[Congressional Record Volume 143, Number 43 (Monday, April 14, 1997)]
[Senate]
[Pages S3117-S3125]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. SANTORUM (for himself and Mr. Coverdell):
  S. 563. A bill to limit the civil liability of business entities that 
donate equipment to nonprofit organizations; to the Committee on the 
Judiciary.
  S. 564. A bill to limit the civil liability of business entities 
providing use of facilities to nonprofit organizations; to the 
Committee on the Judiciary.
  S. 565. A bill to limit the civil liability of business entities that 
make available to a nonprofit organization the use of a motor vehicle 
or aircraft; to the Committee on the Judiciary.
  S. 566. A bill to limit the civil liability of business entities that 
provide facility tours; to the Committee on the Judiciary.


            LEGISLATION TO LIMIT CIVIL LIABILITY OF BUSINESS

 Mr. SANTORUM. Mr. President, I introduce four related pieces 
of legislation all aimed at increasing donations of goods and services 
to charities. Collectively called the charity empowerment project, I 
urge my colleagues to consider cosponsoring these bills.
  Over the past 30 years, courts have consistently expanded what 
constitutes tortious conduct. Regrettably, fault is often not a factor 
when deciding who should compensate an individual for damages incurred. 
This has had an impact on charitable giving. Today, individuals and 
businesses are wary of giving goods, services, and time to charities 
for fear of frivolous lawsuits.
  The charity empowerment project is designed to free up resources for 
charities by providing legal protections for donors. Generally, these 
bills raise the tort liability standard for donors, whereby they are 
liable only in cases of gross negligence, hence eliminating strict 
liability and returning to a fault based legal standard. By allowing 
businesses to once again become good Samaritans, I look forward to 
seeing a massive increase in the donation of goods and services to 
charities.
  Specifically, I am introducing four bills each of which accomplishes 
one of the following four objectives: First, to limit the civil 
liability of business entities that donate equipment to nonprofit 
organizations; second, to limit the civil liability of business 
entities that provide use of their facilities to nonprofit 
organizations; third, to limit the civil liability of business entities 
that provide facility tours; and fourth, to limit the civil liability 
of business entities that make available to nonprofit organizations the 
use of motor vehicles or aircraft.
  Clearly, where an organization is grossly negligent when providing 
goods or the use of its facilities to charity, that organization should 
be fully liable for injuries caused. These bills merely require this to 
be the standard in cases arising from certain donations to charities.
  Last autumn, the Good Samaritan Food Donation Act was passed into 
law. This law now protects donors of foodstuffs to charities from 
liability except in cases where the donor was grossly negligent in 
making the donation. I was proud to join Senator Bond in his successful 
efforts to pass this act. The bills I introduce today draw from my 
successful work with Senator Bond last year. Each of these bills is 
modeled on the legal framework of the Good Samaritan Food Donation Act. 
I hope my distinguished colleagues who supported the Food Donation Act 
will help further these efforts by supporting the charity empowerment 
project.
  Mr. President, I wish to note additional efforts by my colleagues to 
enhance charitable giving. Senator Coverdell and Senator Ashcroft have 
recently introduced legislation which

[[Page S3118]]

protects volunteers from frivolous and damaging litigation. I am proud 
to be an original cosponsor of Senator Coverdell's Volunteer Protection 
Act of 1997, and I anticipate supporting Senator Ashcroft's bill with 
equal vigor. Collectively, I look forward to our legislation freeing up 
massive resources for charities through increased volunteerism and 
increased giving.
  At the end of this month, the Summit for America's Future will 
assemble in Philadelphia. The Senate now has the opportunity to 
consider the Santorum, Coverdell, and Ashcroft bills prior to the 
convening of this century's greatest gathering on voluntarism. There 
may never be a more appropriate time to consider legislation which so 
dramatically empowers charities with enhanced ability to carry out 
their noble causes.
  Mr. President, I ask unanimous consent that the text of these bills 
be printed in the Record.
  There being no objection, the bills were ordered to be printed in the 
Record, as follows:

                                 S. 563

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

     SECTION 1. LIABILITY OF BUSINESS ENTITIES THAT DONATE 
                   EQUIPMENT TO NONPROFIT ORGANIZATIONS.

       (a) Definitions.--In this section:
       (1) Business entity.--The term ``business entity'' means a 
     firm, corporation, association, partnership, consortium, 
     joint venture, or other form of enterprise.
       (2) Equipment.--The term ``equipment'' includes mechanical 
     equipment, electronic equipment, and office equipment.
       (3) Gross negligence.--the term ``gross negligence'' means 
     voluntary and conscious conduct by a person with knowledge 
     (at the time of the conduct) that the conduct is likely to be 
     harmful to the health or well-being of another person.
       (4) Intentional misconduct.--The term ``intentional 
     misconduct'' means conduct by a person with knowledge (at the 
     time of the conduct) that the conduct is harmful to the 
     health or well-being of another person.
       (5) Nonprofit organization.--The term ``nonprofit 
     organization'' means--
       (A) any organization described in section 501(c)(3) of the 
     Internal Revenue Code of 1986 and exempt from tax under 
     section 501(a) of such Code; or
       (B) any not-for-profit organization organized and conducted 
     for public benefit and operated primarily for charitable, 
     civic, educational, religious, welfare, or health purposes.
       (6) State.--The term ``State'' means each of the several 
     States, the District of Columbia, the Commonwealth of Puerto 
     Rico, the Virgin Islands, Guam, American Samoa, the Northern 
     Mariana Islands, any other territory or possession of the 
     United States, or any political subdivision of any such 
     State, territory, or possession.
       (b) Limitation on Liability.--
       (1) In general.--Subject to subsection (c), a business 
     entity shall not be subject to civil liability relating to 
     any injury or death that results from the use of equipment 
     donated by a business entity to a noprofit organization.
       (2) Application.--This subsection shall apply with respect 
     to civil liability under Federal and State law.
       (c) Exception for Liability.--Subsection (b) shall not 
     apply to an injury or death that results from an act or 
     omission of a business entity that constitutes gross 
     negligence or intentional misconduct, including any 
     misconduct that--
       (1) constitutes a crime of violence (as that term is 
     defined in section 16 of title 18, United States Code) or act 
     of international terrorism (as that term is defined in 
     section 2331 of title 18) for which the defendant has been 
     convicted in any court;
       (2) constitutes a hate crime (as that term is used in the 
     Hate Crime Statistics Act (28 U.S.C. 534 note));
       (3) involves a sexual offense, as defined by applicable 
     State law, for which the defendant has been convicted in any 
     court; or
       (4) involves misconduct for which the defendant has been 
     found to have violated a Federal or State civil rights law.
       (d) Superseding Provision.--
       (1) In general.--Subject to paragraph (2) and subsection 
     (e), this Act preempts the laws of any State to the extent 
     that such laws are inconsistent with this Act, except that 
     this Act shall not preempt any State law that provides 
     additional protection for a business entity for an injury or 
     death described in subsection (b)(1).
       (2) Limitation.--Nothing in this Act shall be construed to 
     supersede any Federal or State health or safety law.
       (e) Election of State Regarding Nonapplicability.--This Act 
     shall not apply to any civil action in a State court against 
     a business entity in which all parties are citizens of the 
     State if such State enacts a statute--
       (1) citing the authority of this subsection;
       (2) declaring the election of such State that this Act 
     shall not apply to such civil action in the State; and
       (3) containing no other provisions.
                                  ____


                                 S. 564

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

     SECTION 1. LIABILITY OF BUSINESS ENTITIES PROVIDING USE OF 
                   FACILITIES TO NONPROFIT ORGANIZATIONS.

       (a) Definitions.--In this section:
       (1) Business entity.--The term ``business entity'' means a 
     firm, corporation, association, partnership, consortium, 
     joint venture, or other form of enterprise.
       (2) Facility.--The term ``facility'' means any real 
     property, including any building, improvement, or 
     appurtenance.
       (3) Gross negligence.--The term ``gross negligence'' means 
     voluntary and conscious conduct by a person with knowledge 
     (at the time of the conduct) that the conduct is likely to be 
     harmful to the health or well-being of another person.
       (4) Intentional misconduct.--The term ``intentional 
     misconduct'' means conduct by a person with knowledge (at the 
     time of the conduct) that the conduct is harmful to the 
     health or well-being of another person.
       (5) Nonprofit organization.--The term ``nonprofit 
     organization'' means--
       (A) any organization described in section 501(c)(3) of the 
     Internal Revenue Code of 1986 and exempt from tax under 
     section 501(a) of such Code; or
       (B) any not-for-profit organization organized and conducted 
     for public benefit and operated primarily for charitable, 
     civic, educational, religious, welfare, or health purposes.
       (6) State.--The term ``State'' means each of the several 
     States, the District of Columbia, the Commonwealth of Puerto 
     Rico, the Virgin Islands, Guam, American Samoa, the Northern 
     Mariana Islands, any other territory or possession of the 
     United States, or any political subdivision of any such 
     State, territory, or possession.
       (b) Limitation on Liability.--
       (1) In general.--Subject to subsection (c), a business 
     entity shall not be subject to civil liability relating to 
     any injury or death occurring at a facility of the business 
     entity in connection with a use of such facility by a 
     nonprofit organization if--
       (A) the use occurs outside of the scope of business of the 
     business entity;
       (B) such injury or death occurs during a period that such 
     facility is used by the nonprofit organization; and
       (C) the business entity authorized the use of such facility 
     by the nonprofit organization.
       (2) Application.--This subsection shall apply--
       (A) with respect to civil liability under Federal and State 
     law; and
       (B) regardless of whether a nonprofit organization pays for 
     the use of a facility.
       (c) Exception for Liability.--Subsection (b) shall not 
     apply to an injury or death that results from an act or 
     omission of a business entity that constitutes gross 
     negligence or intentional misconduct, including any 
     misconduct that--
       (1) constitutes a crime of violence (as that term is 
     defined in section 16 of title 18, United States Code) or act 
     of international terrorism (as that term is defined in 
     section 2331 of title 18) for which the defendant has been 
     convicted in any court;
       (2) constitutes a hate crime (as that term is used in the 
     Hate Crime Statistics Act (28 U.S.C. 534 note));
       (3) involves a sexual offense, as defined by applicable 
     State law, for which the defendant has been convicted in any 
     court; or
       (4) involves misconduct for which the defendant has been 
     found to have violated a Federal or State civil rights law.
       (d) Superseding Provision.--
       (1) In general.--Subject to paragraph (2) and subsection 
     (e), this Act preempts the laws of any State to the extent 
     that such laws are inconsistent with this Act, except that 
     this Act shall not preempt any State law that provides 
     additional protection from liability for a business entity 
     for an injury or death with respect to which conditions under 
     subparagraphs (A) through (C) of subsection (b)(1) apply.
       (2) Limitation.--Nothing in this Act shall be construed to 
     supersede any Federal or State health or safety law.
       (e) Election of State Regarding Nonapplicability.--This Act 
     shall not apply to any civil action in a State court against 
     a business entity in which all parties are citizens of the 
     State if such State enacts a statute--
       (1) citing the authority of this subsection;
       (2) declaring the election of such State that this Act 
     shall not apply to such civil action in the State; and
       (3) containing no other provisions.
                                  ____


                                 S. 565

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

     SECTION 1. LIABILITY OF BUSINESS ENTITIES PROVIDING USE OF A 
                   MOTOR VEHICLE OR AIRCRAFT.

       (a) Definitions.--In this section:
       (1) Aircraft.--The term ``aircraft'' has the meaning 
     provided that term in section 40102(6) of title 49, United 
     States Code.
       (2) Business entity.--the term ``business entity'' means a 
     firm, corporation, association, partnership, consortium, 
     joint venture, or other form of enterprise.
       (3) Gross negligence.--The term ``gross negligence'' means 
     voluntary and conscious conduct by a person with knowledge 
     (at the

[[Page S3119]]

     time of the conduct) that the conduct is likely to be harmful 
     to the health or well-being of another person.
       (4) Intentional misconduct.--The term ``intentional 
     misconduct'' means conduct by a person with knowledge (at the 
     time of the conduct) that the conduct is harmful to the 
     health or well-being of another person.
       (5) Motor vehicle.--The term ``motor vehicle'' has the 
     meaning provided that term in section 30102(6) of title 49, 
     United States Code.
       (6) Nonprofit organization.--The term ``nonprofit 
     organization'' means--
       (A) any organization described in section 501(c)(3) of the 
     Internal Revenue Code of 1986 and exempt from tax under 
     section 501(a) of such Code; or
       (B) any not-for-profit organization organized and conducted 
     for public benefit and operated primarily for charitable, 
     civic, educational, religious, welfare, or health purposes.
       (7) State.--The term ``State'' means each of the several 
     States, the District of Columbia, the Commonwealth of Puerto 
     Rico, the Virgin Islands, Guam, American Samoa, the Northern 
     Mariana Islands, any other territory or possession of the 
     United States, or any political subdivision of any such 
     State, territory, or possession.
       (b) Limitation on Liability.--
       (1) In general.--Subject to subsection (c), a business 
     entity shall not be subject to civil liability relating to 
     any injury or death occurring as a result of the operation of 
     aircraft or a motor vehicle of a business entity loaned to a 
     nonprofit organization for use outside of the scope of 
     business of the business entity if--
       (A) such injury or death occurs during a period that such 
     motor vehicle or aircraft is used by a nonprofit 
     organization; and
       (B) the business entity authorized the use by the nonprofit 
     organization of motor vehicle or aircraft that resulted in 
     the injury or death
       (2) Application.--This subsection shall apply--
       (A) with respect to civil liability under Federal and State 
     law; and
       (B) regardless of whether a nonprofit organization pays for 
     the use of the aircraft or motor vehicle.
       (c) Exception for Liability.--Subsection (b) shall not 
     apply to an injury or death that results from an act or 
     omission of a business entity that constitutes gross 
     negligence or intentional misconduct, including any 
     misconduct that--
       (1) constitutes a crime of violence (as that term is 
     defined in section 16 of title 18, United States Code) or act 
     of international terrorism (as that term is defined in 
     section 2331 of title 18) for which the defendant has been 
     convicted in any court;
       (2) constitutes a hate crime (as that term is used in the 
     Hate Crime Statistics Act (28 U.S.C. 534 note));
       (3) involves a sexual offense, as defined by applicable 
     State law, for which the defendant has been convicted in any 
     court; or
       (4) involves misconduct for which the defendant has been 
     found to have violated a Federal or State civil rights law.
       (d) Superseding Provision.--
       (1) In general.--Subject to paragraph (2) and subsection 
     (e), this Act preempts the laws of any State to the extent 
     that such laws are inconsistent with this Act, except that 
     this Act shall not preempt any State law that provides 
     additional protection from liability for a business entity 
     with respect an injury or death with respect to which the 
     conditions described in subparagraphs (A) and (B) of 
     subsection (b)(1) apply.
       (2) Limitation.--Nothing in this Act shall be construed to 
     supersede any Federal or State health or safety law.
       (e) Election of State Regarding Nonapplicability.--This Act 
     shall not apply to any civil action in a State court against 
     a volunteer, nonprofit organization, or governmental entity 
     in which all parties are citizens of the State if such State 
     enacts a statute--
       (1) citing the authority of this subsection;
       (2) declaring the election of such State that this Act 
     shall not apply to such civil action in the State; and
       (3) containing no other provisions.
                                  ____


                                 S. 566

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

     SECTION 1. LIABILITY OF BUSINESS ENTITIES PROVIDING TOURS OF 
                   FACILITIES.

       (a) Definitions.--In this section:
       (1) Business entity.--The term ``business entity'' means a 
     firm, corporation, association, partnership, consortium, 
     joint venture, or other form of enterprise.
       (2) Facility.--The term ``facility'' means any real 
     property, including any building, improvement, or 
     appurtenance.
       (3) Gross negligence.--The term ``gross negligence'' means 
     voluntary and conscious conduct by a person with knowledge 
     (at the time of the conduct) that the conduct is likely to be 
     harmful to the health or well-being of another person.
       (4) Intentional misconduct.--The term ``intentional 
     misconduct'' means conduct by a person with knowledge (at the 
     time of the conduct) that the conduct is harmful to the 
     health or well-being of another person.
       (5) State.--The term ``State'' means each of the several 
     States, the District of Columbia, the Commonwealth of Puerto 
     Rico, the Virgin Islands, Guam, American Samoa, the Northern 
     Mariana Islands, any other territory or possession of the 
     United States, or any political subdivision of any such 
     State, territory, or possession.
       (b) Limitation on Liability.--
       (1) In general.--Subject to subsection (c), a business 
     entity shall not be subject to civil liability relating to 
     any injury to, or death of an individual occurring at a 
     facility of the business entity if--
       (A) such injury or death occurs during a tour of the 
     facility in an area of the facility that is not otherwise 
     accessible to the general public; and
       (B) the business entity authorized the tour.
       (2) Application.--This subsection shall apply--
       (A) with respect to civil liability under Federal and State 
     law; and
       (B) regardless of whether an individual pays for the tour.
       (c) Exception for Liability.--Subsection (b) shall not 
     apply to an injury or death that results from an act or 
     omission of a business entity that constitutes gross 
     negligence or intentional misconduct, including any 
     misconduct that--
       (1) constitutes a crime of violence (as that term is 
     defined in section 16 of title 18, United States Code) or act 
     of international terrorism (as that term is defined in 
     section 2331 of title 18) for which the defendant has been 
     convicted in any court;
       (2) constitutes a hate crime (as that term is used in the 
     Hate Crime Statistics Act (28 U.S.C. 534 note));
       (3) involves a sexual offense, as defined by applicable 
     State law, for which the defendant has been convicted in any 
     court; or
       (4) involves misconduct for which the defendant has been 
     found to have violated a Federal or State civil rights law.
       (d) Superseding Provision.--
       (1) In general.--Subject to paragraph (2) and subsection 
     (e), this Act preempts the laws of any State to the extent 
     that such laws are inconsistent with this Act, except that 
     this Act shall not preempt any State law that provides 
     additional protection from liability for a business entity 
     for an injury or death with respect to which the conditions 
     under subparagraphs (A) and (B) of subsection (b)(1) apply.
       (2) Limitation.--Nothing in this Act shall be construed to 
     supersede any Federal or State health or safety law.
       (e) Election of State Regarding Nonapplicability.--This Act 
     shall not apply to any civil action in a State court against 
     a business entity in which all parties are citizens of the 
     State if such State enacts a statute--
       (1) citing the authority of this subsection;
       (2) declaring the election of such State that this Act 
     shall not apply to such civil action in the State; and
       (3) containing no other provisions.
                                 ______
                                 
      By Mr. SMITH of New Hampshire:
  S. 567. A bill to permit revocation by members of the clergy of their 
exemption from Social Security coverage; to the Committee on Finance.


                  social security coverage legislation

  Mr. SMITH of New Hampshire. Mr. President, today I am introducing 
what I believe to be a very sensible piece of legislation which will 
allow a number of members of the clergy of all faiths to participate in 
the Social Security Program. Before 1968 a minister was exempt from 
Social Security coverage unless he or she chose to elect that coverage, 
and in 1968 ministers were covered by Social Security unless they filed 
an irrevocable exemption from the IRS on the grounds that they were 
opposed on basic religious principles to participate in any public 
insurance program. So a member of the clergy who is eligible for this 
exemption is an ``individual who is duly ordained, commissioned, or 
licensed member of a church, or a member of a religious order which has 
not taken a vow of poverty.''
  About 260,000 ministers are affected by this exclusion. This 
legislation which I have offered would simply permit ministers and the 
few members of religious orders who have not taken a vow of poverty to 
secure that coverage. Modestly paid clergy would be among those most 
likely to need Social Security benefits when they retire. But earlier 
in their careers many chose not to participate in the program. They had 
good intentions. They were doing it on principle. But they didn't fully 
understand the ramifications of the exemption. Since 1968--once in 1977 
and another time in 1986--ministers were given a temporary opportunity 
to revoke their exemption from Social Security; that is, they would 
have the opportunity to have a window whereby they could come back 
under the Social Security System.
  This was brought to my attention by the distinguished bishop in 
Manchester, NH, Reverend Bishop O'Neil.

[[Page S3120]]

 He brought this matter to my attention--that there are a number of 
hardships for individuals who may or may not have any retirement income 
as a result of this.
  So this legislation simply provides another open season, a 2-year 
period whereby those who are clergy who may wish now to be under the 
Social Security System may take advantage of this opportunity to revoke 
their exemption.
  That is all the bill does, and I think it is fair in that again these 
are very principled members of the cloth who have decided now that they 
would like to have the opportunity to get into the program.
  So it is a 2-year open season during which the members of the clergy 
could opt into the system. The application for benefits must be filed 
before the clergy member can become entitled to benefits, and those who 
choose coverage would be subject to self-employment taxes. And their 
earnings would be credited for Social Security and for Medicare 
purposes. And, of course, no one who is at retirement age now would be 
allowed in. These would be people who are not yet at the retirement 
age.
  Based on the experience in 1986 and the trends in the number of 
clergy since then, the Congressional Budget Office estimates that maybe 
as many as 1,500 to 1,600 members of the clergy would take advantage of 
the open season and enroll in Social Security. That is based on past 
performance. That is what happened in 1986. The bill was scored by the 
Congressional Budget Office. I have had it scored. It is a short-time 
revenue raiser because people would be paying into the system but, of 
course, it is going to ultimately be like any other Social Security 
beneficiary in the sense that we will be paying out more than comes in.
  This legislation has the endorsement of the National Conference of 
Catholic Bishops. It is an issue of fairness. I hope my colleagues will 
join me in support of this legislation which I would like to see passed 
this year so that we could begin the open season process so that 
members of the clergy could opt in now to the Social Security System. I 
hope that many of my colleagues will join me as quickly as possible in 
cosponsoring the legislation so that we can get it out of the Finance 
Committee and here on the floor so that we can begin to correct this 
inadequacy, this unfairness where many members of the clergy are 
affected.
                                 ______
                                 
      By Mr. McCAIN (for himself, Mr. Campbell, Mr. Domenici, and Mr. 
        Dorgan):
  S. 569. A bill to amend the Indian Child Welfare Act of 1978, and for 
other purposes; to the Committee on Indian Affairs.


            the indian child welfare act amendments of 1997

 Mr. McCAIN. Mr. President, I am introducing today a bill to 
amend the Indian Child Welfare Act [ICWA] of 1978 to make the process 
that applies to voluntary Indian child custody and adoption proceedings 
more fair, consistent, and certain. The provisions of this legislation 
would further advance the best interests of Indian children without 
eroding tribal sovereignty and the fundamental principles of Federal-
Indian law.
  I want to thank my principal cosponsors, Senators Campbell, Domenici, 
and Dorgan, for their continued support of this much-needed 
legislation. Let me point out also that this bill is identical to 
legislation which passed the Senate by unanimous consent on September 
26, 1996. It is the result of nearly 2 years of discussions and debates 
among representatives of the adoption community, Indian tribal 
governments, and the Congress to address some of the problems with the 
implementation of ICWA since its enactment in 1978.
  Mr. President, ICWA was originally enacted to provide for procedural 
and substantive protection for Indian children and families and to 
recognize and formalize a substantial role for Indian tribes in cases 
involving involuntary and voluntary child custody proceedings, whether 
on or off the Indian reservation. Although implementation of ICWA has 
been less than perfect, in the vast majority of cases ICWA has 
effectively provided such protection. It has compelled greater efforts 
and more painstaking analysis by State and private adoption agencies 
and State courts before removing Indian children from their homes and 
communities. It has required recognition by all parties that an Indian 
child has a vital interest in retaining a connection with his or her 
Indian tribe.
  Nonetheless, particularly in the voluntary adoption context, there 
have been occasional, high-profile cases which have resulted in 
lengthy, protracted litigation causing great anguish for the children, 
their adoptive families, their birth families, and their Indian tribes. 
This bill takes a measured and limited approach, crafted by 
representatives of tribal governments and the adoption community, to 
address the problems of implementing ICWA in voluntary adoption 
proceedings.
  This legislation would achieve greater certainty and speed in the 
adoption process for Indian children by providing new guarantees of 
early and effective notice in all cases involving Indian children. The 
bill also establishes new, strict time restrictions on both the right 
of Indian tribes and families to intervene and the right of Indian 
birth parents to revoke their consent to an adoptive placement. 
Finally, the bill includes a provision which would encourage early 
identification of the relatively few cases involving controversy and 
promote the settlement of cases by making visitation agreements 
enforceable.
  For a full analysis of the provisions of the bill, I respectfully 
refer my colleagues to the report accompanying the legislation as it 
was reported to the Senate on July 26, 1996, which is Senate Report No. 
104-335.
  Mr. President, nothing is more sacred and more important to our 
future than our children. The issues surrounding Indian child welfare 
stir deep emotions. I am thankful that, in formulating the compromise 
that led to the introduction of this bill in the last Congress, the 
representatives of both the adoption community and tribal governments 
were able to put aside their individual desires and focus on the best 
interests of Indian children.
  Mr. President, last year, proposals were put forth in the House which 
would have gone too far in restricting the application of ICWA. Those 
proposals, which were considered by the Senate as title III of H.R. 
3286, the Adoption Promotion and Stability Act of 1996, were deleted by 
the Indian Affairs Committee because of our concern about the breadth 
of the language and the fundamental changes the provisions would have 
made to the government-to-government relationship between the United 
States and Indian tribes.
  I believe this bill represents an appropriate and fair-minded 
compromise proposal which would enhance the best interests of Indian 
children by guaranteeing speed, certainty, and stability in the 
adoption process. At the same time, the provisions of this bill 
preserve fundamental principles of tribal government by recognizing the 
appropriate role of tribal governments in the lives of Indian children.
  Mr. President, this bill has been thoroughly analyzed and debated in 
the Senate, as well as in the adoption community and Indian tribal 
governments. I believe it is time for the Congress to act in the best 
interests of Indian children by approving these amendments to the 
voluntary adoption procedures in the 1978 ICWA.
  Mr. President, I ask unanimous consent that the full text of the 
legislation I am introducing today be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 569

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

     SECTION 1. SHORT TITLE; REFERENCES.

       (a) Short Title.--This Act may be cited as the ``Indian 
     Child Welfare Act Amendments of 1997''.
       (b) References.--Whenever in this Act an amendment or 
     repeal is expressed in terms of an amendment to or repeal of 
     a section or other provision, the reference shall be 
     considered to be made to a section or other provision of the 
     Indian Child Welfare Act of 1978 (25 U.S.C. 1901 et seq.).

     SEC. 2. EXCLUSIVE JURISDICTION.

       Section 101(a) (25 U.S.C. 1911(a)) is amended--
       (1) by inserting ``(1)'' after ``(a)''; and
       (2) by striking the last sentence and inserting the 
     following:

[[Page S3121]]

       ``(2) An Indian tribe shall retain exclusive jurisdiction 
     over any child custody proceeding that involves an Indian 
     child, notwithstanding any subsequent change in the residence 
     or domicile of the Indian child, in any case in which the 
     Indian child--
       ``(A) resides or is domiciled within the reservation of the 
     Indian tribe and is made a ward of a tribal court of that 
     Indian tribe; or
       ``(B) after a transfer of jurisdiction is carried out under 
     subsection (b), becomes a ward of a tribal court of that 
     Indian tribe.''.

     SEC. 3. INTERVENTION IN STATE COURT PROCEEDINGS.

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

     SEC. 4. VOLUNTARY TERMINATION OF PARENTAL RIGHTS.

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

     SEC. 5. WITHDRAWAL OF CONSENT.

       Section 103(b) (25 U.S.C. 1913(b)) is amended--
       (1) by inserting ``(1)'' before ``Any''; and
       (2) by adding at the end the following new paragraphs:
       ``(2) Except as provided in paragraph (4), a consent to 
     adoption of an Indian child or voluntary termination of 
     parental rights to an Indian child may be revoked, only if--
       ``(A) no final decree of adoption has been entered; and
       ``(B)(i) the adoptive placement specified by the parent 
     terminates; or
       ``(ii) the revocation occurs before the later of the end 
     of--
       ``(I) the 180-day period beginning on the date on which the 
     Indian child's tribe receives written notice of the adoptive 
     placement provided in accordance with the requirements of 
     subsections (c) and (d); or
       ``(II) the 30-day period beginning on the date on which the 
     parent who revokes consent receives notice of the 
     commencement of the adoption proceeding that includes an 
     explanation of the revocation period specified in this 
     subclause.
       ``(3) The Indian child with respect to whom a revocation 
     under paragraph (2) is made shall be returned to the parent 
     who revokes consent immediately upon an effective revocation 
     under that paragraph.
       ``(4) Subject to paragraph (6), if, by the end of the 
     applicable period determined under subclause (I) or (II) of 
     paragraph (2)(B)(ii), a consent to adoption or voluntary 
     termination of parental rights has not been revoked, 
     beginning after that date, a parent may revoke such a consent 
     only--
       ``(A) pursuant to applicable State law; or
       ``(B) if the parent of the Indian child involved petitions 
     a court of competent jurisdiction, and the court finds that 
     the consent to adoption or voluntary termination of parental 
     rights was obtained through fraud or duress.
       ``(5) Subject to paragraph (6), if a consent to adoption or 
     voluntary termination of parental rights is revoked under 
     paragraph (4)(B), with respect to the Indian child involved--
       ``(A) in a manner consistent with paragraph (3), the child 
     shall be returned immediately to the parent who revokes 
     consent; and
       ``(B) if a final decree of adoption has been entered, that 
     final decree shall be vacated.
       ``(6) Except as otherwise provided under applicable State 
     law, no adoption that has been in effect for a period longer 
     than or equal to 2 years may be invalidated under this 
     subsection.''.

     SEC. 6. NOTICE TO INDIAN TRIBES.

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

     SEC. 7. CONTENT OF NOTICE.

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

     SEC. 8. INTERVENTION BY INDIAN TRIBE.

       Section 103 (25 U.S.C. 1913) is amended by adding at the 
     end the following new subsections:
       ``(e)(1) The Indian child's tribe shall have the right to 
     intervene at any time in a voluntary child custody proceeding 
     in a State court only if--
       ``(A) in the case of a voluntary proceeding to terminate 
     parental rights, the Indian tribe filed a notice of intent to 
     intervene or a written objection to the termination, not 
     later than 30 days after receiving notice that was provided 
     in accordance with the requirements of subsections (c) and 
     (d); or
       ``(B) in the case of a voluntary adoption proceeding, the 
     Indian tribe filed a notice of intent to intervene or a 
     written objection to the adoptive placement, not later than 
     the later of--
       ``(i) 90 days after receiving notice of the adoptive 
     placement that was provided in accordance with the 
     requirements of subsections (c) and (d); or
       ``(ii) 30 days after receiving a notice of the voluntary 
     adoption proceeding that was provided in accordance with the 
     requirements of subsections (c) and (d).
       ``(2)(A) Except as provided in subparagraph (B), the Indian 
     child's tribe shall have the right to intervene at any time 
     in a voluntary child custody proceeding in a State court in 
     any case in which the Indian tribe did not receive written 
     notice provided in accordance with the requirements of 
     subsections (c) and (d).

[[Page S3122]]

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

     SEC. 9. FRAUDULENT REPRESENTATION.

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

     ``SEC. 114. FRAUDULENT REPRESENTATION.

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

  Mr. CAMPBELL. Mr. President, as Chairman of the Committee on Indian 
Affairs, today I join Senator McCain in introducing the Indian Child 
Welfare Act Amendments of 1997. This legislation will amend the 1978 
Indian Child Welfare Act [ICWA] and will serve the best interests of 
Indian children across the United States in the process. The ICWA is a 
procedural statute and this legislation clarifies and strengthens the 
procedures contained in it. The bill strengthens the statute by 
providing certainty, stability, and finality to adoptions and other 
placements involving Indian children.
  In the 104th Congress, this legislation received the support of 
parties affected by and knowledgeable of ICWA-related adoptions: tribal 
organizations, and non-Indian adoption attorneys. The bill I am 
cosponsoring today addresses the major concerns of these parties in a 
way that strengthens the existing ICWA, and provides certainty and 
finality to non-Indian adoptive families. Most important, this bill 
serves the best interests of Indian children and enhances the integrity 
of Indian families.
  Adoption and child custody proceedings are delicate and emotional 
matters for all involved: for the Indian child; for the birth parents; 
for the Indian tribe; and for the adoptive parents. My own experience 
as a youth is helpful in providing a context for ICWA and why it was 
enacted. I grew up in California, many miles from the Northern Cheyenne 
Reservation in Montana where my tribe and relatives lived. I am lucky 
in that even though I was not raised on the reservation, I still cling 
to my tribal identity, my culture, and the spiritual traditions that 
make me a member of the Northern Cheyenne Tribe. Many Indian youth are 
not so lucky, and once removed from their Indian families, tribes and 
cultures, never regain what they have lost.
  The 1978 statute has worked well since its inception, and the reasons 
it was introduced are crucial to understanding the act and the 
legislation we introduce today. After exhaustive congressional 
testimony and many years of hard work the Indian Child Welfare Act was 
enacted in 1978. Prior to 1978 there were no available protections for 
Indian children, families, or tribes in situations involving the 
unwarranted and forced removal of Indian children from their families, 
tribes, and rich cultures. The cold fact is that prior to ICWA between 
25 percent and 35 percent of all Indian children were separated from 
their families and given to adoptive families or placed in foster care 
or in institutions.
  Through exhaustive hearings prior to enactment of the 1978 act, the 
Congress realized that at the staggering rate of Indian child removal, 
it would have been simply a matter of time before Indian families and 
tribes would literally be sapped of their futures--their precious 
children.
  The ICWA is procedural in nature and is designed to protect the best 
interests of Indian children by reinforcing the strong interests Indian 
families and tribes have in maintaining their relationships with their 
children. The act also recognizes that tribal authorities and tribal 
courts are the appropriate authorities over Indian adoptions and 
placements. Just as we in the majority often speak of maintaining 
families and traditions and of respecting the rights of local 
governments, this act is one of the few Indian statutes that actually 
does both.

  Non-Indian institutions, including State courts, do not and cannot 
completely understand the unique culture and relationships that make up 
tribal life. Because they cannot know these facts and these 
relationships, they should not be given authority to make child custody 
decisions involving Indian children. Practically, State authorities are 
not in a position to make these decisions. Legally, they should not be 
allowed to make these decisions. The right of any sovereign nation, 
including Indian nations, includes the right to determine who is and 
who is not a member or citizen. The legislation we introduce today 
preserves those most basic rights of Indian tribes: tribal self-
preservation and self-determination.
  Mr. President, I want to say a word about adoptive parents and 
families. The decision to adopt a child or children is one that is done 
out of the noblest motives, and with much love and affection. It is 
often a process fraught with many obstacles, both emotional and 
financial. I have nothing but the greatest respect and admiration for 
adoptive parents. This legislation will provide adoptive parents with 
the security they sometimes lack under current law. The bill will 
provide what many have complained of: finality and security in cases 
involving Indian children. For the past several years, there have been 
highly publicized cases involving Indian children and what some felt 
were late interventions by tribes in these proceedings.
  By strengthening the procedures of ICWA this bill will make cases 
like the ones we saw last year a thing of the past. Parties seeking 
placement of Indian children would be required to file detailed notices 
with the tribe that includes biographical information on the child, as 
well as information regarding the rights of the tribe in responding to 
the notice. With the notice in hand, the

[[Page S3123]]

tribe must decide if it wants to intervene or not, and to inform the 
party seeking placement of its intentions.
  By requiring tribes to file written notice of intervention and 
providing time limits within which tribes can intervene in proceedings, 
adoptive parents can be assured that they will not face the prospect of 
having final or near final. These procedural demands are not unduly 
burdensome and fall equally on both the parties seeking placement and 
tribal governments.
  The truth is that many of these inflammatory and well-publicized 
cases involved unethical attorneys and other adoption professionals who 
advised their Indian clients to conceal or not reveal their Indian 
heritage in an effort to expedite the adoption. Because ICWA-related 
adoptions and proceedings involve procedural requirements, some 
attorneys and professionals seek to cut corners and save time and 
money. Not only is this shortsighted, but is damaging to all parties 
involved in an adoption or custody proceeding.

  By expediting these adoptions, the attorneys interests were served. 
But what about the Indian children, Indian families, Indian tribes, and 
non-Indian adoptive families?
  As we have seen, these people have had to endure long, bitter, and 
costly court battles some of which continue to this day. The 
legislation we introduce today will provide tough civil and criminal 
penalties to any person that willfully falsifies facts regarding 
whether a child is Indian or whether a parent is Indian; makes false or 
fraudulent statements; or falsifies documents containing facts related 
to the proceeding.
  These provisions are not radical notions. They simply provide that if 
you are involved in an ICWA-related proceeding, and if you do not want 
to lose your money and your freedom, follow the law. No good adoption 
attorney worth his salt will fear these penalties if he or she follows 
the law and is forthright with the facts.
  I urge my colleagues to join in enacting this crucial legislation to 
bring stability and certainty to adoptions and other proceedings 
involving Indian children.
                                 ______
                                 
      By Mr. NICKLES (for himself, Mr. Breaux, Mr. Mack, Mr. Baucus, 
        Mr. D'Amato, Mr. Bond, Mr. DeWine, Mr. Cochran, Mr. Enzi, Mr. 
        Hagel, and Mr. Thomas):
  S. 570. A bill to amend the Internal Revenue Code of 1986 to exempt 
certain small businesses from the mandatory electronic fund transfer 
system; to the Committee on Finance.


         MANDATORY ELECTRONIC FUND TRANSFER SYSTEM LEGISLATION

  Mr. NICKLES. Mr. President, today, I am introducing legislation with 
my colleague from Louisiana, Senator Breaux, to address the ever-
recurring problem of Federal mandates on small business. Our bill will 
prohibit the Internal Revenue Service from forcing thousands of small 
businesses to deposit payroll taxes by electronic funds transfer under 
threat of penalty. In addition to Senator Breaux, I would like to thank 
several other Senators who have agreed to cosponsor this legislation, 
including Senator Mack, Senator Baucus, Senator D'Amato, Senator Bond, 
Senator DeWine, Senator Cochran, and Senator Enzi.
  Legislation enacted in 1993 to implement the North American Free-
Trade Agreement directed the IRS to begin collecting a progressively 
larger percentage of payroll tax deposits from employers by electronic 
funds transfer, in lieu of the Federal tax deposit coupon system. 
Congress' intent was to simplify the tax deposit system and reduce 
paperwork for taxpayers, financial institutions, and the IRS. The 
Senate report accompanying this bill recommended that the 
implementation of this mandate not create hardships for small 
businesses, and that no small business should be required to purchase 
computers or gain access to any electronic equipment other than a 
touch-tone telephone. Further, the report urged Treasury to take into 
account the specific needs of small employers, including possible 
exemption for the very smallest businesses from the electronic deposit 
system.
  Unfortunately, the IRS has done little to mitigate the impact on 
small business. Instead, they sent notices to 1.2 million small 
businesses last summer stating that they must begin using the new 
electronic Federal tax payment System, or EFTPS, to make payroll tax 
deposits on January 1, 1997. Further, the IRS told these taxpayers that 
continued use of the Federal tax deposit coupon system would result in 
penalties equal to 10 percent of each deposit. The IRS targeted this 
mandate on any business which deposited more than $50,000 in payroll 
taxes in 1995. Prior to this time, the threshold for mandatory 
electronic deposits was $47 million. If the IRS is not stopped, Mr. 
President, the threshold will drop to $20,000 next year.
  The reaction from the small business community to this mandate last 
year was adverse and vocal, Mr. President. Fortunately, Congress acted 
to delay the EFTPS mandate until July 1, 1997. However, that date is 
quickly approaching, and thousands of small business owners are no more 
comfortable with the mandate now than they were last year. Business 
owners who have used the coupon system for years to diligently pay 
their taxes on time are incensed to learn that they can be forced from 
that system against their will. Some fear IRS access to their bank 
accounts, and others fear the additional costs which may arise if their 
bank begins charging fees for these transactions. Finally, many small 
businesses are discovering that their current bank does not participate 
fully in the electronic transaction system.
  Mr. President, small business owners should not have a new tax 
deposit system forced down their throats without alternatives and 
without enough time or information to make an orderly transition to the 
new system. Further, they should not be forced to incur fees or other 
additional costs in order to pay their taxes. While I agree that many 
taxpayers will come to prefer an electronic deposit system, I do not 
believe such a change should be mandated under threat of penalty. If a 
small business prefers to use the coupon system and continues to pay 
their taxes on time, they should not be penalized for doing so.
  Mr. President, the legislation Senator Breaux and I are introducing 
today will phase in the requirement to pay depository taxes 
electronically in manageable increments and exempt most small 
businesses permanently. Under our bill, only businesses who annually 
deposit over $5 million in payroll taxes will ever be mandated to use 
the electronic deposit system. Further, the bill directs the Secretary 
of the Treasury to establish a program to encourage all business 
taxpayers to voluntarily participate in the electronic deposit system.
  Enactment of this legislation will free small business owners from 
yet another heavyhanded Federal mandate and preserve their right to pay 
their taxes in a manner which best suits their business needs. I 
encourage all Senators to join in this effort.
  Mr. President, again I wish to thank the Presiding Officer of the 
Senate at this time, the Senator from Wyoming, for cosponsoring this 
legislation. I also ask unanimous consent that Senator Hagel be added 
as an original cosponsor.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. NICKLES. Mr. President, to summarize again for the benefit of my 
colleagues, effective July 1, if we do not change this current--I 
started to say ``law,'' but this is not a law. The IRS came up with a 
regulation. We passed a law. Congress passed a law that says we want to 
encourage electronic fund transfers of payroll taxes. A good idea. It 
makes sense. It will work for a lot of people.
  IRS, to implement this, and maybe with some direction of Congress--
Congress said put most of the taxpayers in. The IRS did so, and then 
they came up with a 10-percent penalty. That is a big inducement, 
encouragement. Congress did not put on the 10-percent penalty; the IRS 
did--it puts a gun to the taxpayer's head--and then said, ``You have to 
do this.'' Then they said, ``This is not too much of a challenge for 
bigger employers.'' As a matter of fact, the current requirement, the 
threshold is $47 million of payroll taxes. If you have payroll taxes of 
$47 million, that is a big operation. And they are doing that now. That 
actually applies to 1,500 taxpayers in the country today.
  The next threshold level drops from $47 million to $50,000. Now you 
are talking about a lot of companies. You

[[Page S3124]]

are talking about a lot of businesses. You do not have to be very big 
to have payroll taxes of $50,000. You might have total payroll of a 
quarter of a million or $300,000. That deadline is July 1. It was to be 
January 1. We postponed it for 6 months.
  The legislation we have introduced today, it phases down the $47 
million threshold to $30 million, to $10 million, to $5 million, and 
says, ``If you have payroll taxes of less than $5 million, you do not 
have to do this. You can still do it, you still have the option to do 
it.''
  I met with some representatives from the IRS. They said, ``We are 
concerned, if we pass this legislation, a lot of people might not get 
into the system. Maybe that would not be fair for the people already in 
the system.''
  I said I want them to have the option. In our legislation, we want to 
encourage people to move into the electronic fund transfer. We think 
that would be good. A lot of people pay their home notes--I do that. 
When I pay my home mortgage, I do it by electronic fund transfer where 
you used to have the coupon system. I am happy with that. I think a lot 
of taxpayers will be happy paying payroll taxes this way, and we want 
this to be an option.
  We want to eliminate the 10-percent penalty for noncompliance, 
especially for small business.
  So that is what we have done. I ask unanimous consent Senator Thomas 
also be included as an original cosponsor.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. NICKLES. Mr. President, I ask unanimous consent to have printed 
in the Record immediately following my statement a copy of this 
legislation and, in addition to the legislation, a letter from the 
Small Business Legislative Council and a letter from the National 
Restaurant Association endorsing the bill.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                 S. 570

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,
       (a) In General.--Section 6302(h)(2) of the Internal Revenue 
     Code of 1986 (relating to use of electronic fund transfer 
     system for collection of certain taxes) is amended to read as 
     follows:
       ``(2) Taxpayers subject to system.--
       ``(A) In general.--The regulations referred to in paragraph 
     (1) shall only require taxpayers to use the electronic funds 
     transfer system for a calendar year if the aggregate amount 
     of depository taxes of such taxpayer for the second preceding 
     calendar year exceeded the applicable dollar amount.
       ``(B) Applicable dollar amount.--For purposes of 
     subparagraph (A)--

``If the 2d preceding calendar year is:The applicable dollar amount is:
    1995....................................................$47,000,000
    1996.....................................................30,000,000
    1997.....................................................20,000,000
    1998.....................................................10,000,000
    1999 or later............................................5,000,000.

       ``(C) Aggregation rule.--All persons treated as a single 
     employer under subsections (a) and (b) of section 52 shall be 
     treated as a single taxpayer for purposes of subparagraph 
     (A).
       ``(D) Voluntary compliance.--The Secretary shall encourage 
     taxpayers not described in subparagraph (A) to participate in 
     the electronic funds transfer system. The participation of 
     such taxpayers shall be voluntary.''
       (b) Conforming Amendment.--Section 6302(h)(4) of such Code 
     is amended to read as follows:
       ``(4) Coordination with other electronic fund transfer 
     requirements.--Under regulations, any tax required to be paid 
     by electronic fund transfer under section 5061(e) or 5703(b) 
     shall be paid in such a manner as to ensure that the 
     requirements of the second sentence of paragraph (1)(A) are 
     met.''
       (c) Reports.--The Secretary of the Treasury or his delegate 
     shall submit annual reports to the Committee on Finance of 
     the Senate and the Committee on Ways and Means of the House 
     of Representatives. Such reports shall provide an analysis of 
     the progress being made in implementing the electronic funds 
     transfer system under section 6302(h) of the Internal Revenue 
     Code of 1986, including, but not limited to, information with 
     respect to--
       (1) the number and nature of any penalties imposed on 
     taxpayers due to noncompliance with such system,
       (2) any administrative efficiencies accruing to the Federal 
     Government by reason of such system, and
       (3) the amount of any additional costs imposed on 
     businesses to comply with such system.
       (d) Effective Date.--The amendments made by this section 
     shall apply to deposits required to be made on and after the 
     date of the enactment of this Act.
                                  ____



                              National Restaurant Association,

                                   Washington, DC, April 14, 1997.
     Senator Don Nickles,
     Assistant Majority Leader,
     Washington, DC.
       Dear Senator Nickles: On behalf of the 770,000 restaurant 
     locations nationwide, we would like to thank you and Senator 
     Breaux for introducing legislation to help reduce the 
     regulatory burden on our nation's employers.
       As part of a revenue-raising provision in NAFTA, our 
     members were mandated to begin filing payroll taxes 
     electronically over a five year phase-in period. Starting 
     July 1, all businesses that deposit over $50,000 in federal 
     payroll taxes will have to start wiring their tax deposits to 
     the Internal Revenue Service. This is the first phase-in that 
     will truly affect the small businesses, including thousands 
     of restaurant owners. For months, the National Restaurant 
     Association and other employer groups have been warning the 
     government that many businesses don't know about the mandate 
     and could face penalties beginning in July for not complying.
       We strongly support this bipartisan legislation which will 
     allow small businesses the option of filing electronically, 
     and will provide a reasonable phase-in of the mandate for 
     larger businesses. Thank you for your leadership on this 
     issue.
           Sincerely,
     Elaine Z. Graham,
                                            Senior Vice President,
                                Government Affairs and Membership.
     Kathleen O'Leary,
     Legislative Representative.
                                  ____

                                                    Small Business


                                          Legislative Council,

                                   Washington, DC, April 14, 1997.
     Hon. Don Nickles,
     U.S. Senate,
     Washington, DC.
       Dear Senator Nickles: On behalf of the members of the Small 
     Business Legislative Council (SBLC), I wish to commend your 
     efforts to address the concerns of the small business 
     community with respect to the Electronic Federal Tax Payment 
     System (EFTPS).
       The EFTPS has proven to be a source of great frustration 
     for us. On one hand, we applaud the movement towards an 
     electronic funds transfer system. Any small business owner 
     can vouch for the inherent flaws in the current paper coupon-
     based deposit system. Errors and inadvertent late payments 
     are still all too frequent. And, while the IRS has become 
     more reasonable in ultimately absolving small businesses of 
     blame, it is difficult to turn off the IRS paper spigot. It 
     can take several unnecessary exchanges to resolve the 
     problem.
       The electronic age is upon us and, ultimately, most small 
     businesses will embrace it fully. But the small business 
     community is not ready yet and, more importantly, neither is 
     the technology and structure to implement this concept. As 
     you know, we secured one delay in implementation in the hopes 
     everything would work out.
       It appears we still have a long way to go, and until such 
     time as the small business community's confidence is secured, 
     it appears a voluntary approach is in everyone's best 
     interest. If the technology does work, it would seem foolish 
     for small business' owners not to embrace it. But, rather 
     than work everyone up into a ``tizzy'' as each new deadline 
     approaches, it may be better to take the longer view, and 
     make sure everyone comes on-board at their own pace and 
     comfort level. We'd rather see the program make it on its own 
     merits. And it does have merit, if done properly.
       Therefore, we support your effort. Once again, you have 
     demonstrated your strong commitment to small business.
       As you know, The Small Business Legislative Council (SBLC) 
     is a permanent, independent coalition of nearly one hundred 
     trade and professional associations that share a common 
     commitment to the future of small business. Our members 
     represent the interests of small businesses in such diverse 
     economic sectors as manufacturing, retailing, distribution, 
     professional, and technical services, construction, 
     transportation, tourism, and agriculture. For your 
     information, a list of our members is enclosed.
           Sincerely,
                                               Benhamin Y. Cooper,
                                                         Chairman.

  Mr. BAUCUS. Mr. President, I am very pleased today to join my 
colleagues Senator Nickles and Senator Breaux in introducing 
legislation to help support America's small businesses. This bill will 
address the problem created for the small business community by the 
Internal Revenue Services' requirement that they convert to a system of 
depositing payroll taxes by electronic funds transfer.
  IRS has been implementing legislation directing the agency to begin 
collecting a progressively larger percentage of Federal tax deposits 
from employers by electronic funds transfer, rather than the current 
Federal tax deposit coupon system. The intent behind the legislation 
was to simplify the tax

[[Page S3125]]

deposit system and reduce paperwork for taxpayers, financial 
institutions, and the Internal Revenue Service itself. The Senate 
report accompanying the bill recommended that the implementation of 
this mandate not create hardships for small businesses, and that no 
small business should be required to purchase computers or gain access 
to any electronic equipment other than a touch-tone telephone. The 
report also urged Treasury to take into account the specific needs of 
small employers, including possible exemption for the very smallest 
businesses from the electronic deposit system.
  We do not believe the Treasury Department has accomplished this goal. 
While a timetable for compliance has been established, there is little 
evidence that the concerns of the small business community have been 
alleviated as July 1, 1997, the deadline for implementation, draws 
near. Business owners who have used the coupon system for years to 
diligently pay their taxes on time do not understand why they are being 
required to convert to an electronic funds transfer system. Many small 
business owners I have spoken with in Montana fear IRS access to their 
bank accounts, particularly in light of recent reported incidences of 
IRS employee browsing through taxpayer records without a valid reason. 
Other small business owners are concerned, and not unreasonably, that 
banks may begin charging fees for these transactions, adding to their 
costs of doing business. Finally, many small businesses are discovering 
that their current banks do not even participate fully in the 
electronic transfer system, forcing them to find a new bank through 
which to send in their deposit payments.
  Mr. President, I agree with my colleagues that small businesses have 
not been given enough time or information to make an orderly transition 
to the new electronic funds transfer system. I also agree that they 
should not be required to pay a fee in order to pay their taxes. The 
bill we are introducing today will exempt businesses who annually 
deposit under $5 million in payroll taxes from the electronic payment 
requirement permanently, and phase it in for the rest at a much more 
manageable rate.
  I believe this bill will preserve the right of small business owners 
to pay their taxes in a manner which best suites their business needs. 
I commend Senators Nickels and Breaux for the work they have done on 
this bill, and encourage our other colleagues to join in our effort.
                                 ______
                                 
      By Mr. REID:
  S. 571. A bill to establish a uniform poll closing time throughout 
the continental United States for Presidential general elections; to 
the Committee on Rules and Administration.


                  the uniform poll closing act of 1997

  Mr. REID. Mr. President, today I am introducing legislation which 
will set a uniform poll closing time for the continental United States. 
Election officials and political scientists for years have believed 
that early announcements, based on exit polls, discourage thousands of 
people from voting and affect the outcome of close races for other 
Federal, State and local offices. Less than 50 percent of eligible 
voters actually voted last year. As public officials, we have a 
responsibility to do everything we can to encourage voting, not 
dissuade it. Uniform poll closing times is a step in this direction.
  We are all aware that the controversy over early network projections 
is not a new one. Senator Barry Goldwater introduced a bill after the 
1960 election prohibiting radio broadcast of any Presidential election 
returns until after midnight on election day. Network predictions 4 
years later of Goldwater's landslide loss, and of Richard Nixon's 
landslide victory in 1972, spawned several Senate bills to muzzle radio 
and television. But none were enacted.
  In 1980, when new technology made it unnecessary for networks to wait 
for actual returns, the furor over early projections was brought to its 
highest pitch. In that year, voters in the West were told at 5 p.m., 
hours before their polls closed, who the next President of the United 
States would be. The three major networks trumpeted Ronald Reagan's 
victory long before the polls had closed in their States. After the 
election, our colleagues, Representatives Tim Wirth and Al Swift began 
a congressional search for a way to prevent early calls of elections. 
Numerous ideas were discussed as solutions to the problem of early 
projections based on exit polls, but there was no consensus. In 
addition to uniform poll closing times, shifting election day to 
Sunday, spreading voting over 2 days, making election day a national 
holiday and forbidding the networks from issuing predictions were 
proposed. Of course the best solution would be voluntary restraint on 
the part of the networks, but that has proven to be a failure.
  My legislation simply states that each polling place in the 
continental United States must close, with respect to a Presidential 
general election, at 10 p.m. eastern standard time. This means the 
polls with close at 7 p.m. Pacific time, 8 p.m. mountain time and 9 
p.m. central time. I do not believe these times are unreasonable. It is 
my hope that this legislation will revive the debate over the use of 
exit polls. I welcome my colleagues to work with me for a solution.

                          ____________________