; to the Committee on the 
Judiciary.


                      violent crime reduction act

  S. 137. A bill to tax 9 millimeter, .25 caliber, and .32 caliber 
bullets; to the Committee on Finance.


              real cost of handgun ammunition act of 1997

  Mr. MOYNIHAN. Mr. President, I introduce two bills: the Violent Crime 
Reduction Act of 1997 and the Real Cost of Handgun Ammunition Act of 
1997. Their purposes are to ban or heavily tax .25 caliber, .32 
caliber, and 9 mm ammunition. These calibers of bullets are used 
disproportionately in crime. They are not sporting or hunting rounds, 
but instead are the bullets of

[[Page S516]]

choice for drug dealers and violent felons. Every year they contribute 
overwhelmingly to the pervasive loss of life caused by bullet wounds.
  Today marks the fourth time in as many Congresses that I have 
introduced legislation to ban or tax these pernicious bullets. As the 
terrible gunshot death toll in the United States continues unabated, so 
too does the need for these bills, which, by keeping these bullets out 
of the hands of criminals, would save a significant number of lives.
  The number of Americans killed or wounded each year by bullets 
demonstrates their true cost to American society. Just look at the 
data:
  In 1995, 13,673 people--68.2 percent of all people murdered--were 
murdered by gunshot. In addition, others lost their lives to bullets by 
shooting themselves, either purposefully or accidentally. And although 
no national statistics are kept on bullet-related injuries, studies 
suggest they occur two to five times more frequently than do deaths.
  The lifetime risk of death from homicide in U.S. males is 1 in 164, 
about the same as the risk of death in battle faced by U.S. servicemen 
in the Vietnam war. For black males, the lifetime risk of death from 
homicide is 1 in 28, twice the risk of death in battle faced by Marines 
in Vietnam.
  As noted by Susan Baker and her colleagues in the book ``Epidemiology 
and Health Policy,'' edited by Sol Levine and Abraham Lilienfeld:

       There is a correlation between rates of private ownership 
     of guns and gun-related death rates; guns cause two-thirds of 
     family homicides; and small easily concealed weapons comprise 
     the majority of guns used for homicides, suicides and 
     unintentional death.

  Baker states that:

       * * * these facts of the epidemiology of firearm-related 
     deaths and injuries have important implications. Combined 
     with their lethality, the widespread availability of easily 
     concealed handguns for impetuous use by people who are angry, 
     drunk, or frightened appears to be a major determinant of the 
     high firearm death rate in the United States. Each 
     contributing factor has implications for prevention. 
     Unfortunately, issues related to gun control have evoked 
     such strong sentiments that epidemiologic data are rarely 
     employed to good advantage.

  Strongly held views on both sides of the gun control issue have made 
the subject difficult for epidemiologists. I would suggest that a good 
deal of energy is wasted in this never-ending debate, for gun control 
as we know it misses the point. We ought to focus on the bullets and 
not the guns.
  I would remind the Senate of our experience in controlling epidemics. 
Although the science of epidemiology traces its roots to antiquity--
Hippocrates stressed the importance of considering environmental 
influences on human diseases--the first modern epidemiological study 
was conducted by James Lind in 1747. His efforts led to the eventual 
control of scurvy. It wasn't until 1795 that the British Navy accepted 
his analysis and required limes in shipboard diets. Most solutions are 
not perfect. Disease is rarely eliminated. But might epidemiology be 
applied in the case of bullets to reduce suffering? I believe so.
  In 1854 John Snow and William Farr collected data that clearly showed 
cholera was caused by contaminated drinking water. Snow removed the 
handle of the Broad Street pump in London to prevent people from 
drawing water from this contaminated water source and the disease 
stopped in that population. His observations led to a legislative 
mandate that all London water companies filter their water by 1857. 
Cholera epidemics subsided. Now treatment of sewage prevents cholera 
from entering our rivers and lakes, and the disinfection of drinking 
water makes water distribution systems uninhabitable for cholera 
vibrio, identified by Robert Koch as the causative agent 26 years after 
Snow's study.
  In 1900, Walter Reed identified mosquitos as the carriers of yellow 
fever. Subsequent mosquito control efforts by another U.S. Army doctor, 
William Gorgas, enabled the United States to complete the Panama Canal. 
The French failed because their workers were too sick from yellow fever 
to work. Now that it is known that yellow fever is caused by a virus, 
vaccines are used to eliminate the spread of the disease.
  These pioneering epidemiology success stories showed the world that 
epidemics require an interaction between three things: the host--the 
person who becomes sick or, in the case of bullets, the shooting 
victim); the agent--the cause of sickness, or the bullet); and the 
environment--the setting in which the sickness occurs or, in the case 
of bullets, violent behavior. Interrupt this epidemiological triad and 
you reduce or eliminate disease and injury.
  How might this approach applies to the control of bullet-
related injury and death? Again, we are contemplating something 
different from gun control. There is a precedent here. In the middle of 
this century it was recognized that epidemiology could be applied to 
automobile death and injury. From a governmental perspective, this 
hypothesis was first adopted in 1959, late in the administration of 
Gov. Averell Harriman of New York State. In the 1960 Presidential 
campaign, I drafted a statement on the subject which was released by 
Senator John F. Kennedy as part of a general response to enquiries from 
the American Automobile Association. Then Senator Kennedy stated:

       Traffic accidents constitute one of the greatest, perhaps 
     the greatest of the nation's public health problems. They 
     waste as much as 2 percent of our gross national product 
     every year and bring endless suffering. The new highways will 
     do much to control the rise of the traffic toll, but by 
     themselves they will not reduce it. A great deal more 
     investigation and research is needed. Some of this has 
     already begun in connection with the highway program. It 
     should be extended until highway safety research takes its 
     place as an equal of the many similar programs of health 
     research which the federal government supports.

  Experience in the 1950's and early 1960's prior to passage of the 
Motor Vehicle Safety Act, showed that traffic safety enforcement 
campaigns designed to change human behavior did not improve traffic 
safety. In fact, the death and injury toll mounted. I was Assistant 
Secretary of Labor in the mid-1960's when Congress was developing the 
Motor Vehicle Safety Act, and I was called to testify.
  It was clear to me and others that motor vehicle injuries and deaths 
could not be limited by regulating driver behavior. Nonetheless, we had 
an epidemic on our hands and we needed to do something about it. My 
friend William Haddon, the first Administrator of the National Highway 
Traffic Safety Administration, recognized that automobile fatalities 
were caused not by the initial collision, when the automobile strikes 
some object, but by a second collision, in which energy from the first 
collision is transferred to the interior of the car, causing the driver 
and occupants to strike the steering wheel, dashboard, or other 
structures in the passenger compartment. The second collision is the 
agent of injury to the hosts--the car's occupants.
  Efforts to make automobiles crashworthy follow examples used to 
control infectious disease epidemics. Reduce or eliminate the agent of 
injury. Seatbelts, padded dashboards, and airbags are all specifically 
designed to reduce, if not eliminate, injury caused by the agent of 
automobile injuries, energy transfer to the human body during the 
second collision. In fact, we've done nothing revolutionary. All of the 
technology used to date to make cars crashworthy, including airbags, 
was developed prior to 1970.

  Experience shows the approach worked. Of course, it could have worked 
better, but it worked. Had we been able to totally eliminate the 
agent--the second collision--the cure would have been complete. 
Nonetheless, merely by focusing on simple, achievable remedies, we 
reduced the traffic death and injury epidemic by 30 percent. Motor 
vehicle deaths declined in absolute terms by 13 percent from 1980 to 
1990, despite significant increases in the number of drivers, vehicles, 
and miles driven. Driver behavior is changing, too. National seatbelt 
usage is up dramatically, 60 percent now compared to 14 percent in 
1984. These efforts have resulted in some 15,000 lives saved and 
100,000 injuries avoided each year.
  We can apply that experience to the epidemic of murder and injury 
from bullets. The environment in which these deaths and injuries occur 
is complex. Many factors likely contribute to the rise in bullet-
related injury. Here is an important similarity with the situation we 
faced 25 years ago regarding automobile safety. We found we could not 
easily alter the behavior of millions of drivers, but we could--
easily--

[[Page S517]]

change the behavior of three or four automobile manufacturers. 
Likewise, we simply cannot do much to change the environment--violent 
behavior--in which gun-related injury occurs, nor do we know how. We 
can, however, do something about the agent causing the injury: bullets. 
Ban them. At least the rounds used disproportionately to cause death 
and injury; that is, the .25 caliber, .32 caliber, and 9 millimeter 
bullets. These three rounds account for the ammunition used in about 13 
percent of licensed guns in New York City, yet they are involved in 
one-third of all homicides. They are not, as I have said, useful for 
sport or hunting. They are used for violence. If we fail to confront 
the fact that these rounds are used disproportionately in crimes, 
innocent people will continue to die.
  I have called on Congress during the past several sessions to ban or 
heavily tax these bullets. This would not be the first time that 
Congress has banned a particular round of ammunition. In 1986, it 
passed legislation written by the Senator from New York banning the so-
called ``cop-killer'' bullet. This round, jacketed with tungsten 
alloys, steel, brass, or any number of other metals, had been 
demonstrated to penetrate no fewer than four police flak jackets and an 
additional five Los Angeles County phonebooks at one time. In 1982, the 
New York Police Benevolent Association came to me and asked me to do 
something about the ready availability of these bullets. The result was 
the Law Enforcement Officers Protection Act, which we introduced in 
1982, 1983, and for the last time during the 99th Congress. In the end, 
with the tacit support of the National Rifle Association, the measure 
passed the Congress and was signed by the President as Public Law 99-
408 on August 28, 1986. In the 1994 crime bill, we enacted my amendment 
to broaden the ban to include new thick steel-jacketed armor-piercing 
rounds.

  There are some 220 million firearms in circulation in the United 
States today. They are, in essence, simple machines, and with minimal 
care, remain working for centuries. However, estimates suggest that we 
have only a 4-year supply of bullets. Some 2 billion cartridges are 
used each year. At any given time there are some 7.5 billion rounds in 
factory, commercial, or household inventory.
  In all cases, with the exception of pistol whipping, gun-related 
injuries are caused not by the gun, but by the agents involved in the 
second collision: the bullets. Eliminating the most dangerous rounds 
would not end the problem of handgun killings. But it would reduce it. 
A 30-percent reduction in bullet-related deaths, for instance, would 
save over 10,000 lives each year and prevent up to 50,000 wounds.
  Water treatment efforts to reduce typhoid fever in the United States 
took about 60 years. Slow sand filters were installed in certain cities 
in the 1880's, and water chlorination treatment began in the 1910's. 
The death rate from typhoid in Albany, NY, prior to 1889, when the 
municipal water supply was treated by sand filtration, was about 100 
fatalities per 100,000 people each year. The rate dropped to about 25 
typhoid deaths per year after 1889, and dropped again to about 10 
typhoid deaths per year after 1915, when chlorination was introduced. 
By 1950, the death rate from typhoid fever had dropped to zero. It will 
likely take longer than 60 years to eliminate bullet-related death and 
injury, but we need to start with achievable measures to break the 
deadly interactions between people, bullets, and violent behavior.
  The bills I introduce today would begin the process. They would begin 
to control the problem by banning or taxing those rounds used 
disproportionately in crime--the .25-caliber, .32-caliber, and 9-
millimeter rounds. The bills recognize the epidemic nature of the 
problem, building on findings contained in the June 10, 1992 issue of 
the Journal of the American Medical Association which was devoted 
entirely to the subject of violence, principally violence associated 
with firearms.
  Mr. President, it is time to confront the epidemic of bullet-related 
violence. I urge my colleagues to support these bills.
                                 ______
                                 
      By Mr. DASCHLE (for himself, Mr. Hollings, Mr. Kennedy, Ms. 
        Mikulski, Mr. Levin, Ms. Moseley-Braun, Mrs. Boxer, Mrs. 
        Feinstein, Mr. Inouye, Mrs. Murray, Mr. Johnson, Mr. Bryan, Mr. 
        Sarbanes, Mr. Ford, and Mr. Lautenberg):
  S. 143. A bill to amend the Public Health Service Act and Employee 
Retirement Income Security Act of 1974 to require that group and 
individual health insurance coverage and group health plans provide 
coverage for a minimum hospital stay for mastectomies and lymph node 
dissections performed for the treatment of breast cancer; to the 
Committee on Labor and Human Resources.


            the breast cancer patient protection act of 1997

  Mr. DASCHLE. Mr. President, today Senator Hollings and I are 
introducing the Breast Cancer Patient Protection Act of 1997. I want to 
thank Senators Kennedy, Milulski, Moseley-Braun, Boxer, Feinstein, 
Levin, Inouye, Murray, Johnson, Bryan, Sarbanes, Ford and Landrieu, for 
joining us as original cosponsors. We welcome the support of all of our 
colleagues, on both sides of the aisle, for this important legislation. 
Our bill is a companion to H.R. 135, which was introduced in the House 
of Representatives by Representatives DeLauro, Dingell, and Roukema on 
January 7, 1997.
  I bring this bill to the Senate both to put an end to the relatively 
new practice of forcing women to have mastectomies on an outpatient 
basis and to begin a discussion on how to develop and maintain policies 
that protect patients and ensure continued access to affordable high 
quality medical care.
  Every 3 minutes another woman is diagnosed with breast cancer. This 
year alone, more than 180,000 women will find out they have breast 
cancer. This disease strikes at the core of American families, taking 
our mothers, wives, sisters, and daughters on an often terrifying tour 
of our health care system.
  The Breast Cancer Patient Protection Act seeks to make the journey 
less worrisome by requiring insurance companies to provide at least a 
minimum amount of inpatient hospital care for patients undergoing 
mastectomies or lymph node dissections for the treatment of breast 
cancer. The language is modeled after last year's carefully drafted and 
unanimously supported compromise agreement that established a similar 
policy to end the practice of drive-through deliveries.
  The bill was designed in part to counter a consulting firm's 
recommendation to its insurance company clients that both mastectomies 
and lymph node dissections be performed on an outpatients basis. As a 
result, some surgeons have been forced to send patients home still 
groggy from anesthesia and with drainage tubes in place. Yet, with few 
exceptions, hospitalization following major breast cancer surgery is 
necessary not only to control pain and manage postoperative care, but 
also to provide a supportive environment for women who have undergone 
an undeniably traumatic and challenging surgery.
  Under this targeted legislation, women would be guaranteed at least 
48 hours of impatient care following a mastectomy, and a minimum of 24 
hours following lymph node dissection for the treatment of breast 
cancer. patients and their physicians--not insurance companies--could 
jointly decide whether it is appropriate for the patient to leave the 
hospital earlier. These timeframes, which were designed in consultation 
with surgeons who specialize in this area, reflect the minimum amount 
of inpatient care thought to be necessary following these procedures. 
It is our hope that insurers would choose to make an investment in the 
future health of their enrollees by allowing coverage for as long as 
the provider determines to be medically appropriate to ensure a proper 
recovery.
  I would also like to call to your attention Senator Kennedy's 
forthcoming bill that will require insurance companies who cover 
mastectomies to also cover reconstruction surgery. Too often, women and 
their physicians are faced with having to justify to the insurance 
carrier the clear need for reconstruction surgery following amputation 
of a diseased breast. This is wrong. Women who have undergone difficult 
and disfiguring surgery for

[[Page S518]]

breast cancer should not have to undergo additional hardship while 
simply seeking to made physically whole again. Senator Kennedy's bill, 
which I will cosponsor, will address this important issue.
  While these bills respond to ill-conceived policies that we believe 
have dangerous implications for women with breast cancer, let them 
serve as reminders of our broken health care system. Addressing health 
insurance problems relating to quality of care and patient protection 
issues on a piecemeal basis may be our only way to accomplish 
meaningful reforms in this increasingly important area.
  With one in eight women likely to develop breast cancer, it is 
increasingly likely that all of our families will be in some way 
affected by this devastating disease. Let us take this small step to 
ensure the experience is not aggravated by unnecessarily difficult 
encounters with the companies that have agreed under contract to stand 
by us not only in health but also in sickness.
  This bill is strongly supported by the National Breast Cancer 
Coalition, the National Alliance of Breast Cancer Organizations, the 
American College of Surgeons, the American Society of Plastic and 
Reconstructive Surgeons, the Y-Me National Breast Cancer Organization, 
the American Cancer Society, Families USA, and the Women's Legal 
Defense Fund.
  Together, I am hopeful that we can put critical health care decisions 
back in the hands of breast cancer patients and their physicians.
  Mr. President, I ask that the full text of the Breast Cancer Patient 
Protection Act be inserted following may remarks.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 143

       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 ``Breast Cancer Patient 
     Protection Act of 1997''.

     SEC. 2. COVERAGE OF MINIMUM HOSPITAL STAY FOR CERTAIN BREAST 
                   CANCER TREATMENT.

       (a) Group Health Plans.--
       (1) Public health service act amendments.--
       (A) In general.--Subpart 2 of part A of title XXVII of the 
     Public Health Service Act, as amended by section 703(a) of 
     Public Law 104-204, is amended by adding at the end the 
     following new section:

     ``SEC. 2706. STANDARDS RELATING TO BENEFITS FOR CERTAIN 
                   BREAST CANCER TREATMENT.

       ``(a) Requirements for Minimum Hospital Stay Following 
     Mastectomy or Lymph Node Dissection.--
       ``(1) In general.--A group health plan, and a health 
     insurance issuer offering group health insurance coverage, 
     may not--
       ``(A) except as provided in paragraph (2)--
       ``(i) restrict benefits for any hospital length of stay in 
     connection with a mastectomy for the treatment of breast 
     cancer to less than 48 hours, or
       ``(ii) restrict benefits for any hospital length of stay in 
     connection with a lymph node dissection for the treatment of 
     breast cancer to less than 24 hours, or
       ``(B) require that a provider obtain authorization from the 
     plan or the issuer for prescribing any length of stay 
     required under subparagraph (A) (without regard to paragraph 
     (2)).
       ``(2) Exception.--Paragraph (1)(A) shall not apply in 
     connection with any group health plan or health insurance 
     issuer in any case in which the decision to discharge the 
     woman involved prior to the expiration of the minimum length 
     of stay otherwise required under paragraph (1)(A) is made by 
     an attending provider in consultation with the woman.
       ``(b) Prohibitions.--A group health plan, and a health 
     insurance issuer offering group health insurance coverage in 
     connection with a group health plan, may not--
       ``(1) deny to a woman eligibility, or continued 
     eligibility, to enroll or to renew coverage under the terms 
     of the plan, solely for the purpose of avoiding the 
     requirements of this section;
       ``(2) provide monetary payments or rebates to women to 
     encourage such women to accept less than the minimum 
     protections available under this section;
       ``(3) penalize or otherwise reduce or limit the 
     reimbursement of an attending provider because such provider 
     provided care to an individual participant or beneficiary in 
     accordance with this section;
       ``(4) provide incentives (monetary or otherwise) to an 
     attending provider to induce such provider to provide care to 
     an individual participant or beneficiary in a manner 
     inconsistent with this section; or
       ``(5) subject to subsection (c)(3), restrict benefits for 
     any portion of a period within a hospital length of stay 
     required under subsection (a) in a manner which is less 
     favorable than the benefits provided for any preceding 
     portion of such stay.
       ``(c) Rules of Construction.--
       ``(1) Nothing in this section shall be construed to require 
     a woman who is a participant or beneficiary--
       ``(A) to undergo a mastectomy or lymph node dissection in a 
     hospital; or
       ``(B) to stay in the hospital for a fixed period of time 
     following a mastectomy or lymph node dissection.
       ``(2) This section shall not apply with respect to any 
     group health plan, or any group health insurance coverage 
     offered by a health insurance issuer, which does not provide 
     benefits for hospital lengths of stay in connection with a 
     mastectomy or lymph node dissection for the treatment of 
     breast cancer.
       ``(3) Nothing in this section shall be construed as 
     preventing a group health plan or issuer from imposing 
     deductibles, coinsurance, or other cost-sharing in relation 
     to benefits for hospital lengths of stay in connection with a 
     mastectomy or lymph node dissection for the treatment of 
     breast cancer under the plan (or under health insurance 
     coverage offered in connection with a group health plan), 
     except that such coinsurance or other cost-sharing for any 
     portion of a period within a hospital length of stay required 
     under subsection (a) may not be greater than such coinsurance 
     or cost-sharing for any preceding portion of such stay.
       ``(d) Notice.--A group health plan under this part shall 
     comply with the notice requirement under section 713(d) of 
     the Employee Retirement Income Security Act of 1974 with 
     respect to the requirements of this section as if such 
     section applied to such plan.
       ``(e) Level and Type of Reimbursements.--Nothing in this 
     section shall be construed to prevent a group health plan or 
     a health insurance issuer offering group health insurance 
     coverage from negotiating the level and type of reimbursement 
     with a provider for care provided in accordance with this 
     section.
       ``(f) Preemption; Exception for Health Insurance Coverage 
     in Certain States.--
       ``(1) In general.--The requirements of this section shall 
     not apply with respect to health insurance coverage if there 
     is a State law (as defined in section 2723(d)(1)) for a State 
     that regulates such coverage that is described in any of the 
     following subparagraphs:
       ``(A) Such State law requires such coverage to provide for 
     at least a 48-hour hospital length of stay following a 
     mastectomy performed for treatment of breast cancer and at 
     least a 24-hour hospital length of stay following a lymph 
     node dissection for treatment of breast cancer.
       ``(B) Such State law requires, in connection with such 
     coverage for surgical treatment of breast cancer, that the 
     hospital length of stay for such care is left to the decision 
     of (or required to be made by) the attending provider in 
     consultation with the woman involved.
       ``(2) Construction.--Section 2723(a)(1) shall not be 
     construed as superseding a State law described in paragraph 
     (1).''.
       (B) Conforming amendment.--Section 2723(c) of such Act (42 
     U.S.C. 300gg-23(c)), as amended by section 604(b)(2) of 
     Public Law 104-204, is amended by striking ``section 2704'' 
     and inserting ``sections 2704 and 2706''.
       (2) ERISA amendments.--
       (A) In general.--Subpart B of part 7 of subtitle B of title 
     I of the Employee Retirement Income Security Act of 1974, as 
     amended by section 702(a) of Public Law 104-204, is amended 
     by adding at the end the following new section:

     ``SEC. 713. STANDARDS RELATING TO BENEFITS FOR CERTAIN BREAST 
                   CANCER TREATMENT.

       ``(a) Requirements for Minimum Hospital Stay Following 
     Mastectomy or Lymph Node Dissection.--
       ``(1) In general.--A group health plan, and a health 
     insurance issuer offering group health insurance coverage, 
     may not--
       ``(A) except as provided in paragraph (2)--
       ``(i) restrict benefits for any hospital length of stay in 
     connection with a mastectomy for the treatment of breast 
     cancer to less than 48 hours, or
       ``(ii) restrict benefits for any hospital length of stay in 
     connection with a lymph node dissection for the treatment of 
     breast cancer to less than 24 hours, or
       ``(B) require that a provider obtain authorization from the 
     plan or the issuer for prescribing any length of stay 
     required under subparagraph (A) (without regard to paragraph 
     (2)).
       ``(2) Exception.--Paragraph (1)(A) shall not apply in 
     connection with any group health plan or health insurance 
     issuer in any case in which the decision to discharge the 
     woman involved prior to the expiration of the minimum length 
     of stay otherwise required under paragraph (1)(A) is made by 
     an attending provider in consultation with the woman.
       ``(b) Prohibitions.--A group health plan, and a health 
     insurance issuer offering group health insurance coverage in 
     connection with a group health plan, may not--
       ``(1) deny to a woman eligibility, or continued 
     eligibility, to enroll or to renew coverage under the terms 
     of the plan, solely for the purpose of avoiding the 
     requirements of this section;
       ``(2) provide monetary payments or rebates to women to 
     encourage such women to accept less than the minimum 
     protections available under this section;

[[Page S519]]

       ``(3) penalize or otherwise reduce or limit the 
     reimbursement of an attending provider because such provider 
     provided care to an individual participant or beneficiary in 
     accordance with this section;
       ``(4) provide incentives (monetary or otherwise) to an 
     attending provider to induce such provider to provide care to 
     an individual participant or beneficiary in a manner 
     inconsistent with this section; or
       ``(5) subject to subsection (c)(3), restrict benefits for 
     any portion of a period within a hospital length of stay 
     required under subsection (a) in a manner which is less 
     favorable than the benefits provided for any preceding 
     portion of such stay.
       ``(c) Rules of Construction.--
       ``(1) Nothing in this section shall be construed to require 
     a woman who is a participant or beneficiary--
       ``(A) to undergo a mastectomy or lymph node dissection in a 
     hospital; or
       ``(B) to stay in the hospital for a fixed period of time 
     following a mastectomy or lymph node dissection.
       ``(2) This section shall not apply with respect to any 
     group health plan, or any group health insurance coverage 
     offered by a health insurance issuer, which does not provide 
     benefits for hospital lengths of stay in connection with a 
     mastectomy or lymph node dissection for the treatment of 
     breast cancer.
       ``(3) Nothing in this section shall be construed as 
     preventing a group health plan or issuer from imposing 
     deductibles, coinsurance, or other cost-sharing in relation 
     to benefits for hospital lengths of stay in connection with a 
     mastectomy or lymph node dissection for the treatment of 
     breast cancer under the plan (or under health insurance 
     coverage offered in connection with a group health plan), 
     except that such coinsurance or other cost-sharing for any 
     portion of a period within a hospital length of stay required 
     under subsection (a) may not be greater than such coinsurance 
     or cost-sharing for any preceding portion of such stay.
       ``(d) Notice under Group Health Plan.--The imposition of 
     the requirements of this section shall be treated as a 
     material modification in the terms of the plan described in 
     section 102(a)(1), for purposes of assuring notice of such 
     requirements under the plan; except that the summary 
     description required to be provided under the last sentence 
     of section 104(b)(1) with respect to such modification shall 
     be provided by not later than 60 days after the first day of 
     the first plan year in which such requirements apply.
       ``(e) Level and Type of Reimbursements.--Nothing in this 
     section shall be construed to prevent a group health plan or 
     a health insurance issuer offering group health insurance 
     coverage from negotiating the level and type of reimbursement 
     with a provider for care provided in accordance with this 
     section.
       ``(f) Preemption; Exception for Health Insurance Coverage 
     in Certain States.--
       ``(1) In general.--The requirements of this section shall 
     not apply with respect to health insurance coverage if there 
     is a State law (as defined in section 731(d)(1)) for a State 
     that regulates such coverage that is described in any of the 
     following subparagraphs:
       ``(A) Such State law requires such coverage to provide for 
     at least a 48-hour hospital length of stay following a 
     mastectomy performed for treatment of breast cancer and at 
     least a 24-hour hospital length of stay following a lymph 
     node dissection for treatment of breast cancer.
       ``(B) Such State law requires, in connection with such 
     coverage for surgical treatment of breast cancer, that the 
     hospital length of stay for such care is left to the decision 
     of (or required to be made by) the attending provider in 
     consultation with the woman involved.
       ``(2) Construction.--Section 731(a)(1) shall not be 
     construed as superseding a State law described in paragraph 
     (1).''.
       (B) Conforming amendments.--
       (i) Section 731(c) of such Act (29 U.S.C. 1191(c)), as 
     amended by section 603(b)(1) of Public Law 104-204, is 
     amended by striking ``section 711'' and inserting ``sections 
     711 and 713''.
       (ii) Section 732(a) of such Act (29 U.S.C. 1191a(a)), as 
     amended by section 603(b)(2) of Public Law 104-204, is 
     amended by striking ``section 711'' and inserting ``sections 
     711 and 713''.
       (iii) The table of contents in section 1 of such Act is 
     amended by inserting after the item relating to section 712 
     the following new item:

``Sec. 713. Standards relating to benefits for certain breast cancer 
              treatment.''.

       (b) Individual Health Insurance.--
       (1) In general.--Part B of title XXVII of the Public Health 
     Service Act, as amended by section 605(a) of Public Law 104-
     204, is amended by inserting after section 2751 the following 
     new section:

     ``SEC. 2752. STANDARDS RELATING TO BENEFITS FOR CERTAIN 
                   BREAST CANCER TREATMENT.

       ``(a) In General.--The provisions of section 2706 (other 
     than subsection (d)) shall apply to health insurance coverage 
     offered by a health insurance issuer in the individual market 
     in the same manner as it applies to health insurance coverage 
     offered by a health insurance issuer in connection with a 
     group health plan in the small or large group market.
       ``(b) Notice.--A health insurance issuer under this part 
     shall comply with the notice requirement under section 713(d) 
     of the Employee Retirement Income Security Act of 1974 with 
     respect to the requirements referred to in subsection (a) as 
     if such section applied to such issuer and such issuer were a 
     group health plan.
       ``(c) Preemption; Exception for Health Insurance Coverage 
     in Certain States.--
       ``(1) In general.--The requirements of this section shall 
     not apply with respect to health insurance coverage if there 
     is a State law (as defined in section 2723(d)(1)) for a State 
     that regulates such coverage that is described in any of the 
     following subparagraphs:
       ``(A) Such State law requires such coverage to provide for 
     at least a 48-hour hospital length of stay following a 
     mastectomy performed for treatment of breast cancer and at 
     least a 24-hour hospital length of stay following a lymph 
     node dissection for treatment of breast cancer.
       ``(B) Such State law requires, in connection with such 
     coverage for surgical treatment of breast cancer, that the 
     hospital length of stay for such care is left to the decision 
     of (or required to be made by) the attending provider in 
     consultation with the woman involved.
       ``(2) Construction.--Section 2762(a) shall not be construed 
     as superseding a State law described in paragraph (1).''.
       (2) Conforming amendment.--Section 2762(b)(2) of such Act 
     (42 U.S.C. 300gg-62(b)(2)), as added by section 605(b)(3)(B) 
     of Public Law 104-204, is amended by striking ``section 
     2751'' and inserting ``sections 2751 and 2752''.
       (c) Effective Dates.--
       (1) Group market.--The amendments made by subsection (a) 
     shall apply with respect to group health plans for plan years 
     beginning on or after January 1, 1998.
       (2) Individual market.--The amendment made by subsection 
     (b) shall apply with respect to health insurance coverage 
     offered, sold, issued, renewed, in effect, or operated in the 
     individual market on or after such date.

  Ms. MOSELEY-BRAUN. Mr. President, I am pleased to join the list of 
cosponsors of the Breast Cancer Patient Protection Act of 1997. I think 
this act is vitally important to prevent health providers from cutting 
costs at the expense of women's health.
  Breast cancer is the most common cancer among women. This year alone 
approximately 184,300 women will be diagnosed with breast cancer while 
another 44,300 women will die of the disease. Breast cancer is a 
disease that will affect one in every eight women. With statistics like 
these, it is possible that every family in America will feel the 
effects of this disease.
  This act would ensure that health insurers which already provide for 
the treatment of breast cancer cover a minimum hospital stay of 48 
hours for patients undergoing mastectomies and 24 hours for those 
undergoing lymph node removal if she and her doctor choose. I am 
cosponsoring this bill to ensure that breast cancer surgery is not 
relegated to routine outpatient surgery.
  The average hospital stay of a breast cancer patient has dwindled 
from 4-6 to 2-3 days and currently some patients are sent home a few 
hours after their operation. Both the American College of Surgeons and 
the American Medical Association believe that most patients require 
hospital stays that are longer than the current trends. In addition, 
accepted practice has shown that breast cancer surgery patients require 
at least 48 hours in the hospital after a mastectomy and 24 hours' 
hospital stay after a lymph node removal.
  The important aspect of this matter is that women are being sent home 
after breast cancer surgery before they are neither physically nor 
emotionally ready to be released from the hospital. The reason for 
sending these women home has nothing to do with medical standards of 
care and everything to do with the bottom line. I support the Breast 
Cancer Patient Protection Act because it will allow the decisions on 
how long to stay in the hospital to be determined by the patient and 
her doctor. If it is determined that the patient is not in need of a 
48-hour stay, the doctor may release the patient from hospital care. 
The crucial distinction between this scenario and what is currently 
being practiced is that insurers will not be able to force someone out 
on a purely arbitrary basis. Decisions will be made based on the needs 
of the patient rather than the fiscal concerns of the insurer.
  This legislation enjoys the support of the National Breast Cancer 
Coalition, the National Association of Breast Care Organizations, the 
Y-me National Breast Cancer Organization, the Families USA foundation, 
the Women's

[[Page S520]]

Legal Defense Fund, and the American Society of Plastic and 
Reconstructive Surgeons.
  I have given careful consideration to the issues involved and believe 
that this act will ensure that American women receive the health care 
treatment and coverage that they are entitled to. I strongly encourage 
all of my colleagues to endorse this effort.
  Mr. FORD. Mr. President, I rise in support of the Breast Cancer 
Protection Act introduced earlier today by my friend the Democratic 
Leader, Senator Tom Daschle. I am pleased to be an original cosponsor 
of this important legislation to provide women with breast cancer the 
best care and health coverage available.
  I come here not as an authority on this subject, but as one of the 
many Americans who have been touched by this disease. My own daughter 
is a breast cancer survivor, as is a former staff member. 
Unfortunately, another member of my staff for 18 years, Martha Moloney, 
was not so lucky. After a long battle with breast cancer, she died in 
November 1995.
  It is for these women, and the thousands of others affected by this 
disease, that I lend my support to this effort to ensure all women with 
breast cancer are treated with dignity and respect. Rather than being 
rushed out the door hours after a breast cancer surgery, women deserve 
to consult with their physician to determine the appropriate hospital 
stay. That is why I am supporting the Breast Cancer Protection Act to 
provide a minimum hospital stay of 48 hours for mastectomies and 24 
hours for lymph node removals.
  Over the past 10 years, the length of hospitalization for patients 
undergoing breast cancer surgery has decreased significantly. Today, 
hospitalization time for patients undergoing mastectomies has dwindled 
to a mere 2-3 days, down from 4-6 days, 10 years ago.
  Under pressure to cut costs, surgeons have been instructed by managed 
care companies to perform lymph node dissections and even mastectomies 
as outpatient surgery. I have heard stories about companies that 
require patients to be sent home a few hours after their surgery, even 
though they may be in severe pain, groggy from anesthesia, and have 
surgical tubes still in place. Some companies have even denied women 
hospitalization on the day of their surgery. These situations place 
doctors in the difficult position of having to choose between 
delivering the quality care their patients deserve and a penalty for 
failing to follow an insurer's guidelines.
  Mr. President, women with breast cancer suffer not only from physical 
pain but also emotional and psychological trauma. They should not have 
to worry whether their physician is struggling to comply with an 
arbitrary length of stay guideline or their own best health interests. 
The Breast Cancer Protection Act will help ease their anxiety by 
ensuring that crucial health decisions are left in the hands of doctors 
and patients, not accountants.
  I am pleased to support this important effort to provide women with 
breast cancer the thorough health care coverage they deserve.
  Mr. Johnson. Mr. President, I am proud and grateful to be here today 
as a co-sponsor of The Beast Cancer Patient Protection Act of 1997. I 
am proud because this bill is the right thing to do--it's a common 
sense measure that protects women undergoing breast cancer treatments. 
And I am grateful because, as the husband of a woman who has suffered 
from breast cancer, I know that every step makes a difference in 
preserving and protecting the quality of life for those afflicted with 
this disease.
  As health care costs spiral out of control, more and more decisions 
are being made based on the bottom-line rather than on the needs of the 
patient. A twenty-four hour stay is not always long enough for a mother 
and newborn child. And a twenty-four hour stay is often not long enough 
for a woman who has undergone surgical treatment for breast cancer.
  I know this not just from literature or fact sheets or discussions 
with health care professionals. I know that twenty-four hours isn't 
long enough for everyone because I helped my wife home from the 
hospital after her cancer surgery. With tubes running everywhere, we 
brought her into our home twenty-two hours after her surgery. Many 
families aren't equipped to give the care needed. And many women aren't 
well enough to give themselves the care needed. An additional twenty-
four hours in the hospital can decrease the risk of infection, allow 
women to rest more comfortably, and ensure that any crucial health care 
decision is being made in the best possible environment.
  My wife and I are not alone. Nearly one out of every eight women will 
develop breast cancer. Approximately, 185,000 women will be diagnosed 
with the disease this year. Sadly, more than 44,000 women will also die 
from this disease in the next 365 days. The numbers of those afflicted 
with this disease must decrease, but the options must increase.
  These are our grandmothers, our mothers, our daughters, our sisters, 
our wives. They deserve the best that we can give.
  This bill does not do it all, but, as we look for a cure and other 
innovative treatments, it is part of a package to ease the pain of this 
invasive disease. I will do all that I can to make sure this bill 
becomes law.
  Mr. HOLLINGS. Mr. President, first I want to thank my colleague, 
Senator Daschle, for introducing this legislation in the Senate. Also, 
I must thank Congresswoman Rosa DeLauro for taking the lead in the 
House in protecting mastectomy patients from new Health Management 
Organization [HMO] payment guidelines. Today, one in eight American 
women develop breast cancer, and they and their families will thank her 
when the bipartisan members of this Congress act to ensure that medical 
decisions for mastectomy patients are made by the doctors and patients 
involved in the case, rather than by HMO's or insurers.
  When I notified one constituent that I would help introduce 
legislation to guarantee women at least 48 hours of hospital coverage 
for mastectomies and 24 hours for lymph node removals, he asked ``what 
have we come to when we need legislation like this?'' What have we come 
to, indeed.
  Most Senators are not doctors, but common sense dictates that 
mastectomy is not generally an outpatient procedure. Not only the pain, 
but also the need to tend drainage tubes and the psychological shock 
usually require at least two days of medical care and adjustment, and 
often more. Unfortunately, managed care payment rules have led to cases 
where women are forced out of the hospital on the same day as their 
mastectomies, before spending a night in the hospital.
  These extreme cases are part of a nationwide reduction in hospital 
stays for women with breast cancer. Outpatient mastectomies have risen 
from less than two percent of mastectomies 5 years ago to nearly 8 
percent now. Mastectomy patients overall now spend only half of the 
time in the hospital that they would have ten years ago--2-3 days 
rather than 4-6. Medical experts know that sometimes a shorter stay is 
appropriate or even requested by a patient who wants to get home and 
has access to adequate follow-up care. But we obviously need to take 
note of increased pressure to send women home early. Medical and 
personal considerations between the patient and attending physician, 
and not HMO financial rules, should be the determining factor.
  I am still collecting data in my home State of South Carolina, which 
is among the States least affected so far by HMO's. With our more 
personalized medicine, we have not seen the same-day discharges without 
an overnight stay. But South Carolina has a relatively high number of 
mastectomies and it appears that many South Carolina women stay 21 
hours, or 23 hours in the hospital after their surgery. Again, 
something is wrong when patients tell me that they felt like the stay 
was too short, the newfound pain was still there, and the medical 
practitioners speak in terms of 21 or 23 hours. Obviously, this is 
someone's attempt to call a procedure ``outpatient'' by not covering 24 
hours in the hospital, and it represents a more subtle affect of 
insurance payment rules on medicine which this Congress should 
consider.
  Mr. President, I will also join my colleagues, Senator D'Amato and 
Senator Snowe, in introducing slightly broader legislation. I am 
heartened that so many Senators of both parties are anxious to pass 
legislation in this area and

[[Page S521]]

I commend their bipartisanship. I invite all of my colleagues to join 
these efforts to make sure in this Congress that doctors and breast 
cancer patients, rather than insurers, determine the best length of 
stay in the hospital for each mastectomy case.
  Mr. KENNEDY. Mr. President, I join Senator Daschle in introducing 
legislation to ban the abusive practice of drive-by" mastectomies. This 
legislation will respond to the concerns of women throughout the 
country who fear that, in dealing with the cruel disease of breast 
cancer, their health plan's bottom line will take precedence over their 
health needs. This legislation will require health insurers to provide 
coverage for a minimum hospital stay for mastectomies and lymph node 
dissections performed for the treatment of breast cancer. The 
legislation allows outpatient surgery when the patient and the doctor 
decide that a hospital stay is not necessary, but it prohibits a health 
plan from forcing patients to go home on the same day that they have 
these major surgical procedures.
  The Daschle bill is a companion to bipartisan legislation (H.R.135) 
introduced by Representative Rosa DeLauro in the House of 
Representatives. It will ban an abusive practice that even the health 
plans themselves have recognized should not be tolerated.
  This legislation is of major importance to millions of women. Breast 
cancer is the most common solid tissue cancer among women. In 1996, 
approximately 184,000 new cases of invasive breast cancer were 
diagnosed. It is now the leading cause of death in women between the 
ages of 40 and 55.
  This legislation is supported by the National Breast Cancer Coalition 
the National Association of Breast Care Organizations, the Y-me 
National Breast Cancer Organization, the Families USA Foundation, the 
Women's Legal Defense Fund, and the American Society of Plastic and 
Reconstructive Surgeons. It prohibits plans from requiring hospital 
stays shorter than 48 hours for patients after mastectomy and 24 hours 
after lymph node dissection.
  Decisions about the need for hospital care after such surgery should 
be made by a woman and her doctor. The social, medical, geographic and 
health issues unique to each person must be considered in deciding the 
required amount of in-hospital care. In certain circumstances and with 
proper support, it may be possible for some women to undergo these 
procedures with a shorter hospital stay, or even on occasion as an 
outpatient. Each circumstance is unique.
  This bill preserves every woman's ability to avail herself of needed 
services without fear of penalty or prejudice. It does not require a 
stay in the hospital for any fixed period of time. Rather, it 
guarantees that hospital care will be provided when it is needed.
  Last year, Congress voted overwhelmingly to ban the practice of 
health plans forcing excessively short stays after delivery of a baby. 
This legislation is a further needed step to protect consumers against 
a particularly abusive practice, and I look forward to its early 
bipartisan approval by Congress.
                                 ______
                                 
      By Mr. MOYNIHAN (for himself and Mr. Kerrey):
  S. 144. A bill to establish the Commission to Study the Federal 
Statistical System, and for other purposes; to the Committee on 
Governmental Affairs.


                 federal statistical system legislation

  Mr. MOYNIHAN. Mr. President, I rise today to reintroduce, along with 
Senator Kerrey of Nebraska, legislation to establish a commission to 
study the Federal Statistical System.
  Statistics are part of our constitutional arrangement, which provides 
for a decennial census that, among other purposes, is the basis for 
apportionment of membership in the House of Representatives. I quote 
from Article I, Section I:

       * * * enumeration shall be made within three Years after 
     the first meeting of the Congress of the United States, and 
     within every subsequent Term of ten Years, in such Manner as 
     they shall by Law direct.

  But, while the Constitution directed that there be a census, there 
was, initially, no Census Bureau. The earliest censuses were conducted 
by U.S. marshals. Later on, statistical bureaus in State governments 
collected the data, with a Superintendent of the Census overseeing from 
Washington. It was not until 1902 that a permanent Bureau of the Census 
was created by the Congress, housed initially in the Interior 
Department. In 1903 the Bureau was transferred to the newly established 
Department of Commerce and Labor.
  The Statistics of Income Division of the Internal Revenue Service, 
which was originally an independent body, began collecting data in 
1866. It too was transferred to the new Department of Commerce and 
Labor in 1903, but then was put in the Treasury Department in 1913 
following ratification of the 16th amendment, which gave Congress the 
power to impose an income tax.
  A Bureau of Labor, created in 1884, was also initially in the 
Interior Department. The first Commissioner, appointed in 1885, was 
Colonel Carroll D. Wright, a distinguished Civil War veteran of the New 
Hampshire Volunteers. A self-trained social scientist, Colonel Wright 
pioneered techniques for collecting and analyzing survey data on 
income, prices, and wages. He had previously served as chief of the 
Massachusetts Bureau of Statistics, a post he held for 15 years, and in 
that capacity had supervised the 1880 Federal census in Massachusetts.
  In 1888, the Bureau of Labor became an independent agency. In 1903 it 
was once again made a Bureau, joining other statistical agencies in the 
Department of Commerce and Labor. When a new Department of Labor was 
formed in 1913, giving labor an independent voice--as labor was 
``removed'' from the Department of Commerce and Labor--what we now know 
as the Bureau of Labor Statistics was transferred to it.
  And so it went. Statistical agencies sprung up as needed. And they 
moved back and forth as new executive departments were formed. Today, 
some 89 different organizations in the Federal Government comprise 
parts of our national statistical infrastructure. Eleven of these 
organizations have as their primary function the generation of data. 
These 11 organizations are:

------------------------------------------------------------------------
                                                                 Date   
               Agency                      Department        Established
------------------------------------------------------------------------
National Agricultural Statistical    Agriculture...........       1863  
 Service.                                                               
Statistics of Income Division, IRS.  Treasury..............       1866  
Economic Research Service..........  Agriculture...........       1867  
National Center for Education        Education.............       1867  
 Statistics.                                                            
Bureau of Labor Statistics.........  Labor.................       1884  
Bureau of the Census...............  Commerce..............       1902  
Bureau of Economic Analysis........  Commerce..............       1912  
National Center for Health           Health and Human             1912  
 Statistics.                          Services.                         
Bureau of Justice Statistics.......  Justice...............       1968  
Energy Information Administration..  Energy................       1974  
Bureau of Transportation Statistics  Transportation........       1991  
------------------------------------------------------------------------

                          need for legislation

  President Kennedy once said:

       Democracy is a difficult kind of government. It requires 
     the highest qualities of self-discipline, restraint, a 
     willingness to make commitments and sacrifices for the 
     general interest, and also it requires knowledge.

  That knowledge often comes from accurate statistics. You cannot begin 
to solve a problem until you can measure it.
  This legislation would require the new commission to conduct a 
comprehensive examination of our current statistical system and focus 
particularly on the agencies that produce data as their primary 
product--agencies such as the Bureau of Economic Analysis [BEA] and the 
Bureau of Labor Statistics [BLS].
  In September 1996, prior to the first introduction of this bill, I 
received a letter from nine former chairmen of the Council of Economic 
Advisers [CEA] endorsing this legislation. Excluding the two most 
recent chairs, who were still serving in the Clinton administration, 
the signatories include virtually every living chair of the CEA. While 
acknowledging that the United States ``possesses a first-class 
statistical system,'' these former chairmen remind us that ``problems 
periodically arise under the current system of widely scattered 
responsibilities.'' They conclude as follows:

       Without at all prejudging the appropriate measures to deal 
     with these difficult problems, we believe that a 
     thoroughgoing review by a highly qualified and bipartisan 
     Commission as provided in your Bill has great promise of 
     showing the way to major improvements.

  The letter is signed by: Michael J. Boskin, Martin Feldstein, Alan 
Greenspan, Paul W. McCracken, Raymond J.

[[Page S522]]

Saulnier, Charles L. Schultze, Beryl W. Sprinkel, Herbert Stein, and 
Murray Weidenbaum.
  I ask unanimous consent that the full text of this letter be printed 
in the Record following my statement.
  It happens that this Senator's association with the statistical 
system in the executive branch began over three decades ago. I was 
Assistant Secretary of Labor for Policy and Planning in the 
administration of President John F. Kennedy. This was a new position in 
which I was nominally responsible for, inter alia, the Bureau of Labor 
Statistics. I say nominally out of respect for the independence of that 
venerable institution, which as I noted earlier long predated the 
Department of Labor itself. The then-Commissioner of the BLS, Ewan 
Clague, could not have been more friendly and supportive. And so were 
the statisticians, who undertook to teach me to the extent I was 
teachable. They even shared professional confidences. And so it was 
that I came to have some familiarity with the field.
  For example, we had just received a report on price indexes from a 
committee led by George J. Stigler, who later won a Nobel prize in 
economics.
  The Committee stressed the importance of accurate and timely 
statistics, noting that:

       The periodic revision of price indexes, and the almost 
     continuous alterations in details of their calculation, are 
     essential if the indexes are to serve their primary function 
     of measuring the average movements of prices.

  And while the recently released Final Report of the Advisory 
Commission To Study The Consumer Index (The Boskin Commission) focused 
primarily on the extent to which changes in the CPI overstate 
inflation, the Boskin Commission also addressed issues related to the 
effectiveness of Federal statistical programs and recommended that:

       Congress should enact the legislation necessary for the 
     Department of Commerce and Labor to share information in the 
     interest of improving accuracy and timeliness of economic 
     statistics and to reduce the resources consumed in their 
     development and production.

  Our Government officials are not oblivious to the growing need for 
reform. In fact, Under Secretary of Commerce for Economic Affairs 
Everett M. Ehrlich has been most forthcoming on this point. In a 
November 24, 1996 New York Times article, Under Secretary Ehrlich 
states:

       Our statistical system is failing to keep track with a 
     rapidly changing economy. The data we provide give us a good 
     picture of where we are in the business cycle but risk 
     misrepresenting such long-term phenomena as inflation, 
     productivity growth and the economy's changing composition.

  To address this problem, Under Secretary Ehrlich has proposed a 3-
year program to improve the Department of Commerce's measurement of 
statistics.
  There is, of course, a long history of attempts to reform our 
Nation's statistical infrastructure. Between 1903 and 1990, 16 
different committees, commissions, and study groups have convened to 
assess our statistical infrastructure, but in most cases little or no 
action has been taken on their recommendations. The result of this 
inaction has been an ever-expanding statistical system. It continues to 
grow in order to meet new data needs, but with little or no regard for 
the overall objectives of the system. Janet L. Norwood, former 
Commissioner of the BLS, writes in her book Organizing to Count:

       The U.S. system has neither the advantages that come from 
     centralization nor the efficiency that comes from strong 
     coordination in decentralization. As presently organized, 
     therefore, the country's statistical system will be hard 
     pressed to meet the demands of a technologically advanced, 
     increasingly internationalized world in which the demand for 
     objective data of high quality is steadily rising.

  In this era of government downsizing and budget cutting it is 
unlikely that Congress will appropriate more funds for statistical 
agencies. It is clear that to preserve and improve the statistical 
system we must consider reforming it, yet we must not attempt to reform 
the system until we have heard from experts in the field. It is also 
clear there is a need for a comprehensive review of the Federal 
statistical infrastructure. For if the public loses confidence in our 
statistics, they are likely to lose confidence in our policies as well.


                       DESCRIPTION OF LEGISLATION

  The legislation established the Commission to Study the Federal 
Statistical System. The Commission would consist of 13 members: 5 
appointed by the President with no more than 3 from the same political 
party, 4 appointed by the President pro tempore of the Senate with no 
more than 2 from the same political party, and 4 appointed by the 
Speaker of the House with no more than 2 from the same political party. 
A chairman would be selected by the President from the appointed 
members. The members must have expertise in statistical policy with a 
background in disciplines such as actuarial science, demography, 
economics, finance, and management.
  The Commission will conduct a comprehensive study of all matters 
relating to the Federal statistical infrastructure, including: and 
examination of multipurpose statistical agencies such as the Bureau of 
Labor Statistics [BLS]; a review and evaluation of the mission and 
organizational structure of statistical agencies, including activities 
that should be expanded or eliminated and the advantages and 
disadvantages of a centralized statistical agency; an examination of 
the methodology involved in producing data and the accuracy of the data 
itself; a review of interagency coordination and standardization of 
collection procedures; a review of information technology and an 
assessment of how data is disseminated to the public; an identification 
and examination of issues regarding individual privacy in the context 
of statistical data; a comparison of our system with the systems of 
other nations; and recommendations for a strategy to maintain a modern 
and efficient statistical infrastructure.
  All of these objectives will be addressed in an interim report due no 
later than June 1, 1998, with a final report due January 15, 1999.
  The Commission is expected to spend $10 million: $2.5 million in 
1997, $5 million in 1998, and $2.5 million in 1999. The Commission will 
cease to exist 90 days after the final report is submitted.
  This legislation is only a first step, but an essential one. The 
Commission will provide Congress with a blueprint for reform. It will 
be up to us to finally take action after nearly a century of 
inattention to this very important issue.
  Mr. President, I ask unanimous consent that the text of the 
legislation be printed in the Record immediately after my statement.
  There being no objection, the items were ordered to be printed in the 
Record, as follows:

                                 S. 144

       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 ``Commission to Study the 
     Federal Statistical System Act of 1997''.

     SEC. 2. FINDINGS.

       The Congress, recognizing the importance of statistical 
     information in the development and administration of policies 
     for the private and public sector, finds that--
       (1) accurate Federal statistics are required to develop, 
     implement, and evaluate government policies and laws;
       (2) Federal spending consistent with legislative intent 
     requires accurate and appropriate statistical information;
       (3) business and individual economic decisions are 
     influenced by Federal statistics and contracts are often 
     based on such statistics;
       (4) statistical information on the manufacturing and 
     agricultural sectors is more complete than statistical 
     information regarding the service sector which employs more 
     than half the Nation's workforce;
       (5) experts in the private and public sector have long-
     standing concerns about the accuracy and adequacy of numerous 
     Federal statistics, including the Consumer Price Index, gross 
     domestic product, trade data, wage data, and the poverty 
     rate;
       (6) Federal statistical data should be accurate, 
     consistent, continuous, and be designed to best serve 
     explicitly stated purposes;
       (7) the Federal statistical infrastructure should be 
     modernized to accommodate the increasingly complex and ever 
     changing American economy;
       (8) Federal statistical agencies should utilize all 
     practical technologies to disseminate statistics to the 
     public;
       (9) the Federal statistical infrastructure should maintain 
     the privacy of individuals; and
       (10) the Federal statistical system should be designed to 
     limit redundancy of activities while achieving the maximum 
     practical level of knowledge, expertise, and data.

     SEC. 3. ESTABLISHMENT OF COMMISSION.

       (a) Establishment.--There is established a commission to be 
     known as the Commission to Study the Federal Statistical 
     System (hereafter in this Act referred to as the 
     ``Commission'').

[[Page S523]]

       (b) Membership.--
       (1) Composition.--The Commission shall be composed of 13 
     members of whom--
       (A) 5 shall be appointed by the President;
       (B) 4 shall be appointed by the President pro tempore of 
     the Senate, in consultation with the Majority Leader and 
     Minority Leader of the Senate; and
       (C) 4 shall be appointed by the Speaker of the House of 
     Representatives, in consultation with the Majority Leader and 
     Minority Leader of the House of Representatives.
       (2) Political party limitation.--(A) Of the 5 members of 
     the Commission appointed under paragraph (1)(A), no more than 
     3 members may be members of the same political party.
       (B) Of the 4 members of the Commission appointed under 
     subparagraphs (B) and (C) of paragraph (1), respectively, no 
     more than 2 members may be members of the same political 
     party.
       (3) Consultation before appointments.--In making 
     appointments under paragraph (1), the President, the 
     President pro tempore of the Senate, and the Speaker of the 
     House of Representatives shall consult with the National 
     Academy of Sciences and appropriate professional 
     organizations, such as the American Economic Association and 
     the American Statistical Association.
       (4) Qualifications.--An individual appointed to serve on 
     the Commission--
       (A) shall have expertise in statistical policy and a 
     background in such disciplines as actuarial science, 
     demography, economics, finance, and management;
       (B) may not be a Federal officer or employee; and
       (C) should be an academician, a statistics user in the 
     private sector, a corporate manager with experience related 
     to information technology, or a former government official 
     with experience related to--
       (i) the Bureau of Labor Statistics of the Department of 
     Labor; or
       (ii) the Bureau of Economic Analysis or the Bureau of the 
     Census of the Department of Commerce.
       (5) Date.--The appointments of the members of the 
     Commission shall be made no later than 150 days after the 
     date of the enactment of this Act.
       (c) Period of Appointment; Vacancies.--Members shall be 
     appointed for the life of the Commission. Any vacancy in the 
     Commission shall not affect its powers, but shall be filled 
     in the same manner as the original appointment.
       (d) Initial Meeting.--No later than 30 days after the date 
     on which all members of the Commission have been appointed, 
     the Commission shall hold its first meeting.
       (e) Meetings.--The Commission shall meet at the call of the 
     Chairman.
       (f) Quorum.--A majority of the members of the Commission 
     shall constitute a quorum, but a lesser number of members may 
     hold hearings.
       (g) Chairman.--The President shall designate a Chairman of 
     the Commission from among the members.

     SEC. 4. FUNCTIONS OF THE COMMISSION.

       (a) Study.--
       (1) In general.--The Commission shall conduct a 
     comprehensive study of all matters relating to the Federal 
     statistical infrastructure, including longitudinal surveys 
     conducted by private agencies and partially funded by the 
     Federal Government, for the purpose of identifying 
     opportunities to improve the quality of statistics in the 
     United States.
       (2) Study and recommendations.--The matters studied by and 
     recommendations of the Commission shall include--
       (A) an evaluation of the accuracy and appropriateness of 
     key statistical indicators and recommendations on ways to 
     improve such accuracy and appropriateness so that the 
     indicators better serve the major purposes for which they 
     were intended;
       (B) an examination of multipurpose statistical agencies 
     that collect and analyze data of broad interest across 
     department and functional areas, such as the Bureau of 
     Economic Analysis and the Bureau of the Census of the 
     Commerce Department, and the Bureau of Labor Statistics of 
     the Labor Department, for the purpose of understanding the 
     interrelationship and flow of data among agencies;
       (C) a review and evaluation of the collection of data for 
     purposes of administering such programs as Old-Age, Survivors 
     and Disability Insurance and Unemployment Insurance under the 
     Social Security Act;
       (D) a review and evaluation of the mission and organization 
     of various statistical agencies, including--
       (i) recommendations with respect to statistical activities 
     that should be expanded or eliminated;
       (ii) the order of priority such activities should be 
     carried out;
       (iii) a review of the advantages and disadvantages of a 
     centralized statistical agency or a partial consolidation of 
     the agencies for the Federal Government; and
       (iv) an assessment of which agencies could be consolidated 
     into such an agency;
       (E) an examination of the methodology involved in producing 
     official data and recommendations for technical changes to 
     improve statistics;
       (F) a review of interagency coordination of statistical 
     data and recommendations of methods to standardize collection 
     procedures and surveys, as appropriate, and presentation of 
     data throughout the Federal system;
       (G) a review of information technology and recommendations 
     of appropriate methods for disseminating statistical data, 
     with special emphasis on resources, such as the Internet, 
     that allow the public to obtain and report information in a 
     timely and cost-effective manner;
       (H) an identification and examination of issues regarding 
     individual privacy in the context of statistical data;
       (I) a comparison of the United States statistical system to 
     statistical systems of other nations for the purposes of 
     identifying best practices and developing a system of 
     maintaining best practices over time;
       (J) a consideration of the coordination of statistical data 
     with other nations and international agencies, such as the 
     Organization for Economic Cooperation and Development; and
       (K) a recommendation of a strategy for maintaining a modern 
     and efficient Federal statistical infrastructure to produce 
     meaningful information as the United States society and 
     economy change.
       (b) Report.--
       (1) Interim report.--No later than June 1, 1998, the 
     Commission shall submit an interim report on the study 
     conducted under subsection (a) to the President and to the 
     Congress.
       (2) Final report.--No later than January 15, 1999, the 
     Commission shall submit a final report to the President and 
     the Congress which shall contain a detailed statement of the 
     findings and conclusions of the Commission, and 
     recommendations for such legislation and administrative 
     actions as the Commission considers appropriate.

     SEC. 5. POWERS OF THE COMMISSION.

       (a) Hearings.--The Commission may hold such hearings, sit 
     and act at such times and places, take such testimony, and 
     receive such evidence as the Commission considers advisable 
     to carry out the purposes of this Act.
       (b) Information From Federal Agencies.--The Commission may 
     secure directly from any Federal department or agency such 
     information as the Commission considers necessary to carry 
     out the provisions of this Act. Upon request of the Chairman 
     of the Commission, the head of such department or agency 
     shall furnish such information to the Commission.
       (c) Postal Services.--The Commission may use the United 
     States mails in the same manner and under the same conditions 
     as other departments and agencies of the Federal Government.
       (d) Gifts.--The Commission may accept, use, and dispose of 
     gifts or donations of services or property.

     SEC. 6. COMMISSION PERSONNEL MATTERS.

       (a) Compensation of Members.--
       (1) In general.--Subject to paragraph (2), each member of 
     the Commission shall be compensated at a rate equal to the 
     daily equivalent of the annual rate of basic pay prescribed 
     for level IV of the Executive Schedule under section 5315 of 
     title 5, United States Code, for each day (including travel 
     time) during which such member is engaged in the performance 
     of the duties of the Commission.
       (2) Chairman.--The Chairman shall be compensated at a rate 
     equal to the daily equivalent of the annual rate of basic pay 
     prescribed for level III of the Executive Schedule under 
     section 5315 of title 5, United States Code, for each day 
     (including travel time) during which such member is engaged 
     in the performance of the duties of the Commission.
       (b) Travel Expenses.--The members of the Commission shall 
     be allowed travel expenses, including per diem in lieu of 
     subsistence, at rates authorized for employees of agencies 
     under subchapter I of chapter 57 of title 5, United States 
     Code, while away from their homes or regular places of 
     business in the performance of services for the Commission. 
     Such travel may include travel outside the United States.
       (c) Staff.--
       (1) In general.--Subject to paragraph (2), the Commission 
     shall, without regard to the provisions of title 5, United 
     States Code, relating to the competitive service, appoint an 
     executive director who shall be paid at a rate equivalent to 
     a rate established for the Senior Executive Service under 
     section 5382 of title 5, United States Code. The Commission 
     shall appoint such additional personnel as the Commission 
     determines to be necessary to provide support for the 
     Commission, and may compensate such additional personnel 
     without regard to the provisions of title 5, United States 
     Code, relating to the competitive service.
       (2) Limitation.--The total number of employees of the 
     Commission (including the executive director) may not exceed 
     30.
       (d) Detail of Government Employees.--Any Federal Government 
     employee may be detailed to the Commission without 
     reimbursement, and such detail shall be without interruption 
     or loss of civil service status or privilege.
       (e) Procurement of Temporary and Intermittent Services.--
     The Chairman of the Commission may procure temporary and 
     intermittent services under section 3109(b) of title 5, 
     United States Code, at rates for individuals which do not 
     exceed the daily equivalent of the annual rate of basic pay 
     prescribed for level V of the Executive Schedule under 
     section 5316 of such title.

     SEC. 7. TERMINATION OF THE COMMISSION.

       The Commission shall terminate 90 days after the date on 
     which the Commission submits the final report of the 
     Commission.

[[Page S524]]

     SEC. 8. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated $2,500,000 for 
     fiscal year 1997, $5,000,000 for fiscal year 1998, and 
     $2,500,000 for fiscal year 1999 to the Commission to carry 
     out the purposes of this Act.
                                                                    ____

                                               September 23, 1996.
     Hon. Daniel P. Moynihan,
     Hon. J. Robert Kerrey,
     U.S. Senate,
     Washington, DC.
       Dear Senators Moynihan and Kerrey: All of us are former 
     Chairmen of the Council of Economic Advisers. We write to 
     support the basic objectives and approach of your Bill to 
     establish the Commission to Study the Federal Statistical 
     System.
       The United States possesses a first-class statistical 
     system. All of us have in the past relied heavily upon the 
     availability of reasonably accurate and timely federal 
     statistics on the national economy. Similarly, our 
     professional training leads us to recognize how important a 
     good system of statistical information is for the efficient 
     operations of our complex private economy. But we are also 
     painfully aware that important problems of bureaucratic 
     organization and methodology need to be examined and dealt 
     with if the federal statistical system is to continue to meet 
     essential public and private needs.
       All of us have particular reason to remember the problems 
     which periodically arise under the current system of widely 
     scattered responsibilities. Instead of reflecting a balance 
     among the relative priorities of one statistical collection 
     effort against others, statistical priorities are set in a 
     system within which individual Cabinet Secretaries recommend 
     budgetary tradeoffs between their own substantive programs 
     and the statistical operations which their departments, 
     sometimes by historical accident, are responsible for 
     collecting. Moreover, long range planning of improvements in 
     the federal statistical system to meet the changing nature 
     and needs of the economy is hard to organize in the present 
     framework. The Office of Management and Budget and the 
     Council of Economic Advisers put a lot of effort into trying 
     to coordinate the system, often with success, but often 
     swimming upstream against the system.
       We are also aware, as of course are you, of a number of 
     longstanding substantive and methodological difficulties with 
     which the current system is grappling. These include the 
     increasing importance in the national economy of the service 
     sector, whose output and productivity are especially hard to 
     measure, and the pervasive effect both on measures of 
     national output and income and on the federal budget of the 
     accuracy (or inaccuracy) with which our measures of prices 
     capture changes in the quality of the goods and services we 
     buy.
       Without at all prejudging the appropriate measures to deal 
     with these difficult problems, we believe that a 
     thoroughgoing review by a highly qualified and bipartisan 
     Commission as provided in your Bill has great promise of 
     showing the way to major improvements.
           Sincerely,
         Professor Michael J. Boskin, Stanford University; Dr. 
           Martin Feldstein, National Bureau of Economic Research; 
           Alan Greenspan; Professor Paul W. McCracken, University 
           of Michigan; Raymond J. Saulnier; Charles L. Schultze, 
           The Brookings Institution; Beryl W. Sprinkel; Herbert 
           Stein, American Enterprise Institute; Professor Murray 
           Weidenbaum, Center for the Study of American Business.
                                 ______
                                 
      By Mr. MOYNIHAN:
  S. 145. A bill to repeal the prohibition against government 
restrictions on communications between government agencies and the INS; 
to the Committee on the Judiciary.


                    GOVERNMENT AGENCIES LEGISLATION

  Mr. MOYNIHAN. Mr. President, I rise today to introduce legislation to 
repeal section 434 of the Personal Responsibility and Work Opportunity 
Reconciliation Act of 1996, and subsections (a) and (b) of section 642 
of the Illegal Immigration Reform and Immigrant Responsibility Act of 
1996. Section 434 of the first act provides that:

       Notwithstanding any other provision of Federal, State, or 
     local law, no State or local government entity may be 
     prohibited, or in any way restricted, from sending to or 
     receiving from the Immigration and Naturalization Service 
     (INS) information regarding the immigration status, lawful or 
     unlawful, of an alien in the United States.

  This provision, along with portions of section 642 of the 
aforementioned illegal immigration law, conflicts with an executive 
order, issued by the mayor of New York in 1985, prohibiting city 
employees from reporting suspected illegal aliens to the Immigration 
and Naturalization Service unless the alien has been charged with a 
crime. The executive order, which is similar to local laws in other 
States and cities, was intended to ensure that fear of deportation does 
not deter illegal aliens from seeking emergency medical attention, 
reporting crimes, and so forth.
  On September 8, 1995, during Senate consideration of H.R. 4, the Work 
Opportunity Act of 1995, Senators Santorum and Nickles offered this 
provision as an amendment. The amendment was adopted by a vote of 91 to 
6. The Senators who voted ``no'' were: Akaka, Campbell, Inouye, 
Moseley-Braun, Moynihan, and Simon.
  Four of these six--Senators Akaka, Moseley-Braun, Simon, and the 
Senator from New York--were also among the 11 Democrats who voted 
against H.R. 4 when it passed the Senate 11 days later on September 19, 
1995. The provision remained in H.R. 3734, the welfare bill recently 
signed by President Clinton.
  Mayor Rudolph W. Giuliani of New York City filed suit last year to 
challenge section 434 of the new welfare law and section 642 of the 
illegal immigration law in U.S. District Court and I introduced a 
similar bill at the time. The mayor's lawsuit deserves to succeed for 
the same reason this legislation deserves to pass: the provisions at 
issue are onerous and represent bad public policy.
  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. 145

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

     SECTION 1. REPEAL OF THE PROHIBITION AGAINST GOVERNMENT 
                   RESTRICTIONS ON COMMUNICATIONS BETWEEN 
                   GOVERNMENT AGENCIES AND THE INS.

       (a) Welfare.--Section 434 of the Personal Responsibility 
     and Work Opportunity Reconciliation Act of 1996 (Public Law 
     104-193, 110 Stat. 2275) is repealed.
       (b) Immigration.--Section 642 of the Illegal Immigration 
     Reform and Immigrant Responsibility Act of 1996 (Public Law 
     104-208, 110 Stat 3009-1834) is amended--
       (1) by striking subsections (a) and (b); and
       (2) in subsection (c), by striking ``(c) Obligation to 
     Respond to Inquiries.--''.
                                 ______
                                 
      By Mr. FRIST (for Mr. Rockefeller (for himself and Mr. Frist)):
  S. 146. A bill to permit medicare beneficiaries to enroll with 
qualified provider-sponsored organizations under title XVIII of the 
Social Security Act, and for other purposes; to the Committee on 
Finance.


            the provider-sponsored organization act of 1997

 Mr. ROCKEFELLER. Mr. President. I am extremely pleased to be 
introducing legislation with my colleague from Tennessee, Senator 
Frist, that will give Medicare beneficiaries the opportunity to receive 
their health care services from a locally-based, provider-owned and 
operated, health care plan.

  In my own State of West Virginia, the health care landscape is 
changing rapidly. Managed care is becoming more prominent, and, with 
it, a concern that profits are being put ahead of a patient's health 
care needs. My constituents want to be sure that their doctor is making 
his or her own medical decisions on patient care and treatment. They do 
not want to be told that their care is being directed by anonymous 
insurance officials in another State available only through a 1-800 
phone number.
  Under current law, Medicare beneficiaries have a choice of receiving 
their health care services under traditional Medicare fee-for-service 
or from a Health Maintenance Organization (HMO). Our legislation would 
allow seniors to choose another option and would make sure that patient 
care and treatment decisions remain in the hands of health care 
providers. This is accomplished by allowing provider-sponsored 
organizations [PSOs] to directly provide benefits to Medicare 
beneficiaries without the insurance middleman. Our bill would mean that 
insurance administrative and overhead costs would be reduced, freeing 
funds which are better spent on patient care costs.
  Our legislation is necessary because insurance regulations in most 
States do not take into account the unique characteristics of a PSO. 
Only 4 States have adopted licensure requirements aimed at encouraging 
the development of provider sponsored organizations. Our bill carves 
out a time-limited Federal role of 4 years for direct federal Medicare 
certification as a qualified PSO. During those 4 years, a PSO could

[[Page S525]]

apply directly to the Medicare Program to be designated as a qualified 
PSO that would be paid on a capitated prospective basis and could serve 
Medicare beneficiaries. Beginning on January 1, 2002, State licensure 
would replace the Federal certification process as long as a State's 
standards for PSOs were sufficiently similar to Federal PSO standards. 
PSOs could continue to apply for a Federal waiver after the initial 4 
years if a State failed to act on a PSO's application within a 
reasonable time period or if a State continued to apply unfair or 
unreasonable criteria for PSOs to enter the market.
  Mr. President, our bill is actually quite similar to legislation 
enacted in the early 70s directed at promoting and fostering the growth 
of HMOs. According to a recent issue briefing prepared by the 
Congressional Research Service on the HMO debate in the 1970s, ``state 
solvency requirements were seen as excessive and unappreciative of the 
unique resources available to a HMO . . . the outcome of the debate was 
the Health Maintenance Organization Act . . . which enabled HMOs 
meeting Federal requirements to be exempt from specific State laws.'' 
In many States, the State HMO requirements that evolved were designed 
to address issues presented by large, insurer-owned and operated HMOs, 
not smaller community-based provider organizations.
  Our bill does not in any way weaken quality assurance or solvency 
standards for PSOs that choose to contract directly with the Medicare 
program. Our legislation is very specific on the solvency and quality 
standards that must be met in order for a PSO to be federally 
qualified. Overall, I believe, our standards are even more detailed and 
explicit than current Medicare law relating to quality and solvency for 
HMOs.
  Our bill retains all of the consumer protections in current law that 
apply to health plans that serve Medicare beneficiaries. Beneficiaries 
would continue to be protected from incurring any financial liability 
if a health care plan became insolvent. In addition, rules on open 
enrollment and arranging for continuing Medigap coverage--without any 
pre-existing condition limitations--would apply as they do under 
current Medicare law. Our legislation would also require Medicare to 
contract with local agencies for ongoing monitoring of PSO performance 
and beneficiary access to services.
  Specifically on solvency, our legislation builds on fiscal soundness 
and solvency standards that were developed by the National Association 
of Insurance Commissioners [NAIC]. Our bill slightly modifies the HMO 
Model Act to take into account how affiliation arrangements are 
structured within PSOs. It also recognizes a variety of alternative 
means, that many States already use, of meeting the solvency standards. 
In this way, our approach goes beyond earlier PSO legislative proposals 
which merely required the Secretary to develop specific solvency 
standards. I believe this approach will address concerns raised by some 
that complete secretarial discretion on fiscal soundness and solvency 
would somehow result in weakened solvency standards.
  In 1972, a proxy measure for quality was enacted by Congress which 
required health plans to meet an arbitrary standard of plan enrollment. 
Under the so-called ``50-50 rule,'' a health plan's Medicare and 
Medicaid enrolles cannot exceed 50 percent of its total enrollment. The 
underlying premise of the 50-50 rule is that if a plan has a 
significant enrollment of private or commercial enrolles its quality 
will be higher than a health plan strictly serving Medicaid or Medicare 
beneficiaries. This is an issue that is especially important in rural 
States like West Virginia. Many rural provider networks--which this 
bill seeks to encourage--would be unable to meet a 50-50 enrollment 
quota because a disproportionate share of the elderly reside in rural 
areas.
  Also, since adoption of the 50-50 rule, there have been significant 
advances made in measuring and assuring quality care. While still far 
from perfect, I believe that we have gained sufficient knowledge to 
adopt an approach that relies on specific quality standards, rather 
than a rough proxy based on a plan's enrollment mix. Quality assurance 
will continue to be a work in progress, but our bill begins to lay the 
groundwork for explicitly setting and measuring the quality of health 
care received by Medicare beneficiaries. Under our bill, the 50-50 rule 
would be waived for any health plan that contracts with the Medicare 
Program if the plan meets the enhanced quality requirements in our bill 
and also has experience in providing managed or coordinated care. PSOs 
would go further by adhering to additional standards governing 
utilization review to reduce intrusions into the doctor patient 
relationship, as well as how physicians participate in PSO networks.
  Mr. President, last year Congress debated a variety of ways to 
improve quality and to put an end to medical decision-making driven by 
a desire to earn hefty profits for a company's stockholders. Our bill 
gives health care providers the opportunity to get back in the driver's 
seat. In addition, by cutting out the insurance company middleman, more 
money could be spent on providing patient care instead of on processing 
claims and realizing profits.
  I look forward to discussing this issue and pursuing the goal of this 
new bill later this year with my colleagues in the Finance Committee as 
we look at a variety of ways to improve and strengthen the Medicare 
program.
  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. 146

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

     SECTION 1. SHORT TITLE; REFERENCES.

       (a) Short Title.--This Act may be cited as the ``Provider-
     Sponsored Organization Act of 1997''.
       (b) References to Social Security Act.--Except as otherwise 
     specifically provided, whenever in this Act an amendment 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 that section or other provision of the Social 
     Security Act.

     SEC. 2. QUALIFIED PROVIDER-SPONSORED ORGANIZATIONS AS 
                   MEDICARE HEALTH PLAN OPTION.

       Section 1876(b) (42 U.S.C. 1395mm(b)) is amended to read as 
     follows:
       ``(b)(1) For purposes of this section, the term `eligible 
     organization' means a public or private entity (which may be 
     a health maintenance organization, a competitive medical 
     plan, or a qualified provider-sponsored organization) that--
       ``(A) is organized and licensed under State law to offer 
     prepaid health services or health benefits coverage in each 
     State in which the entity seeks to enroll individuals who are 
     entitled to benefits under this title; and
       ``(B) is described in paragraph (2), (3), or (4).
       ``(2) An entity is described in this paragraph if the 
     entity is a qualified health maintenance organization (as 
     defined in section 1310(d) of the Public Health Service Act).
       ``(3)(A) An entity is described in this paragraph if the 
     entity--
       ``(i) provides to enrolled members health care services 
     that include at least--
       ``(I) physicians' services performed by physicians (as 
     defined in section 1861(r)(1));
       ``(II) inpatient hospital services;
       ``(III) laboratory, X-ray, emergency, and preventive 
     services; and
       ``(IV) out-of-area coverage;
       ``(ii) is compensated (except for deductibles, coinsurance, 
     and copayments) for the provision of health care services to 
     enrolled members by a payment which is paid on a periodic 
     basis without regard to the date the health care services are 
     provided and which is fixed without regard to the frequency, 
     extent, or kind of health care service actually provided to a 
     member;
       ``(iii) provides physicians' services primarily--
       ``(I) directly through physicians who are either employees 
     or partners of such organization; or
       ``(II) through contracts with individual physicians or 1 or 
     more groups of physicians (organized on a group practice or 
     individual practice basis);
       ``(iv) except as provided in subsection (i), assumes full 
     financial risk on a prospective basis for the provision of 
     health care services listed in clause (i), except that such 
     entity may--
       ``(I) obtain insurance or make other arrangements for the 
     cost of providing to any enrolled member health care services 
     listed in clause (i), the aggregate value of which exceeds 
     $5,000 in any year;
       ``(II) obtain insurance or make other arrangements for the 
     cost of health care services listed in clause (i) provided to 
     its enrolled members other than through the entity because 
     medical necessity required their provision before they could 
     be secured through the entity;
       ``(III) obtain insurance or make other arrangements for not 
     more than 90 percent of the amount by which its costs for any 
     of its

[[Page S526]]

     fiscal years exceed 115 percent of its income for such fiscal 
     year; and
       ``(IV) make arrangements with physicians or other health 
     professionals, health care institutions, or any combination 
     of such individuals or institutions to assume all or part of 
     the financial risk on a prospective basis for the provision 
     of basic health services by the physicians or other health 
     professionals or through the institutions; and
       ``(v) has made adequate provision against the risk of 
     insolvency, which provision is satisfactory to the Secretary.
       ``(B) Subparagraph (A)(i)(II) shall not apply to an entity 
     that has contracted with a single State agency administering 
     a State plan approved under title XIX for the provision of 
     services (other than inpatient hospital services) to 
     individuals eligible for such services under such State plan 
     on a prepaid risk basis prior to 1970.
       ``(4) An entity is described in this paragraph if the 
     entity is a qualified provider-sponsored organization (as 
     defined in subsection (l)(1)(A)).''.

     SEC. 3. PARTIAL RISK ARRANGEMENTS.

       Section 1876 (42 U.S.C. 1395mm) is amended--
       (1) by redesignating subsections (i) and (j) as subsections 
     (j) and (k), respectively; and
       (2) by inserting after subsection (h) the following:
       ``(i) The Secretary may enter into a partial risk contract 
     with an eligible organization under which--
       ``(1) notwithstanding subsection (b)(3)(A)(iv), the 
     organization and the program established under this title 
     share the financial risk associated with the services the 
     organization provides to individuals entitled to benefits 
     under part A and enrolled under part B or enrolled under part 
     B only;
       ``(2) notwithstanding subsections (a)(1) and (h)(2), 
     payment is based on--
       ``(A) a blend of--
       ``(i) the payments that would otherwise be made to such 
     organization under a risk-sharing contract under subsection 
     (g); and
       ``(ii) the payments that would be made to such organization 
     under a reasonable cost reimbursement contract under 
     subsection (h); or
       ``(B) any other methodology agreed upon by the Secretary 
     and the organization; and
       ``(3) adjustments, if appropriate, are made to payments to 
     the organization under this section to reflect any risk 
     assumed by such program.''.

     SEC. 4. STANDARDS AND REQUIREMENTS FOR QUALIFIED PROVIDER-
                   SPONSORED ORGANIZATIONS.

       Section 1876 (42 U.S.C. 1395mm), as amended by section 3 of 
     this Act, is amended by adding at the end the following:
       ``(l)(1)(A) For purposes of this section, the term 
     `qualified provider-sponsored organization' means a provider-
     sponsored organization that--
       ``(i) provides a substantial proportion (as defined by the 
     Secretary, in accordance with subparagraph (C) and the 
     regulations established under section 1889) of the health 
     care items and services under the contract under this section 
     directly through the provider or through an affiliated group 
     of providers that comprise the organization; and
       ``(ii) is certified under section 1890 as meeting the 
     regulations established under section 1889, which, except as 
     provided in the succeeding paragraphs of this subsection, 
     shall be based on the requirements that apply to an 
     organization described in subsection (b)(3) with a risk 
     contract under subsection (g).
       ``(B) For purposes of this section, the term `provider-
     sponsored organization' means a public or private entity that 
     is a provider or a group of affiliated providers organized to 
     deliver a spectrum of health care services (including basic 
     hospital and physicians' services) under contract to 
     purchasers of such services.
       ``(C) In defining a `substantial proportion' for purposes 
     of subparagraph (A)(i), the Secretary--
       ``(i) shall take into account the need for such an 
     organization to assume responsibility for providing--
       ``(I) significantly more than the majority of the items and 
     services under the contract under this section through its 
     own affiliated providers; and
       ``(II) most of the remainder of the items and services 
     under the contract through providers with which the 
     organization has an agreement to provide such items and 
     services,
     in order to assure financial stability and to address the 
     practical considerations involved in integrating the delivery 
     of a wide range of service providers;
       ``(ii) shall take into account the need for such an 
     organization to provide a limited proportion of the items and 
     services under the contract through providers that are 
     neither affiliated with nor have an agreement with the 
     organization; and
       ``(iii) may allow for variation in the definition of 
     substantial proportion among such organizations based on 
     relevant differences among the organizations, such as their 
     location in an urban or rural area.
       ``(D) For purposes of this paragraph, a provider is 
     `affiliated' with another provider if, through contract, 
     ownership, or otherwise--
       ``(i) one provider, directly or indirectly, controls, is 
     controlled by, or is under the control of the other;
       ``(ii) each provider is a participant in a lawful 
     combination under which each provider shares, directly or 
     indirectly, substantial financial risk in connection with 
     their operations;
       ``(iii) both providers are part of a controlled group of 
     corporations under section 1563 of the Internal Revenue Code 
     of 1986; or
       ``(iv) both providers are part of an affiliated service 
     group under section 414 of such Code.
       ``(E) For purposes of subparagraph (D), control is presumed 
     to exist if one party, directly or indirectly, owns, 
     controls, or holds the power to vote, or proxies for, not 
     less than 51 percent of the voting rights or governance 
     rights of another.
       ``(2)(A) Subject to subparagraph (B), subsection (b)(1)(A) 
     (relating to State licensure) shall not apply to a qualified 
     provider-sponsored organization.
       ``(B) Beginning on January 1, 2002, subsection (b)(1)(A) 
     shall only apply (and subparagraph (A) of this paragraph 
     shall no longer apply) to a qualified provider-sponsored 
     organization in a State if--
       ``(i) the financial solvency and capital adequacy standards 
     for licensure of the organization under the laws of the State 
     are identical to the regulations established under section 
     1889; and
       ``(ii) the standards for licensure of the organization 
     under the laws of the State (other than the standards 
     referred to in clause (i)) are substantially equivalent to 
     the standards established by regulations under section 1889.
       ``(C)(i) A provider-sponsored organization, to which 
     subsection (b)(1)(A) applies by reason of subparagraph (B), 
     that seeks to operate in a State under a full risk contract 
     under subsection (g) or a partial risk contract under 
     subsection (i) may apply for a waiver of the requirement of 
     subsection (b)(1)(A) for that organization operating in that 
     State.
       ``(ii) The Secretary shall act on such a waiver application 
     within 60 days after the date it is filed and shall grant a 
     waiver for an organization with respect to a State if the 
     Secretary determines that--
       ``(I) the State did not act upon a licensure application 
     within 90 days after the date it was filed; or
       ``(II)(aa) the State denied a licensure application; and
       ``(bb) the State's licensing standards or review process 
     are determined by the Secretary to impose unreasonable 
     barriers to market entry, including through the imposition of 
     any requirements, procedures, or other standards on such 
     organization that are not generally applicable to any other 
     entities engaged in substantially similar activities.
       ``(iii) In the case of a waiver granted under this 
     paragraph for an organization--
       ``(I) the waiver shall be effective for a 24-month period, 
     except that it may be renewed based on a subsequent 
     application filed during the last 6 months of such period;
       ``(II) if the State failed to meet the requirement of 
     clause (ii)(I)--
       ``(aa) any application for a renewal may be made on the 
     basis described in clause (ii)(I) only if the State does not 
     act on a pending licensure application during the 24-month 
     period specified in subclause (I);
       ``(bb) any application for renewal (other than one made on 
     the basis described in clause (ii)(I)) may be made only on 
     the basis described in clause (ii)(II); and
       ``(cc) the waiver shall cease to be effective on approval 
     of the licensure application by the State during such 24-
     month period; and
       ``(III) any provisions of State law that relate to the 
     licensing of the organization and prohibit the organization 
     from providing coverage pursuant to a contract under this 
     title shall be superseded during the period for which such 
     waiver is effective.
       ``(D) Nothing in this paragraph shall be construed as--
       ``(i) limiting the number of times such a waiver may be 
     renewed under subparagraph (C)(iii)(I); or
       ``(ii) affecting the operation of section 514 of the 
     Employee Retirement Income Security Act of 1974 (29 U.S.C. 
     1144).
       ``(3) The requirement of subsection (b)(3)(A)(i) (relating 
     to benefit package for commercial enrollees) shall not apply 
     to a qualified provider-sponsored organization.
       ``(4) The requirement of subsection (b)(3)(A)(iii) 
     (relating to delivery of physicians' services) shall apply to 
     a qualified provider-sponsored organization, except that the 
     Secretary shall by regulation specify alternative delivery 
     models or arrangements that may be used by such organizations 
     in lieu of the models or arrangements specified in such 
     subsection.
       ``(5) The requirement of subsection (b)(3)(A)(iv) (relating 
     to risk assumption) shall apply to a qualified provider-
     sponsored organization, except that any such organization 
     with a full risk contract under subsection (g) may (with the 
     approval of the Secretary) obtain insurance or make other 
     arrangements for covering costs in excess of those permitted 
     to be covered by such insurance and any arrangements under 
     subsection (b)(3)(A)(iv)(III).
       ``(6)(A) A qualified provider-sponsored organization shall 
     be treated as meeting the requirement of subsection 
     (b)(3)(A)(v) (relating to adequate provision against risk of 
     insolvency) if the organization is fiscally sound.
       ``(B) A qualified provider-sponsored organization shall be 
     treated as fiscally sound for purposes of subparagraph (A) if 
     the organization--
       ``(i) has a net worth that is not less than the required 
     net worth (as defined in subparagraph (C)); and

[[Page S527]]

       ``(ii) has established adequate claims reserves (as defined 
     in subparagraph (D)).
       ``(C) For purposes of subparagraph (B)(i), the term 
     `required net worth' means--
       ``(i) in the case of an organization with a full risk 
     contract under subsection (g), a net worth (determined in 
     accordance with statutory accounting principles for insurance 
     companies and health maintenance organizations), not less 
     than the greatest of--
       ``(I) $1,500,000 at the time of application and $1,000,000 
     thereafter,
       ``(II) the sum of--
       ``(aa) 8 percent of the cost of health services that are 
     not provided directly by the organization or its affiliated 
     providers to enrollees; and
       ``(bb) 4 percent of the estimated annual costs of health 
     services provided directly by the organization or its 
     affiliated providers to enrollees; or
       ``(III) 3 months of uncovered expenditures; and
       ``(ii) in the case of an organization with a partial risk 
     contract under subsection (i), an amount determined in 
     accordance with clause (i), except that in applying subclause 
     (II) of such clause, the Secretary shall substitute for the 
     percentages specified in such subclause such lower 
     percentages as are appropriate to reflect the risk-sharing 
     arrangements under the contract.
       ``(D) For purposes of subparagraph (B)(ii), the term 
     `adequate claims reserves' means, with respect to an 
     organization, reserves for claims that are--
       ``(i) incurred but not reported; or
       ``(ii) reported but unpaid,
     that are determined in accordance with statutory accounting 
     principles for insurance companies and health maintenance 
     organizations and with professional standards of actuarial 
     practice and are certified by an independent actuary as 
     adequate in light of the operations and contracts of the 
     organization.
       ``(E) In applying statutory accounting principles for 
     purposes of determining the net worth of an organization 
     under subparagraph (B)(i), the Secretary shall--
       ``(i) treat as `admitted assets'--
       ``(I) land, buildings, and equipment of the organization 
     used for the direct provision of health care services;
       ``(II) any receivables from governmental programs due for 
     more than 90 days; and
       ``(III) any other assets designated by the Secretary; and
       ``(ii) recognize, as a contribution to surplus, amounts 
     received under subordinated debt (meeting such requirements 
     as the Secretary may specify).
       ``(F) The Secretary shall recognize ways of complying with 
     the requirement of subparagraph (A) other than by means of 
     subparagraph (B), including (alone or in combination)--
       ``(i) letters of credit from a bank;
       ``(ii) financial guarantees from financially strong parties 
     including affiliates;
       ``(iii) unrestricted fund balances;
       ``(iv) diversity of lines of business and presence of 
     nonrisk related revenue;
       ``(v) certification of fiscal soundness by an independent 
     actuary;
       ``(vi) reinsurance ceded to, or stop loss insurance 
     purchased through, a recognized commercial insurance company; 
     and
       ``(vii) any other methods that the Secretary determines are 
     acceptable for such purpose.
       ``(7)(A) A qualified provider-sponsored organization shall 
     not be treated as meeting the requirements of subsection 
     (c)(6) (relating to an ongoing quality assurance program) 
     unless the quality assurance program of the organization 
     meets the requirements of subparagraphs (B) and (C).
       ``(B) A quality assurance program meets the requirements of 
     this subparagraph if the program--
       ``(i) stresses health outcomes;
       ``(ii) provides opportunities for input by physicians and 
     other health care professionals;
       ``(iii) monitors and evaluates high volume and high risk 
     services and the care of acute and chronic conditions;
       ``(iv) evaluates the continuity and coordination of care 
     that enrollees receive;
       ``(v) establishes mechanisms to detect both 
     underutilization and overutilization of services;
       ``(vi) after identifying areas for improvement, establishes 
     or alters practice parameters;
       ``(vii) takes action to improve quality and assess the 
     effectiveness of such action through systematic followup;
       ``(viii) makes available information on quality and 
     outcomes measures to facilitate beneficiary comparison and 
     choice of health coverage options (in such form and on such 
     quality and outcomes measures as the Secretary determines to 
     be appropriate); and
       ``(ix) is evaluated on an ongoing basis as to its 
     effectiveness.
       ``(C) If a qualified provider-sponsored organization 
     utilizes case-by-case utilization review, the organization 
     shall--
       ``(i) base such review on written protocols developed on 
     the basis of current standards of medical practice; and
       ``(ii) implement a plan under which--
       ``(I) such review is coordinated with the quality assurance 
     program of the organization; and
       ``(II) a transition is made from relying predominantly on 
     case-by-case review to review focusing on patterns of care.
       ``(D) A qualified provider-sponsored organization shall be 
     treated as meeting the requirements of subparagraphs (A) and 
     (B) and the requirements of subsection (c)(6) if the 
     organization is accredited (and periodically reaccredited) by 
     a private organization under a process that the Secretary has 
     determined assures that the organization meets standards that 
     are no less stringent than the standards established under 
     section 1889 to carry out this paragraph and subsection 
     (c).''.

     SEC. 5. EXEMPTION FROM CERTAIN ENROLLMENT REQUIREMENTS FOR 
                   ELIGIBLE ORGANIZATIONS MEETING ENHANCED QUALITY 
                   ASSURANCE REQUIREMENTS.

       (a) In General.--Section 1876 of the Social Security Act 
     (42 U.S.C. 1395mm), as amended by section 4 of this Act, is 
     amended by adding at the end the following:
       ``(m)(1) An eligible organization shall be deemed to meet 
     the requirements of subsection (f) (relating to enrollment 
     composition) if the organization demonstrates that it--
       ``(A) is capable of providing coordinated care in 
     accordance with the quality assurance standards established 
     under subsections (c)(6) and (l)(7)(B); and
       ``(B) has experience, under a past or present arrangement, 
     providing coordinated care to individuals (other than 
     individuals who are entitled to benefits under this title) 
     who are enrollees, participants, or beneficiaries of a health 
     plan or a State plan approved under title XIX.
       ``(2) An eligible organization shall be treated as meeting 
     the quality assurance standards referred to in paragraph 
     (1)(A) if the organization is accredited (and periodically 
     reaccredited) by a private organization under a process that 
     the Secretary has determined assures that the organization 
     meets standards that are no less stringent than the 
     requirements of that subparagraph.
       ``(3) For purposes of paragraph (1), the term `health plan' 
     means--
       ``(A) any contract of insurance, including any hospital or 
     medical service policy or certificate, hospital or medical 
     service plan contract, or health maintenance organization 
     contract, that is provided by a carrier; and
       ``(B) an employee welfare benefit plan insofar as the plan 
     provides health benefits and is funded in a manner other than 
     through the purchase of one or more policies or contracts 
     described in subparagraph (A).
       ``(4) For purposes of paragraph (3), the term `carrier' 
     means a licensed insurance company, a hospital or medical 
     service corporation (including an existing Blue Cross or Blue 
     Shield organization), or any other entity licensed or 
     certified by a State to provide health insurance or health 
     benefits.''.
       (b) Size Requirement for Eligible Organizations.--Section 
     1876(g)(1) (42 U.S.C. 1395mm(g)(1)) is amended--
       (1) by striking ``5000'' and inserting ``1500''; and
       (2) by striking ``fewer'' and inserting ``500 or more''.
       (c) Conforming Amendment.--Section 1876(f)(1) (42 U.S.C. 
     1395mm(f)(1)) is amended by striking ``Each eligible'' and 
     inserting ``Except as provided in subsection (m), each 
     eligible''.

     SEC. 6. ADJUSTED COMMUNITY RATE FOR A QUALIFIED PROVIDER-
                   SPONSORED ORGANIZATION.

       Section 1876(g) (42 U.S.C. 1395mm(g)) is amended by adding 
     at the end the following:
       ``(7) In the case of a qualified provider-sponsored 
     organization, the adjusted community rate under subsection 
     (e)(3) and paragraph (2) may be computed (in a manner 
     specified by the Secretary) using data in the general 
     commercial marketplace or (during a transition period) based 
     on the costs incurred by the organization in providing such a 
     product.''.

     SEC. 7. PROCEDURES RELATING TO PARTICIPATION OF A PHYSICIAN 
                   IN A QUALIFIED PROVIDER-SPONSORED ORGANIZATION.

       Section 1876 (42 U.S.C. 1395mm), as amended by section 5 of 
     this Act, is amended by adding at the end the following:
       ``(n) A qualified provider-sponsored organization shall not 
     be treated as meeting the requirements of this section unless 
     the organization--
       ``(1) establishes reasonable procedures, as determined by 
     the Secretary, relating to the participation (under an 
     agreement between a physician or group of physicians and the 
     organization) of physicians under contracts under this 
     section, including procedures to provide--
       ``(A) notice of the rules regarding participation;
       ``(B) written notice of a participation decision that is 
     adverse to a physician; and
       ``(C) a process within the organization for appealing an 
     adverse decision, including the presentation of information 
     and views of the physician regarding such decision; and
       ``(2) consults with physicians who have entered into 
     participation agreements with the organization regarding the 
     organization's medical policy, quality, and medical 
     management procedures.
     Paragraph (1)(C) shall not be construed to require a live 
     evidentiary hearing, a verbatim record, or representation of 
     the appealing party by legal counsel.''.

     SEC. 8. ESTABLISHMENT OF REGULATIONS; CERTIFICATION 
                   PROCEDURES.

       Part C of title XVIII (42 U.S.C. 1395x et seq.) is amended 
     by inserting after section 1888 (42 U.S.C. 1395yy) the 
     following:


    ``ESTABLISHMENT OF REGULATIONS FOR QUALIFIED PROVIDER-SPONSORED 
                             ORGANIZATIONS

       ``Sec. 1889. (a) Interim Regulations.--

[[Page S528]]

       ``(1) In general.--Not later than 180 days after the date 
     of enactment of this section, the Secretary shall promulgate 
     regulations to implement the requirements for qualified 
     provider-sponsored organizations under section 1876). Such 
     regulations shall be issued on an interim basis, but shall 
     become effective upon publication and shall remain in effect 
     until the end of December 31, 2001.
       ``(2) Consultation.--In developing regulations under this 
     subsection, the Secretary shall consult with the National 
     Association of Insurance Commissioners, the American Academy 
     of Actuaries, State health departments, associations 
     representing provider-sponsored organizations, quality 
     experts (including private accreditation organizations), and 
     medicare beneficiaries.
       ``(3) Contracts with state agencies.--The Secretary shall 
     enter into contracts with appropriate State agencies to 
     monitor performance and beneficiary access to services 
     provided under this title during the period in which interim 
     regulations are in effect under this subsection.
       ``(b) Permanent Regulations.--
       ``(1) In general.--Not later than July 1, 2001, the 
     Secretary shall issue permanent regulations to implement the 
     requirements for qualified provider-sponsored organizations 
     under section 1876.
       ``(2) Consultation.--In developing regulations under this 
     subsection, the Secretary shall consult with the 
     organizations and individuals listed in subsection (a)(2).
       ``(3) Effective date.--The permanent regulations developed 
     under this subsection shall be effective on and after January 
     1, 2002.


          ``CERTIFICATION OF PROVIDER-SPONSORED ORGANIZATIONS

       ``Sec. 1890. (a) In General.--
       ``(1) Process for certification.--The Secretary shall 
     establish a process for the certification of provider-
     sponsored organizations as qualified provider-sponsored 
     organizations under section 1876. Such process shall provide 
     that an application for certification shall be approved or 
     denied not later than 90 days after receipt of a complete 
     application.
       ``(2) Fees.--The Secretary may impose user fees on entities 
     seeking certification under this subsection in such amounts 
     as the Secretary deems sufficient to pay the costs to the 
     Secretary resulting from the certification process.
       ``(b) Decertification.--If a qualified provider-sponsored 
     organization is decertified under this section, the 
     organization shall notify each enrollee with the organization 
     under section 1876 of such decertification.''.

     SEC. 9. DEMONSTRATION OF COORDINATED ACUTE AND LONG-TERM CARE 
                   BENEFITS; QUALIFIED PROVIDER-SPONSORED 
                   ORGANIZATIONS UNDER MEDICAID PROGRAMS.

       (a) Demonstration of Coordinated Acute and Long-Term Care 
     Benefits.--The Secretary of Health and Human Services shall 
     provide, in not less than 10 States, for demonstration 
     projects that permit State medicaid programs under title XIX 
     of the Social Security Act (42 U.S.C. 1396 et seq.) to be 
     treated as eligible organizations under section 1876 of that 
     Act (42 U.S.C. 1395mm) for the purpose of demonstrating the 
     delivery of primary, acute, and long-term care through an 
     integrated delivery network that emphasizes noninstitutional 
     care to individuals who are--
       (1) eligible to enroll with an organization under such 
     section; and
       (2) eligible to receive medical assistance under a State 
     program approved under title XIX of the Social Security Act 
     (42 U.S.C. 1396 et seq.).
       (b) Provider-Sponsored Organizations Under Medicaid 
     Programs.--Section 1903(m)(1)(A) (42 U.S.C. 1396b(m)(1)(A)) 
     is amended, in the matter preceding clause (i), by inserting 
     ``(which may be a provider-sponsored organization, as defined 
     in section 1876(l)(1)(B))'' after ``public or private 
     organization''.
       (c) Conforming Amendments.--
       (1) Section 1866(a)(1)(O) is amended by striking 
     ``1876(i)(2)(A)'' and inserting ``1876(j)(2)(A)''.
       (2) Section 1877(e)(3)(B)(i)(II) is amended by striking 
     ``1876(i)(8)(A)(ii)'' and inserting ``1876(j)(8)(A)(ii)''.

     SEC. 10. REPORT ON MEDICARE CONTRACTS INVOLVING PARTIAL RISK.

       (a) Report.--Not later than 4 years after the date of 
     enactment of this Act, the Secretary of Health and Human 
     Services (in this section referred to as the ``Secretary'') 
     shall submit a report to the Committee on Ways and Means and 
     the Committee on Commerce of the House of Representatives and 
     the Committee on Finance of the Senate.
       (b) Contents of Report.--The report described in subsection 
     (a) shall include--
       (1) the number and type of partial-risk contracts entered 
     into by the Secretary under section 1876(i) of the Social 
     Security Act (42 U.S.C. 1395mm(i));
       (2) the type of eligible organizations operating such 
     contracts;
       (3) the impact such contracts have had on increasing 
     beneficiary access and choice under the medicare program 
     under title XVIII of that Act (42 U.S.C. 1395 et seq.); and
       (4) a recommendation as to whether the Secretary should 
     continue to enter into partial-risk contracts under section 
     1876(i) of that Act (42 U.S.C. 1395mm(i)).

     SEC. 11. EFFECTIVE DATES; INTERIM FINAL REGULATIONS.

       (a) Effective Dates.--
       (1) In general.--Except as provided in paragraph (2), this 
     Act and the amendments made by this Act shall take effect on 
     the date of enactment of this Act.
       (2) Eligible organization amendments.--The amendments made 
     by sections 2 through 8 shall take effect on the date of 
     enactment of this Act and shall apply to contract years 
     beginning on or after January 1, 1998.
       (b) Use of Interim Final Regulations.--In order to carry 
     out the amendments made by this Act in a timely manner for 
     eligible organizations under section 1876 of the Social 
     Security Act (42 U.S.C. 1395mm), excluding organizations 
     described in subsection (b)(4) of that section, the Secretary 
     of Health and Human Services may promulgate regulations that 
     take effect on an interim basis, after notice and opportunity 
     for public comment.

  Mr. FRIST. Mr. President, earlier today the President of the United 
States announced that in his budget, which will be released on February 
6, that he would aim to achieve approximately $138 billion in savings 
in the Medicare program. He described this as a first gesture, which I 
think should be applauded because the President clearly recognized the 
importance of saving Medicare and strengthening it for future 
generations.
  The real issue is what policy lies behind that number of $138 billion 
in savings. And to make it a legitimate first step, a first step that 
really does start the debate in Medicare, we need to make sure that 
there is policy which does things like expand choice for senior 
citizens, give them the same options that most other people today have. 
The structural reform I think should include looking at some of the 
payment methodology, another element that relates to this choice in the 
structural reform. We have to accomplish this structural reform if we 
are going to truly strengthen the Medicare program and not just play 
with numbers.
  Again, we will be looking at a lot of numbers over the next several 
weeks. I, as a physician, will keep coming back to the importance of 
having true structural reform built into the program, both part A and 
part B, in the overall Medicare program so that we truly will 
strengthen the system and make sure it is there for not only the 38 
million Americans today, senior citizens and individuals with 
disabilities, but is there 5 years from now, 10 years from now, 15, 20 
years from now on into the future.
  I say all that to preface my reason for rising today, and that is to 
introduce a bill, the Provider Sponsored Organization Act of 1997, to 
be introduced along with my distinguished colleague from West Virginia, 
Mr. Rockefeller. This bill, I believe, offers one of those very 
important structural components which does expand choice for our senior 
citizens, which when injected into the Medicare system today will do 
something very important, and that is inject quality into the 
considerations of options and choices among Medicare recipients. I will 
explain this shortly.
  Provider sponsored organizations, or PSOs, are integrated health care 
delivery systems that are sponsored by local health care providers, 
physicians in hospitals at the local level. Their purpose is to deliver 
a full spectrum of health services. Very specifically, this bill 
establishes the Federal solvency requirements, the licensing 
requirements and those quality standards that PSOs, provider sponsored 
organizations, must meet in order to come to the table and participate 
in the Medicare Program.
  It was more than 20 years ago that Congress really stepped up to the 
plate and, I think, quite innovatively provided Federal guidance for 
the entry of a brand-new phenomenon, and that was of HMOs, health 
maintenance organizations. HMOs were established with the primary 
purpose of coordinating health care delivery in such a way that there 
could be competition and in some way control those skyrocketing costs 
that previously had been associated with the fee-for-service programs. 
What it did, it allowed a combining of the financing delivery system to 
the health care delivery system.
  Today Senator Rockefeller and I are proposing to level the playing 
field once again with our bill to allow PSOs, for the first time, to 
have access to the Medicare market. Our bill sets the national rules by 
which these locally-based networks of providers may compete head to 
head with the traditional managed care organizations. All of that is 
done with the hope that the providers, the physicians, the hospitals,

[[Page S529]]

the frontline people who are taking care of patients, will be able to 
more actively participate in coordinating the overall health care for 
Medicare beneficiaries. We trust that free and fair competition will 
give Medicare beneficiaries more choices and ultimately improve the 
cost, and as I will discuss shortly, the quality of the services they 
receive.
  All of us know that today's health care market in its broadest sense 
is in the midst of dynamic change. The cost of care does continue to 
rise rapidly. There are a growing number of Americans all across this 
country who are shifting from a traditional fee-for-service model to a 
managed-care model. Today's paper, the Washington Post, released new 
figures that show that 75 percent, three-quarters of all working 
Americans today, receive their health insurance benefits through some 
type of managed care. Unfortunately, I think, in many ways, the 
accompanying perception with this shift of managed care, although it is 
not always fair, has been that managed care companies focus almost 
entirely on cutting costs, and then only after costs are cut is the 
quality issue discussed.
  In addition, physicians who have to clear practice decisions through 
managed care organizations, and I can recall before coming to the U.S. 
Senate 3 years ago picking up the telephone and calling a bureaucrat or 
someone sitting 200, 300 and 400 miles away, to ask if I could 
discharge my patient, or if my patient met criteria for discharge, 
whether the hematic or blood count was appropriate, this intrusion is 
really resented by physicians, that health care delivery which really 
is in this country a pact, a relationship between a doctor and a 
patient.

  The mother-may-I mentality that has emerged has frustrated both 
parties and providers and led them to question who is in charge. Is it 
the physician, working with the patient, taking care, who knows that 
patient, who has been trained to take care of that patient, or is it a 
bureaucrat or somebody hundreds of miles away?
  On the other side of the coin, it is very clear that managed care has 
been very successful in forcing an out-of-date delivery system to be 
more accountable. This has had very important benefits for patients. 
That leads me to think of how outcomes, data and results are studied 
very carefully by most managed care organizations, driving us into the 
whole realm of quality assessment. That has been a huge contribution of 
managed care, as well as HMOs. Much of that would not have occurred 
without HMOs or managed care.
  Amidst all this change is a great deal of uncertainty. We have senior 
citizens who are scared to death to change anything, and that was 
reinforced in the recent campaigns where huge advertising campaigns 
were put on television, ``Don't change anything.'' Today, purchasers, 
consumers and providers are really forcing attention back to that issue 
of quality. As a physician, I find that very encouraging.
  People will still tell you today though, as you travel across 
Tennessee or our respective States, that their fear of managed care 
stems a great deal from the fact that they feel their physician is no 
longer in charge of their case, that somebody who is watching just the 
dollars and cents or some bureaucrat is now in charge of their care.
  Now, this has generated, and it really starts at a grassroots level, 
has generated a lot of proposals in the last several months, both at 
the State level and at the Federal level. That includes the ban on the 
gag rule clauses and various length-of-stay proposals after various 
procedures that are done in the hospital.
  America's largest health care payer today is the Federal Medicare 
Program. It has had difficulty, interestingly enough, in attracting 
seniors to managed care. The figure that I just mentioned, three-
quarters of all people today being in managed care, contrasts with 
those senior citizens, all of whom are in Medicare. Only 11 percent, 
only 11 percent compared to 75 percent of Medicare beneficiaries are 
signed up to participate. It is very clear that our senior citizens 
have a great fear today of being herded into the traditional managed 
care plans where they have a fear they will not include the physician 
they choose or the hospital that they might choose.
  The outmoded blank check mentality, on the other hand, of fee-for-
service system is not sustainable over time. It can be one of the 
choices, but it cannot be and will not be the only choice. Given that 
Medicare's own trustees have reported that the program is going to be 
bankrupt in 4 to 5 years, Medicare clearly has to find a way to have 
its growth slowed.
  Medicare beneficiaries who fear managed care may well feel much more 
secure knowing that they have the choice of a health care plan that is 
actually run by providers--doctors working with hospitals, and not just 
a business, not just a traditional insurance company.
  PSOs will help push the market to elevate the level of quality at all 
levels of plans of negotiation and delivery because of the direct 
involvement of physicians with hospitals, of the people who are 
actually delivering that care in every step of the process. Quality, 
all of a sudden, becomes the primary goal. Once at the negotiating 
table, you bring physicians into the room.
  Many see all of this as an ``us-versus-them scenario.'' In fact, 
neither group acts alone when funds are limited, whether care is paid 
for by a Government program, an employer, an insurer, an individual. 
Medicare providers and plan administrators simply must work together to 
increase the value of health care dollars.
  Before coming to the U.S. Senate, as one who used to negotiate, as a 
transplant surgeon and running a large transplant center I negotiated 
with managed care plans. Based on that negotiation, all too often 
quality was not the issue, really, at the table. People would come in 
and say, ``I need a discount of 10 percent, of 15 percent or 20 
percent.'' What was missing at that table was someone--a group of 
providers, physicians with hospitals, working together--who would ask 
those questions about quality. Why do they ask the questions about 
quality? Because they are on the frontline. At the table we will bring 
physicians who are delivering that care to individuals.
  That to me is one of the most exciting things about this bill. It 
injects quality back into the marketplace. Is there any evidence today 
that senior citizens will respond to this alternative? This year the 
Health Care Financing Administration established the demonstration 
project called Medicare Choices.
  This pilot project is examining ways of expanding the choice of 
health care plan options available to Medicare beneficiaries. Included 
in this demonstration are a number of PSO's. Senator Mack recently 
shared with me his experience in Florida with this new demonstration 
project during its first 3 weeks of enrollment. A participating PSO in 
Orlando received 5,500 phone calls from interested beneficiaries in the 
first 5 days. They have already processed enrollment for 400 Medicare 
beneficiaries. They started out holding 13 informational seminars each 
week and had 600 attendees. They are now conducting 15 seminars a week 
with 700 attendees. In addition, the PSO staffs have been making home 
visits to those beneficiaries who are unable to come to the seminars, 
and as a result of those home visits, they are enrolling seven to nine 
individuals a day. The Orlando PSO has already enrolled another 400 
beneficiaries just for February. So, yes, I think our senior citizens 
will respond to this new option, this new option that expands choice, 
when we bring physicians and hospitals through a PSO entity to the 
table.
  Clearly, we can make managed care options more attractive to 
America's seniors by allowing PSO's to participate in the Medicare 
program. What are the other advantages that provider-sponsored 
organizations offer? These groups offer many advantages.
  First, ``one-stop shopping'' for a coordinated package of health care 
services really saves time and the expense of negotiating with 
individual provider contracts.
  Second, because it is the providers who are coordinating care, 
clinical decisions and utilization reviews are conducted by the 
providers themselves and not by a faceless third party charged with 
conducting these reviews.
  Third, incentives to control costs are borne by the only group that 
can truly deliver systematic quality improvement and cost efficiency 
over the long run. Why? Because it is the providers who are monitoring 
that quality. It is

[[Page S530]]

the physicians and hospitals who are actually providing that care and, 
thus, they are in a position to best monitor that quality.
  Finally, PSO's simply tend to have much lower startup and 
administrative costs, making it easier for them to enter the market in 
those key areas that we need to look at, and that is the rural areas. 
These rural areas have a real risk of being underserved without this 
new entity, a PSO.
  What are the advantages of the PSO's--provider-sponsored 
organizations--for the country as a whole? The managed care industry 
has been able to change our paradigms about health care tremendously 
over the last 10 years. Health care is becoming less costly and more 
efficient. But now we have to come back to quality and inject quality 
back into the system and the effectiveness of that health care 
delivery. By bringing providers, the people delivering that care every 
day, to the table for the first time in Medicare, PSO's will create 
that opportunity.
  The PSO's are really in the health care business day in and day out. 
Remember, it is a group of physicians who, every day, are taking care 
of patients who we are bringing to the table for the first time. PSO's 
are in the health care business, not in the insurance business, and 
they are currently excluded from fair participation in the market by a 
system ill-suited to their needs. Let me give a couple of examples.
  Providers navigating the complex State licensure process for the 
first time are really at a significant disadvantage compared to the 
very large insurance companies and the large managed care plans. In a 
competitive marketplace, the timing of entry is critical.
  Even though PSO's do not take on the same level of insurance risk as 
other players, PSO's are now required to submit the same State-defined 
solvency tests and net worth requirements as HMO's. Since the law now 
only allows Medicare to contract with organizations that are licensed 
by the States as HMO's, many PSO's are forced to perform administrative 
contortions in order to serve Medicare patients--contortions that make 
them look like insurance companies, even though, in reality, they are 
not.
  How does the Provider Sponsored Organization Act develop solutions to 
the problem?
  First, it recognizes the potential for PSO's to serve beneficiaries 
by enabling them to contract directly with Medicare, thus expanding the 
range of choices available to each Medicare beneficiary.
  Second, it will provide Federal leadership to the States in 
fashioning a more nationally consistent, streamlined PSO approval 
process.
  However, with access must come accountability. This bill will also 
require PSO's to meet strict standards that ensure that they are able 
to take on the financial risks associated with delivering health care 
services for a set fee, but these are tailored to their primary role as 
providers, as physicians and hospitals; it will require collective 
accountability, where quality and cost are both measured by overall 
practice patterns across the entire PSO, not by case-by-case 
utilization review; finally, it will set a standard for quality 
assurance, a standard that will set the pace for the rest of the 
industry.

  This legislation--I need to be very clear about this--does not, in 
any way, eclipse other health care plans. Rather, it complements, adds 
to the existing menu of health care services. Qualified provider-
sponsored organizations will challenge all health care organizations 
participating with Medicare to meet the goal of an integrated health 
system, a system which truly provides an environment with lower costs, 
better care, higher quality, and preserved relationships between 
caregivers and their patients.
  Mr. President, I send the bill to the desk and ask that it be 
referred to the appropriate committee.
  The PRESIDING OFFICER. The bill will be appropriately referred.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. FRIST. I ask unanimous consent that a letter of endorsement from 
a wide variety of hospital associations be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:
                                                 January 21, 1997.
     Hon. Bill Frist,
     U.S. Senate,
     Washington, DC.
       Dear Senator Frist:  We endorse enthusiastically ``The 
     Provider Sponsored Organization Act of 1997'' which you are 
     introducing in the Senate today. This legislation provides an 
     important new health care choice for Medicare beneficiaries, 
     the Provider Sponsored Organization (PSO) option.
       Medicare beneficiaries deserve a greater variety of high 
     quality health care options from which they can choose--and 
     PSOs provide an outstanding additional choice for them. 
     Medicare PSOs will hold down health care costs by directly 
     managing both the use of services and the cost of providing 
     those services. These PSOs will offer affordable, high-
     quality and coordinated care and be sponsored by 
     organizations that are concerned about the health of the 
     entire community. Because the PSO focused on the Community, 
     its medical management policies are locally focused rather 
     than nationally driven. And, in a PSO plan, a consumer is 
     more likely to maintain stable relationships with his or her 
     personal physician and community hospital, whereas other 
     health plans may change their rosters of participating 
     providers from year to year.
       Your legislation recognizes that Medicare PSOs will not be 
     in the insurance business, but will focus on what has been 
     their primary business for years, the delivery of high 
     quality care. The bill requires, however, high solvency 
     standards for those participating in the program and 
     organizational arrangements that assure the plans are 
     integrated, fully operational, and responsive to the needs of 
     the Medicare beneficiaries that they will serve. Also, 
     Medicare PSOs will reduce administrative expenses in 
     comparison to many of the options offered to Medicare 
     beneficiaries today by stream-ling the organization of 
     administrative functions between the provider and the 
     Medicare program.
       In short, Medicare beneficiaries need and deserve 
     additional health care choices built from the base of their 
     local community of hospitals and doctors. And they should be 
     assured the uniformity of plan standards that only federal 
     regulation can bring.
       We look forward to working with you to seek enactment of 
     this important legislation in the first session of the 105th 
     Congress.
           Sincerely,
         American Hospital Association; Association of American 
           Medial Colleges; Catholic Health Association; 
           Federation of American Health Systems; InterHealth; 
           National Association of Childrens' Hospitals; National 
           Association of Public Hospitals; Premier, Inc.; 
           Voluntary Hospitals of America.
                                 ______
                                 
      By Mr. DASCHLE (for himself, Mr. Chafee, Mr. Kennedy, Mr. 
        Johnson, and Mr. Reid):
  S. 147. A bill to amend title XIX of the Social Security Act to 
provide for coverage of alcoholism and drug dependency residential 
treatment services for pregnant women and certain family members under 
the Medicaid program, and for other purposes; to the Committee on 
Finance.


               The Medicaid Substance Abuse Treatment Act

                                 ______
                                 
      By Mr. DASCHLE (for himself, Mr. Chafee, Mr. Bingaman, Mr. 
        Inouye, Mrs.  Murray, Mr. Johnson, Mr. Campbell and Mr. Reid):
  S. 148. A bill to amend the Public Health Service Act to provide a 
comprehensive program for the prevention of Fetal Alcohol Syndrome; to 
the Committee on Labor and Human Resources.


        The Comprehensive Fetal Alcohol Syndrome Prevention Act

  Mr. DASCHLE. Mr. President, today I am introducing two bipartisan 
bills to help prevent the tragic occurrence of alcohol-related birth 
defects, including both fetal alcohol syndrome [FAS] and fetal alcohol 
effects [FAE]. I speak on behalf of all cosponsors when I say we are 
hopeful we can move these two simple, but important, pieces of 
legislation this year.
  FAS and FAE are devastating, complex birth defects. Many people fail 
to realize that FAS is the leading cause of mental retardation. Too 
many women remain uninformed about the real dangers of alcohol 
consumption during pregnancy. And, unfortunately, misconceptions about 
the impact of alcohol intake during pregnancy are not limited to the 
general public. Even some health care providers are unaware of the 
danger of drinking during pregnancy, and for many years it was widely 
held that moderate alcohol consumption during pregnancy was beneficial. 
I am happy to report that several medical schools have begun teaching 
their students about FAS and FAE, and I remain hopeful that medical 
professionals will continue to learn more

[[Page S531]]

about how to appropriately diagnose and counsel women who are pregnant 
or are considering pregnancy.
  Recent estimates indicate that up to 12,000 children are born each 
year in the United States with FAS. Thousands more are born with FAE. 
It is estimated that the incidence of FAS may be as high as one per 100 
in some Native American communities.
  The costs associated with caring for individuals with FAS are 
staggering. The Centers for Disease Control and Prevention estimates 
that the lifetime cost of treating an individual with FAS is almost 
$1.4 million. The total cost in terms of health care and social 
services to treat all Americans with FAS was estimated to be $2.7 
billion in 1995. This is an extraordinary and unnecessary expense, 
especially when one considers that all alcohol-related birth defects 
are 100 percent preventable.
  The first step toward illuminating this devastating disease is 
raising the public's consciousness about FAS/FAE. Although great 
strides have been made in this regard, much more work remains to be 
done. The Comprehensive Fetal Alcohol Syndrome Prevention Act attempts 
to fill in the gaps in our current FAS/FAE prevention system. It 
contains four major components, representing the provisions of the 
original legislation that have not yet been enacted. These provisions 
include the initiation of a coordinated education and public awareness 
campaign; increased support for basic and applied epidemiologic 
research into the causes, treatment and prevention of FAS/FAE; 
widespread dissemination of FAS/FAE diagnostic criteria; and the 
establishment of an interagency task force to coordinate the wide range 
of Federal efforts in combating FAS/FAE.
  A prevention strategy cannot succeed in the absence of increased 
access to comprehensive treatment programs for pregnant addicted women. 
Many pregnant substance abusers are denied treatment because facilities 
refuse to accept them, or the women cannot accept treatment because 
they lack adequate child care for their existing children while they 
receive treatment. In fact, many treatment programs specifically 
exclude pregnant women or women with children. To make matters worse, 
while Medicaid covers some services associated with substance abuse, 
like outpatient treatment and detoxification, it rails to cover non-
hospital based residential treatment, which is considered by most 
health care professionals to be the most effective method of overcoming 
addiction.
  The Medicaid Substance Abuse Treatment Act would permit coverage of 
residential alcohol and drug treatment for pregnant women and certain 
family members under the Medicaid program, thereby assuring a stable 
source of funding for States that wish to establish these programs. The 
bill has three primary objectives. First, it would facilitate the 
participation of pregnant women who are substance abusers in alcohol 
and drug treatment programs. Second, by increasing the availability of 
comprehensive and effective treatment programs for pregnant women and, 
thus, improving a woman's chances of bearing healthy children, it would 
help combat the serious and ever-growing problem of drug-impaired 
infants and children, many of whom are born with FAS and FAE. Third, it 
would address the unique situation of pregnant addicted Native American 
and Alaska Native women in Indian Health Service areas.

  Mr. President, the cost of prevention is substantially less than the 
downstream costs in money and human capital of caring of children and 
adults who have been impaired due to prenatal exposure to alcohol and 
drugs. These prevention and treatment services are an investment that 
yields substantial long-term dividends--both on a societal level, as 
costs and efforts associated with taking care of children born with 
alcohol-related birth defects decline, and on an individual level, as 
mothers plagued by alcohol and drug addiction are given the means to 
heal themselves and give their unborn children a healthier start in 
life.
  FAS and FAE represent a national tragedy that reaches across economic 
and social boundaries. With researchers from Columbia University 
reporting that at least one of every five pregnant women uses alcohol 
and/or other drugs during pregnancy, the demand for a comprehensive and 
determined response to this devastating problem is clear. I welcome the 
support of my colleagues on these important bills.
  Mr. President, I ask unanimous consent that the text of the bills be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                 S. 147

       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 ``Medicaid Substance Abuse 
     Treatment Act of 1997''.

     SEC. 2. FINDINGS AND PURPOSE.

       (a) Findings.--The Congress finds that--
       (1) a woman's ability to bear healthy children is 
     threatened by the consequences of alcoholism and drug 
     addiction and particularly by the use of alcohol and drugs 
     during pregnancy;
       (2) hundreds of thousands of infants each year are born 
     drug-exposed, approximately 12,000 infants are born each year 
     with fetal alcohol syndrome, and thousands more are born each 
     year with fetal alcohol effects, a less severe version of 
     fetal alcohol syndrome;
       (3) drug use during pregnancy can result in low 
     birthweight, physical deformities, mental retardation, 
     learning disabilities, and heightened nervousness and 
     irritability in newborns;
       (4) fetal alcohol syndrome is the leading identifiable 
     cause of mental retardation in the United States and the only 
     cause that is 100 percent preventable;
       (5) drug-impaired individuals pose extraordinary societal 
     costs in terms of medical, educational, foster care, 
     residential, and support services over the lifetimes of such 
     individuals;
       (6) women, in general, are underrepresented in drug and 
     alcohol treatment programs;
       (7) due to fears among service providers concerning the 
     risks pregnancies pose, pregnant women face more obstacles to 
     substance abuse treatment than do other addicts and many 
     substance abuse treatment programs, in fact, exclude pregnant 
     women or women with children;
       (8) residential alcohol and drug treatment is an important 
     prevention strategy to prevent low birthweight, transmission 
     of AIDS, and chronic physical, mental, and emotional 
     disabilities associated with prenatal exposure to alcohol and 
     other drugs;
       (9) effective substance abuse treatment must address the 
     special needs of pregnant women who are alcohol or drug 
     dependent, including substance-abusing women who may often 
     face such problems as domestic violence, incest and other 
     sexual abuse, poor housing, poverty, unemployment, lack of 
     education and job skills, lack of access to health care, 
     emotional problems, chemical dependency in their family 
     backgrounds, single parenthood, and the need to ensure child 
     care for existing children while undergoing substance abuse 
     treatment;
       (10) nonhospital residential treatment is an important 
     component of comprehensive and effective substance abuse 
     treatment for pregnant addicted women, many of whom need 
     long-term, intensive habilitation outside of their 
     communities to recover from their addiction and take care of 
     themselves and their families; and
       (11) a gap exists under the medicaid program for the 
     financing of comprehensive residential care in the existing 
     continuum of covered alcoholism and drug abuse treatment 
     services for pregnant medicaid beneficiaries.
       (b) Purposes.--The purposes of this Act are--
       (1) to increase the ability of pregnant women who are 
     substance abusers to participate in alcohol and drug 
     treatment;
       (2) to ensure the availability of comprehensive and 
     effective treatment programs for pregnant women, thus 
     promoting a woman's ability to bear healthy children;
       (3) to ensure that nonhospital residential treatment is 
     available to those low-income pregnant addicted women who 
     need long-term, intensive habilitation to recover from their 
     addiction;
       (4) to create a new optional medicaid residential treatment 
     service for alcoholism and drug dependency treatment; and
       (5) to define the core services that must be provided by 
     treatment providers to ensure that needed services will be 
     available and appropriate.

     SEC. 3. MEDICAID COVERAGE OF ALCOHOLISM AND DRUG DEPENDENCY 
                   RESIDENTIAL TREATMENT SERVICES FOR PREGNANT 
                   WOMEN, CARETAKER PARENTS, AND THEIR CHILDREN.

       (a) Coverage of Alcoholism and Drug Dependency Residential 
     Treatment Services.--
       (1) Optional coverage.--Section 1905 of the Social Security 
     Act (42 U.S.C. 1396d) is amended--
       (A) in subsection (a)--
       (i) in paragraph (24), by striking ``and'' at the end;
       (ii) by redesignating paragraph (25) as paragraph (26); and
       (iii) by inserting after paragraph (24) the following new 
     paragraph:
       ``(25) alcoholism and drug dependency residential treatment 
     services (to the extent allowed and as defined in section 
     1931); and''; and
       (B) in the sentence following paragraph (26), as so 
     redesignated--

[[Page S532]]

       (i) in subparagraph (A), by striking ``or'' at the end;
       (ii) in subparagraph (B), by striking the period and 
     inserting ``; or''; and
       (iii) by inserting after subdivision (B) the following:
       ``(C) any such payments with respect to alcoholism and drug 
     dependency residential treatment services under paragraph 
     (25) for individuals not described in section 1932(d).''.
       (2) Alcoholism and drug dependency residential treatment 
     services defined.--Title XIX of the Social Security Act (42 
     U.S.C. 1396 et seq.) is amended--
       (A) by redesignating section 1932 as section 1933; and
       (B) by inserting after section 1931, the following:


    ``ALCOHOLISM AND DRUG DEPENDENCY RESIDENTIAL TREATMENT SERVICES

       ``Sec. 1932. (a) Alcoholism and Drug Dependency Residential 
     Treatment Services.--The term `alcoholism and drug dependency 
     residential treatment services' means all the required 
     services described in subsection (b) which are provided--
       ``(1) in a coordinated manner by a residential treatment 
     facility that meets the requirements of subsection (c) either 
     directly or through arrangements with--
       ``(A) public and nonprofit private entities;
       ``(B) licensed practitioners or federally qualified health 
     centers with respect to medical services; or
       ``(C) the Indian Health Service or a tribal or Indian 
     organization that has entered into a contract with the 
     Secretary under section 102 of the Indian Self-Determination 
     Act (25 U.S.C. 450f) or section 502 of the Indian Health Care 
     Improvement Act (25 U.S.C. 1652) with respect to such 
     services provided to women eligible to receive services in 
     Indian Health Facilities; and
       ``(2) pursuant to a written individualized treatment plan 
     prepared for each individual, which plan--
       ``(A) states specific objectives necessary to meet the 
     individual's needs;
       ``(B) describes the services to be provided to the 
     individual to achieve those objectives;
       ``(C) is established in consultation with the individual;
       ``(D) is periodically reviewed and (as appropriate) revised 
     by the staff of the facility in consultation with the 
     individual;
       ``(E) reflects the preferences of the individual; and
       ``(F) is established in a manner which promotes the active 
     involvement of the individual in the development of the plan 
     and its objectives.
       ``(b) Required Services Defined.--
       ``(1) In general.--The required services described in this 
     subsection are as follows:
       ``(A) Counseling, addiction education, and treatment 
     provided on an individual, group, and family basis and 
     provided pursuant to individualized treatment plans, 
     including the opportunity for involvement in Alcoholics 
     Anonymous and Narcotics Anonymous.
       ``(B) Parenting skills training.
       ``(C) Education concerning prevention of HIV infection.
       ``(D) Assessment of each individual's need for domestic 
     violence counseling and sexual abuse counseling and provision 
     of such counseling where needed.
       ``(E) Room and board in a structured environment with on-
     site supervision 24 hours-a-day.
       ``(F) Therapeutic child care or counseling for children of 
     individuals in treatment.
       ``(G) Assisting parents in obtaining access to--
       ``(i) developmental services (to the extent available) for 
     their preschool children;
       ``(ii) public education for their school-age children, 
     including assistance in enrolling them in school; and
       ``(iii) public education for parents who have not completed 
     high school.
       ``(H) Facilitating access to prenatal and postpartum health 
     care for women, to pediatric health care for infants and 
     children, and to other health and social services where 
     appropriate and to the extent available, including services 
     under title V, services and nutritional supplements provided 
     under the special supplemental food program for women, 
     infants, and children (WIC) under section 17 of the Child 
     Nutrition Act of 1966, services provided by federally 
     qualified health centers, outpatient pediatric services, 
     well-baby care, and early and periodic screening, diagnostic, 
     and treatment services (as defined in section 1905(r)).
       ``(I) Ensuring supervision of children during times their 
     mother is in therapy or engaged in other necessary health or 
     rehabilitative activities, including facilitating access to 
     child care services under title IV and title XX.
       ``(J) Planning for and counseling to assist reentry into 
     society, including appropriate outpatient treatment and 
     counseling after discharge (which may be provided by the same 
     program, if available and appropriate) to assist in 
     preventing relapses, assistance in obtaining suitable 
     affordable housing and employment upon discharge, and 
     referrals to appropriate educational, vocational, and other 
     employment-related programs (to the extent available).
       ``(K) Continuing specialized training for staff in the 
     special needs of residents and their children, designed to 
     enable such staff to stay abreast of the latest and most 
     effective treatment techniques.
       ``(2) Requirement for certain services.--Services under 
     subparagraphs (A), (B), (C), and (D), of paragraph (1) shall 
     be provided in a cultural context that is appropriate to the 
     individuals and in a manner that ensures that the individuals 
     can communicate effectively, either directly or through 
     interpreters, with persons providing services.
       ``(3) Limitations on coverage.--
       ``(A) In general.--Subject to subparagraph (B), services 
     described in paragraph (1) shall be covered in the amount, 
     duration, and scope therapeutically required for each 
     eligible individual in need of such services.
       ``(B) Restrictions on limiting coverage.--A State plan 
     shall not limit coverage of alcoholism and drug dependency 
     residential treatment services for any period of less than 12 
     months per individual, except in those instances where a 
     finding is made that such services are no longer 
     therapeutically necessary for an individual.
       ``(c) Facility Requirements.--The requirements of this 
     subsection with respect to a facility are as follows:
       ``(1) The agency designated by the chief executive officer 
     of the State to administer the State's alcohol and drug abuse 
     prevention and treatment activities and programs has 
     certified to the single State agency under section 1902(a)(5) 
     that the facility--
       ``(A) is able to provide all the services described in 
     subsection (b) either directly or through arrangements with--
       ``(i) public and nonprofit private entities;
       ``(ii) licensed practitioners or federally qualified health 
     centers with respect to medical services; or
       ``(iii) the Indian Health Service or with a tribal or 
     Indian organization that has entered into a contract with the 
     Secretary under section 102 of the Indian Self-Determination 
     Act (25 U.S.C. 450f) or section 502 of the Indian Health Care 
     Improvement Act (25 U.S.C. 1652) with respect to such 
     services provided to women eligible to receive services in 
     Indian Health Facilities; and
       ``(B) except for Indian Health Facilities, meets all 
     applicable State licensure or certification requirements for 
     a facility of that type.
       ``(2)(A) The facility or a distinct part of the facility 
     provides room and board, except that--
       ``(i) subject to subparagraph (B), the facility shall have 
     no more than 40 beds; and
       ``(ii) subject to subparagraph (C), the facility shall not 
     be licensed as a hospital.
       ``(B) The single State agency may waive the bed limit under 
     subparagraph (A)(i) for one or more facilities subject to 
     review by the Secretary. Waivers, where granted, must be made 
     pursuant to standards and procedures set out in the State 
     plan and must require the facility seeking a waiver to 
     demonstrate that--
       ``(i) the facility will be able to maintain a therapeutic, 
     family-like environment;
       ``(ii) the facility can provide quality care in the 
     delivery of each of the services identified in subsection 
     (b);
       ``(iii) the size of the facility will be appropriate to the 
     surrounding community; and
       ``(iv) the development of smaller facilities is not 
     feasible in that geographic area.
       ``(C) The Secretary may waive the requirement under 
     subparagraph (A)(ii) that a facility not be a hospital, if 
     the Secretary finds that such facility is located in an 
     Indian Health Service area and that such facility is the only 
     or one of the only facilities available in such area to 
     provide services under this section.
       ``(3) With respect to a facility providing the services 
     described in subsection (b) to an individual eligible to 
     receive services in Indian Health Facilities, such a facility 
     demonstrates (as required by the Secretary) an ability to 
     meet the special needs of Indian and Native Alaskan women.
       ``(d) Eligible Individuals.--
       ``(1) In general.--A State plan shall limit coverage of 
     alcoholism and drug dependency residential treatment services 
     under section 1905(a)(24) to the following individuals 
     otherwise eligible for medical assistance under this title:
       ``(A) Women during pregnancy, and until the end of the 12th 
     month following the termination of the pregnancy.
       ``(B) Children of a woman described in subparagraph (A).
       ``(C) At the option of a State, a caretaker parent or 
     parents and children of such a parent.
       ``(2) Initial assessment of eligible individuals.--An 
     initial assessment of eligible individuals specified in 
     paragraph (1) seeking alcoholism and drug dependency 
     residential treatment services shall be performed by the 
     agency designated by the chief executive officer of the State 
     to administer the State's alcohol and drug abuse treatment 
     activities (or its designee). Such assessment shall determine 
     whether such individuals are in need of alcoholism or drug 
     dependency treatment services and, if so, the treatment 
     setting (such as inpatient hospital, nonhospital residential, 
     or outpatient) that is most appropriate in meeting such 
     individual's health and therapeutic needs and the needs of 
     such individual's dependent children, if any.
       ``(e) Overall Cap on Medical Assistance and Allocation of 
     Beds.--
       ``(1) Total amount of services as medical assistance.--
       ``(A) In general.--The total amount of services provided 
     under this section as medical assistance for which payment 
     may be made available under section 1903 shall be limited to 
     the total number of beds allowed to be allocated for such 
     services in any given year as specified under subparagraph 
     (B).

[[Page S533]]

       ``(B) Total number of beds.--The total number of beds 
     allowed to be allocated under this subparagraph (subject to 
     paragraph (2)(C)) for the furnishing of services under this 
     section and for which Federal medical assistance may be made 
     available under section 1903 is for calendar year--
       ``(i) 1998, 1,080 beds;
       ``(ii) 1998, 2,000 beds;
       ``(iii) 2000, 3,500 beds;
       ``(iv) 2001, 5,000 beds;
       ``(v) 2002, 6,000 beds; and
       ``(vi) 2003 and for calendar years thereafter, a number of 
     beds determined appropriate by the Secretary.
       ``(2) Allocation of beds.--
       ``(A) Initial allocation formula.--For each calendar year, 
     a State exercising the option to provide the services 
     described in this section shall be allocated from the total 
     number of beds available under paragraph (1)(B)--
       ``(i) in calendar years 1998 and 1999, 20 beds;
       ``(ii) in calendar years 2000, 2001, and 2002, 40 beds; and
       ``(iii) in calendar year 2003 and for each calendar year 
     thereafter, a number of beds determined based on a formula 
     (as provided by the Secretary) distributing beds to States on 
     the basis of the relative percentage of women of childbearing 
     age in a State.
       ``(B) Reallocation of beds.--The Secretary shall provide 
     that in allocating the number of beds made available to a 
     State for the furnishing of services under this section that, 
     to the extent not all States are exercising the option of 
     providing services under this section and there are beds 
     available that have not been allocated in a year as provided 
     in paragraph (1)(B), that such beds shall be reallocated 
     among States which are furnishing services under this section 
     based on a formula (as provided by the Secretary) 
     distributing beds to States on the basis of the relative 
     percentage of women of childbearing age in a State.
       ``(C) Indian health service areas.--In addition to the beds 
     allowed to be allocated under paragraph (1)(B) there shall be 
     an additional 20 beds allocated in any calendar year to 
     States for each Indian Health Service area within the State 
     to be utilized by Indian Health Facilities within such an 
     area and, to the extent such beds are not utilized by a 
     State, the beds shall be reapportioned to Indian Health 
     Service areas in other States.''.
       (3) Maintenance of state financial effort and 100 percent 
     federal matching for services for indian and native alaskan 
     women in indian health services areas.--Section 1903 of the 
     Social Security Act (42 U.S.C. 1396b) is amended by adding at 
     the end the following new subsections:
       ``(x) No payment shall be made to a State under this 
     section in a State fiscal year for alcoholism and drug 
     dependency residential treatment services (described in 
     section 1932) unless the State provides assurances 
     satisfactory to the Secretary that the State is maintaining 
     State expenditures for such services at a level that is not 
     less than the average annual level maintained by the State 
     for such services for the 2-year period preceding such fiscal 
     year.
       ``(y) Notwithstanding the preceding provisions of this 
     section, the Federal medical assistance percentage for 
     purposes of payment under this section for services described 
     in section 1932 provided to individuals residing on or 
     receiving services in an Indian Health Service area shall be 
     100 percent.''.
       (b) Payment on a Cost-Related Basis.--Section 1902(a)(13) 
     of the Social Security Act (42 U.S.C. 1396a(a)(13)) is 
     amended--
       (1) by striking ``and'' at the end of subparagraph (E);
       (2) by adding ``and'' at the end of subparagraph (F); and
       (3) by adding at the end the following new subparagraph:
       ``(G) for payment for alcoholism and drug dependency 
     residential treatment services which the State finds, and 
     makes assurances satisfactory to the Secretary, are 
     reasonable and adequate to meet the costs which must be 
     incurred by efficiently and economically operated facilities 
     in order to provide all the services listed in section 
     1932(b) in conformity with applicable Federal and State laws, 
     regulations, and quality and safety standards and to assure 
     that individuals eligible for such services have reasonable 
     access to such services;''.
       (c) Conforming Amendments.--
       (1) Clarification of optional coverage for specified 
     individuals.--Section 1902(a)(10) of the Social Security Act 
     (42 U.S.C. 1396a(a)(10)) is amended, in the matter following 
     subparagraph (F)--
       (A) by striking ``; and (XIII)'' and inserting ``, 
     (XIII)''; and
       (B) by inserting before the semicolon at the end the 
     following: ``, and (XIII) the making available of alcoholism 
     and drug dependency residential treatment services to 
     individuals described in section 1932(d) shall not, by reason 
     of this paragraph, require the making of such services 
     available to other individuals''.
       (2) Continuation of eligibility for alcoholism and drug 
     dependency treatment for pregnant women for 12 months 
     following end of pregnancy.--Section 1902 of the Social 
     Security Act (42 U.S.C. 1396a) is amended in subsection 
     (e)(5) by striking ``under the plan,'' and all through the 
     period at the end and inserting ``under the plan--
       ``(A) as though she were pregnant, for all pregnancy-
     related and postpartum medical assistance under the plan, 
     through the end of the month in which the 60-day period 
     (beginning on the last day of her pregnancy) ends; and
       ``(B) for alcoholism and drug dependency residential 
     treatment services under section 1932 through the end of the 
     1-year period beginning on the last day of her pregnancy.''.
       (3) Redesignations.--Section 1902 of the Social Security 
     Act (42 U.S.C. 1396a) is further amended in subsection 
     (a)(10)(C)(iv), by striking ``(24)'' and inserting ``(25)''.
       (d) Annual Education and Training in Indian Health Service 
     Areas.--The Secretary of Health and Human Services in 
     cooperation with the Indian Health Service shall conduct on 
     at least an annual basis training and education in each of 
     the 12 Indian Health Service areas for tribes, Indian 
     organizations, residential treatment providers, and State 
     health care workers regarding the availability and nature of 
     residential treatment services available in such areas under 
     the provisions of this Act.
       (e) Effective Date; Transition.--(1) The amendments made by 
     this section apply to alcoholism and drug dependency 
     residential treatment services furnished on or after January 
     1, 1998, without regard to whether or not final regulations 
     to carry out such amendments have been promulgated by such 
     date.
       (2) The Secretary of Health and Human Services shall not 
     take any compliance, disallowance, penalty, or other 
     regulatory action against a State under title XIX of the 
     Social Security Act with regard to alcoholism and drug 
     dependency residential treatment services (as defined in 
     section 1932(a) of such Act) made available under such title 
     on or after January 1, 1998, before the date the Secretary 
     issues final regulations to carry out the amendments made by 
     this section, if the services are provided under its plan in 
     good faith compliance with such amendments.

                                 S. 148

       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 ``Comprehensive Fetal Alcohol 
     Syndrome Prevention Act''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) Fetal Alcohol Syndrome is the leading known cause of 
     mental retardation, and it is 100 percent preventable;
       (2) each year, up to 12,000 infants are born in the United 
     States with Fetal Alcohol Syndrome, suffering irreversible 
     physical and mental damage;
       (3) thousands more infants are born each year with Fetal 
     Alcohol Effects, which are lesser, though still serious, 
     alcohol-related birth defects;
       (4) children of women who use alcohol while pregnant have a 
     significantly higher infant mortality rate (13.3 per 1000) 
     than children of those women who do not use alcohol (8.6 per 
     1000);
       (5) Fetal Alcohol Syndrome and Fetal Alcohol Effects are 
     national problems which can impact any child, family, or 
     community, but their threat to American Indians and Alaska 
     Natives is especially alarming;
       (6) in some American Indian communities, where alcohol 
     dependency rates reach 50 percent and above, the chances of a 
     newborn suffering Fetal Alcohol Syndrome or Fetal Alcohol 
     Effects are up to 30 times greater than national averages;
       (7) in addition to the immeasurable toll on children and 
     their families, Fetal Alcohol Syndrome and Fetal Alcohol 
     Effects pose extraordinary financial costs to the Nation, 
     including the costs of health care, education, foster care, 
     job training, and general support services for affected 
     individuals;
       (8) the total cost to the economy of Fetal Alcohol Syndrome 
     was approximately $2,500,000,000 in 1995, and over a 
     lifetime, health care costs for one Fetal Alcohol Syndrome 
     child are estimated to be at least $1,400,000;
       (9) researchers have determined that the possibility of 
     giving birth to a baby with Fetal Alcohol Syndrome or Fetal 
     Alcohol Effects increases in proportion to the amount and 
     frequency of alcohol consumed by a pregnant woman, and that 
     stopping alcohol consumption at any point in the pregnancy 
     reduces the emotional, physical, and mental consequences of 
     alcohol exposure to the baby; and
       (10) though approximately 1 out of every 5 pregnant women 
     drink alcohol during their pregnancy, we know of no safe dose 
     of alcohol during pregnancy, or of any safe time to drink 
     during pregnancy, thus, it is in the best interest of the 
     Nation for the Federal Government to take an active role in 
     encouraging all women to abstain from alcohol consumption 
     during pregnancy.

     SEC. 3. PURPOSE.

       It is the purpose of this Act to establish, within the 
     Department of Health and Human Services, a comprehensive 
     program to help prevent Fetal Alcohol Syndrome and Fetal 
     Alcohol Effects nationwide. Such program shall--
       (1) coordinate, support, and conduct basic and applied 
     epidemiologic research concerning Fetal Alcohol Syndrome and 
     Fetal Alcohol Effects;
       (2) coordinate, support, and conduct national, State, and 
     community-based public awareness, prevention, and education 
     programs on Fetal Alcohol Syndrome and Fetal Alcohol Effects; 
     and

[[Page S534]]

       (3) foster coordination among all Federal agencies that 
     conduct or support Fetal Alcohol Syndrome and Fetal Alcohol 
     Effects research, programs, and surveillance and otherwise 
     meet the general needs of populations actually or potentially 
     impacted by Fetal Alcohol Syndrome and Fetal Alcohol Effects.

     SEC. 4. ESTABLISHMENT OF PROGRAM.

       Title III of the Public Health Service Act (42 U.S.C. 241 
     et seq.) is amended by adding at the end the following:

          ``PART O--FETAL ALCOHOL SYNDROME PREVENTION PROGRAM

     ``SEC. 399G. ESTABLISHMENT OF FETAL ALCOHOL SYNDROME 
                   PREVENTION PROGRAM.

       ``(a) Fetal Alcohol Syndrome Prevention Program.--The 
     Secretary shall establish a comprehensive Fetal Alcohol 
     Syndrome and Fetal Alcohol Effects prevention program that 
     shall include--
       ``(1) an education and public awareness program to--
       ``(A) support, conduct, and evaluate the effectiveness of--
       ``(i) training programs concerning the prevention, 
     diagnosis, and treatment of Fetal Alcohol Syndrome and Fetal 
     Alcohol Effects;
       ``(ii) prevention and education programs, including school 
     health education and school-based clinic programs for school-
     age children, concerning Fetal Alcohol Syndrome and Fetal 
     Alcohol Effects; and
       ``(iii) public and community awareness programs concerning 
     Fetal Alcohol Syndrome and Fetal Alcohol Effects;
       ``(B) provide technical and consultative assistance to 
     States, Indian tribal governments, local governments, 
     scientific and academic institutions, and nonprofit 
     organizations concerning the programs referred to in 
     subparagraph (A); and
       ``(C) award grants to, and enter into cooperative 
     agreements and contracts with, States, Indian tribal 
     governments, local governments, scientific and academic 
     institutions, and nonprofit organizations for the purpose 
     of--
       ``(i) evaluating the effectiveness, with particular 
     emphasis on the cultural competency and age-appropriateness, 
     of programs referred to in subparagraph (A);
       ``(ii) providing training in the prevention, diagnosis, and 
     treatment of Fetal Alcohol Syndrome and Fetal Alcohol 
     Effects;
       ``(iii) educating school-age children, including pregnant 
     and high-risk youth, concerning Fetal Alcohol Syndrome and 
     Fetal Alcohol Effects, with priority given to programs that 
     are part of a sequential, comprehensive school health 
     education program; and
       ``(iv) increasing public and community awareness concerning 
     Fetal Alcohol Syndrome and Fetal Alcohol Effects through 
     culturally competent projects, programs, and campaigns, and 
     improving the understanding of the general public and 
     targeted groups concerning the most effective intervention 
     methods to prevent fetal exposure to alcohol;
       ``(2) an applied epidemiologic research and prevention 
     program to--
       ``(A) support and conduct research on the causes, 
     mechanisms, diagnostic methods, treatment, and prevention of 
     Fetal Alcohol Syndrome and Fetal Alcohol Effects;
       ``(B) provide technical and consultative assistance and 
     training to States, Tribal governments, local governments, 
     scientific and academic institutions, and nonprofit 
     organizations engaged in the conduct of--
       ``(i) Fetal Alcohol Syndrome prevention and early 
     intervention programs; and
       ``(ii) research relating to the causes, mechanisms, 
     diagnosis methods, treatment, and prevention of Fetal Alcohol 
     Syndrome and Fetal Alcohol Effects; and
       ``(C) award grants to, and enter into cooperative 
     agreements and contracts with, States, Indian tribal 
     governments, local governments, scientific and academic 
     institutions, and nonprofit organizations for the purpose 
     of--
       ``(i) conducting innovative demonstration and evaluation 
     projects designed to determine effective strategies, 
     including community-based prevention programs and 
     multicultural education campaigns, for preventing and 
     intervening in fetal exposure to alcohol;
       ``(ii) improving and coordinating the surveillance and 
     ongoing assessment methods implemented by such entities and 
     the Federal Government with respect to Fetal Alcohol Syndrome 
     and Fetal Alcohol Effects;
       ``(iii) developing and evaluating effective age-appropriate 
     and culturally competent prevention programs for children, 
     adolescents, and adults identified as being at-risk of 
     becoming chemically dependent on alcohol and associated with 
     or developing Fetal Alcohol Syndrome and Fetal Alcohol 
     Effects; and
       ``(iv) facilitating coordination and collaboration among 
     Federal, State, local government, Indian tribal, and 
     community-based Fetal Alcohol Syndrome prevention programs;
       ``(3) a basic research program to support and conduct basic 
     research on services and effective prevention treatments and 
     interventions for pregnant alcohol-dependent women and 
     individuals with Fetal Alcohol Syndrome and Fetal Alcohol 
     Effects;
       ``(4) a procedure for disseminating the Fetal Alcohol 
     Syndrome and Fetal Alcohol Effects diagnostic criteria 
     developed pursuant to section 705 of the ADAMHA 
     Reorganization Act (42 U.S.C. 485n note) to health care 
     providers, educators, social workers, child welfare workers, 
     and other individuals; and
       ``(5) the establishment, in accordance with subsection (b), 
     of an interagency task force on Fetal Alcohol Syndrome and 
     Fetal Alcohol Effects to foster coordination among all 
     Federal agencies that conduct or support Fetal Alcohol 
     Syndrome and Fetal Alcohol Effects research, programs, and 
     surveillance, and otherwise meet the general needs of 
     populations actually or potentially impacted by Fetal Alcohol 
     Syndrome and Fetal Alcohol Effects.
       ``(b) Interagency Task Force.--
       ``(1) Membership.--The Task Force established pursuant to 
     paragraph (5) of subsection (a) shall--
       ``(A) be chaired by the Secretary or a designee of the 
     Secretary, and staffed by the Administration; and
       ``(B) include representatives from all relevant agencies 
     and offices within the Department of Health and Human 
     Services, the Department of Agriculture, the Department of 
     Education, the Department of Defense, the Department of the 
     Interior, the Department of Justice, the Department of 
     Veterans Affairs, the Bureau of Alcohol, Tobacco and 
     Firearms, the Federal Trade Commission, and any other 
     relevant Federal agency.
       ``(2) Functions.--The Task Force shall--
       ``(A) coordinate all Federal programs and research 
     concerning Fetal Alcohol Syndrome and Fetal Alcohol Effects, 
     including programs that--
       ``(i) target individuals, families, and populations 
     identified as being at risk of acquiring Fetal Alcohol 
     Syndrome and Fetal Alcohol Effects; and
       ``(ii) provide health, education, treatment, and social 
     services to infants, children, and adults with Fetal Alcohol 
     Syndrome and Fetal Alcohol Effects;
       ``(B) coordinate its efforts with existing Department of 
     Health and Human Services task forces on substance abuse 
     prevention and maternal and child health; and
       ``(C) report on a biennial basis to the Secretary and 
     relevant committees of Congress on the current and planned 
     activities of the participating agencies.
       ``(c) Scientific Research and Training.--The Director of 
     the National Institute on Alcohol Abuse and Alcoholism, with 
     the cooperation of members of the interagency task force 
     established under subsection (b), shall establish a 
     collaborative program to provide for the conduct and support 
     of research, training, and dissemination of information to 
     researchers, clinicians, health professionals and the public, 
     with respect to the cause, prevention, diagnosis, and 
     treatment of Fetal Alcohol Syndrome and the related condition 
     know as Fetal Alcohol Effects.

     ``SEC. 399H. ELIGIBILITY.

       ``To be eligible to receive a grant, or enter into a 
     cooperative agreement or contract under this part, an entity 
     shall--
       ``(1) be a State, Indian tribal government, local 
     government, scientific or academic institution, or nonprofit 
     organization; and
       ``(2) prepare and submit to the Secretary an application at 
     such time, in such manner, and containing such information as 
     the Secretary may prescribe, including a description of the 
     activities that the entity intends to carry out using amounts 
     received under this part.

     ``SEC. 399I. AUTHORIZATION OF APPROPRIATIONS.

       ``There are authorized to be appropriated to carry out this 
     part, such sums as are necessary for each of the fiscal years 
     1997 through 2001.''.
                                 ______
                                 
  Mr. DASCHLE. Mr. President, today I am reintroducing two bipartisan 
bills to help prevent the tragic occurrence of alcohol-related birth 
defects, including both fetal alcohol syndrome [FAS] and fetal alcohol 
effects [FAE]. I speak on behalf of all cosponsors when I say we are 
hopeful we can move these two simple, but important pieces of 
legislation this year.
  Recent estimates indicate that up to 12,000 children are born each 
year in the United States with FAS. Thousands more are born with FAE. 
It is estimated that the incidence of FAS may be as high as one per 100 
in some Native American communities.
  FAS and FAE are devastating, complex birth defects. Many people fail 
to realize that FAS is the leading cause of mental retardation. Too 
many women remain uninformed about the real dangers of alcohol 
consumption during pregnancy. In fact, at least one recently published 
popular pregnancy book actually recommends a drink or two to relax 
later in pregnancy. And, unfortunately, misconceptions about the impact 
of alcohol intake during pregnancy are not limited to the general 
public. For many years it was widely, though mistakenly, believed in 
the medical community that moderate alcohol consumption during 
pregnancy was beneficial. These misperceptions are not only 
frightening, but life threatening. Children born to women who drink 
alcohol during pregnancy have a 50 percent higher infant mortality rate 
than the children of women who abstain. Fortunately, several medical 
and nursing schools have begun offering a course specifically on FAS 
and

[[Page S535]]

FAE. I remain hopeful that medical professionals will continue to learn 
more about how to appropriately counsel women who are pregnant or are 
considering pregnancy and how to recognize and diagnose children who 
may be suffering from FAS or FAE.
  The costs associated with caring for the individual with FAS and FAE 
are staggering. The Centers for Disease Control and Prevention 
estimates that the lifetime cost of treating an individual with FAS is 
almost $1.4 million. The total costs in terms of health care and social 
services to treat all Americans with FAS was estimated to be $2.7 
billion 1995. This is an extraordinary and unnecessary expense, 
especially when one considers that all alcohol-related birth defects 
are 100% preventable.
  The first step eliminating this devastating disease is raising the 
public's consciousness about FAS/FAE. Although great strides have been 
made in this regard, much more work remains to be done. The 
Comprehensive Fetal Alcohol Syndrome Prevention Act attempts to fill in 
the gaps in our current FAS/FAE prevention system. In contains four 
major components, representing the provisions of the original 
legislation that have not yet been enacted. These provisions include 
the initiation of a coordinated education and public awareness 
campaign; increased support for basic and applied epidemiologic 
research into the causes, treatment and prevention of FAS/FAE; 
widespread dissemination of FAS/FAE diagnostic criteria; and the 
establishment of an inter-agency task force to coordinate the wide 
range of federal efforts in combating FAS/FAE.
  A prevention strategy cannot succeed in the absence of increases 
access to comprehensive treatment programs for pregnant addicted women. 
Many pregnant substance abusers are denied treatment because facilities 
specifically exclude them, or they cannot find or afford adequate child 
care for their existing children while they receive residential 
treatment. To make matters worse, while Medicaid covers some services 
associated with substance abuse, like outpatient treatment and 
detoxification, it fails to cover non-hospital based residential 
treatment, which is considered by most health care professionals to be 
the most effective method of overcoming addiction.
  The Medicaid Substance Abuse Treatment Act would create an optional 
Medicaid benefit that would permit coverage of non-hospital based 
residential alcohol and drug treatment for Medicaid-eligible pregnant 
women and their children. This would assure a stable source of funding 
for states that wish to establish these programs. The bill has three 
primary objectives. First, it would facilitate the participation of 
pregnant women who are substance abusers in alcohol and drug treatment 
programs. Second, by increasing the availability of comprehensive and 
effective treatment programs for pregnant women and, thus, improving a 
woman's ability to bear health children, it would help combat the 
serious and ever-growing problem of drug-impaired infants and children, 
many of whom are also born with FAS or FAE. Third, it would address the 
unique situation of pregnant, addicted Native American and Alaska 
Native women in Indian Health Service areas.
  Mr. President, the cost of prevention is substantially less than the 
downstream costs in money and human capital of caring for children and 
adults who have been impaired due to prenatal exposure to alcohol and 
drugs. These prevention and treatment services are an investment that 
yields substantial long-term dividends--both on a societal level, as 
costs and efforts associated with taking care of children born with 
alcohol-related birth defects decline and on a individual level, as 
mothers plagued by alcohol and drug addiction are given the means to 
heal themselves and give their unborn children a healthier start in 
life.
  FAS and FAE represent a national tragedy that reaches across economic 
and social boundaries. With researchers from Columbia University 
reporting that at least one of every five pregnant women uses alcohol 
and/or other drugs during pregnancy, the demand for a comprehensive and 
determined response to this devastating problem is clear. I welcome the 
support of my colleagues on these important bills.
                                 ______
                                 
      By Mr. MOYNIHAN (for himself and Mr. Grassley):
  S. 149. A bill to amend the National Narcotics Leadership Act of 1988 
to establish qualification standards for individuals nominated to be 
the Deputy Director of Demand Reduction in the Office of National Drug 
Control Policy; to the Committee on Labor and Human Resources.


                national drug control policy legislation

  Mr. MOYNIHAN. Mr. President, I rise today to introduce a bill, 
cosponsored by Senator Charles E. Grassley, to amend the Anti-Drug 
Abuse Act of 1988 to establish qualification standards for individuals 
nominated for the position of Deputy Director of Demand Reduction in 
the Office of National Drug Control Policy.
  On May 17, 1988, then-Senate Majority Leader Robert S. Byrd 
established a working group on substance abuse which I was to co-chair 
with Senator Sam Nunn of Georgia. Interdiction and crackdown were then 
all the rage. My role on the working group was to assert that, other 
than to raise the price of drugs somewhat, interdiction was not going 
to have the slightest effect on supply. We saw the failure of supply 
side measures during Prohibition and in the French Connection model of 
cutting off production abroad. Accordingly, any comprehensive 
legislation should place at least equal emphasis on demand.
  The Anti-Drug Abuse Act of 1988, which became law on November 18 of 
that year, did just that. Section 2012 sets out the purposes of the 
law. They include: To increase to the greatest extent possible the 
availability and quality of treatment services so that treatment on 
request may be provided to all individuals desiring to rid themselves 
of their substance abuse problem.
  The legislation established an Office of National Drug Control Policy 
in the executive office of the President. It was headed by a so-called 
czar and included a deputy director of supply reduction and a deputy 
director for demand reduction. The Deputy Director for Demand would 
seek a clinical device, a pharmacological block, similar to methadone 
treatment for heroin. The Deputy Director would know the chemistry of 
the subject enough to promote some treatment beyond the sort of 
psychiatric treatment currently available.
  President Bush made extraordinary, fine appointments. He appointed 
Dr. William Bennett as the head of the office. As the Deputy Director 
for Demand Reduction he appointed Dr. Herbert Kleber, a physician at 
the Yale Medical School, a research scientist, and exactly the person 
you would want for this.
  Then, after a while, Bennett left, and Kleber also left. Kleber has 
gone to Columbia College of Physicians and Surgeons and is working at 
the New York Psychiatric Institute in this field.
  Nobody succeeded him in a scientific role. There have been a number 
of persons in the job. I am sure they are good persons, but they are 
nothing like what we had in mind in the legislation.
  The bill I introduce today would require that the Deputy Director of 
Demand Reduction have a scientific background and be a leader in the 
field of substance abuse prevention or treatment. This is no more than 
what the 1988 Act intended. We enacted a good statute which has been 
trivialized. If we are serious about getting hold of the drug dealer 
epidemic in this country, we must have an individual eminent in the 
field of substance abuse prevention leading the charge on demand 
reduction.
  Mr. GRASSLEY. Mr. President, Senator Moynihan and I are introducing 
Legislation today to spell out more specifically the requirements for 
the office of Deputy Director for Demand Reduction at the Office of 
National Drug Control Policy. I know it is Senator Moynihan's view, and 
mine, that this office requires an incumbent of the highest 
qualifications in the demand reduction area. This is especially true at 
this time. We have seen 4 years of rising teenage drug use in this 
country. We have seen initiatives that move us perilously close to 
legalizing a dangerous drug. We have seen the cynical exploitation of 
the public's trust in order to do this. In response, we need credible, 
visible leadership of the highest caliber in the Nation's chief demand 
reduction office. These qualifications were what Congress had in mind

[[Page S536]]

when we created the Drug Czar's office and the position of Deputy 
Director for Demand Reduction. Today, we are introducing legislation 
that will spell out more clearly this intent.
  Last year, Congress increased funding to restore the Drug Czar's 
office to effective staffing levels. This year we will be reviewing the 
reauthorization of the office. Congress remains deeply interested in 
ONDCP and I and others will be working to ensure that it is meeting the 
expectations that we have in it.
  As we work during this Congress to ensure a drug-free future for our 
children, we must have an individual in charge of our national demand 
reduction efforts who can command the respect of parents, doctors, 
treatment and prevention specialist, and the public. I am pleased to 
join Senator Moynihan in this effort. Our legislation will ensure that 
we will see candidates for this important post who command universal 
respect. I welcome the support of our colleagues. I look forward to 
having someone of outstanding capabilities with whom we can work and in 
whom the public can have confidence.
                                 ______
                                 
      By Mr. MOYNIHAN (for himself, Mr. D'Amato, and Mr. Dodd):
  S. 150. A bill to amend section 552 of title 5, United States Code, 
(commonly referred to as the Freedom of Information Act), to provide 
for disclosure of information relating to individuals who committed 
Nazi war crimes, and for other purposes; to the Committee on the 
Judiciary.


                     The War Crimes Disclosure Act

  Mr. MOYNIHAN. Mr. President, today I am joined by Senators D'Amato 
and Dodd in introducing the War Crime Disclosure Act. This legislation 
is a companion to a measure introduced in the House, sponsored by 
Representative Maloney.
  The measure is a simple one. It requires the disclosure of 
information under the Freedom of Information Act regarding individuals 
who participated in Nazi war crimes.
  Ideally, such documents would be made available to the public without 
further legislation and without having to go through the slow process 
involved in getting information through the Freedom of Information Act 
[FOIA]. Unfortunately, this is not the case. Researchers seeking 
information on Nazi war criminals are denied access to relevant 
materials in the possession of the U.S. Government, even when the 
disclosure of these documents no longer poses a threat to national 
security--if indeed such disclosure ever did.
  With the passing of time it becomes ever more important to document 
Nazi war crimes, lest the enormity of those crimes be lost to history. 
The greater access which this legislation provides will add clarity of 
this important effort. I applaud those researchers who continue to 
pursue this important work.
  I would also like to call to the attention of my colleagues the 
excellent work of the Office of Special Investigations of the 
Department of Justice. This office has a monumental task and I would 
not wish to add to that burden or divert its officials from their 
primary goal of pursuing Nazi war criminals. To that end, I would note 
that this legislation does not apply to the Office of Special 
Investigations, as it is not identified in paragraph (1)(B) of the bill 
as a ``specified agency.'' I would also add that there is a provision 
in the bill which specifically prohibits the disclosure of information 
which would compromise the work of the Office of Special 
Investigations.
  I would like to thank Representative Maloney for her original work on 
this subject in the House of Representatives. I would also thank 
Senators D'Amato and Dodd for joining me in this effort here in the 
Senate.
  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:

                [From the New York Times, June 25, 1996]

                      Ms. Maloney and Mr. Waldheim

                          (By A.M. Rosenthal)

       For a full half-century, with determination and skill, and 
     with the help of the law, U.S. intelligence agencies have 
     kept secret the record of how they used Nazis for so many 
     years after World War II, what the agencies got from these 
     services--and what they gave as payback.
       Despite the secrecy blockade, we do know how one 
     cooperative former Wehrmacht officer and war crimes suspect 
     was treated. We know the U.S. got him the Secretary 
     Generalship of the U.N. as reward and base.
       For more than two years, Congress has had legislation 
     before it to allow the public access to information about 
     U.S.-Nazi intelligence relations--a bill introduced by 
     Representative Carolyn B. Maloney, a Manhattan Democrat, and 
     now winding through the legislative process.
       If Congress passes her War Crimes Disclosure Act, H.R. 
     1281, questions critical to history and the conduct of 
     foreign affairs can be answered and the power of government 
     to withhold them reduced. The case of Kurt Waldheim is the 
     most interesting example--the most interesting we know of at 
     the moment.
       Did the U.S. know when it backed him for Secretary General 
     that he had been put on the A list of war-crime suspects, 
     adopted in London in 1948, for his work as a Wehrmacht 
     intelligence officer in the Balkans, when tens of thousands 
     of Yugoslavs, Greeks, Italians, Jew and non-Jew, were being 
     deported to death?
       If not, isn't that real strange, since the U.S. 
     representative on the War Crimes Commission voted to list 
     him. A report was sent to the State Department. Didn't State 
     give the C.I.A. a copy--a peek?
       And when he was running for Secretary General why did State 
     Department biographies omit any reference to his military 
     service--just as he forgot to mention it in his 
     autobiographies?
       If all that information was lost by teams of stupid clerks, 
     once the Waldheim name came up for the job why did not the 
     U.S. do the obvious thing--check with Nazi and war-crime 
     records in London and Berlin to see if his name by any chance 
     was among those dearly wanted?
       Didn't the British know? They voted for the listing too. 
     And the Russians--Yugoslavia moved to list him when it was a 
     Soviet satellite. Belgrade never told Moscow?
       How did Mr. Waldheim repay the U.S. for its enduring 
     fondness to him? Twice it pushed him successfully for the 
     job. The third time it was among few countries that backed 
     him again but lost. Nobody can say the U.S. was not loyal to 
     the end.
       Did he also serve the Russians and British? One at a time? 
     Or was he a big-power groupie, serving all?
       One thing is not secret any longer, thanks to Prof. Robert 
     Herzstein of the University of South Carolina history 
     department. He has managed through years of perseverance to 
     pry some information loose. He found that while Mr. Waldheim 
     worked for the Austrian bureaucracy, the U.S. Embassy in 
     Vienna year after year sent in blurby reports about his 
     assistance to American foreign policy--friendly, outstanding, 
     cooperative, receptive to American thinking. All the while, 
     this cuddly fellow was on the A list, which was in the locked 
     files or absent with official leave.
       On May 24, 1994, I reported on Professor Herzstein's 
     findings and the need for opening files of war-crime 
     suspects. Representative Maloney quickly set to work on her 
     bill to open those files to Freedom of Information requests--
     providing safeguards for personal privacy, on-going 
     investigations and national security if ever pertinent.
       Her first bill expired in the legislative machinery and in 
     1995 she tried again. She got her hearing recently thanks to 
     the chairman of her subcommittee of the Government Reform 
     Committee--Stephen Horn, the California Republican.
       If the leaders of Congress will it, the Maloney bill can be 
     passed this year. I nominate my New York Senators to 
     introduce it in the Senate. It will be a squeeze to get it 
     passed before the end of the year, so kindly ask your 
     representatives and senators to start squeezing.
       If not, the laborious legislative procedure will have to be 
     repeated next session. Questions about the Waldheim 
     connection will go unanswered, and also about other cases 
     that may be in the files or strangely misplaced, which will 
     also be of interest.
                                 ______
                                 
      By Mr. MOYNIHAN:
  S. 151. A bill for the relief of Dr. Yuri F. Orlov of Ithaca, New 
York; to the Committee on Governmental Affairs.


                      soviet dissident legislation

  Mr. MOYNIHAN. Mr. President, today I rise to introduce a bill to 
recognize the immeasurable debt which we owe to a leading Soviet 
dissident. Dr. Yuri F. Orlov, a founding member of the Soviet chapter 
of Amnesty International and founder of the Moscow Helsinki Watch Group 
(the first nation-wide organization in Soviet history to question 
government actions), who now lives in Ithaca, New York, is threatened 
by poverty. Yuri Orlov could not be stopped by the sinister forces of 
the Soviet Union and, no doubt, he will not be stopped by poverty. But 
I rise today in hopes that it will not come to that.
  Dr. Orlov's career as a dissident began while he was working at the 
famous Institute for Theoretical and Experimental Physics in Moscow. At 
the Institute in 1956 he made a pro-democracy speech which cost him his 
position and forced him to leave Moscow.

[[Page S537]]

He was able to return in 1972, whereupon he began his most outspoken 
criticism of the Soviet regime.
  On September 13, 1973, in response to a government orchestrated-
public smear campaign against Audrei Sakharov, Orlov sent ``Thirteen 
Questions to Brezhnev,'' a letter which advocated freedom of the press 
and reform of the Soviet economy. One month later, he became a founding 
member of the Soviet chapter of Amnesty International. His criticism of 
the Soviet Union left him unemployed and under constant KGB 
surveillance, but he would not be silenced.
  In May, 1976 Dr. Orlov founded the Moscow Helsinki Watch Group to 
pressure the Soviet Union to honor the human rights obligations it had 
accepted under the Helsinki Accords signed in 1975. His leadership of 
the Helsinki Watch Group led to his arrest and, eventually, to a show 
trial in 1978. He was condemned to seven years in a labor camp and five 
years in exile.
  After having served his prison sentence, and while still in exile, 
Dr. Orlov was able to immigrate to the United States in 1986 in an 
exchange arranged by the Reagan Administration. A captured Soviet spy 
was returned in exchange for the release of Dr. Orlov and a writer for 
U.S. News & World Report who had been arrested in Moscow, Nicholas 
Daniloff.
  Since then, Dr. Orlov has served as a senior scientist at Cornell 
University in the Newman Laboratory of Nuclear Studies. Now that he is 
72 years old, he is turning his thoughts to retirement. Unfortunately, 
since he has only been in the United States for 10 years, his 
retirement income from the Cornell pension plus Social Security will be 
insufficient: only a fraction of what Cornell faculty of comparable 
distinction now get at retirement.
  His scientific colleagues, Nobel physicist Dr. Hans A. Bethe, Kurt 
Gottfried of Cornell, and Sidney Drell of Stanford, have made concerted 
efforts to raise support for Dr. Orlov's retirement, but they are in 
further need.
  To this end, I have agreed to assist these notable scientists in 
their endeavor to secure a more appropriate recompense for this heroic 
dissident. That is the purpose that brings me here to the Senate floor 
today, on the first day of the 105th Congress, to introduce a bill on 
Dr. Orlov's behalf. While I acknowledge the daunting prospects that 
face private relief bills these days, I offer the bill at least as a 
step toward bringing the kind of attention to Dr. Orlov's situation 
which he deserves.
  To understand Dr. Orlov's contributions to ending the Cold War, I 
would draw my colleagues attention to his autobiography, Dangerous 
Thoughts: Memoirs of a Russian Life. It captures the fear extant in 
Soviet society and the courage of men like Orlov, Sakharov, Sharansky, 
Solzhenitsyn, and others who defied the Soviet regime. Dr. Orlov, who 
spent 7 years in a labor camp and two years in Siberian exile, never 
ceased protesting against oppression. Despite deteriorating health and 
the harsh conditions of the camp, Dr. Orlov smuggled out messages in 
support of basic rights and nuclear arms control. His bravery and that 
of his dissident colleagues played no small role in the dissolution of 
the Soviet Union. I am sure many would agree that we owe them a 
tremendous debt. This then is a call to all those who agree with that 
proposition. Dr. Orlov is now in need; please join our endeavor.
                                 ______
                                 
      By Mr. MOYNIHAN (for himself and Mr. D'Amato):
  S. 152. A bill to provide for the relief and payment of an equitable 
claim to the estate of Dr. Beatrice Braude of New York, New York; to 
the Committee on the Judiciary.


                       PRIVATE RELIEF LEGISLATION

  Mr. MOYNIHAN. Mr. President, I rise today to introduce a bill, 
cosponsored by Senator D'Amato, to provide for the relief and payment 
of an equitable claim to the estate of Dr. Beatrice Braude.
  Mr. President, this is a measure of justice which brings back 
memories of an old and awful time. Dr. Braude, a linguist fluent in 
several languages, was dismissed from her position at the United States 
Information Agency (USIA) in 1953 as a result of accusations of 
disloyalty to the United States. The accusations were old; two years 
earlier, the State Department's Loyalty Security Board had investigated 
and unanimously voted to dismiss them. The Board sent a letter to Dr. 
Braude stating ``there is no reasonable doubt as to your loyalty to the 
United States Government or as to your security risk to the Department 
of State.''
  Dr. Braude was terminated one day after being praised for her work 
and informed that she probably would be promoted. USIA officials told 
her that the termination was due to budgetary constraints. Congress had 
funded the USIA at a level 27 percent below the President's request. 
The Supplemental Appropriation Act of 1954 (Public Law 83-207) 
authorized a reduction in force commensurate to the budget cut. Fair 
enough. As Dr. Braude remarked years later, ``I never felt that I had a 
lien on a government job.'' But what Dr. Braude did not know is that 
she was selected for termination because of the old--and answered--
charges against her. And because she did not know the real reason for 
her dismissal, she was denied certain procedural rights (the right to 
request a hearing, for instance).
  The true reason for her dismissal was kept hidden from her. When she 
was unable, over the next several years, to secure employment anywhere 
else within the Federal Government--even in a typing pool despite a 
perfect score on the typing test--she became convinced that she had 
been blacklisted. She spent the next 30 years fighting to regain 
employment and restore her reputation. Though she succeeded in 1982 (at 
the age of 69) in securing a position in the CIA as a language 
instructor, she still had not been able to clear her name by the time 
of her death in 1988. The irony of the charges against Dr. Braude is 
that she was an anti-communist, having witnessed first-hand communist-
sponsored terrorism in Europe while she was an assistant cultural 
affairs officer in Paris and, for a brief period, an exchange officer 
in Bonn during the late 1940s and early 1950s.
  Mr. President, I would like to review the charges against Dr. Braude 
because they are illustrative of that dark era and instructive to us 
even today. There were a total of four. First, she was briefly a member 
of the Washington Book Shop at Farragut Square that the Attorney 
General later labeled subversive. Second, she had been in contact with 
Mary Jane Keeney, a Communist Party activist employed at the United 
Nations. Third, she had been a member of the State Department unit of 
the Communist-dominated Federal Workers' Union. Fourth, she was an 
acquaintance of Judith Coplon.

  With regard to the first charge, Dr. Braude had indeed joined the 
Book Shop shortly after her arrival in Washington in 1943. She was 
eager to meet congenial new people and a friend recommended the Book 
Shop, which hosted music recitals in the evenings. I must express some 
sensitivity here: my F.B.I. records report that I was observed several 
times at a ``leftist musical review'' in suburban Hampstead while I was 
attending the London School of Economics on a Fulbright Fellowship.
  Dr. Braude was aware of the undercurrent of sympathy with the Russian 
cause at the Book Shop, but her membership paralleled a time of close 
U.S.-Soviet collaboration. She drifted away from the Book Shop in 1944 
because of her distaste for the internal politics of other active 
members. Her membership at the Book Shop was only discovered when her 
name appeared on a list of delinquent dues. It appears that her most 
sinister crime while a member of the book shop was her failure to 
return a book on time.
  Dr. Braude met Mary Jane Keeney on behalf of a third woman who 
actively aided Nazi victims after the war and was anxious to send 
clothing to another woman in occupied Germany. Dr. Braude knew nothing 
of Keeney's political orientation and characterized the meeting as a 
transitory experience.
  With regard to the third charge, Dr. Braude, in response to an 
interrogatory from the State Department's Loyalty Security Board, 
argued that she belonged to an anti-Communist faction of the State 
Department unit of the Federal Workers' Union.
  Remember that the Loyalty Security Baird invested these charges and 
exonerated her.

[[Page S538]]

  The fourth charge, which Dr. Braude certainly did not--or could not--
deny, was her friendship with Judith Coplon. Braude met Coplon in the 
summer of 1945 when both women attended a class Herber Marcuse taught 
at American University. They saw each other infrequently thereafter. In 
May 1948, Coplon wrote to Braude, then stationed in Paris and living in 
a hotel on the Left Bank, to announce that she would be visiting 
shortly and needed a place to stay. Dr. Braude arranged for Coplon to 
stay at the hotel. Coplon stayed for 6 weeks, during which time Dr. 
Braude found her behavior very trying. The two parted on unfriendly 
terms. The friendship they had prior to parting was purely social.
  Mr. President, Judith Coplon was a spy. She worked in the Justice 
Department's Foreign Agents Registration Division, an office integral 
to the FBI's counter-intelligence efforts. She was arrested early in 
1949 while handing over notes on counterintelligence operations to 
Soviet citizen Valentine Gubitchev, a United Nations employee. Coplon 
was tried and convicted--there was no doubt of her guilt--but the 
conviction was overturned on a technicality. Gubitchev was also 
convicted but was allowed to return to the U.S.S.R. because of his 
quasi-diplomatic status.
  My involvement in Dr. Braude's case dates back to early 1979, when 
Dr. Braude came to me and my colleague at the time, Senator Javits, and 
asked us to introduce private relief legislation on her behalf. In 
1974, after filing a Freedom of Information Act request and finally 
learning the true reason for her dismissal, she filed suit in the Court 
of Claims to clear her name and seek reinstatement and monetary damages 
for the time she was prevented from working for the Federal Government. 
The Court, however, dismissed her case on the grounds that the statute 
of limitations had expired. On March 5, 1979, Senator Javits and I 
together introduced a bill, S. 546, to waive the statute of limitations 
on Dr. Braude's case against the U.S. Government and to allow the Court 
of Claims to render judgment on her claim. The bill passed the Senate 
on January 30, 1980. Unfortunately, the House failed to take action on 
the bill before the 96th Congress adjourned.

  In 1988, and again in 1990, 1991, and 1993, Senator D'Amato and I re-
introduced similar legislation on Dr. Braude's behalf. Our attempts met 
with repeated failure. Until at last, on September 21, 1993, we secured 
passage of Senate Resolution 102, which referred S. 840, the bill we 
introduced for the relief of the estate of Dr. Braude, to the Court of 
Claims for consideration as a congressional reference action. The 
measure compelled the Court to determine the facts underlying Dr. 
Braude's claim and to report back to Congress on its findings.
  The Court held a hearing on the case in November of 1995 and on March 
7 of last year Judge Roger B. Andewelt of the Court of Federal Claims 
issued his verdict that the USIA had wrongfully dismissed Dr. Braude 
and intentionally concealed the reason for her termination. He 
concluded that such actions constituted an equitable claim for which 
compensation is due. Forty-three years after her dismissal from the 
USIA and 8 years after her death, the Court found in favor of the 
estate of Dr. Braude.
  Senator D'Amato and I wish to express our profound admiration for 
Judge Andewelt's decision in which he absolved Dr. Beatrice Braude of 
the surreptitious charges of disloyalty with which she was never 
actually confronted. The Court declared that Dr. Braude ``cared about 
others deeply and was loyal to her friends, family and country.''
  We are equally grateful to Christopher N. Sipes and William 
Livingston, Jr. of Covington & Burling, two of the many lawyers who 
have handled Dr. Braude's case on a pro bono basis over the years. Mr. 
Sipes quite properly remarked that the decision represents an important 
page in the annals of U.S. history: ``The Court of the United States 
has said it recognizes that this conduct is out of bounds. It tells the 
government it must acknowledge its wrongs and pay for them.''
  Justice Department attorneys have reached a settlement with lawyers 
representing the estate of Dr. Beatrice Braude concerning monetary 
damages equitably due for the wrongful dismissal of Dr. Braude from her 
Federal job in 1953 and subsequent blacklisting. The estate will 
receive $200,000 in damages. Family members have announced that the 
funds--which Congress must now appropriate--will be donated to Hunter 
College, the institution from which Dr. Braude received her bachelor's 
degree.
  Now that the parties to the Braude case have reached an agreement on 
the monetary damages equitably due to Dr. Braude's estate, Senator 
D'Amato and I are offering legislation to release the $200,000 to her 
estate. I hope that we will have the unqualified and unanimous support 
of our colleagues.

  What happened to Dr. Braude was a personal tragedy. But it was also 
part of a national tragedy, too. This Nation lost, prematurely and 
unnecessarily, the exceptional services of a gifted and dedicated 
public servant. Stanley I. Kutler, a professor of constitutional 
history at the University of Wisconsin, estimates that Dr. Braude was 
one of about 1,500 Federal employees who were dismissed as security 
risks between 1953 and 1956. Another 6,000 resigned under the pressure 
of security and loyalty inquiries, according to Professor Kutler, who 
testified as an expert witness on Dr. Braude's behalf. It was, as I 
said earlier, an awful time. We had settled ``as on a darkling plain, 
Swept with confused alarm of struggle and flight, Where ignorant armies 
clash by night.'' It must not happen again.
                                 ______
                                 
      Mr. MOYNIHAN (for himself and Mr. Ashcroft):
  S. 153. A bill to amend the Age Discrimination in Employment Act of 
1967 to allow institutions of higher education to offer faculty members 
who are serving under an arrangement providing for unlimited tenure, 
benefits on voluntary retirement that are reduced or eliminated on the 
basis of age, and for other purposes; to the Committee on Labor and 
Human Resources.


                  the faculty retirement incentive act

  Mr. MOYNIHAN. Mr. President, today I rise to introduce the Faculty 
Retirement Incentive Act. This bill will amend the Age Discrimination 
in Employment Act of 1967 (ADEA) to allow the use of age-based 
incentives for the voluntary retirement of tenured faculty at colleges 
and universities. I am pleased that Senator Ashcroft is an original 
cosponsor of this legislation.
  Since the late 1950s, there has been a vast expansion in the number 
of individuals pursuing careers in academia. Now, an unusually large 
cohort of tenured faculty make it difficult for universities to hire 
more recent graduates. As a practical matter, it is extremely difficult 
or costly or both for institutions to bring on new tenured faculty 
except where tenure positions open up as a result of retirement. In 
order for academic institutions to remain effective centers of teaching 
and scholarship they must have a balance of old and new faculty. This 
balance, however, is threatened by continuing uncertainties created by 
recent legislation.
  I support the ADEA, but when it was amended in 1986 to extend the 
protections of the act to individuals age 70 and over, I expressed 
concern that the application of this change to the unique situation of 
tenured faculty members at colleges and universities would affect 
teaching and scholarship at these institutions. While it did include an 
exemption from the provisions for the bill for tenured faculty, the 
exemption only lasted seven years. Therefore, I was pleased when that 
bill included a request for the National Academy of Sciences (NAS) to 
appoint a commission to study the impact of removing the mandatory 
retirement age for faculty members at colleges and universities.
  When the National Research Council released this study, Ending 
Mandatory Retirement for Tenured Faculty: The Consequences for Higher 
Education, on behalf of NAS in 1991, the report concluded that 
diminished faculty turnover--particularly at research universities--
could increase costs and limit institutional flexibility in responding 
to changing academic needs, particularly with regard to necessary hires 
in new and existing disciplines. In concluding that there was ``no 
strong basis for continuing the exemption for tenured faculty,'' the 
NAS report presumed that the Federal government would allow ``Practical 
steps'' such as age-based early-retirement incentives

[[Page S539]]

to mitigate the impact of an uncapped retirement age for tenured 
faculty. Specifically, the NAS report stated: ``The committee 
recommends that Congress, the Internal Revenue Service, and the Equal 
Employment Opportunity Commission permit colleges and universities to 
offer faculty voluntary-retirement incentive programs that are not 
classified as an employee benefit, include an upper age limit for 
participants and limit participation on the basis of institutional 
needs.''
  These practical steps, however, were not taken although the exemption 
was allowed to run out. Instead, passage of the Older Workers Benefit 
Protection Act of 1990 (OWBPA) further confused the issue. OWBPA made 
early-retirement incentives permissible in the context of defined-
benefit retirement plans but did not address the status of such 
incentives in the context of defined-contribution retirement plans. 
Defined-contribution retirement plans are most popular with tenured 
faculty due to their pension portability. The OWBPA did not preclude 
defined-contribution retirement plans, but by not addressing the issue 
at all, it added to the ambiguity surrounding the matter. Functionally, 
early-retirement incentives operate in the same manner for both types 
of plans. There is continued uncertainty, however, whether early-
retirement incentives with an upper-age limit that are offered to 
tenured faculty conflict with the purpose of ADEA of prohibiting 
arbitrary age discrimination.
  I am troubled by the continued uncertainty created by these bills, 
and I hope that the Faculty Retirement Incentive Act will provide a 
``safe harbor'' for colleges and universities by clarifying that the 
early retirement incentives are permitted by the ADEA. Universities 
must ensure that older faculty members retire at an appropriate age, 
not simply to ``make room'' for younger faculty, but to maintain a 
contemporary, innovative, and creative atmosphere at our nation's 
colleges and universities.
                                 ______
                                 
      By Mr. MOYNIHAN (for himself and Mr. D'Amato):
  S. 154. A bill to improve Orchard Beach, New York; to the Committee 
on Environment and Public Works.


          THE ORCHARD BEACH, NEW YORK IMPROVEMENT ACT OF 1997

  Mr. MOYNIHAN. Mr. President, I rise today to introduce a most 
important piece of legislation for the State of New York, and to ask my 
Senate colleagues for their support. This bill directs the Secretary of 
the Army to repair a section of waterfront parkland in the Bronx, New 
York, known as Orchard Beach. My colleague in New York City, Bronx 
Borough President Fernando Ferrer, has worked hard for many years to 
get this beach--so beloved by the citizens of the Bronx--restored to 
its former glory.
  Orchard Beach is a splendid natural sanctuary and recreational spot 
within the Bronx, which is one of New York City's most urbanized areas. 
Orchard Beach provides a welcome respite from urban living and is 
particularly valued by low-income families with children who cannot 
afford summer homes or trips to the tonier beach resorts on Long Island 
or the Jersey shore. Over two million people visit Orchard Beach 
annually. For many of New York's working families, it offers the only 
affordable and convenient place for their children to play in the sea 
and sand.
  In addition, the beach and surrounding wetlands and salt marshes 
provide a vital habitat for many marine creatures, including crabs, 
lobsters, striped bass and winter flounder, as well as numerous species 
of overwintering waterfowl.
  But today, the beach is in urgent need of repair--there is widespread 
erosion due to repeated storm damage, threatening both the recreational 
utility of the beach and the stability of the animal and ocean life 
habitats. It seems only appropriate that we come to the rescue of this 
treasure now before irreversible damage is done.
  In the Water Resources Development Acts of 1992 and 1996, a total of 
$5.6 million was authorized to study and then conduct an Orchard Beach 
shoreline protection project to address storm damage prevention, 
recreation, and environmental restoration. The bill I introduce today 
would help to ensure that this important project for New York goes 
forward.
                                 ______
                                 
      By Mr. MOYNIHAN (for himself and Mr. D'Amato):
  S. 155. A bill to redesignate General Grant National Memorial as 
Grant's Tomb National Monument, and for other purposes; to the 
Committee on Energy and Natural Resources.
  Mr. MOYNIHAN. Mr. President, I rise to introduce, along with my 
friend and colleagues, Senator D'Amato, a bill to designate President 
Grant's tomb a national monument. This April 27 will be the centennial 
of the dedication of the tomb. I can think of no better observance than 
to pass this designation and the other provisions in this bill that 
would protect and preserve the tomb and make it more attractive to 
visitors.
  The Nation owes President Grant a great debt for his efforts during 
the Civil War alone. He proved to be the capable general President 
Lincoln lacked in the early years of that conflict. Grant provided the 
leadership, strategy, determination, and courage to do what was 
necessary to win the war. He should also be remembered for his efforts 
to include Blacks in the Union Army and later for his relentless 
opposition to the Ku Klux Klan. Many Southerners appreciated his 
generous terms with General Lee, which included allowing Lee's men to 
keep their horses for the spring plowing. Grant went on to become the 
eighteenth President and to serve two terms.
  In 1881 the former President moved to New York City, and four years 
later to Mount McGregor near Saratoga. He died in 1885. In the next few 
years, 90,000 people contributed to a fundraising effort that brought 
in $600,000. This was enough to build structure on Riverside Drive in 
Manhattan modeled on the tombs of the Emperor Hadrian in Rome, Napoleon 
in Paris, and King Mausolis in Turkey. Inside are two eight-and-a-half 
ton sarcophagi made of Wisconsin red granite and a great mural 
depicting Lee's surrender to Grant at Appomattox.
  The tomb became a leading attraction for New York residents and for 
tourists. However, the neighborhood around the tomb has changed in 
recent years and visitorship is down. Vandalism is an ongoing concern. 
This bill takes several steps that are past due to protect and preserve 
the tomb.
  The bill would make Grant's Tomb a National Monument and require the 
Secretary of the Interior to ``administer, repair, restore, preserve, 
maintain, and promote'' the tomb in accordance with the law applicable 
to all National Monuments. It requires the Secretary to build a 
visitors center. It also calls for a study over two years to plan 
interpretive programs, restoration, and security and maintenance.
  This bill addresses the needs at Grant's Tomb. It can again become a 
leading attraction in New York. More important, the bill does what is 
right for the memory of our eighteenth President.
                                 ______
                                 

      By Mr. DASCHLE (for himself and Mr. Johnson):
  S. 156. A bill to provide certain benefits of the Pick-Sloan Missouri 
River Basin program to the Lower Brule Sioux Tribe, and for other 
purposes; to the Committee on Energy and Natural Resources.


 the lower brule sioux tribe infrastructure development trust fund act 
                                of 1997

  Mr. DASCHLE. Mr. President, I am pleased to introduce the Lower Brule 
Sioux Tribe Infrastructure Development Trust Fund of 1997. This 
legislation is the companion bill to the Crow Creek Sioux Tribe 
Infrastructure Development Trust Fund Act of 1996, which was signed by 
President Clinton on October 1, 1996.
  When the Senate considered the Crow Creek Sioux bill last fall, I 
told my colleagues it is important to enact legislation to address 
similar claims by the Lower Brule Sioux and Cheyenne River Sioux 
tribes. The introduction of this legislation is intended to start that 
process for the Lower Brule Sioux Tribe. I intend to introduce similar 
legislation for the Cheyenne River Sioux Tribe later in this session.
  The need for this legislation is great. In 1944, Congress passed the 
Flood Control Act, authorizing the Pick-Sloan Plan to build five dams 
on the Missouri River. Four of the Pick-Sloan dams are located in South 
Dakota. While the

[[Page S540]]

Pick-Sloan Project has been instrumental in providing the region with 
irrigation, hydropower and flood control capabilities, its construction 
took a serious toll on many Native American tribes, who were forced to 
cede land to the project and suffer the turmoil associated with 
relocating entire communities.
  Like many of the tribes along the Missouri River, the Lower Brule 
Sioux Tribe shouldered a disproportionate amount of the cost to 
implement the Pick-Sloan project. Three decades ago, the Big Bend and 
Fort Randall dams flooded more than 22,000 acres of the Lower Brule 
Sioux land. Over 70 percent of the tribe's residents were forced to 
settle elsewhere. The tribe suffered the loss of fertile and productive 
land along the river that provided many of the tribe's basic staples, 
including wood for fuel and construction, edible plants, and wildlife 
habitat that supported the game on which the tribe relied for food. 
This land, which once played such an important role in the day-to-day 
lives of the tribal members, now lies underneath the Missouri River 
reservoirs. The tribe was never adequately compensated for this 
extraordinary loss.
  It was not until 1992 that Congress formally acknowledged the federal 
government's failure to provide the tribes with adequate compensation. 
The passage of the Three Affiliated Tribes and Standing Rock Sioux 
Tribe Equitable Compensation Act, which I cosponsored, established a 
recovery fund to compensate these tribes. This fund is financed 
entirely from Pick-Sloan power revenues, and payments to the fund are 
structured in such a way that they will not result in rate increases to 
power customers. This is appropriate and fair. As with any well-run 
business, the revenues from the project should be used to pay its 
costs.
  With the legislation that I am introducing today, we have an 
opportunity to finally compensate the Lower Brule Sioux Tribe for the 
sacrifices it has had to bear since being relocated forcibly decades 
ago. We have an opportunity to mitigate the effects of dislocating the 
tribal communities and inundating the natural resources that the tribe 
depended upon for its survival. This legislation will help the Lower 
Brule Sioux Tribe build new facilities and improve existing 
infrastructure. Hopefully, by doing so, it will improve the lives of 
tribal residents in a meaningful and lasting way and promote greater 
economic self-sufficiency.
  Under this legislation, a fund similar to the Crow Creek Sioux 
Infrastructure Development Trust Fund will be established for the Lower 
Brule Sioux Tribe. The trust fund will be capitalized from hydropower 
revenues until the fund accumulates $39.3 million--a figure well 
documented by Dr. Michael Lawson in his study of the history of this 
issue entitled An Analysis of the Impact of Pick-Sloan Dam Projects on 
the Lower Brule Sioux Tribe. The tribe will be able to use the interest 
generated from the fund to finance its own economic development 
priorities according to a plan prepared in conjunction with the Bureau 
of Indian Affairs and the Indian Health Service.
  Mr. President, in conclusion I want to emphasize the broad support 
this legislation enjoys in South Dakota. Senator Tim Johnson is a 
cosponsor and Governor Bill Janklow has endorsed this bill. 
Establishing this fund for the Lower Brule Sioux Tribe benefits the 
entire state of South Dakota, as well as the tribal members. It will 
spur greater economic activity within the state and help the Lower 
Brule Sioux Tribe establish the infrastructure necessary to participate 
more fully in the region's economy.
  It is my hope that my colleagues will join with me in supporting this 
legislation.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 156

       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 ``Lower Brule Sioux Tribe 
     Infrastructure Development Trust Fund Act''.

     SEC. 2. FINDINGS. 

       Congress finds that--
       (1) under the Act of December 22, 1994, commonly known as 
     the ``Flood Control Act of 1994'' (58 Stat. 887, chapter 665; 
     33 U.S.C. 701-1 et seq.) Congress approved the Pick-Sloan 
     Missouri River Basin program--
       (A) to promote the general economic development of the 
     United States;
       (B) to provide for irrigation above Sioux City, Iowa;
       (C) to protect urban and rural areas from devastating 
     floods of the Missouri River; and
       (D) for other purposes;
       (2) the Fort Randall and Big Bend projects are major 
     components of the Pick-Sloan Missouri River Basin program, 
     and contribute to the national economy by generating a 
     substantial amount of hydropower and impounding a substantial 
     quantity of water;
       (3) the Fort Randall and Big Bend projects overlie the 
     western boundary of the Lower Brule Indian Reservation, 
     having inundated the fertile, wooded bottom lands of the 
     Tribe along the Missouri River that constituted the most 
     productive agricultural and pastoral lands of the Lower Brule 
     Sioux Tribe and the homeland of the members of the Tribe;
       (4) Public Law 85-923 (72 Stat. 1773 et seq.) authorized 
     the acquisition of 7,997 acres of Indian land on the Lower 
     Brule Indian Reservation for the Fort Randall project and 
     Public Law 87-734 (76 Stat. 698 et seq.) authorized the 
     acquisition of 14,299 acres of Indian land on the Lower Brule 
     Indian Reservation for the Big Bend project;
       (5) Public Law 87-734 (76 Stat. 698 et seq.) provided for 
     the mitigation of the effects of the Fort Randall and Big 
     Bend projects on the Lower Brule Indian Reservation, by 
     directing the Secretary of the Army to--
       (A) as necessary, by reason of the Big Bend project, 
     protect, replace, relocate, or reconstruct--
       (i) any essential governmental and agency facilities on the 
     reservation, including schools, hospitals, offices of the 
     Public Health Service and the Bureau of Indian Affairs, 
     service buildings, and employee quarters existing at the time 
     that the projects were carried out; and
       (ii) roads, bridges, and incidental matters or facilities 
     in connection with those facilities;
       (B) provide for a townsite adequate for 50 homes, including 
     streets and utilities (including water, sewage, and 
     electricity), taking into account the reasonable future 
     growth of the townsite; and
       (C) provide for a community center containing space and 
     facilities for community gatherings, tribal offices, tribal 
     council chamber, offices of the Bureau of Indian Affairs, 
     offices and quarters of the Public Health Service, and a 
     combination gymnasium and auditorium;
       (6) the requirements under Public Law 87-734 (76 Stat. 698 
     et seq.) with respect to the mitigation of the effects of the 
     Fort Randall and Big Bend projects on the Lower Brule Indian 
     Reservation have not been fulfilled;
       (7) although the national economy has benefited from the 
     Fort Randall and Big Bend projects, the economy on the Lower 
     Brule Indian Reservation remains underdeveloped, in part as a 
     consequence of the failure of the Federal Government to 
     fulfill the obligations of the Federal Government under the 
     laws referred to in paragraph (4);
       (8) the economic and social development and cultural 
     preservation of the Lower Brule Sioux Tribe will be enhanced 
     by increased tribal participation in the benefits of the Fort 
     Randall and Big Bend components of the Pick-Sloan Missouri 
     River Basin program; and
       (9) the Lower Brule Sioux Tribe is entitled to additional 
     benefits of the Pick-Sloan Missouri River Basin program.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Fund.--The term ``Fund'' means the Lower Brule Sioux 
     Tribe Infrastructure Development Trust Fund established under 
     section 4(a).
       (2) Plan.--The term ``plan'' means the plan for 
     socioeconomic recovery and cultural preservation prepared 
     under section 5.
       (3) Program.--The term ``Program'' means the power program 
     of the Pick-Sloan Missouri River Basin program, administered 
     by the Western Area Power Administration.
       (4) Secretary.--The term ``Secretary'' means the Secretary 
     of the Interior.
       (5) Tribe.--The term ``Tribe'' means the Lower Brule Sioux 
     Tribe of Indians, a band of the Great Sioux Nation recognized 
     by the United States of America.

     SEC. 4. ESTABLISHMENT OF LOWER BRULE SIOUX TRIBE 
                   INFRASTRUCTURE DEVELOPMENT TRUST FUND.

       (a) Lower Brule Sioux Tribe Infrastructure Development 
     Trust Fund.--There is established in the Treasury of the 
     United States a fund to be known as the ``Lower Brule Sioux 
     Tribe Infrastructure Development Trust Fund''.
       (b) Funding.--Beginning with fiscal year immediately 
     following the fiscal year during which the aggregate of the 
     amounts deposited in the Crow Creek Sioux Tribe 
     Infrastructure Development Trust Fund is equal to the amount 
     specified in section 4(b) of the Crow Creek Sioux Tribe 
     Infrastructure Development Trust Fund Act of 1996 (110 Stat. 
     3026 et seq.), and for each fiscal year thereafter, until 
     such time as the aggregate of the amounts deposited in the 
     Fund is equal to $39,300,000, the Secretary of the Treasury 
     shall deposit into the Fund an amount equal to 25 percent of 
     the receipts from the deposits to the Treasury of the United 
     States for the preceding fiscal year from the Program.

[[Page S541]]

       (c) Investments.--The Secretary of the Treasury shall 
     invest the amounts deposited under subsection (b) only in 
     interest-bearing obligations of the United States or in 
     obligations guaranteed as to both principal and interest by 
     the United States.
       (d) Payment of Interest to Tribe.--
       (1) Establishment of account and transfer of interest.--The 
     Secretary of the Treasury shall, in accordance with this 
     subsection, transfer any interest that accrues on amounts 
     deposited under subsection (b) into a separate account 
     established by the Secretary of the Treasury in the Treasury 
     of the United States.
       (2) Payments.--
       (A) In general.--Beginning with the fiscal year immediately 
     following the fiscal year during which the aggregate of the 
     amounts deposited in the Fund is equal to the amount 
     specified in subsection (b), and for each fiscal year 
     thereafter, all amounts transferred under paragraph (1) shall 
     be available, without fiscal year limitation, to the 
     Secretary of the Interior for use in accordance with 
     subparagraph (C).
       (B) Withdrawal and transfer of funds.--For each fiscal year 
     specified in subparagraph (A), the Secretary of the Treasury 
     shall withdraw amounts from the account established under 
     paragraph (1) and transfer such amounts to the Secretary of 
     the Interior for use in accordance with subparagraph (C). The 
     Secretary of the Treasury may only withdraw funds from the 
     account for the purpose specified in this paragraph.
       (C) Payments to tribe.--The Secretary of the Interior shall 
     use the amounts transferred under subparagraph (B) only for 
     the purpose of making payments to the Tribe.
       (D) Use of payments by tribe.--The Tribe shall use the 
     payments made under subparagraph (C) only for carrying out 
     projects and programs pursuant to the plan prepared under 
     section 5.
       (3) Prohibition on per capita payments.--No portion of any 
     payment made under this subsection may be distributed to any 
     member of the Tribe on a per capita basis.
       (e) Transfers and Withdrawals.--Except as provided in 
     subsection (d)(1), the Secretary of the Treasury may not 
     transfer or withdraw any amount deposited under subsection 
     (b).

     SEC. 5. PLAN FOR SOCIOECONOMIC RECOVERY AND CULTURAL 
                   PRESERVATION.

       (a) Plan.--
       (1) In general.--The Tribe shall, not later than 2 years 
     after the date of enactment of this Act, prepare a plan for 
     the use of the payments made to the Tribe under section 
     4(d)(2). In developing the plan, the Tribe shall consult with 
     the Secretary of the Interior and the Secretary of Health and 
     Human Services.
       (2) Requirements for plan components.--The plan shall, with 
     respect to each component of the plan--
       (A) identify the costs and benefits of that component; and
       (B) provide plans for that component.
       (b) Content of Plan.--The plan shall include the following 
     programs and components:
       (1) Educational facility.--The plan shall provide for an 
     educational facility to be located on the Lower Brule Indian 
     Reservation.
       (2) Comprehensive inpatient and outpatient health care 
     facility.--The plan shall provide for a comprehensive 
     inpatient and outpatient health care facility to provide 
     essential services that the Secretary of Health and Human 
     Services, in consultation with the individuals and entities 
     referred to in subsection (a)(1), determines to be--
       (A) needed; and
       (B) unavailable through facilities of the Indian Health 
     Service on the Lower Brule Indian Reservation in existence at 
     the time of the determination.
       (3) Water system.--The plan shall provide for the 
     construction, operation, and maintenance of a municipal, 
     rural, and industrial water system for the Lower Brule Indian 
     Reservation.
       (4) Recreational facilities.--The plan shall provide for 
     recreational facilities suitable for high-density recreation 
     at Lake Sharpe at Big Bend Dam and at other locations on the 
     Lower Brule Indian Reservation in South Dakota.
       (5) Other projects and programs.--The plan shall provide 
     for such other projects and programs for the educational, 
     social welfare, economic development, and cultural 
     preservation of the Tribe as the Tribe considers to be 
     appropriate.

     SEC. 6. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated such funds as may 
     be necessary to carry out this Act, including such funds as 
     may be necessary to cover the administrative expenses of the 
     Fund.

     SEC. 7. EFFECT OF PAYMENTS TO TRIBE.

       (a) In General.--No payment made to the Tribe pursuant to 
     this Act shall result in the reduction or denial of any 
     service or program to which, pursuant to Federal law--
       (1) the Tribe is otherwise entitled because of the status 
     of the Tribe as a federally recognized Indian tribe; or
       (2) any individual who is a member of the Tribe is entitled 
     because of the status of the individual as a member of the 
     Tribe.
       (b) Exemptions; Statutory Construction.--
       (1) Power rates.--No payment made pursuant to this Act 
     shall affect Pick-Sloan Missouri River Basin power rates.
       (2) Statutory construction.--Nothing in this Act may be 
     construed as diminishing or affecting--
       (A) any right of the Tribe that is not otherwise addressed 
     in this Act; or
       (B) any treaty obligation of the United States.
                                 ______
                                 
      By Mr. INOUYE:
  S. 157. A bill to amend title XIX of the Social Security Act to 
provide for coverage of services provided by nursing school clinics 
under State medicaid programs; to the Committee on Finance.


                 the nursing school clinics act of 1997

  Mr. INOUYE. Mr. President, I rise today to introduce the Nursing 
School Clinics Act of 1997, a bill that has two main purposes. First, 
it builds on our concerted efforts to provide access to quality health 
care for all Americans by furnishing grants and incentives for nursing 
schools to establish primary care clinics in areas where additional 
medical services are most needed. Second, it provides the opportunity 
for nursing schools to enhance the scope of their students' training 
and education by giving them firsthand clinical experience in primary 
care facilities.

  Any good manager knows that when major problems are at hand and 
resources are tight, the most important act is the one that makes full 
use of all available resources. The American health care system is 
particularly deficient in this regard. We all know only too well that 
many individuals in the Nation have no or inadequate access to health 
care services, especially if they live in many of our rural towns and 
villages or inhabit our Indian communities. Many good people are trying 
to deliver services that are so vitally needed, but we need to do more. 
We must make full use of all health care practitioners, especially 
those who have been long waiting to give the nation the full measure of 
their professional abilities.
  Nursing is one of the noblest professions, with an enduring history 
of offering effective and sensitive care to those in need. Yet it is 
only in the last few years that we have begun to recognize the role 
that nurses can play as independent providers of care. Only recently, 
in 1990, Medicare was changed to authorize direct reimbursements to 
nurse practitioners. Medicaid is gradually being reformed to 
incorporate their services more effectively. The Nursing School Clinics 
Act continues the progress toward fully incorporating nurses in the 
delivery of health care services. Under the act, nursing schools will 
be able to establish clinics, supervised and staffed by nurse 
practitioners and nurse practitioner students, that provide primary 
care targeted to medically underserved rural and native American 
populations.
  In the process of giving direct ambulatory care to their patients, 
these clinics will also furnish the forums in which both public and 
private schools of nursing can design and implement clinical training 
programs for their students. Simultaneous school-based education and 
clinical training have been a traditional part of physician 
development, but nurses have enjoyed fewer opportunities to combine 
classroom instruction with the practical experience of treating 
patients. This bill reinforces the principle for nurses of joining 
schooling with the actual practice of health care.
  To accomplish these objectives, title XIX of the Social Security Act 
is amended to designate that the services provided in these nursing 
school clinics are reimbursable under Medicaid. The combination of 
grants and the provision of Medicaid reimbursement furnishes the 
incentives and operational resources to start the clinics and to keep 
them going.
  To meet the increasing challenges of bringing cost-effective and 
quality health care to all Americans, we are going to have to think 
about and debate a variety of proposals, both large and small. Most 
important, however, we must approach the issue of health care with 
creativity and determination, ensuring that all reasonable avenues are 
pursued. Nurses have always been an integral part of health care 
delivery. The Nursing School Clinics Act of 1997 recognizes the central 
role they can perform as care givers to the medically underserved.
  Mr. President, I ask unanimous consent that the text of this bill be 
printed in the Record.

[[Page S542]]

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

                                 S. 157

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

     SECTION 1. MEDICAID COVERAGE OF SERVICES PROVIDED BY NURSING 
                   SCHOOL CLINICS.

       (a) In General.--Section 1905(a) of the Social Security Act 
     (42 U.S.C. 1396d(a)) is amended--
       (1) in paragraph (24), by striking ``and'' at the end;
       (2) by redesignating paragraph (25) as paragraph (26); and
       (3) by inserting after paragraph (24), the following:
       ``(25) nursing school clinic services (as defined in 
     subsection (t)) furnished by or under the supervision of a 
     nurse practitioner or a clinical nurse specialist (as defined 
     in section 1861(aa)(5)), whether or not the nurse 
     practitioner or clinical nurse specialist is under the 
     supervision of, or associated with, a physician or other 
     health care provider; and''.
       (b) Nursing School Clinic Services Defined.--Section 1905 
     of such Act (42 U.S.C. 1396d) is amended by adding at the end 
     the following:
       ``(t) The term `nursing school clinic services' means 
     services provided by a health care facility operated by an 
     accredited school of nursing which provides primary care, 
     long-term care, mental health counseling, home health 
     counseling, home health care, or other health care services 
     which are within the scope of practice of a registered 
     nurse.''.
       (c) Conforming Amendments.--Section 1902 of such Act (42 
     U.S.C. 1396a) is amended--
       (1) in subsection (a)(10)(C)(iv), by striking ``through 
     (24)'' and inserting ``through (25)''; and
       (2) in subsection (j), by striking ``through (25)'' and 
     inserting ``through (26)''.
       (d) Effective Date.--The amendments made by this Act shall 
     be effective with respect to payments made under a State plan 
     under title XIX of the Social Security Act for calendar 
     quarters commencing with the first calendar quarter beginning 
     after the date of the enactment of this Act.
                                 ______
                                 
      By Mr. INOUYE:
  S. 158. A bill to amend title XVII of the Social Security Act to 
provide improved reimbursement for clinical social worker services 
under the medicare program, and for other purposes; to the Committee on 
Finance.


            the clinical social worker services act of 1997

  Mr. INOUYE. Mr. President, today I am introducing legislation to 
amend Title XVIII of the Social Security Act to correct discrepancies 
in the reimbursement of clinical social workers covered through 
Medicare, Part B. The three proposed changes that are contained in this 
legislation are necessary to clarify the current payment process for 
clinical social workers and to establish a reimbursement methodology 
for the profession that is similar to other health care professionals 
reimbursed through the Medicare program.

  First, this legislation would set payment for clinical social worker 
services according to a fee schedule established by the Secretary. 
Currently, the methodology for reimbursing clinical social workers' 
services is set at a percentage of the fee for another nonphysician 
provider group, creating a greater differential in charges than that 
which exists in the marketplace. I am aware of no other provision in 
the Medicare statute where one nonphysician's reimbursement rate is 
tied to that of another nonphysician provider. This is a precedent that 
clinical social workers understandably wish to change. I also wish to 
see that clinical social workers' services are valued on their own 
merit.
  Second, this legislation makes it clear that services and supplies 
furnished incident to a clinical social worker's services are a covered 
Medicare expense, just as these services are currently covered for 
other mental health professionals in Medicare. Third, the bill would 
allow a clinical social worker to be reimbursed for services provided 
to a client who is hospitalized.
  Clinical social workers are valued members of our health care 
provider team. They are legally regulated in every state of our nation 
and are recognized as independent providers of mental health care 
throughout the health care system. Clinical social worker services were 
made available to Medicare beneficiaries through the Omnibus Budget 
Reconciliation Act of 1989. I believe that it is time now to correct 
the reimbursement problems that this profession has experienced through 
Medicare.
  Mr. President, I ask unanimous consent that the text of this bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 158

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

     SECTION 1. IMPROVED REIMBURSEMENT FOR CLINICAL SOCIAL WORKER 
                   SERVICES UNDER MEDICARE.

       (a) In General.--Section 1833(a)(1)(F)(ii) of the Social 
     Security Act (42 U.S.C. 1395l(a)(1)(F)(ii)) is amended to 
     read as follows: ``(ii) the amount determined by a fee 
     schedule established by the Secretary,''.
       (b) Definition of Clinical Social Worker Services 
     Expanded.--Section 1861(hh)(2) of such Act (42 U.S.C. 
     1395x(hh)(2)) is amended by striking ``services performed by 
     a clinical social worker (as defined in paragraph (1))'' and 
     inserting ``such services and such services and supplies 
     furnished as an incident to such services performed by a 
     clinical social worker (as defined in paragraph (1))''.
       (c) Clinical Social Worker Services Not To Be Included in 
     Inpatient Hospital Services.--Section 1861(b)(4) of such Act 
     (42 U.S.C. 1395x(b)(4)) is amended by striking ``and 
     services'' and inserting ``clinical social worker services, 
     and services''.
       (d) Treatment of Services Furnished in Inpatient Setting.--
     Section 1832(a)(2)(B)(iii) of such Act (42 U.S.C. 
     1395k(a)(2)(B)(iii)) is amended by striking ``and services'' 
     and inserting ``clinical social worker services, and 
     services''.
       (e) Effective Date.--The amendments made by this section 
     shall become effective with respect to payments made for 
     clinical social worker services furnished on or after January 
     1, 1998.
                                 ______
                                 
      By Mr. INOUYE:
  S. 159. A bill to amend title XVIII of the Social Security Act to 
remove the restriction that a clinical psychologist or clinical social 
worker provide services in a comprehensive outpatient rehabilitation 
facility to a patient only under the care of a physician, and for other 
purposes; to the Committee on Finance.


                          medicare legislation

  Mr. INOUYE. Mr. President, today I am introducing legislation to 
authorize the autonomous functioning of clinical psychologists and 
clinical social workers within the Medicare comprehensive outpatient 
rehabilitation facility program.

  In my judgment, it is truly unfortunate that programs such as this 
currently require clinical supervision of the services provided by 
certain health professionals and do not allow each of the various 
health professions to truly function to the extent of their state 
practice acts. In my judgment, it is especially appropriate that those 
who need the services of outpatient rehabilitation facilities have 
access to a wide range of social and behavioral science expertise. 
Clinical psychologists and clinical social workers are recognized as 
independent providers of mental health care services through the 
Federal Employee Health Benefits Program, the Civilian Health and 
Medical Program of the Uniformed Services, the Medicare (Part B) 
Program, and numerous private insurance plans.
  Mr. President, I ask unanimous consent that the text of this bill be 
printed in the Congressional Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 159

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

     SECTION 1. REMOVAL OF RESTRICTION THAT A CLINICAL 
                   PSYCHOLOGIST OR CLINICAL SOCIAL WORKER PROVIDE 
                   SERVICES IN A COMPREHENSIVE OUTPATIENT 
                   REHABILITATION FACILITY TO A PATIENT ONLY UNDER 
                   THE CARE OF A PHYSICIAN.

       (a) In General.--Section 1861(cc)(2)(E) of the Social 
     Security Act (42 U.S.C. 1395x(cc)(2)(E)) is amended by 
     inserting before the semicolon ``(except with respect to 
     services provided by a clinical psychologist or a clinical 
     social worker)''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall become effective with respect to services provided on 
     or after January 1, 1998.
                                 ______
                                 
      By Mr. INOUYE:
  S. 160. A bill to amend title 5, United States Code, to require the 
issuance of a prisoner-of-war medal to civilian employees of the 
Federal Government who are forcibly detained or interned by a enemy 
government or a hostile force under wartime conditions; to the 
Committee on Governmental Affairs.

[[Page S543]]

                   prisoner of war medal legislation

  Mr. INOUYE. Mr. President, all too often we find that our nation's 
civilians who have been captured by a hostile government do not receive 
the recognition they deserve. My bill would correct this inequity and 
provide a prisoner of war medal for civilian employees of the federal 
government.

  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. 160

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

     SECTION 1. PRISONER-OF-WAR MEDAL FOR CIVILIAN EMPLOYEES OF 
                   THE FEDERAL GOVERNMENT.

       (a) Authority To Issue Prisoner-of-War Medal.--(1) Subpart 
     A of part III of title 5, United States Code, is amended by 
     inserting after chapter 23 the following new chapter:

                   ``CHAPTER 25--MISCELLANEOUS AWARDS

``Sec.
``2501. Prisoner-of-war medal: issue.

     ``Sec. 2501. Prisoner-of-war medal: issue

       ``(a) The President shall issue a prisoner-of-war medal to 
     any person who, while serving in any capacity as an officer 
     or employee of the Federal Government, was forcibly detained 
     or interned, not as a result of such person's own willful 
     misconduct--
       ``(1) by an enemy government or its agents, or a hostile 
     force, during a period of war; or
       ``(2) by a foreign government or its agents, or a hostile 
     force, during a period other than a period of war in which 
     such person was held under circumstances which the President 
     finds to have been comparable to the circumstances under 
     which members of the armed forces have generally been 
     forcibly detained or interned by enemy governments during 
     periods of war.
       ``(b) The prisoner-of-war medal shall be of appropriate 
     design, with ribbons and appurtenances.
       ``(c) Not more than one prisoner-of-war medal may be issued 
     to a person under this section or section 1128 of title 10. 
     However, for each succeeding service that would otherwise 
     justify the issuance of such a medal, the President (in the 
     case of service referred to in subsection (a) of this 
     section) or the Secretary concerned (in the case of service 
     referred to in section 1128(a) of title 10) may issue a 
     suitable device to be worn as determined by the President or 
     the Secretary, as the case may be.
       ``(d) For a person to be eligible for issuance of a 
     prisoner-of-war medal, the person's conduct must have been 
     honorable for the period of captivity which serves as the 
     basis for the issuance.
       ``(e) If a person dies before the issuance of a prisoner-
     of-war medal to which he is entitled, the medal may be issued 
     to the person's representative, as designated by the 
     President.
       ``(f) Under regulations to be prescribed by the President, 
     a prisoner-of-war medal that is lost, destroyed, or rendered 
     unfit for use without fault or neglect on the part of the 
     person to whom it was issued may be replaced without charge.
       ``(g) In this section, the term `period of war' has the 
     meaning given such term in section 101(11) of title 38.''.
       (2) The table of chapters at the beginning of part III of 
     such title is amended by inserting after the item relating to 
     chapter 23 the following new item:

``25. Miscellaneous Awards..................................2501''.....

       (b) Applicability.--Section 2501 of title 5, United States 
     Code, as added by subsection (a), applies with respect to any 
     person who, after April 5, 1917, is forcibly detained or 
     interned as described in subsection (a) of such section.
                                 ______
                                 
      By Mr. INOUYE:
  S. 161. A bill to amend title 38, United States Code, to revise 
certain provisions relating to the appointment of clinical and 
counseling psychologist in the Veterans Health Administration, and for 
other purposes; to the Committee on Veterans Affairs.


            the veterans' health administration act of 1997

  Mr. INOUYE. Mr. President, I am introducing legislation today to 
amend chapter 74 of title 38, United States Code, to revise certain 
provisions relating to the appointment of clinical and counseling 
psychologists in the Veterans Health Administration (VHA).

  The VHA has a long history of maintaining a staff of the very best 
health care professionals to provide care to those men and women who 
have served their country in the Armed Forces. It is certainly fitting 
that this should be done.
  Recently a quite distressing situation regarding the care of our 
veterans has come to my attention. In particular, the recruitment and 
retention of psychologists in the VHA of the Department of Veterans 
Affairs has become a significant problem.
  The Congress has recognized the important contribution of the 
behavioral sciences in the treatment of several conditions from which a 
significant portion of our veterans suffer. For example, programs 
related to homelessness, substance abuse, and post traumatic stress 
disorder [PTSD] have received funding from the Congress in recent 
years.
  Certainly, psychologists, as behavioral science experts, are 
essential to the successful implementation of these programs. However, 
the high vacancy and turnover rates for psychologists in the VHA (over 
11 percent and 18 percent respectively as reported in one recent 
survey) might seriously jeopardize these programs and will negatively 
impact overall patient care in the VHA.
  Recruitment of psychologists by the VHA is hindered by a number of 
factors including a pay scale not commensurate with private sector 
rates of pay as well as by the low number of clinical and counseling 
psychologists appearing on the register of the Office of Personnel 
Management [OPM]. Most new hires have no post-doctoral experience and 
are hired immediately after a VA internship. Recruitment, when 
successful, takes up to six months or more.
  Retention of psychologists in the VA system poses an even more 
significant problem. I have been informed that almost 40 percent of VHA 
psychologists had five years or less of post-doctoral experience. 
Without doubt, our veterans would benefit from a higher percentage of 
senior staff who are more experienced in working with veterans and 
their particular concerns. My bill provides incentives for 
psychologists to continue their work with the VHA and seek additional 
education and training.
  Several factors are associated with the difficulties in retention of 
VHA psychologists including low salaries and lack of career advancement 
opportunities. It seems that psychologists are apt to leave the VA 
system after five years because they have almost reached peak levels 
for salary and professional development in the VHA. Furthermore, under 
the present system psychologists cannot be recognized nor appropriately 
compensated for excellence or for taking on additional responsibilities 
such as running treatment programs.
  In effect, the current system for hiring psychologists in the VHA 
supports mediocrity, not excellence and mastery. Our veterans with 
behavioral disorders and mental health problems are deserving of better 
psychological care from more experienced professionals than they are 
currently receiving.
  A hybrid title 38 appointment authority for psychologists would help 
ameliorate the recruitment and retention problems in several ways. The 
length of time it takes to recruit psychologists could be abbreviated 
by eliminating the requirement for applicants to be rated by the Office 
of Personnel Management. This would also facilitate the recruitment of 
applicants who are not recent VA interns by reducing the amount of time 
between identifying a desirable applicant and being able to offer that 
applicant a position.
  It is expected that problems in retention of behavioral science 
experts will be greatly alleviated with the implementation of a hybrid 
title 38 system for VA psychologists, primarily through offering 
financial incentives for psychologists to pursue professional 
development with the VHA. Achievements that would merit salary 
increases under title 38 should include such activities as assuming 
supervisory responsibilities for clinical programs, implementing 
innovative clinical treatments that improve the effectiveness and/or 
efficiency of patient care, making significant contributions to the 
science of psychology, earning the ABPP diplomate status, and becoming 
a Fellow of the American Psychological Association.
  Currently, psychologists are the only doctoral level health care 
providers in the VHA who are not included in title 38. This is, without 
question, a significant factor in the recruitment and retention 
difficulties that I have addressed. Ultimately, an across-the-board 
salary increase might be necessary. However, the conversion of 
psychologists to a hybrid title 38, as proposed by this amendment, 
would provide relief for these difficulties and enhance the quality of 
care for our Nations' veterans and their families.
  Mr. President, I ask unanimous consent that the text of this bill be 
printed in the Congressional Record.

[[Page S544]]

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

                                 S. 161

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

     SECTION 1. REVISION OF AUTHORITY RELATING TO APPOINTMENT OF 
                   CLINICAL AND COUNSELING PSYCHOLOGISTS IN THE 
                   VETERANS HEALTH ADMINISTRATION.

       (a) In General.--Section 7401(3) of title 38, United States 
     Code, is amended by striking out ``who hold diplomas as 
     diplomates in psychology from an accrediting authority 
     approved by the Secretary''.
       (b) Certain Other Appointments.--Section 7405(a) of such 
     title is amended--
       (1) in paragraph (1)(B), by striking out ``Certified or'' 
     and inserting in lieu thereof ``Clinical or counseling 
     psychologists, certified or''; and
       (2) in paragraph (2)(B), by striking out ``Certified or'' 
     and inserting in lieu thereof ``Clinical or counseling 
     psychologists, certified or''.
       (c) Effective Date.--The amendments made by subsections (a) 
     and (b) shall take effect on the date of enactment of this 
     Act.
       (d) Appointment Requirement.--Notwithstanding any other 
     provision of law, the Secretary of Veterans Affairs shall 
     begin to make appointments of clinical and counseling 
     psychologists in the Veterans Health Administration under 
     section 7401(3) of title 38, United States Code (as amended 
     by subsection (a)), not later than 1 year after the date of 
     enactment of this Act.
                                 ______
                                 
      By Mr. INOUYE:
  S. 162. A bill to amend title 10, United States Code, to permit 
former members of the Armed Forces who have a service-connected 
disability rated as total on military aircraft in the same manner and 
to the same extent as retired members of the Armed Forces are entitled 
to travel on such aircraft; to the Committee on Armed Services.


                     travel privileges legislation

  Mr. INOUYE. Mr. President, today I am introducing a bill which is of 
great importance to a group of patriotic Americans. This legislation is 
designed to extend space-available travel privileges on military 
aircraft to those who have been totally disabled in the service of our 
country.

  Currently, retired members of the Armed Forces are permitted to 
travel on a space-available basis on non-scheduled military flights 
within the continental United States and on scheduled overseas flights 
operated by the Military Airlift Command. My bill would provide the 
same benefits for 100 percent service-connected disabled veterans.
  Surely, we owe these heroic men and women, who have given so much to 
our country, a debt of gratitude. Of course, we can never repay them 
for the sacrifice they have made on behalf of our nation but we can 
surely try to make their lives more pleasant and fulfilling. One way in 
which we can help is to extend military travel privileges to these 
distinguished American veterans. I have received numerous letters from 
all over the country attesting to the importance attached to this issue 
by veterans. Therefore, I ask that my colleagues show their concern and 
join me in saying ``thank you'' by supporting this legislation.
  Mr. President, I ask unanimous consent that the text of my bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 162

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

     SECTION 1. TRAVEL ON MILITARY AIRCRAFT OF CERTAIN DISABLED 
                   FORMER MEMBERS OF THE ARMED FORCES.

       (a) In General.--Chapter 53 of title 10, United States 
     Code, is amended by adding after section 1060a the following 
     new section:

     ``Sec. 1060b. Travel on military aircraft: certain disabled 
       former members of the armed forces

       ``The Secretary of Defense shall permit any former member 
     of the armed forces who is entitled to compensation under the 
     laws administered by the Secretary of Veterans Affairs for a 
     service-connected disability rated as total to travel, in the 
     same manner and to the same extent as retired members of the 
     armed forces, on unscheduled military flights within the 
     continental United States and on scheduled overseas flights 
     operated by the Military Airlift Command. The Secretary of 
     Defense shall permit such travel on a space-available 
     basis.''.
       (b) Clerical Amendment.--The table of sections at the 
     beginning of such chapter is amended by adding after the item 
     relating to section 1060a the following new item:

``1060b. Travel on military aircraft: certain disabled former members 
              of the armed forces.''.
                                 ______
                                 
      By Mr. INOUYE:
  S. 163. A bill to recognize the organization known as the National 
Academies of Practice; to the Committee on the Judiciary.


       the national academies of practice recognition act of 1997

  Mr. INOUYE. Mr. President, today I am introducing legislation that 
would provide a federal charter for the National Academies of Practice. 
This organization represents outstanding practitioners who have made 
significant contributions to the practice of applied psychology, 
medicine, dentistry, nursing, optometry, podiatry, social work, and 
veterinary medicine. When fully established, each of the nine academies 
will possess 100 distinguished practitioners selected by their peers. 
This umbrella organization will be able to provide the Congress of the 
United States and the executive branch with considerable health policy 
expertise, especially from the perspective of those individuals who are 
in the forefront of actually providing health care.

  As we continue to grapple with the many complex issues surrounding 
the delivery of health care services, it is clearly in our best 
interest to ensure that the Congress have systematic access to the 
recommendations of an interdisciplinary body of health care 
practitioners.
  Mr. President, I ask unanimous consent that the text of this bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 163

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

     SECTION 1. CHARTER.

       The National Academies of Practice organized and 
     incorporated under the laws of the District of Columbia, is 
     hereby recognized as such and is granted a Federal charter.

     SEC. 2. CORPORATE POWERS.

       The National Academies of Practice (hereafter referred to 
     in this Act as the ``corporation'') shall have only those 
     powers granted to it through its bylaws and articles of 
     incorporation filed in the State in which it is incorporated 
     and subject to the laws of such State.

     SEC. 3. PURPOSES OF CORPORATION.

       The purposes of the corporation shall be to honor persons 
     who have made significant contributions to the practice of 
     applied psychology, dentistry, medicine, nursing, optometry, 
     osteopathy, podiatry, social work, veterinary medicine, and 
     other health care professions, and to improve the practices 
     in such professions by disseminating information about new 
     techniques and procedures.

     SEC. 4. SERVICE OF PROCESS.

       With respect to service of process, the corporation shall 
     comply with the laws of the State in which it is incorporated 
     and those States in which it carries on its activities in 
     furtherance of its corporate purposes.

     SEC. 5. MEMBERSHIP.

       Eligibility for membership in the corporation and the 
     rights and privileges of members shall be as provided in the 
     bylaws of the corporation.

     SEC. 6. BOARD OF DIRECTORS; COMPOSITION; RESPONSIBILITIES.

       The composition and the responsibilities of the board of 
     directors of the corporation shall be as provided in the 
     articles of incorporation of the corporation and in 
     conformity with the laws of the State in which it is 
     incorporated.

     SEC. 7. OFFICERS OF THE CORPORATION.

       The officers of the corporation and the election of such 
     officers shall be as provided in the articles of 
     incorporation of the corporation and in conformity with the 
     laws of the State in which it is incorporated.

     SEC. 8. RESTRICTIONS.

       (a) Use of Income and Assets.--No part of the income or 
     assets of the corporation shall inure to any member, officer, 
     or director of the corporation or be distributed to any such 
     person during the life of this charter. Nothing in this 
     subsection shall be construed to prevent the payment of 
     reasonable compensation to the officers of the corporation or 
     reimbursement for actual necessary expenses in amounts 
     approved by the board of directors.
       (b) Loans.--The corporation shall not make any loan to any 
     officer, director, or employee of the corporation.
       (c) Political Activity.--The corporation, any officer, or 
     any director of the corporation, acting as such officer or 
     director, shall not contribute to, support, or otherwise 
     participate in any political activity or in any manner 
     attempt to influence legislation.
       (d) Issuance of Stock and Payment of Dividends.--The 
     corporation shall have no power to issue any shares of stock 
     nor to declare or pay any dividends.
       (e) Claims of Federal Approval.--The corporation shall not 
     claim congressional approval or Federal Government authority 
     for any of its activities.

     SEC. 9. LIABILITY.

       The corporation shall be liable for the acts of its 
     officers and agents when acting within the scope of their 
     authority.

[[Page S545]]

     SEC. 10. MAINTENANCE AND INSPECTION OF BOOKS AND RECORDS.

       (a) Books and Records of Account.--The corporation shall 
     keep correct and complete books and records of account and 
     shall keep minutes of any proceeding of the corporation 
     involving any of its members, the board of directors, or any 
     committee having authority under the board of directors.
       (b) Names and Addresses of Members.--The corporation shall 
     keep at its principal office a record of the names and 
     addresses of all members having the right to vote in any 
     proceeding of the corporation.
       (c) Right To Inspect Books and Records.--All books and 
     records of the corporation may be inspected by any member 
     having the right to vote, or by any agent or attorney of such 
     member, for any proper purpose, at any reasonable time.
       (d) Application of State Law.--Nothing in this section 
     shall be construed to contravene any applicable State law.

     SEC. 11. AUDIT OF FINANCIAL TRANSACTIONS.

       The first section of the Act entitled ``An Act to provide 
     for audit of accounts of private corporations established 
     under Federal law'', approved August 30, 1964 (36 U.S.C. 
     1101), is amended--
       (1) by redesignating paragraph (72) as paragraph (71);
       (2) by designating the paragraph relating to the Non 
     Commissioned Officers Association of the United States of 
     America, Incorporated, as paragraph (72);
       (3) by redesignating paragraph (60), relating to the 
     National Mining Hall of Fame and Museum, as paragraph (73); 
     and
       (4) by adding at the end the following:
       ``(75) National Academies of Practice.''.

     SEC. 12. ANNUAL REPORT.

       The corporation shall report annually to the Congress 
     concerning the activities of the corporation during the 
     preceding fiscal year. Such annual report shall be submitted 
     at the same time as is the report of the audit for such 
     fiscal year required by section 3 of the Act referred to in 
     section 11 of this Act. The report shall not be printed as a 
     public document.

     SEC. 13. RESERVATION OF RIGHT TO AMEND OR REPEAL CHARTER.

       The right to alter, amend, or repeal this Act is expressly 
     reserved to the Congress.

     SEC. 14. DEFINITION.

       For purposes of this Act, the term ``State'' includes the 
     District of Columbia, the Commonwealth of Puerto Rico, and 
     the territories and possessions of the United States.

     SEC. 15. TAX-EXEMPT STATUS.

       The corporation shall maintain its status as an 
     organization exempt from taxation as provided in the Internal 
     Revenue Code of 1986 or any corresponding similar provision.

     SEC. 16. TERMINATION.

       If the corporation fails to comply with any of the 
     restrictions or provisions of this Act the charter granted by 
     this Act shall terminate.
                                 ______
                                 
      By Mr. INOUYE:
  S. 164. A bill to allow the psychiatric or psychological examinations 
required under chapter 313 of title 18, United States Code, relating to 
offenders with mental disease or defect, to be conducted by a clinical 
social worker; to the Committee on the Judiciary.


       the psychiatric and psychological examinations act of 1997

  Mr. INOUYE. Mr. President, today I am introducing legislation to 
amend Title 18 of the United States Code to allow our nation's clinical 
social workers to provide their mental health expertise to the federal 
judiciary.

  I feel that the time has come to allow our nation's judicial system 
to have access to a wide range of behavioral science and mental health 
expertise. I am confident that the enactment of this legislation would 
be very much in our nation's best interest.
  Mr. President, I ask unanimous consent that the text of this bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 164

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

     SECTION 1. EXAMINATIONS BY CLINICAL SOCIAL WORKERS.

       Section 4247(b) of title 18, United States Code, is amended 
     in the first sentence by--
       (1) striking out ``or'' after ``certified psychiatrist'' 
     and inserting a comma; and
       (2) inserting after ``psychologist,'' the following: ``or 
     clinical social worker,''.
                                 ______
                                 
      By Mr. INOUYE:
  S. 165. A bill for the relief of Donald C. Pence; to the Committee on 
the Judiciary.


                       private relief legislation

  Mr. INOUYE. 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. 165

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

     SECTION 1. RELIEF OF DONALD C. PENCE.

       (a) Relief.--The Secretary of the Treasury shall pay, out 
     of any moneys in the Treasury not otherwise appropriated, to 
     Donald C. Pence, of Sanford, North Carolina, the sum of 
     $31,128 in compensation for the failure of the Department of 
     Veterans Affairs to pay dependency and indemnity compensation 
     to Kathryn E. Box, the now-deceased mother of Donald C. 
     Pence, for the period beginning on July 1, 1990, and ending 
     on March 31, 1993.
       (b) Limitation on Fees.--Not more than a total of 10 
     percent of the payment authorized by subsection (a) shall be 
     paid to or received by agents or attorneys for services 
     rendered in connection with obtaining such payment, any 
     contract to the contrary notwithstanding. Any person who 
     violates this subsection shall be fined not more than $1,000.
                                 ______
                                 
      By Mr. INOUYE:
  S. 166. A bill to amend section 1086 of title 10, United States Code, 
to provide for payment under CHAMPUS of certain health care expenses 
incurred by certain members and former members of the uniformed 
services and their dependents to the extent that such expenses are not 
payable under Medicare, and for other purposes; to the Committee on 
Armed Services.


                   the champus amendment act of 1997

  Mr. INOUYE. Mr. President, I feel that it is very important that our 
nation continue its firm commitment to those individuals and their 
families who have served in the Armed Forces and made us the great 
nation that we are today. As this population becomes older, they are 
unfortunately finding that they need a wider range of health services, 
some of which are simply not available under Medicare. These 
individuals made a commitment to their nation, trusting that when they 
needed help the nation would honor that commitment. The bill that I am 
recommending today would ensure the highest possible quality of care 
for these dedicated citizens and their families, who gave so much for 
us.

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

                                 S. 166

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

     SECTION 1. EXPANSION OF MEDICARE EXCEPTION TO THE PROHIBITION 
                   OF CHAMPUS COVERAGE FOR CARE COVERED BY ANOTHER 
                   HEALTH CARE PLAN.

       (a) Amendment and Reorganization of Exceptions.--Subsection 
     (d) of section 1086 of title 10, United States Code, is 
     amended to read as follows:
       ``(d)(1) Section 1079(j) of this title shall apply to a 
     plan contracted for under this section except as follows:
       ``(A) Subject to paragraph (2), a benefit may be paid under 
     such plan in the case of a person referred to in subsection 
     (c) for items and services for which payment is made under 
     title XVIII of the Social Security Act.
       ``(B) No person eligible for health benefits under this 
     section may be denied benefits under this section with 
     respect to care or treatment for any service-connected 
     disability which is compensable under chapter 11 of title 38 
     solely on the basis that such person is entitled to care or 
     treatment for such disability in facilities of the Department 
     of Veterans Affairs.
       ``(2) If a person described in paragraph (1)(A) receives 
     medical or dental care for which payment may be made under 
     both title XVIII of the Social Security Act (42 U.S.C. 1395 
     et seq.) and a plan contracted for under subsection (a), the 
     amount payable for that care under the plan may not exceed 
     the difference between--
       ``(A) the sum of any deductibles, coinsurance, and balance 
     billing charges that would be imposed on the person if 
     payment for that care were made solely under that title; and
       ``(B) the sum of any deductibles, coinsurance, and balance 
     billing charges that would be imposed on the person if 
     payment for that care were made solely under the plan.
       ``(3) A plan contracted for under this section shall not be 
     considered a group health plan for the purposes of paragraph 
     (2) or (3) of section 1862(b) of the Social Security Act (42 
     U.S.C. 1395y(b)).
       ``(4) A person who, by reason of the application of 
     paragraph (1), receives a benefit for items or services under 
     a plan contracted for under this section shall provide the 
     Secretary of Defense with any information relating to amounts 
     charged and paid for the items and services that, after 
     consulting with the other administering Secretaries, the 
     Secretary requires. A certification of such person regarding 
     such amounts may be accepted for the purposes of determining 
     the benefit payable under this section.''.
       (b) Repeal of Superseded Provision.--Such section is 
     further amended--
       (1) by striking out subsection (g); and

[[Page S546]]

       (2) by redesignating subsection (h) as subsection (g).

     SEC. 2. CONFORMING AMENDMENT.

       Section 1713(d) of title 38, United States Code, is amended 
     by striking out ``section 1086(d)(1) of title 10 or''.

     SEC. 3. EFFECTIVE DATE.

       The amendments made by this Act shall take effect with 
     respect to health care items or services provided on and 
     after the date of enactment of this Act.
                                 ______
                                 
      By Mr. INOUYE:
  S. 167. A bill for the relief of Alfredo Tolentino of Honolulu, 
Hawaii; to the Committee on Governmental Affairs.


                       private relief legislation

  Mr. INOUYE. 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.167

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled, That, 
     notwithstanding the provisions of section 8337(b) of title 5, 
     United States Code, Alfredo Tolentino of Honolulu, Hawaii may 
     file an application no later than 60 days after the date of 
     the enactment of this Act with the Office of Personnel 
     Management for a claim of disability retirement under the 
     provisions of such section.
                                 ______
                                 
      By Mr. DeWINE:
  S. 168. A bill to reform criminal procedure, and for other purposes; 
to the Committee on the Judiciary.


                      the triggerlock act of 1997

  Mr. DeWINE. Mr. President, there are two truly fundamental issues we 
need to address in the area of crime. First, what is the proper role of 
the Federal Government in fighting crime in this country? Second, 
despite all the rhetoric, what really works in law enforcement?
  What matters? What doesn't matter?
  Today, I would like to discuss one issue that I believe really 
matters: How do we go about protecting America from armed career 
criminals?
  I am talking about repeat violent criminals who use a gun while 
committing a crime.
  In this area, too, we need to be asking: What works? And what level 
of Government should do it?
  In the area of gun crimes, we have a pretty good answer.
  We all know that there is some controversy over whether general 
restrictions on gun ownership would help to reduce crime. But there is 
no controversy over whether taking guns away from felons would reduce 
crime.
  There is legitimate disagreement over whether the Brady bill would 
reduce crime. Similarly, reasonable people can disagree on the question 
of whether a ban on assault weapons would reduce crime. I happen to 
support both those measures--but I recognize that some people think 
they are not effective.
  But what I am talking about today is something on which there is 
absolutely no controversy. There's simply no question that taking the 
guns away from armed career criminals will reduce crime.
  No question, Mr. President. When it comes to felons, unilateral 
disarmament of the thugs is the best policy. Let's disarm the people 
who hurt people.
  We have actually tried it--and we know it works. One of the most 
successful crime-fighting initiatives of recent years was known as 
Project Triggerlock. This project was wildly successful precisely 
because it addresses a problem squarely--and places the resources where 
they are most needed.
  Let me tell you a little about project Triggerlock. The U.S. Justice 
Department began Project Triggerlock in May 1991. The program targeted 
for prosecution--in Federal court--armed and violent repeat offenders.
  Under Triggerlock, U.S. Attorneys throughout the country said to 
State and local prosecutors: If you catch a felon with a gun, and if 
you want us to, we--the Federal prosecutors--will take over the 
prosecution.
  We will prosecute him. We will convict him. We will hit him with a 
stiff Federal mandatory sentence. And we will lock him up in a Federal 
prison at no cost to the State or local community.
  That's what Triggerlock did. Triggerlock was an assault on the very 
worst criminals in America. And it worked.
  This program took 15,000 criminals off the streets in an 18-month 
period.
  Incredibly, the Clinton Justice Department abandoned Project 
Triggerlock. It was the most effective Federal program in recent 
history for targeting and removing armed career criminals. But the 
Justice Department stopped Triggerlock dead in its tracks.
  What I am proposing in this bill is that we resurrect Project 
Triggerlock.
  My bill requires the U.S. attorneys in every jurisdiction in this 
country to make a montly report to the Attorney General in Washington 
on the number of arrests, prosecutions, and convictions they have 
gotten on gun-related offenses. The Attorney General should then 
report, semi-annually, to the Congress on the work of these 
prosecutors.
  Like all prosecutors, U.S. attorneys have limited resources. So--like 
all prosecutors--U.S. attorneys have to exercise discretion about whom 
to prosecute. We all recognize the Congress can't dictate to 
prosecutors whom they should prosecute--but it's clear that we should 
go on record with the following proposition: There's nothing more 
important than getting armed career criminals off the streets.
  Mr. President, I think Project Triggerlock is a very important way to 
keep the focus on the prosecution of gun crimes. Getting gun criminals 
off the streets is a major national priority--and we ought to behave 
accordingly.


                           MANDATORY MINIMUMS

  Mr. President, the second thing we need to do is change the law. We 
need to toughen the law against those who use a gun to commit a crime. 
My bill would say to career criminals--if you possess a gun after being 
convicted for gun crimes, you will get a mandatory 15-year sentence.
  Under current law, a first-time felon gets a 5-year mandatory minimum 
sentence. A third-time felon gets a mandatory minimum of 15 years. But 
there is a gap--there's no mandatory minimum for a second-time felon.
  My legislation would fix that. It would provide a mandatory minimum 
of 10 years for a second-time felon.
  That would make it a lot easier for police to get gun criminals off 
our streets.


                              BAIL REFORM

  A third thing we have to do is reform the bail system.
  Under current law--the Bail Reform Act--certain dangerous accused 
criminals can be denied bail detention if they have been charged with 
crimes of violence. But it's unclear under current law whether 
possession of firearms should be considered a crime of violence.
  Mr. President, let us do a reality check on this. If someone who is a 
known convicted felon is walking around with a gun, what's the 
likelihood that person is carrying the gun for law-abiding purposes?
  I think it is perfectly reasonable to consider that person prima 
facie dangerous. We should deny bail--and keep that convicted felon off 
the streets while awaiting trial on the new charge.
  My legislation would eliminate the ambiguity in current law. May bill 
would define a ``crime of violence'' specifically to include possession 
of a firearm by a convicted felon.
  If you are a convicted felon, and you're walking around with a gun--
you're dangerous. You need to be kept off the streets. We need to give 
prosecutors the legal right to protect the community from these people 
while they are awaiting trial.


                  CRACK DOWN ON ILLEGAL GUN SUPPLIERS

  A fourth way we can crack down on gun crimes is to go after those who 
knowingly provide the guns to felons. Under current law, you can be 
prosecuted for providing a gun only if you know for certain that it 
will be used in a crime.
  The revision I propose would make it illegal to provide a firearm if 
you have reasonable cause to believe that it's going to be used in a 
crime.
  The is the best way to go after the illegal gun trade--those who 
provide guns to the predators on society. We will no longer allow these 
gun providers to pretend ignorance. They are helping felons--and they 
need to be stopped.
  All of these proposals are motivated by a single purpose: I--along 
with the police officers of this country--believe that we have to get 
the guns away from the gun criminals.
  Project Triggerlock is one major initiative we can pursue at the 
Federal

[[Page S547]]

level to help make this happen. Imposing stiff mandatory minimums and 
cracking down on illegal gun providers are also important measures.
  All of the gun proposals contained in my crime legislation have the 
same goal. They are designed to assure American families who are living 
in crime-threatened communities that we're going to do what it takes to 
get guns off your streets.
  We are going to go after the armed career criminals. We're going to 
prosecute them. We're going to convict them. We are going to keep them 
off the streets.
  This is why we have a government in the first place--to protect the 
innocent, to keep ordinary citizens safe from violent, predatory 
criminals.
  I think Government needs to do a much better job at this fundamental 
task--and that's why targeting the armed career criminals is such a 
major component of this bill.
                                 ______
                                 
      By Mr. CRAIG:
  S. 169. A bill to amend the Immigration and Nationality Act with 
respect to the admission of temporary H-2A workers; to the Committee on 
the Judiciary.


        The Agricultural Work Force Stability and Protection Act

  Mr. CRAIG. Mr. President, I rise to introduce the Agricultural Work 
Force Stability and Protection Act. This bill would make needed reforms 
to the so-called ``H-2A Program,'' the program intended by Congress in 
the Immigration and Nationality Act to allow for a reliable supply of 
legal, temporary, immigrant workers in the agricultural sector, under 
terms that also provide reasonable worker protections, when there is a 
shortage of domestic labor in this sector.
  Last year, Senator Alan Simpson, then the Chairman of the Judiciary 
Committee's Subcommittee on Immigration, and then this body as a whole, 
acknowledged the importance of this issue by agreeing to including in 
the Illegal Immigration Reform conference report some compromise 
language regarding the Sense of the Congress on the H-2A Program and 
requiring the General Accounting Office to review the effectiveness of 
the program.
  The language included in the Illegal Immigration Reform and Immigrant 
Responsibility Act of 1996 was essentially the same as language agreed 
to in the conference report on fiscal year 1997 Agriculture 
Appropriations. With these provisions, the Congress went on record 
twice on the importance of having a program that helps ensure an 
adequate workforce for agricultural producers.
  This is an issue that is of the utmost importance to this country's 
farmers and ranchers, especially in light of the impact that 
immigration reform will have on the supply of agricultural labor. There 
is very real concern among Idaho farmers and throughout the country 
that these reforms will reduce the availability of agricultural 
workers.
  Farmers need access to an adequate supply of workers and want to have 
certainty that they are hiring a legal work force. In 1995, the total 
agricultural work force was about 2.5 million people. That equals 6.7 
percent of our labor force, which is directly involved in production 
agriculture and food processing.
  Hired labor is one of the most important and costly inputs in 
farming. U.S. farmers spent more than $15 billion on hired labor 
expenses in 1992--one of every eight dollars of farm production 
expenses. For the labor-intensive fruit, vegetable and horticultural 
sector, labor accounts for 35 to 45 percent of production costs.
  The competitiveness of U.S. agriculture, especially in the fruit, 
vegetable and horticultural specialty sectors, depends on the continued 
availability of hired labor at a reasonable cost. U.S. farmers, 
including producers of labor-intensive perishable commodities, compete 
directly with producers in other countries for market share in both 
U.S. and foreign commodity markets.
  Wages of U.S. farmworkers will not be forced up by eliminating alien 
labor, because growers' production costs are capped by world market 
commodity prices. Instead, a reduction in the work force available to 
agriculture will force U.S. producers to reduce production to the level 
that can be sustained by a smaller work force.
  Over time, wages for these farm workers have actually risen faster 
than non-farm worker wages. Between 1986-1994, there was a 34.6 percent 
increase in average hourly earnings for farm workers, while non-farm 
workers only saw a 27.1 percent increase.
  Even with this increase in on-farm wages, this country has 
historically been unable to provide a sufficient number of domestic 
workers to complete the difficult manual labor required in the 
production of many agricultural commodities. In Idaho, this is 
especially true for producers of fruit, sugar beets, onions and other 
specialty crops.
  The difficulty in obtaining sufficient domestic workers is primarily 
due to the fact that domestic workers prefer the security of full-time 
employment in year round positions. As a result the available domestic 
work force tends to prefer the long term positions, leaving the 
seasonal jobs unfilled. In addition, many of the seasonal jobs 
unfilled. In addition, many of the seasonal agricultural jobs are 
located in areas where it is necessary for workers to migrate into the 
area and live temporarily to do the work. Experience has shown that 
foreign workers are more likely to migrate than domestic workers. As a 
result of domestic short supply, farmers and ranchers have had to rely 
upon the assistance of foreign workers.
  The only current mechanism available to admit foreign workers for 
agricultural employment is the H-2A program. The H-2A program is 
intended to serve as a safety valve for times when domestic labor is 
unavailable. Unfortunately, the H-2A program isn't working.
  Despite efforts to streamline the temporary worker program in 1986, 
it now functions so poorly that few in agriculture use it without 
risking an inadequate work force, burdensome regulations and potential 
litigation expense. In fact, usage of the program has actually 
decreased from 25,000 workers in 1986 to only 17,000 in 1995.
  The bill I am introducing would provide some much-needed reforms to 
the H-2A program. I urge my colleagues to consider the following 
reasonable modifications of the H-2A program.
  First, the bill would reduce the advance filing deadline from 60 to 
40 days before workers are needed. In many agricultural operations, 60 
days is too far in advance to be able to predict labor needs with the 
precision required in H-2A applications. Furthermore, virtually all 
referrals of U.S. workers who actually report for work are made close 
to the date of need. The advance application period serves little 
purpose except to provide time for litigation.
  Second, in lieu of the present certification letter, the Department 
of Labor [DOL] would issue the employer a domestic recruitment report 
indicating that the employer's job offer meets the statutory criteria 
and lists the number of U.S. workers referred. The employer would then 
file a petition with INS for admission of aliens, including a copy of 
DOL's domestic recruitment report and any countervailing evidence 
concerning the adequacy of the job offer and/or the availability of 
U.S. workers. The Attorney General would make the admission decision. 
The purpose is to restore the role of the Labor Department to that of 
giving advice to the Attorney General on labor availability, and return 
decision making to the Attorney General.
  Third, the Department of Labor would be required to provide the 
employer with a domestic recruitment report not later than 20 days 
before the date of need. The report either states sufficient domestic 
workers are not available or gives the names and Social Security 
numbers of the able, willing and qualified workers who have been 
referred to the employer. The Department of Labor now denies 
certification not only on the basis of workers actually referred to the 
employer, but also on the basis of reports or suppositions that 
unspecified numbers of workers may become available. The proposed 
change would assure that only workers actually identified as available 
would be the basis for denying foreign workers.
  Fourth, the Immigration and Naturalization Service [INS] would 
provide expedited processing of employers' petitions, and, if approved, 
notify the visa issuing consulate or port of entry within 15 calendar 
days. This would ensure timely admission decisions.

[[Page S548]]

  Fifth, INS would provide expedited procedures for amending petitions 
to increase the number of workers admitted on 5 days before the date of 
need. This is to reduce the paperwork and increase the timeliness of 
obtaining needed workers very close to or after the work has started.
  Sixth, DOL would continue to recruit domestic workers and make 
referrals to employers until 5 days before the date of need. This 
method is needed to allow the employer at a date certain to complete 
his hiring, and to operate without having the operation disrupted by 
having to displace existing workers with new workers.
  Seventh, the bill would enumerate the specific obligations of 
employers in occupations in which H-2A workers are employed. The 
proposed definition would define jobs that meet the following criteria 
as not adversely affecting U.S. workers:
       1. The employer offers a competitive wage for the position.
       2. The employer would provide approved housing, or a 
     reasonable housing allowance, to workers whose permanent 
     place of residence is beyond normal commuting distance.
       3. The employer continues to provide current transportation 
     reimbursement requirements.
       4. A guarantee of employment is provided for at least 
     three-quarters of the anticipated hours of work during the 
     actual period of employment.
       5. The employer would provide workers' compensation or 
     equivalent coverage.
       6. Employer must comply with all applicable Federal, State, 
     and local labor laws with respect to both United States and 
     alien workers.
       This combination of employment requirements would eliminate 
     the discretion of Department of Labor to specify terms and 
     conditions of employment on a case-by-case basis. In 
     addition, the scope for litigation would be reduced since 
     employers (and the courts) would know with particularity the 
     required terms and conditions of employment.
       Eighth, the bill would provide that workers must exhaust 
     administrative remedies before engaging their employers in 
     litigation.
       Ninth, certainty would be given to employers who comply 
     with the terms of an approved job order. If at a later date 
     the Department of Labor requires changes, the employer would 
     be required to comply with the law only prospectively. This 
     very important provision removes the possibility of 
     retroactive liability if an approved order is changed.
       As the Illegal Immigration Reform law is implemented, 
     action on these H-2A reforms will be necessary in the coming 
     months to avoid jeopardizing the labor supply for American 
     agriculture.
       Therefore, I am introducing this bill at this time and 
     invite and urge my colleagues to sign on as cosponsors. It is 
     time to begin in earnest to discuss these issues and examine 
     these vitally-needed reforms. I hope and expect the Senate 
     will pass constructive legislation along these lines this 
     year.
       Thank you, Mr. President. At this time, I ask unanimous 
     consent that a summary of the bill be printed in the Record.
       There being no objection, the summary was ordered to be 
     printed in the Record, as follows:

  Summary of the Agricultural Work Force Stability and Protection Act

       The following proposed changes to the H-2A program would 
     improve its timeliness and utility for agricultural employers 
     in addressing agricultural labor shortages, while providing 
     wages and benefits that equal or exceed the median level of 
     compensation in non-H-2A occupations, and reducing the 
     vulnerability of the program to being hamstrung and delayed 
     by litigation.
       1. Reduce the advance filing deadline from 60 to 40 days 
     before workers are needed.
       Rationale. In many agricultural operations, 60 days is too 
     far in advance to be able to predict labor needs with the 
     precision required in H-2A applications. Furthermore, 
     virtually all referrals of U.S. workers who actually report 
     for work are made close to the date of need. The advance 
     application period serves little purpose except to provide 
     time for litigation.
       2. In lieu of the present certification letter, DOL would 
     issue the employer a domestic recruitment report indicating 
     that the employer's job offer meets the statutory criteria 
     (or the specific deficiencies in the order) and the number of 
     U.S. workers referred, per #3 below. The employer would file 
     a petition with INS for admission of aliens (or transfer of 
     aliens already in the United States), including a copy of 
     DOL's domestic recruitment report and any countervailing 
     evidence concerning the adequacy of the job offer and/or the 
     availability of U.S. workers. The Attorney General would make 
     the admission decision.
       Rationale. The purpose is to restore the role of the Labor 
     Department to that of giving advice to the AG on labor 
     availability, and return the true gatekeeper role to the AG. 
     Presently the certification letter is, de facto, the 
     admission decision.
       3. DOL provides employer with a domestic recruitment report 
     not later than 20 days before the date of need stating either 
     that sufficient domestic workers are not available, or giving 
     the names and Social Security Numbers of the able, willing 
     and qualified workers who have been referred to the employer 
     and who have agreed to be available at the time and place 
     needed. DOL also provides a means for the employer to contact 
     the referred worker to confirm availability close to the date 
     of need. DOL would be empowered to issue a report that 
     sufficient domestic workers are not available without waiting 
     until 20 days before the date of need for workers if there 
     are already unfilled orders for workers in the same or 
     similar occupations in the same area of intended employment.
       Rationale: DOL now denies certification not only on the 
     basis of workers actually referred to the employer, but also 
     on the basis of reports or suppositions that unspecified 
     numbers of workers may become available. These suppositions 
     almost never prove correct, forcing the employer into costly 
     and time wasting redeterminations on or close to the date of 
     need and delaying the arrival of workers. The proposed change 
     would assure that only workers actually identified as 
     available would be the basis for denying foreign workers. DOL 
     also interprets the existing statutory language as precluding 
     it from issuing each labor certification until 20 days before 
     the date of need, even in situations where ongoing 
     recruitment shows that sufficient workers are not available.
       4. INS to provide expedited processing of employer's 
     petitions, and, if approved, notify the visa issuing 
     consulate or port of entry within 15 calendar days.
       Rationale: To assure timely admission decisions.
       5. INS to provide an expedited procedures for amending 
     petitions to increase the number of workers admitted (or 
     transferred) on or after 5 days before the date of need, to 
     replace referred workers whose continued availability can not 
     be confirmed, who fail to report on the date of need, or who 
     abandon employment or are terminated for cause, without first 
     obtaining a redetermination of need from DOL.
       Rationale: To reduce the paperwork and increase the 
     timeliness of obtaining needed workers very close to or after 
     the work has started.
       6. DOL would continue to recruit domestic workers and make 
     referrals to employers until 5 days before the date of need. 
     Employers would be required to give preference to able, 
     willing and qualified workers who agree to be available at 
     the time and place needed who are referred to the employer 
     until 5 days before the date workers are needed. After that 
     time, employers would be required to give preference to U.S. 
     workers who are immediately available in filling job 
     opportunities that become available, but would not be 
     required to bump alien workers already employed.
       Rationale: A method is needed to allow the employer at a 
     date-certain close to the date of need to complete his 
     hiring, and to operate without having the operation disrupted 
     by having to displace existing workers with new workers.
       7. Create a ``bounded definition'' of adverse effect by 
     enumerating the specific obligations of employers in 
     occupations in which H-2A aliens are employed. The proposed 
     definition would define jobs that meet the following criteria 
     as not adversely affecting U.S. workers:
       7a. Offer at least the median rate of pay for the 
     occupation in the area of intended employment.
       7b. Provide approved housing or, if sufficient housing is 
     available in the approximate area of employment, a reasonable 
     housing allowance, to workers whose permanent place of 
     residence is beyond normal commuting distance.
       Note: Provision should also be made to allow temporary 
     housing that does not meet the full set of Federal standards 
     for a transitional period in areas where sufficient housing 
     that meets standards is not presently available, and for such 
     temporary housing on a permanent basis in occupations in 
     which the term of employment is very short (e.g. cherry 
     harvesting, which lasts about 15-20 days) if sufficient 
     housing that meets the full standards is not available. 
     Federal law should pre-empt state and local laws and codes 
     with respect to the provision of such temporary housing.
       7c. Current transportation reimbursement requirements (i.e. 
     employer reimburses transportation of workers who complete 50 
     percent of the work contract and provides or pays for return 
     transportation for workers who complete the entire work 
     contract).
       7d. A guarantee of employment for at least three-quarters 
     of the anticipated hours of work during the actual period of 
     employment.
       7e. Employer-provided Workers' Compensation or equivalent.
       7f. Employer must comply with all applicable federal, state 
     and local labor laws with respect to both U.S. and alien 
     workers.
       Rationale: The objective is to eliminate the discretion of 
     DOL to specify terms and conditions of employment on a case-
     by-case basis and reduce the scope for litigation of 
     applications. Employers (and the courts) would know with 
     particularity, up front, what the required terms and 
     conditions of employment are. The definition also reduces the 
     cost premium for participating in the program by relating the 
     Adverse Effect Wage Rate to the minimum wage and limiting the

[[Page S549]]

     applicability of the three-quarters guarantee to the actual 
     period of employment.
       8. Provide that workers must exhaust administrative 
     remedies before engaging their employers in litigation.
       Rationale: To reduce litigation costs.
       9. Provide that if an employer complies with the terms of 
     an approved job order, and DOL or a court later orders a 
     provision to be changed, the employer would be required to 
     comply with the new provision only prospectively.
       Rationale: To reduce the exposure of employers to 
     litigation seeking to overturn DOL's approval of job orders, 
     and to retroactive liability if an approved order is changed.
                                 ______
                                 
      By Mr. DeWINE:
  S. 170 A bill to provide for a process to authorize the use of clone 
pagers, and for other purposes; to the Committee on the Judiciary.


               the clone pager authorization act of 1996

  Mr. DeWINE. Mr. President, I believe that, to stop crime, we have to 
do more. That doesn't mean another rhetorical assault on crime--or even 
a flashy ten-point program. Rather, we have to do more of the little 
things that--when you put them all together--make a big difference.
  The most important of these is giving law enforcement officials the 
tools they need to do their jobs. Today, I am introducing legislation 
that will help us do that.
  The bill I am introducing today would simply rectify an imbalance in 
current Federal law which makes it more difficult for law enforcement 
officials to fight drug trafficking. Today, drug traffickers have taken 
advantage of technological advances to advance their own criminal 
interests.
  Drug traffickers--on a regular basis--use digital display paging 
devices, better known as beepers--in transacting their business. They 
do this because it gives them the freedom to run their criminal 
enterprise out of any available phone booth, and to avoid police 
surveillance. If law enforcement officials knew from whom they were 
receiving the calls to their beepers it would certainly aid efforts in 
tracking down drug traffickers.
  The technology now exists to allow law enforcement to receive the 
digital display message, without intercepting the content of any 
conversation or message. It is called a ``clone pager.'' This clone 
pager is programmed identically to the suspect's pager and allows law 
enforcement to receive the digital displays at the same time as the 
suspect.
  This device functions identically to a pen register. Mr. President, 
as you may know, a pen register is a device which law enforcement 
attaches to a phone line to decode the numbers which have called a 
specific telephone. Like a clone pager, the pen register only 
intercepts phone numbers, not the content of any conversation or 
message.
  Since both devices serve the same purpose, a reasonable person would 
conclude that both the system for receiving authorization to use these 
devices, and the procedures mandated by the courts once the 
authorization was granted would be the same. However, in both cases it 
is not.
  Under current law, the requirements for obtaining authorization to 
use a clone pager are much more stringent than they are for using a pen 
register. I would like to briefly outline the differences.
  In order to obtain authorization to use a pen register, a Federal 
prosecutor must certify to a district court judge the phone number to 
which the pen register will be attached, the phone company that 
delivers service to that number, and that the pen register serves a 
legitimate law enforcement purpose. In other words, the prosecutor must 
show only that the use of the pen register is based on an ongoing 
investigation. The district court judge may then grant the 
authorization on a mere finding that the prosecutor has made the 
required certification. The pen register can then be used for a period 
of 60 days--with no requirement that law enforcement report pen 
register activity to the court.
  In contrast, the U.S. Attorney for a particular district must sign 
off on a request for clone pager authorization. Once this occurs, a 
prosecutor may then go before a district court judge where he must show 
that there is probable cause to suspect an individual has committed a 
crime--a much higher standard than what is required for a pen register 
authorization. He must also detail what other investigative techniques 
have been used, why they have not been successful, and why they will 
continue to be unsuccessful. Moreover, the prosecutor must disclose 
other available investigative techniques and why they are unlikely to 
be successful. Only after all of this is done can authorization to use 
a clone pager be granted.
  But these are not the only differences in treatment. After the 
authorization is granted, it can only be used for 30 days. During that 
30 days, the prosecutor must report activity from the clone pager to 
the issuing judge at least once every 2 weeks.
  I do not believe that the authorization disparity in authorization 
for these two devices is warranted.
  The legislation that I am introducing today would simply amend the 
Federal code to end this disparity. This bill would give law 
enforcement agents ready access, with warranted limitations, to the 
tools they need to do their jobs. This bill will bring Federal law 
enforcement into the 21st century. The drug traffickers are already 
there. It's time for law and order to catch up with them.
                                 ______
                                 
      By Mr. DeWINE:
  S. 171. A bill to amend title 18, United States Code, to insert a 
general provision for criminal attempt; to the Committee on the 
Judiciary.


                        THE ATTEMPT ACT OF 1997

  Mr. DeWine. Mr. President, I am introducing a bill today that will 
give law enforcement officers a tool they need to their jobs--
protecting American families. It would establish, for the first time in 
the Federal Criminal Code, a general attempt provision. Thankfully, 
criminals to not succeed every time they set out to commit a crime. We 
need to take advantage of these failed crimes to get criminals off the 
streets.
  Mr. President, under current Federal law, there is no general attempt 
provision applicable to all Federal offenses. This has forced Congress 
to enact separate legislation to cover specific circumstances. This 
approach to the law has led to a patchwork of attempt statutes--leaving 
gaps in coverage, and failing to adequately define exactly what 
constitutes an attempt in all circumstances.
  Some statutes include attempt language within the substantive 
offense, but don't bother to define exactly what an attempt is. Others 
define, as a separate crime, conduct which is only a step toward 
commission of a more serious offense. Moreover, there is no offense of 
attempt for still other serious crimes, such as disclosing classified 
information to an unauthorized person.
  This ad hoc approach to attempt statutes is causing problems for law 
enforcement officials. At what point is it OK for law enforcement 
officials to step in to prevent the completion of a crime? If someone 
is seriously dedicated to committing a crime, law enforcement must be 
able to intervene and prevent it--without having to worry whether doing 
so would cause a criminal to walk. In the absence of a statutory 
definition of an attempt, the courts have been called upon to decide 
whether specific actions fit within existing statutory language.
  When a criminal is attempting to commit a crime where attempt is not 
an offense, then law enforcement must wait until the crime is 
completed, or find some other charge to fit the criminal's actions. Law 
enforcement should never be placed in either of these positions.
  The bill that I am introducing today will solve these problems in the 
current law. As I mentioned earlier, this legislation will add a 
general attempt provision to the U.S. Criminal Code. It provides 
congressional direction in defining what constitutes an attempt in all 
circumstances. And, it will serve to fill in the irrational gaps in 
attempt coverage.
  In my view, it's time for the American people--acting through the 
Congress--to clarify their intention when it comes to this area of the 
law.
  Millions of Americans work hard every day to make ends meet and raise 
their families and provide a better life for their children.
  But, there are some people who choose a different approach to life--a 
life of crime. We as Americans need to leave no doubt where we stand on 
that choice. If you even try to commit a crime, we're going to 
prosecute you

[[Page S550]]

and convict you. This bill will make it easier for our law enforcement 
officers to protect our families and our communities.
                                 ______
                                 
      By Mr. DeWINE:
  S. 172. A bill to amend title 18, United States Code, to set forth 
the civil jurisdiction of the United States for crimes committed by 
persons accompanying the Armed Forces outside of the United States, and 
for other purposes; to the Committee on the Judiciary.


                 the military and civilian justice act

  Mr. DeWINE. Mr. President, there are shortcomings in the Code of 
Military Law that have terrible repercussions in the streets of 
civilian America. These failures of the military judicial system too 
often result in military criminals being pushed out of the service and 
into our civilian streets--where these criminals continue to behave as 
lawless predators. This bill closes two such gaps in the Military Code 
and ensures that the enlisted criminal is not pushed out to prey on 
decent citizens. This bill protects civilians from military personnel 
who have committed crimes, just as the Military protects itself from 
those same people.
  My bill addresses an important gap in the law. Under current law, 
many illegal acts committed abroad by U.S. soldiers or accompanying 
civilians go unpunished by the military courts. The prosecution of 
these crimes is left to the discretion of a military court, which 
either chooses to do no more than hand down a dishonorable discharge or 
lacks jurisdiction over the civilian defendant. This should not be the 
case.
  This bill guarantees that a soldier or accompanying civilian abroad, 
committing an illegal act punishable under the United States Code by 
more than a year's imprisonment, will be handed over to civilian 
authorities for prosecution under the United States Code.
  There is another aspect of this bill intended to protect civilian 
Americans from the actions of those who commit crimes while in the 
military. This bill also mandates that when an enlisted criminal is 
discharged from the service, the military Secretary will turn over to 
the FBI all the criminal records of that soldier for inclusion in the 
FBI criminal records system. Again, Mr. President, this is another way 
to protect the tax-paying, law-abiding American from dishonorably 
discharged criminals. Under current law, the criminal histories of 
these military personnel do not become part of the National Crime 
Information Center database. This bill will ensure that they do.
                                 ______
                                 
      By Mr. DeWINE:
  S. 173. A bill to expedite State reviews of criminal records of 
applicants for private security officer employment, and for other 
purposes; to the Committee on the Judiciary.


          The private security officers quality assurance act

  Mr. DeWINE. Mr. President, I rise today to introduce the Private 
Security Officer Assurance Act of 1997. This bill establishes an 
expedited procedure for State regulators or private security officers 
to obtain criminal records background checks through the FBI prior to 
issuing state permits to security officers. Currently, it frequently 
takes between 6 to 18 months to complete such checks.
  My bill would authorize the Attorney General to designate an 
association of employers of security officers to collect signature 
cards from applicants and forward them to the FBI for a comparison 
against the Federal criminal history records on file. The records would 
then be forwarded to the appropriate State regulators who would decide 
the qualification of the applicants for permits based on State laws. 
Under this bill, the applicant would pay fees to compensate for the 
cost of the background checks. No criminal history information would go 
to the employer.
  I would note that Congress has established similar procedures for 
banks, the parimutuel industry and the financial securities industry. 
The process that I described takes about 3 weeks for these industries.
  Mr. President, I believe this bill will help improve public safety by 
ensuring the integrity of those hired as security officers.
                                 ______
                                 
      By Mr. DeWINE:
  S. 174. A bill to establish the Fallen Timbers Battlefield, Fort 
Meigs, and Fort Miamis National Historical Site in the State of Ohio; 
to the Committee on Energy and Natural Resources.


                         THE FALLEN TIMBERS ACT

  Mr. DeWINE. Mr. President, I rise today to introduce legislation that 
will designate the Fallen Timbers Battlefield, Fort Meigs, and Fort 
Miamis as National Historic Sites.
  Mr. President, the people of northwest Ohio are committed to 
preserving the historic heritage of the United States and the State of 
Ohio, as well as that of their own community.
  The truly national significance of the Battle of Fallen Timbers and 
Fort Meigs have been acknowledged already. In 1960, Fallen Timbers was 
designated as a National Historic Landmark. In 1969, Fort Meigs 
received this designation.
  The Battle of Fallen Timbers is acknowledged by the National Park 
Service as a culminating event in the history of the struggle for 
dominance in the old Northwest Territory.
  Fort Meigs is recognized by the National Park Service as ``the zenith 
of the British advance in the west as well as the maximum effort by 
Native forces under the Shawnee, Tecumseh, during the War of 1812.''
  Fort Miamis, which was attacked twice without success by British 
troops, led by General Henry Proctor, in the spring of 1813, is listed 
on the National Register of Historic Places.
  Recently, the National Park Service completed a special resource 
study examining the proposed National Historic Site designation and the 
suitability of these sites for inclusion in the National Park System.
  The Park Service concluded that these sites were suitable for 
inclusion in the National Park System--with non-Federal management and 
National Park Service assistance. The bill I am introducing today would 
act on that recommendation.
  My legislation will accomplish the following:
  Recognize and preserve the 185-acre Fallen Timbers Battlefield site;
  Formalize the linkage between the Fallen Timbers Battlefield and 
Monument to Fort Meigs and Fort Miamis;
  Preserve and interpret U.S. military history and Native American 
culture during the period from 1794 through 1813; and,
  Provide technical assistance to the State of Ohio as well as 
interested community and historical groups in the development and 
implementation of programming and interpretation of the three sites.
  However, my legislation will not require the Federal Government to 
provide direct funding to these three sites. That responsibility 
remains with--and is welcomed by--the many individuals, community 
groups, elected officials, and others who deserve recognition for their 
many hours of hard work dedicated to this issue.
  Mr. President, we have entered an era where the responsibility and 
the drive behind the management, programming, and--in many cases--the 
funding for historic preservation is the responsibility of local 
community groups, local elected officials, and local business 
communities.
  This legislation to designate the Fallen Timbers Battlefield, Fort 
Meigs, and Fort Miamis as National Historic Sites represents just such 
an effort. In my opinion, it is long overdue.
  Mr. President, it is time to grant these truly historic areas the 
measure of respect and recognition they deserve. I agree with the 
National Park Service--and the people of Ohio--on this issue. That is 
why I am proposing this important legislation today.
                                 ______
                                 
      By Mr. INOUYE:
  S. 175. A bill to amend chapter 81 of title 5, United States Code, to 
authorize the use of clinical social workers to conduct evaluations to 
determine work-related emotional and mental illnesses; to the Committee 
on Governmental Affairs.


          the clinical social workers' recognition act of 1997

  Mr. INOUYE. Mr. President, I rise today to introduce the Clinical 
Social Workers' Recognition Act of 1997 to correct an outstanding 
problem in the Federal Employees Compensation Act. This bill will also 
provide clinical social workers the recognition they deserve as 
independent providers of quality mental health care services.

[[Page S551]]

  Clinical social workers are authorized to independently diagnose and 
treat mental illnesses through public and private health insurance 
plans across the Nation. However, title V, United States Code, does not 
permit the use of mental health evaluations conducted by clinical 
social workers for use as evidence in determining workers' compensation 
claims brought about by Federal employees. The bill I am introducing 
corrects this problem.
  All 50 States, the District of Columbia, Puerto Rico, and the Virgin 
Islands legally regulate social workers through licensure or 
certification. Thirty-one States and the District of Columbia have 
enacted laws that mandate reimbursement for clinical social workers by 
insurance plans that offer mental health care coverage. All Federal 
insurance programs that authorize the provision of mental health care 
services, including Medicare, the Federal Employee Health Benefits 
Program [FEHBP], and the Civilian Health and Medical Program of the 
Uniformed Services [CHAMPUS] recognize the ability of clinical social 
workers to provide mental health services.
  It is a sad irony that Federal employees may select a clinical social 
worker through their health plans to provide mental health services but 
may not go to this professional for a workers' compensation evaluation. 
Studies show that as much as 65 percent of all mental health services 
are provided by clinical social workers and clinical social workers are 
often the only providers of mental health service in rural areas of the 
country. The failure to recognize the validity of evaluations provided 
by clinical social workers unnecessarily limits the choice of Federal 
employees in selecting a provider to conduct the mental health 
evaluation and may well impose an undue burden for Federal employees in 
certain areas where clinical social workers are the only available 
providers for mental health care. This legislation will correct such an 
inequity.
  Mr. President, I ask unanimous consent that the text of this bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 175

       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 ``Clinical Social Workers' 
     Recognition Act of 1997''.

     SEC. 2. EXAMINATIONS BY CLINICAL SOCIAL WORKERS FOR FEDERAL 
                   WORKER COMPENSATION CLAIMS.

       Section 8101 of title 5, United States Code, is amended--
       (1) in paragraph (2) by striking ``and osteopathic 
     practitioners'' and inserting ``osteopathic practitioners, 
     and clinical social workers''; and
       (2) in paragraph (3) by striking ``and osteopathic 
     practitioners'' and inserting ``osteopathic practitioners, 
     and clinical social workers''.
                                 ______
                                 
      By Mr. INOUYE:
  S. 176. A bill for the relief of Susan Rebola Cardenas; to the 
Committee on the Judiciary.


                       private relief legislation

  Mr. INOUYE. 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. 176

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

     SECTION 1. PERMANENT RESIDENCE.

       Notwithstanding any other provision of law, for purposes of 
     the Immigration and Nationality Act (8 U.S.C. 1101 et seq.), 
     Susan Rebola Cardenas shall be held and considered to have 
     been lawfully admitted to the United States for permanent 
     residence as of the date of the enactment of this Act upon 
     payment of the required visa fee.

     SEC. 2. REDUCTION OF NUMBER OF AVAILABLE VISAS.

       Upon the granting of permanent residence to Susan Rebola 
     Cardenas as provided in this Act, the Secretary of State 
     shall instruct the proper officer to reduce by one number 
     during the current fiscal year the total number of immigrant 
     visas available to natives of the country of the alien's 
     birth under section 203(a) of the Immigration and Nationality 
     Act (8 U.S.C. 1153(a)).
                                 ______
                                 
      By Mr. INOUYE:
  S. 177. A bill to provide for a special application of section 1034 
of the Internal Revenue Code of 1986; to the Committee on Finance.


                    special application legislation

  Mr. INOUYE. 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. 177

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled, That, in 
     the case of Rita Bennington--
       (1) who purchased her new principal residence (within the 
     meaning of section 1034 of the Internal Revenue Code of 1986) 
     in January 1992, and
       (2) who was unable to meet the requirements of such section 
     with respect to the sale of an old principal residence until 
     May 1994, because of unexpected delays caused by Hurricane 
     Iniki, the Secretary of the Treasury, in the administration 
     of section 1034 of the Internal Revenue Code of 1986, shall 
     apply subsection (a) of such section by substituting ``2.5 
     years'' for ``2 years'' each place it appears.
                                 ______
                                 
      By Mr. DeWINE:
  S. 178. A bill to amend the Social Security Act to clarify that the 
reasonable efforts requirement includes consideration of the health and 
safety of the child; to the Committee on Finance.


                        FOSTER CARE LEGISLATION

  Mr. DeWINE. Mr. President, in 1980, Congress passed the Adoption 
Assistance and Child Welfare Act, known as CWA. The 1980 Act has done a 
great deal of good. It increased the resources available to struggling 
families. It increased the supervision of children in the foster care 
system. And it gave financial support to people to encourage them to 
adopt children with special needs.
  But while the law has done a great deal of good, many experts are 
coming to believe that this law has actually had some bad unintended 
consequences.
  Under the 1980 Act, for a state to be eligible for Federal matching 
funds for foster care expenditures, the state must have a plan for the 
provision of child welfare services approved by the Secretary of HHS 
and this State plan must provide, and I quote:

     that, in each case, reasonable efforts will be made (A) prior 
     to the placement of a child in foster care, to prevent or 
     eliminate the need for removal of the child from his home, 
     and (B) to make it possible for the child to return to his 
     home.

  In other words, Mr. President, no matter what the particular 
circumstances of a household may be the state must make reasonable 
efforts to keep it together, and to put it back together if it falls 
apart.
  What constitutes reasonable efforts? How far does the State have to 
go?
  This has not been defined by Congress. Nor has it been defined by 
HHS.
  This failure to define what constitutes ``reasonable efforts'' has 
had a very important--and very damaging--practical result. There is 
strong evidence to suggest that in the absence of a definition, 
reasonable efforts have become in some cases extraordinary efforts. 
Efforts to keep families together at all costs.
  Mr. President, during the past year, I have traveled throughout the 
state of Ohio, talking to social work professionals. In these 
discussions I have found that there is great disparity in how the law 
is being interpreted by judges and social workers.
  Let me give you an example. I posed this hypothetical to 
representatives of children's services in both rural and urban 
counties.
  Mary is a 28-year-old crack-addicted mother who has seven children. 
Steve, the 29-year-old father of the children, is an abusive alcoholic, 
and all seven of the children have been taken away--permanently--by the 
county.
  Now, Mary gives birth to an eighth child, little Peggy. The newborn 
Peggy tests positive for crack. Therefore, it is obvious that her 
mother is still addicted to crack. Steve, the father, is still an 
alcoholic.
  Pretend for a moment that you work for the county children's services 
department. Does the law allow you to get the new baby out of the 
household? And if you do, should you file for permanent custody so that 
the baby can be adopted?
  The answer will surprise you. In fact, I was surprised at the 
response I got when I asked a number of Ohio social work professionals 
that very same question. The answer varied from county to county, but I 
heard too much

[[Page S552]]

``no'' in the answers I got. Some officials said they could apply for 
emergency custody of the baby and take her away on a temporary basis, 
but they would have to make a continued effort to send the baby back to 
her mother!
  Other social workers said that if they went to court to get custody 
of the baby, they probably wouldn't be able to get even temporary 
custody of her. In one county, I was told it would be two years before 
the baby could be made available for adoption. Another county said it 
would be five years.
  One social worker--just one, out of all the ones I asked--told me 
that her department would move immediately for permanent custody of the 
baby. But she said that their success would still depend on the judge 
assigned to the case.
  Should our Federal law really push the envelope, so that 
extraordinary efforts are made to keep that family together--efforts 
that any of us would not consider reasonable?
  It is clear after 17 years of experience with this law that there is 
a great deal of confusion as to how the act applies.
  My legislation would clarify, once and for all, the intent of 
Congress in the 1980 Act. My legislation would amend that language in 
the following way: ``In determining reasonable efforts, the best 
interests of the child, including the child's health and safety, shall 
be of primary concern.''
  The 1980 Act was a good bill. There are some families that need a 
little help if they are going to stay together, and it's right for us 
to help them. That's what the Child Welfare Act did.
  But by now it should be equally clear that the framers of the 1980 
Act did not intend for extraordinary efforts to be made to reunite 
children with their abusers. As Peter Digre, the director of the Los 
Angeles County Department of Children and Family Services, testified at 
a hearing last year before the House Ways and Means Subcommittee on 
Human Resources: ``[W]e cannot ignore the fact that at least 22% of the 
time infants who are reunified with their families are subjected to new 
episodes of abuse, neglect, or endangerment.''
  That was not the intention of Congress in the 1980 law. But too 
often, that law is being misinterpreted in a way that is trapping these 
children in abusive households.
  I believe we should leave no doubt about the will of the American 
people on this issue affecting the lives of America's children. The 
legislation I am proposing today would put the children first.
                                 ______
                                 
      By Mr. HATCH (for himself, Mr. Lott, Mr. Thurmond, Mr. Craig, Mr. 
        Nickles, Mr. Domenici, Mr. Stevens, Mr. Roth, Mr. Bryan, Mr. 
        Kohl, Mr. Grassley, Mr. Graham, Mr. Specter, Mr. Baucus, Mr. 
        Thompson, Mr. Breaux, Mr. Kyl, Ms. Moseley-Braun, Mr. DeWine, 
        Mr. Robb, Mr. Abraham, Mr. Ashcroft, Mr. Sessions, Mr. D'Amato, 
        Mr. Helms, Mr. Lugar, Mr. Chafee, Mr. McCain, Mr. Jeffords, Mr. 
        Warner, Mr. Coverdell, Mr. Cochran, Mrs. Hutchison, Mr. Mack, 
        Mr. Gramm, Ms. Snowe, Mr. Allard, Mr. Brownback, Ms. Collins, 
        Mr.  Enzi, Mr. Hagel, Mr. Hutchinson, Mr. Roberts, Mr. Gordon 
        H. Smith, Mr. Bennett, Mr. Bond, Mr. Burns, Mr. Campbell, Mr. 
        Coats, Mr. Faircloth, Mr. Frist, Mr. Gorton, Mr. Grams, Mr. 
        Gregg, Mr. Inhofe, Mr. Kempthorne, Mr. McConnell, Mr. 
        Murkowski, Mr. Santorum, Mr. Shelby, Mr. Smith, and Mr. 
        Thomas):
  S.J. Res. 1. A joint resolution proposing an amendment to the 
Constitution of the United States to require a balanced budget; to the 
Committee on the Judiciary.


                 the constitutional balanced budget act

  Mr. HATCH. Mr. President, let me just say I compliment my colleagues 
for the excellent job they have done in coming up with the first 10 
bills of this session. I think they are bills that the American people 
have to be very interested in. There is no question that each and every 
one is essential for the future of our country. I am very appreciative 
that so many colleagues are willing to cosponsor and to push these 
particular bills.
  Having said that, the No. 1 issue on our agenda is, as it has always 
been for Republicans and I think some very courageous Democrats as 
well, S.J. Res. 1, the balanced budget constitutional amendment.
  Mr. President, this is an amendment that literally could change the 
future of our country for the better. We are now approaching a $6 
trillion deficit. It has been largely accumulated over the last 15 or 
20 years. We have had a period of almost 60 years of unbalanced 
budgets, except on very rare occasions.
  The Senate and the Hose seem to be institutionally incapable of 
reaching balanced budget appropriations and budget acts. And I might 
add, the President is incapable, as well. If you look at the last 
budgets that the President has submitted, even the one that he called 
the balanced budget, it was heavily loaded in the rear end of the 
budget, in the last 2 years, knowing that there is no way in the world 
that when we ultimately reach 2001 and 2002 that we can actually 
balance the budget.
  It has been a phony game. It is time to end that game. It is time to 
literally strike out for the people of this country and for our 
children and grandchildren of future generations by getting our fiscal 
house in order. The only way that many of the now 62 cosponsors, and 
another 6 who have said to their constituents that they will vote for 
this amendment, it is the only way we can bring about a fiscal sanity 
that will reduce taxes, reduce the interest rates of our society, keep 
the stock market going, protect social security, Medicaid, Medicare, 
veterans pensions and other matters, by having a strong fiscal economy 
through the balanced budget amendment.
  We are very concerned. This is a major, major battle this year. We 
have 62 cosponsors--all 55 Republicans and 7 courageous Democrats so 
far. We have another six Democrats who have promised their people at 
home that they would vote for the balanced budget amendment. Everybody 
knows this game. Everybody knows there will be some killer amendments 
trying to defeat this amendment. In the end, everybody knows what the 
amendment is. It is precisely the same as that found in the House and 
that which will be brought up in the House. If we are ever going to get 
this fiscal house in order, this is the way to do it. It is only the 
first step.
  Even if both Houses of Congress do pass the balanced budget amendment 
by the requisite two-thirds vote, the amendment still has to be 
submitted to the States, and three-quarters of them, or 38 States, have 
to ratify the amendment. It is a very, very difficult process at best.
  I just believe this is the year to do it. I hope that everybody will 
live up to the commitments they have made to their constituents at 
home. If they do, we will have set this country on a fiscal order path 
that will be very beneficial for all of our children and grandchildren 
and future generations.
  Mr. President. I rise to speak on the Balanced Budget Amendment, 
which I have just introduced. Last Congress, when the Amendment fell a 
mere one vote short of passage here in the Senate, I vowed that we 
would be back to try to pass this amendment and put America back on the 
course of fiscal responsibility. We are back again and I have brought 
sixty-one other Senators with me. Every one of the 55 Republicans in 
the Senate are original co-sponsors, and we are joined by seven strong 
Democrats. The Balanced Budget Amendment has sixty two original 
cosponsors. If only five other Senators join us we will have the votes 
America needs to see the Senate pass the Balanced Budget Amendment. If 
everyone votes as they said they would before the November election and 
keeps their promise to their constituents, the Senate will pass the 
balanced budget amendment.
  The Balanced Budget Amendment will again be S.J. Res. 1. It is right 
that it should be, because it is the single most important piece of 
legislation that will be voted on this Congress. It is that important 
because if enacted it will change forever the way business is done in 
Washington.
  The idea of a Balanced Budget Amendment is not new. Unfortunately, 
neither is the problem it is designed to solve. About thirty years ago, 
we got off track and ran a deficit. It was not the first deficit we had 
ever run, and it

[[Page S553]]

was only a small one, nothing to get too worried about. But we never 
got back on track: we ran another deficit the next year, and again the 
next year after that, and never got back into balance. In fact, we have 
run a deficit every year since 1969. And that budget in 1969 was the 
only balanced budget since 1960.
  Today, the national debt is estimated to be $5.311 trillion. Last 
Friday, when we began hearings on S.J. Res 1, the debt was at less than 
$5.310 trillion. In other words, the debt has already increased by more 
than $1 billion since the Senate began consideration of the measure 
last week. Portioned out equally, every man, woman, and child in 
America owes about $20,000. If the debt were piled into a single stack 
of pennies, that pile could reach past the Moon, past Mars, and all the 
way to Jupiter! It is enough money to buy every single automobile ever 
sold in the United States AND every plane ticket ever sold for travel 
in the United States.
  And, Mr. President, the debt continues to grow. If you spent a dollar 
a second, it would take you over 150,000 years to spend as much as the 
national debt. But we have managed to accumulate our national debt much 
faster. This year, we will increase the debt by about $4,500 every 
second. At this rate it won't be long before we're all going to have to 
learn what comes after trillion. The reality is that the bridge we are 
building to the 21st century is awash in debt.
  I read recently that this year the European Union will be deciding 
which nations quality to join the new single currency in the first 
tier. In order to join, nations must satisfy several criteria. One of 
those criteria is that the nation's total debt must be no greater than 
sixty percent of that nation's GDP. Well, Mr. President, our debt is 
about seventy percent of our GDP. Which means if we tried to join the 
European Union's new currency now, the United States would not qualify. 
By international standards, we are too far in debt to be trusted 
financially. This nation faces a future with higher taxes, lower wages, 
and dramatically reduced world influence if we do not get our spending 
habits under control. As well, failure to get our national debt under 
control could prove catastrophic to current and future older Americans.

  Over the next few weeks, opponents of the balanced budget amendment 
are going to try to change the subject to a discussion of social 
security and Medicare. For example, Treasury Secretary Rubin testified 
before the Judiciary Committee on Friday in opposition to the balanced 
budget amendment and suggested--no less than eight times during a six 
page statement--that passage of the balanced budget amendment would 
result in social security or Medicare checks being stopped. Opponents 
of the balanced budget amendment want the public to believe that 
passing the balanced budget amendment and balancing our federal budget 
threatens the retirement security of older Americans. What they ignore 
is that Congress simply never will allow social security or Medicare 
checks to stop. It simply will not happen. Furthermore, they fail to 
appreciate--or fail to mention--the positive effect the balanced budget 
amendment would have on the long term stability of social security as 
well as the retirement investments for most every American.
  To listen to opponents of the balanced budget amendment, one would 
think that Americans are counting exclusively on social security for 
their economic security during retirement when in fact, more and more 
Americans are relying on Wall Street. A recent PBS Frontline 
documentary, ``Betting on the Market,'' explains how Americans are 
increasingly entrusting their long-term retirement savings in Wall 
Street. There are 34 million households that have invested in the stock 
market in some form. As financial expert and the best-selling author of 
``Smart Money,'' Jim Cramer, points out, if you have a pension, it's 
likely that it's invested in stocks. If you have a 401K plan, it's 
probably invested in stocks. Worth magazine's Ken Kurson points out 
that in 1996, 34 percent of households headed by someone under 25 had 
some sort of mutual fund. Stock mutual funds represent the biggest 
chunk of young investor's money. At the same time Americans carry 
record credit card debt. As financial historian Peter Bernstein points 
out, the money that people used to put in the stock market was money 
that they hoped to get rich on. Today, we are investing our blood 
money--our savings; our nest eggs. America's affection for the markets 
is demonstrated by Paine Webber's recent announcement that it achieved 
a fifty percent increase in earnings last quarter. This is all well and 
good while the Dow Jones Industrial keeps setting new highs--it closed 
yesterday at 6,843. NASDAQ also reached record levels benefiting from a 
boost in technology stocks.
  With more and more Americans relying on mutual funds and stocks--
whether they know it or not--for their retirement, what happens to our 
retirement security if we experience an economic downturn precipitated 
by our failure to address our nation's growing debt? What happens if 
Congress once again demonstrates an unwillingness to pass the balanced 
budget amendment and take this necessary step towards balancing the 
budget? With the fortunes of Wall Street effecting the quality of life 
for more and more future retirees, Congress needs to concern itself 
with how our growing debt and our willingness to make tough choices 
will affect Wall Street. Nothing the Congress can do would have a more 
positive effect on Wall Street and, in turn, the stability of our 
retirement savings than passing the balanced budget amendment and 
balancing the budget. More than 250 economists share this view. If my 
colleagues are concerned with the financial security of current and 
future older Americans, they will refrain from the wedge politics of 
Medicare and social security cuts and, instead, support the balanced 
budget.

  The fact is that every political incentive in this town is to spend 
now and let the next guy worry about paying the bill. Fiscal 
accountability is the enemy of big government. There is only one way to 
break Washington's addiction to spending other people's money and 
borrowing from our children to do so: the pressure of a constitutional 
amendment for a balanced budget.
  I look forward to the debate on this important measure, and I look 
forward to more fully explaining why I think that only a structural 
change in our basic charter can restore the fiscal responsibility we 
seem to have lost over the three or so decades.
  Mr. President, I ask unanimous consent that the text of the Joint 
Resolution be printed in the Record.
  There being no objection, the Joint Resolution was ordered to be 
printed in the Record, as follows:

                               S.J. Res.1

       Resolved by the Senate and House of Representatives of the 
     United States of America in Congress assembled, (two-thirds 
     of each House concurring therein), That the following article 
     is proposed as an amendment to the Constitution, which shall 
     be valid to all intents and purposes as part of the 
     Constitution when ratified by the legislatures of three-
     fourths of the several States within seven years after the 
     date of its submission to the States for ratification:

                              ``Article --

       ``Section 1. Total outlays for any fiscal year shall not 
     exceed total receipts for that fiscal year, unless three-
     fifths of the whole number of each House of Congress shall 
     provide by law for a specific excess of outlays over receipts 
     by a rollcall vote.
       ``Section 2. The limit on the debt of the United States 
     held by the public shall not be increased, unless three-
     fifths of the whole number of each House shall provide by law 
     for such an increase by a rollcall vote.
       ``Section 3. Prior to each fiscal year, the President shall 
     transmit to the Congress a proposed budget for the United 
     States Government for that fiscal year, in which total 
     outlays do not exceed total receipts.
       ``Section 4. No bill to increase revenue shall become law 
     unless approved by a majority of the hole number of each 
     House by a rollcall vote.
       ``Section 5. The Congress may waive the provisions of this 
     article for any fiscal year in which a declaration of war is 
     in effect. The provisions of this article may be wived for 
     any fiscal year in which the Untied States is engaged in 
     military conflict which causes an imminent and serious 
     military threat to national security and is so declared by a 
     joint resolution, adopted by a majority of the whole number 
     of each House, which becomes law.
       ``Section 6. The Congress shall enforce and implement this 
     article by appropriate legislation, which may rely on 
     estimates of outlays and receipts.
       ``Section 7. Total receipts shall include all receipts of 
     the United States Government except those derived from 
     borrowing. Total outlays shall include all outlays of the 
     United States Government except for those for repayment of 
     debt principal.

[[Page S554]]

       ``Section 8. This article shall take effect beginning with 
     fiscal year 2002 or with the second fiscal year beginning 
     after its ratification, whichever is later.''.

  Mr. HATCH. I am delighted to yield to my colleague and friend from 
Idaho who I think has played not only a singularly important role in 
the Senate, but long has played a very important role when he was in 
the House of Representatives, as well, and has been a great partner in 
fighting this battle. I yield to the distinguished Senator from Idaho.
  Mr. CRAIG. Mr. President, let me thank the senior Senator from Utah 
for yielding but for a moment, to add to the comments that he has made 
as we have introduced S.J. Res. 1, or Senate Joint Resolution 1, the 
balanced budget constitutional amendment. The Senator from Utah has 
outlined, as chairman of the Judiciary Committee, what we bring to the 
floor and the very critical nature of this debate. For a moment, let me 
humanize it, if I can, as to what it means to you, to me, to our 
children, and to the future of this country.
  Without a fiscally responsible Government that begins to rein in the 
growth of the Federal debt, already at 5.3 trillion dollars, and the 
ongoing year-after-year multibillion-dollar deficit that we have seen 
now for decades, the financial future of our country and its citizens 
is in doubt. There is no question today that the Congress and our 
President mouth the words of a balanced budget. We even work toward 
that by the very actions undertaken in writing the annual budgets.
  To guarantee it, to assure that when it gets to the time of making 
the tough votes to truly create a balanced budget, can we do it? Will 
we have the will of the people behind us and the support to accomplish 
that? I think that, absent a balanced budget amendment, the strength 
will not be there. I say that having watched this institution for many 
decades, and recognize that in the end when it really comes to the 
business of sorting out Government, the decisions become very tough.
  If we pass a balanced budget amendment to our Constitution this year, 
and if the States ratify it within the next 2 years, we will offer to 
the young people born today a unique opportunity. What is that 
opportunity? That they will pay in their lifetime $180,000 less in 
taxes, compared to what they would pay under the trends of the status 
quo, because of the rate at which our Government currently grows.
  We will offer to the average American family an opportunity 
unprecedented, and that is a better standard of living and actually 
more take-home pay and more dollars to spend, on an annualized basis, 
of more than $1,500 a year, in addition to their current income. We 
will offer our senior citizens the economic security we have promised 
them, by protecting Social Security and Medicare from the ravages of a 
massive debt and interest payments that crowd out all our other 
priorities. Let us remember, the debt is the threat to Social Security 
and to our seniors.
  When the Senator from Utah and the Senator from Idaho began to work 
to convince the Congress and the American people that a constitutional 
amendment to require a balanced budget was necessary in the early 
1980's, if it had passed at that time, if it had become part of the 
Constitution, the Concord Coalition and others have estimated that the 
average income per American family today would be $15,000 more than it 
currently is. I think, from that kind of fact, you begin to recognize 
the power and the importance of what we offer up today. You begin to 
recognize the very critical nature of what a $5.3 trillion debt really 
is, and how it is growing by $800 million a day and more than $9,000 a 
second. If this Senate is to stand in the shadow of today's work a 
decade from now and say that we did for our country what we thought was 
necessary to assure the American dream to our children, to be able to 
say to Americans that you will have the same unique opportunity that 
your forebears had, then we must make sure that we have produced, and 
locked in the requirement of, a Government that is fiscally 
responsible.
  What we offer today and what we will be debating in the coming weeks 
is a balanced budget amendment to our Constitution which assures that 
this body and the other, as well as the President and his budget 
office, must operate in a fiscally sound and responsible way. It is 
what the American people say is their No. 1 issue. It must be our No. 1 
issue.
  I am pleased today to join as a cosponsor in this critical amendment 
and look forward to the debate in the coming weeks as we say to the 
American people, ``We have heard your message and we will fight to be 
fiscally responsible in the building and the maintaining of a federally 
balanced budget.''
  I yield back to the Senator from Utah.
  Mr. HATCH. I thank my colleague from Idaho for his excellent remarks 
and for his ardent fight for this amendment through the years.
  Mr. President, there are 13 Democrats who have promised to vote for 
this amendment. If we add all 55 Republicans and the 13 heroic 
Democrats who have agreed to vote for this amendment, that will give us 
68 votes, 1 more than we need. We know the President is going to put on 
a full-court press. We also know that the minority leader and others 
will do the same. It is important that these people live up to the 
commitments they made to the constituents at home, and we are counting 
on them to do it. I believe they will.
  Thus far, only seven have cosponsored, but I believe the others will 
be on board when the debate comes to the floor. I hope, with all my 
heart, they realize how important this is. I hope they also realize how 
very deeply I feel about their courageous stand on this issue.
  Mr. ABRAHAM. Mr. President, 2 years ago, the Senate failed by one 
vote to support a constitutional amendment requiring a balanced budget. 
At the time, opponents told the Senate that balancing the budget didn't 
require amending the Constitution. All we needed, they told us, was to 
make the tough choices and cast the hard votes. Two budgets, hundreds 
of tough votes, and one Government shutdown later, the budget is still 
in deficit, and the case for a constitutional balanced budget amendment 
is stronger than ever.
  That's not to say we haven't made progress in the past 2 years. We 
have. Since the 1994 elections, Congress has worked hard to hold the 
line on discretionary spending while just last fall we passed historic 
reforms to the 60-year-old welfare state. Perhaps just as importantly, 
we have witnessed a dramatic shift in the debate itself. Two years ago, 
President Clinton submitted a budget that never reached balance. Today 
all sides have agreed--at least in principle--to the goal of balancing 
the budget by the year 2002.
  That's the good news.
  The bad news is that while we have all seemingly agreed on the goal 
of balancing the budget, we are miles apart on the details. It's one 
thing to say you support a balanced budget--it's quite another to make 
the tough decisions necessary to make it happen.
  Mr. President, that's where Senator Hatch's amendment to the 
Constitution comes in. As an original cosponsor of this amendment, I 
believe it will force the hand of an unwilling Congress to set its 
fiscal house in order. Where Congress has failed, I am confident the 
Constitution will succeed. How would it work?
  Section 1 of the amendment requires that total outlays of the 
Government not exceed receipts unless three-fifths of the whole number 
of both Houses waives the requirement. Once this amendment is passed, a 
three-fifths vote of both the House and the Senate will be necessary in 
order to increase the deficit.
  Section 2 prohibits Congress from raising the debt ceiling unless 
three-fifths of the whole number of both Houses of Congress waives the 
requirement.
  And, finally, section 4 requires that there be no revenue increases 
unless approved by a majority of the whole number of each House in 
Congress. If this proposal becomes the 28th amendment to the 
Constitution, then in order to increase taxes, you would need first, a 
recorded vote and, second, the support of at least 51 U.S. Senators and 
218 Members of the House.
  Quite simply, Mr. President, the balanced budget amendment raises the 
procedural bar necessary for Congress to incur debt and raise taxes. 
Given Congress' historic predilection toward doing both, I believe this 
amendment is

[[Page S555]]

possibly the most important measure we will consider in the 105th 
Congress.
  Having focused on what the balanced budget amendment does, it is just 
as important to focus on what it doesn't do. The first thing it doesn't 
do is endanger the Social Security System. Social Security currently 
operates with a surplus, and some Members have argued that sound fiscal 
policy demands that we should exclude that surplus from the amendment 
and our deficit calculations.
  I am of the opinion that this argument is more of a diversion than 
anything else. It has been raised to confuse the issue and provide some 
Members with a smokescreen to cover their opposition to a measure that 
is supported by an overwhelming majority of Americans. Balancing the 
budget will strengthen, not weaken, the Social Security System.
  The second thing this amendment doesn't do is endanger the health of 
the national economy. Some--including the President--argue the balanced 
budget amendment will prevent Congress from responding to shifting 
economic recessions and booms.
  Mr. President, the amendment being discussed today does not prohibit 
running a deficit or borrowing money. It requires a three-fifths vote 
in order to do those things. Under the circumstances generally 
described in support of an economic exception, I think it is incumbent 
upon the exceptions advocates to explain why they could not get the 
necessary votes. Furthermore, I am interested to hear why the higher 
standards established by the balanced budget amendment would be more 
restrictive than the prospect of continued annual deficits, higher debt 
and debt payments, and less real discretionary spending under Congress' 
control.
  Finally, this amendment does not transfer undue power to the 
judiciary. One concern raised about the balanced budget amendment is 
the role the courts will play in enforcing its provisions. In the past, 
some have argued that the courts will involve themselves in the Federal 
budget process in order to enforce the balanced budget amendment. As 
someone with deep concerns about judicial activism, I have inspected 
this issue closely, and I am confident that adoption of this amendment 
will not authorize courts to insert themselves into the budget process.
  As I mentioned previously, the balanced budget amendment establishes 
new procedures that encourage Congress to move toward and adopt a 
balanced budget. It does not, however, create a ``right'' to a balanced 
budget. It does not disturb the powers of Congress under Article I of 
the Constitution, it does not confer those powers on the courts, and it 
does not give to the courts authority to interfere in those powers.
  Mr. President, in conclusion, let me say the greatest danger facing 
our economy, our senior citizens, and future generations is not an 
amendment to the Constitution restricting Congress' ability to borrow 
money or raise taxes, but rather the endless stream of deficits and 
huge mountains of debt that a previous, unrestricted Congresses have 
imposed upon this and future generations. It is unfair, irresponsible, 
and immoral to pass this burden on to our children, and I applaud you 
and the Republican leadership for making passage of Senate Joint 
Resolution 1 the No. 1 priority of the 105th Congress.
  Mr. CAMPBELL. Mr. President, for many years I have spoken out in 
favor of a Balanced Budget Amendment to the Constitution, and have 
supported and voted for this measure each time I have had the 
opportunity to do so. Now, once again, I join many of my colleagues as 
an original cosponsor of the Balanced Budget Amendment which is being 
introduced today, and I applaud Senator Orrin Hatch, Majority Leader 
Trent Lott, and the leadership for making this particular item a top 
priority for the 105th Congress.
  It would be so easy to give up on the idea of passing the Balanced 
Budget Amendment. For a number of years, despite the hard work of many 
individuals, this measure has failed to pass through Congress and move 
on to the states for ratification where it belongs. However, I believe 
passage of this Amendment is in the best interest of the future of this 
country. It will force us to make the tough choices that need to be 
made to balance the budget and eventually eliminate the staggering 
debt.
  There are those that believe there is no need for the Balanced Budget 
Amendment, that Congress can continually balance the budget without 
being mandated by the Constitution to do so. However, I have been a 
member of this institution for ten years now, and I have yet to see 
Congress and the administration bite the bullet, balance the budget, 
and tackle our enormous debt. If we do not address this important 
issue, the amount of the federal budget devoted toward paying off the 
interest on the debt and the entitlement programs will increase to the 
point that there will be barely any money left for those programs which 
deserve and require federal funding such as education, law enforcement, 
national security, or even our national parks and monuments. I think we 
owe more to the American people and to future generations.
  For those of us who remain committed to this effort, this piece of 
legislation is a vital tool for tackling the difficult task of 
balancing the budget. I would like to see an increase not only in our 
standard of living and national savings rate but also in the amount of 
money the Federal Government devotes to worthwhile and beneficial 
programs--programs which could suffer due to our financial troubles.
  Congress came within one vote last session of passing the Balanced 
Budget Amendment. I am optimistic that this year we can pass this 
legislation and send the measure on to the states for their 
deliberation. It is time to allow the American people and the State 
legislatures the opportunity to debate the merits of the Balanced 
Budget Amendment, and I hope that the Congress will see fit to entrust 
this measure to those who must ratify or reject it.
                                 ______
                                 
      By Mr. HOLLINGS (for himself, Mr. Specter, Mr. Daschle, Mr. 
        Dorgan, Mr. Shelby, Mr. Reid, Mr. Ford, and Mr. Reed):
  S.J. Res. 2. A joint resolution proposing an amendment to the 
Constitution of the United States relating to contributions and 
expenditures intended to affect elections; to the Committee on the 
Judiciary.


          THE CAMPAIGN FINANCE REFORM CONSTITUTIONAL AMENDMENT

  Mr. HOLLINGS. Mr. President, I rise today, along with my collegue and 
cosponsor Senator Specter, to introduce for the sixth time a 
constitutional amendment to limit campaign spending. Although I commend 
the efforts of the Minority Leader and others seeking to statutorily 
reform our campaign finance laws, I am convinced the only way to solve 
the chronic problems surrounding campaign financing is to reverse the 
Supreme Court's flawed decision in Buckley versus Valeo by adopting a 
constitutional amendment granting Congress the right to limit campaign 
spending.
  We all know the score--we're hamstrung by that decision and the ever 
increasing cost of a competitive campaign. With the total cost for 
congressional elections, just general elections, skyrocketing from $403 
million in 1990 to over $626 million in 1996, the need for limits on 
campaign expenditures is more urgent than ever. For nearly a quarter of 
a century, Congress has tried to tackle runaway campaign spending with 
bills aimed at getting around the disjointed Buckley decision. Again 
and again, Congress has failed.
  Let us resolve not to repeat the mistakes of past campaign finance 
reform efforts, which have become bogged down in partisanship as 
Democrats and Republicans each tried to gore the other's sacred cows. 
During the 103d Congress there was a sign that we could move beyond 
this partisan bickering, when the Senate in a bipartisan fashion 
expressed its support for a constitutional amendment to limit campaign 
expenditures. In May 1993, a non-binding sense of the Senate resolution 
was agreed to which advocated the adoption of a constitutional 
amendment empowering Congress and States to limit campaign 
expenditures.
  Now it is time to take the next step. We must strike the decisive 
blow against the anything-goes fundraising and spending tolerated by 
both political parties. Looking beyond the current headlines regarding 
the source of these funds, the massive amount of

[[Page S556]]

money spent is astonishing and serves only to cement the commonly held 
belief that our elections are nothing more than auctions and that our 
politicians are up for sale. It is time to put a limit on the amount of 
money sloshing around campaign war chests. It is time to adopt a 
constitutional amendment to limit campaign spending--a simple, 
straightforward, nonpartisan solution.
  As Prof. Gerald G. Ashdown has written in the New England Law Review, 
amending the Constitution to allow Congress to regulate campaign 
expenditures is ``the most theoretically attractive of the approaches-
to-reform since, from a broad free speech perspective, the decision in 
Buckley is misguided and has worsened the campaign finance 
atmosphere.'' Adds Professor Ashdown: ``If Congress could 
constitutionally limit the campaign expenditures of individuals, 
candidates, and committees, along with contributions, most of the 
troubles * * * would be eliminated.''
  Right to the point, back in 1974, Congress responded to the public's 
outrage over the Watergate scandals by passing, on a bipartisan basis, 
a comprehensive campaign finance law. The centerpiece of this reform 
was a limitation on campaign expenditures. Congress recognized that 
spending limits were the only rational alternative to a system that 
essentially awarded office to the highest bidder or wealthiest 
candidate.
  Unfortunately, the Supreme Court overturned these spending limits in 
its infamous Buckley versus Valeo decision of 1976. The Court 
mistakenly equated a candidate's right to spend unlimited sums of money 
with his right to free speech. In the face of spirited dissents, the 
Court came to the conclusion that limits on campaign contributions but 
not spending furthered ``* * * the governmental interest in preventing 
corruption and the appearance of corruption'' and that this interest 
``outweighs considerations of free speech.''
  I have never been able to fathom why that same test--the governmental 
interest in preventing corruption and the appearance of corruption--
does not overwhelmingly justify limits on campaign spending. The Court 
made a huge mistake. The fact is, spending limits in Federal campaigns 
would act to restore the free speech that has been eroded by the 
Buckley decision.
  After all, as a practical reality, what Buckley says is: Yes, if you 
have a fundraising advantage or personal wealth, then you have access 
to television, radio, and other media and you have freedom of speech. 
But if you do not have a fundraising advantage or personal wealth, then 
you are denied access. Instead of freedom of speech, you have only the 
freedom to say nothing.
  So let us be done with this phony charge that spending limits are 
somehow an attack on freedom of speech. As Justice Byron White points 
out, clear as a bell, in his dissent, both contribution limits and 
spending limits are neutral as to the content of speech and are not 
motivated by fear of the consequences of the political speech in 
general.
  Mr. President, every Senator realizes that television advertising is 
the name of the game in modern American politics. In warfare, if you 
control the air, you control the battlefield. In politics, if you 
control the airwaves, you control the tenor and focus of a campaign.
  Probably 80 percent of campaign communications take place through the 
medium of television. And most of that TV airtime comes at a dear 
price. In South Carolina, you're talking between $1,000 and $2,000 for 
30 seconds of primetime advertising. In New York City, it's anywhere 
from $30,000 to $40,000 for the same 30 seconds.
  The hard fact of life for a candidate is that if you're not on TV, 
you're not truly in the race. Wealthy challengers as well as incumbents 
flushed with money go directly to the TV studio. Those without a 
fundraising advantage or personal wealth are sidetracked to the time-
consuming pursuit of cash.
  The Buckley decision created a double bind. It upheld restrictions on 
campaign contributions, but struck down restrictions on how much 
candidates with deep pockets can spend. The Court ignored the practical 
reality that if my opponent has only $50,000 to spend in a race and I 
have $1 million, then I can effectively deprive him of his speech. By 
failing to respond to my advertising, my cash-poor opponent will appear 
unwilling to speak up in his own defense.
  Justice Thurgood Marshall zeroed in on this disparity in his dissent 
to Buckley. By striking down the limit on what a candidate can spend, 
Justice Marshall said, ``It would appear to follow that the candidate 
with a substantial personal fortune at his disposal is off to a 
significant head start.''
  Indeed, Justice Marshall went further: He argued that by upholding 
the limitations on contributions but striking down limits on overall 
spending, the Court put an additional premium on a candidate's personal 
wealth.
  Justice Marshall was dead right and Ross Perot and Steve Forbes have 
proved it. Massive spending of their personal fortunes immediately made 
them contenders. Our urgent task is to right the injustice of Buckley 
versus Valeo by empowering Congress to place caps on Federal campaign 
spending. We are all painfully aware of the uncontrolled escalation of 
campaign spending. The average cost of a winning Senate race was $1.2 
million in 1980, rising to $2.9 million in 1984, and skyrocketing to 
$3.1 million in 1986, $3.7 million in 1988, and up to $4.3 in 1996. To 
raise that kind of money, the average Senator must raise over $13,800 a 
week, every week of his or her 6-year term. Overall spending in 
congressional races increased from $446 million in 1990 to more than 
$724 million in 1994--almost a 70 percent increase in 4 short years. I 
predict that when the final FEC reports are compiled for 1996, that 
figure will go even higher.
  This obsession with money distracts us from the people's business. It 
corrupts and degrades the entire political process. Fundraisers used to 
be arranged so they didn't conflict with the Senate schedule; nowadays, 
the Senate schedule is regularly shifted to accommodate fundraisers.
  I have run for statewide office 16 times in South Carolina. You 
establish a certain campaign routine, say, shaking hands at a mill 
shift in Greer, visiting a big country store outside of Belton, and so 
on. Over the years, they look for you and expect you to come around. 
But in recent years, those mill visits and dropping by the country 
store have become a casualty of the system. There is very little time 
for them. We're out chasing dollars.
  During my 1992 reelection campaign, I found myself raising money to 
get on TV to raise money to get on TV to raise money to get on TV. It's 
a vicious cycle.
  I remember Senator Richard Russell saying: ``They give you a 6-year 
term in this U.S. Senate: 2 years to be a statesman, the next 2 years 
to be a politician, and the last 2 years to be a demagogue.'' 
Regrettably, we are no longer afforded even 2 years as statesmen. We 
proceed straight to politics and demagoguery right after the election 
because of the imperatives of raising money.
  My proposed constitutional amendment would change all this. It would 
empower Congress to impose reasonable spending limits on Federal 
campaigns. For instance, we could impose a limit of, say, $800,000 per 
Senate candidate in a small State like South Carolina--a far cry from 
the millions spent by my opponent and me in 1992. And bear in mind that 
direct expenditures account for only a portion of total spending. For 
instance, my 1992 opponent's direct expenditures were supplemented by 
hundreds of thousands of dollars in expenditures by independent 
organizations and by the State and local Republican Party. When you 
total up spending from all sources, my challenger and I spent roughly 
the same amount in 1992.

  And incidentally, Mr. President, let's be done with the canard that 
spending limits would be a boon to incumbents, who supposedly already 
have name recognition and standing with the public and therefore begin 
with a built-in advantage over challengers. Nonsense. I hardly need to 
remind my Senate colleagues of the high rate of mortality in upper 
chamber elections. And as to the alleged invulnerability of incumbents 
in the House, I would simply note that well over 50 percent of the 
House membership has been replaced since the 1990 elections and just 3 
weeks ago we swore in 15 new Senators.
  I can tell you from experience that any advantages of incumbency are

[[Page S557]]

more than counterbalanced by the obvious disadvantages of incumbency, 
specifically the disadvantage of defending hundreds of controversial 
votes in Congress.
  Moreover, Mr. President, I submit that once we have overall spending 
limits, it will matter little whether a candidate gets money from 
industry groups, or from PAC's, or from individuals. It is still a 
reasonable amount any way you cut it. Spending will be under control, 
and we will be able to account for every dollar going out.
  On the issue of PAC's, Mr. President, let me say that I have never 
believed that PAC's per se are an evil in the current system. On the 
contrary, PAC's are a very healthy instrumentality of politics. PAC's 
have brought people into the political process: nurses, educators, 
small business people, senior citizens, unionists, you name it. They 
permit people of modest means and limited individual influence to band 
together with others of mutual interest so their message is heard and 
known.
  For years we have encouraged these people to get involved, to 
participate. Yet now that they are participating, we turn around and 
say, ``Oh, no; your influence is corrupting, your money is tainted''. 
This is wrong. The evil to be corrected is not the abundance of 
participation but the superabundance of money. The culprit is runaway 
campaign spending.
  To a distressing degree, elections are determined not in the 
political marketplace but in the financial marketplace. Our elections 
are supposed to be contests of ideas, but too often they degenerate 
into megadollar derbies, paper chases through the board rooms of 
corporations and special interests.
  Mr. President, I repeat, campaign spending must be brought under 
control. The constitutional amendment Senator Specter and I have 
proposed would permit Congress to impose fair, responsible, workable 
limits on Federal campaign expenditures and allow States to do the same 
with regard to State and local elections.
  Such a reform would have four important impacts. First, it would end 
the mindless pursuits of ever-fatter campaign war chests. Second, it 
would free candidates from their current obsession with fundraising and 
allow them to focus more on issues and ideas; once elected to office, 
we wouldn't have to spend 20 percent of our time raising money to keep 
our seats. Third, it would curb the influence of special interests. And 
fourth, it would create a more level playing field for our Federal 
campaigns--a competitive environment where personal wealth does not 
give candidates an insurmountable advantage.
  Finally, Mr. President, a word about the advantages of the amend-the-
Constitution approach that I propose. Recent history amply demonstrates 
the practicality and viability of this constitutional route. Certainly, 
it is not coincidence that five of the last seven amendments to the 
Constitution have dealt with Federal election issues. In elections, the 
process drives and shapes the end result. Election laws can skew 
election results, whether you're talking about a poll tax depriving 
minorities of their right to vote, or the absence of campaign spending 
limits giving an unfair advantage to wealthy candidates. These are 
profound issues which go to the heart of our democracy, and it is 
entirely appropriate that they be addressed through a constitutional 
amendment.
  And let's not be distracted by the argument that the amend-the-
Constitution approach will take too long. Take too long? We have been 
dithering on this campaign finance issue since the early 1970's, and we 
haven't advanced the ball a single yard. All-the-while the Supreme 
Court continues to strike down campaign limit after campaign limit. It 
has been a quarter of a century, and no legislative solution has done 
the job.
  Except for the 27th amendment, the last five constitutional 
amendments took an average of 17 months to be adopted. There is no 
reason why we cannot pass this joint resolution, submit it to the 
States for a vote, and ratify the amendment in time for it to govern 
the 1998 election. Once passed by the Congress, the Joint Resolution 
goes directly to the States for ratification. Once ratified, it becomes 
the law of the land, and it is a Supreme Court challenge.
  And, by the way, I reject the argument that if we were to pass and 
ratify this amendment, Democrats and Republicans would be unable to 
hammer out a mutually acceptable formula of campaign expenditure 
limits. A Democratic Congress and Republican President did exactly that 
in 1974, and we can certainly do it again.
  Mr. President, this amendment will address the campaign finance mess 
directly, decisively, and with finality. The Supreme Court has chosen 
to ignore the overwhelming importance of media advertising in today's 
campaigns. In the Buckley decision, it prescribed a bogus if-you-have-
the-money-you-can-talk version of free speech. In its place, I urge the 
Congress to move beyond these acrobatic attempts at legislating around 
the Buckley decision. As we have all seen, no matter how sincere, these 
plans are doomed to fail. The solution rests in fixing the Buckley 
decision. It is my hope that as the campaign financing debate unfolds, 
the Majority Leader will provide us with an opportunity to vote on this 
resolution--it is the only solution.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the joint resolution was ordered to be 
printed in the Record, as follows:

                              S.J. Res. 2

       Resolved by the Senate and House of Representatives of the 
     United States of America in Congress assembled (two-thirds of 
     each House concurring therein), That the following article is 
     proposed as an amendment to the Constitution of the United 
     States, to be valid only if ratified by the legislatures of 
     three-fourths of the several States within 7 years after the 
     date of final passage of this joint resolution:

                              ``Article--

       ``Section 1. Congress shall have power to set reasonable 
     limits on the amount of contributions that may be accepted 
     by, and the amount of expenditures that may be made by, in 
     support of, or in opposition to, a candidate for nomination 
     for election to, or for election to, Federal office.
       ``Section 2. A State shall have power to set reasonable 
     limits on the amount of contributions that may be accepted 
     by, and the amount of expenditures that may be made by, in 
     support of, or in opposition to, a candidate for nomination 
     for election to, or for election to, State or local office.
       ``Section 3. Congress shall have power to implement and 
     enforce this article by appropriate legislation.''.

     

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