Congressional Record, Volume 143 Issue 46 (Thursday, April 17, 1997)

[Congressional Record Volume 143, Number 46 (Thursday, April 17, 1997)]
[Senate]
[Pages S3349-S3361]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

By Ms. SNOWE:
S. 601. A bill to amend title 18, United States Code, to prohibit
taking a child hostage in order to evade arrest; to the Committee on
the Judiciary.
S. 602. A bill to provide a mandatory minimum sentence for State
crimes involving the use of a firearm, impose work requirements for
prisoners, and prohibit the provision of luxury items to prisoners; to
the Committee on the Judiciary.

CRIME LEGISLATION

Ms. SNOWE. Mr. President, I rise today to introduce two bills
intended to protect innocent Americans from the violent will of
criminals and fugitives. One need take only a quick review of recent
statistics to realize the chilling scope of our nation's crime
problems. For instance, the Bureau of Justice Statistics reports that
11 million Americans were the victims of violent crime in 1994 alone.
The Bureau of Justice Statistics also reports that approximately 3.5
million Americans were accosted at gunpoint during that same year.
These statistics should galvanize us all into taking concrete steps to
protect innocent Americans against senseless victimization and turn the
tide against criminals once and for all. My bills will help to do just
that.

The first bill I introduce today, the Crime Control Act of 1997, will
ensure that an individual convicted of committing a violent crime or
engaging in drug trafficking activities while in possession of a gun,
will go to jail for 10 years, and not a day less. If an offender fires
a gun while committing those crimes, that offender will go to jail for
20 years. And should that criminal make the mistake of using a
machinegun or a gun with a silencer to commit those crimes, that
criminal will be incarcerated for 30 years. Once imprisoned, the Crime
Control Act provides hardened criminals with no option for parole or
reduced sentences that would allow them another chance to harm innocent
citizens.
Simply put, the passage of my Crime Control Act ensures that if you
do the crime, you will most certainly do the time. And under my bill,
that time won't be easy. A key initiative of the Crime Control Act is
the creation of work programs for all able bodied prisoners by the
Attorney General. In addition, my bill prohibits the government from
providing any entertainment devices, like televisions, radios, or
stereos, for use in individual prisoner cells. Federal prisons are not
the place for entertainment. They are not intended to be fun. They are
the places where individuals repay their debt to society and in the
case of violent criminals, it is a very large debt indeed. My Crime
Control Act makes sure that violent criminals pay that debt, and I hope
my colleagues will join me in supporting this important and effective
crime control measure.
The second bill I introduce today applies directly to actions taken
by fugitives who resist arrest. Over the past few years, America has
witnessed an unfortunate trend involving standoffs between the U.S.
Government and parties who reject its authority to enforce the laws of
this land--specifically, the incidents in Waco, TX; Ruby Ridge, ID; and
Garfield County, MT. Thankfully, the episode involving the Freemen did
not escalate to violence or bloodshed. Regrettably, this does not hold
true for Waco or Ruby Ridge, where there was a tragic loss of life to
civilians and Government agents alike.
Each of these situations jeopardized children's lives--innocent
children who had no choice in the role they played in these standoffs.
In Waco, 25 young children under the age of 15 died in the blaze that
spread throughout the compound. These deaths occurred despite the
repeated efforts by Federal agents to encourage Branch Davidians
leaders to allow children to leave the compound.
At Ruby Ridge, a 14-year-old died after being caught in gunfire. And
during the Freeman standoff, Americans across the Nation held their
breath--praying that violence would not erupt. Once again, the lives of
children were placed in jeopardy. But thankfully, this time, the
children--and adults--emerged unharmed.
As we have seen, tragedy can occur in these very tense situations.
Above all else, we need to ensure that children are kept out of these
situations in the future. People who arm themselves after failing to
comply with warrants or because they seek to avoid arrest must realize
that, whether or not it is intended, children are implicated in these
standoffs. We cannot allow this to continue any longer. We cannot allow
another child's life to be endangered in this manner.
This bill seeks to protect children from harm in these standoff
situations. My bill would make it a crime to detain a child when two
conditions are met: if a person is trying to evade arrest or avoid
complying with a warrant, and that person uses force, or threatens to
use force, against a Federal agent. Any person convicted of violating
this act would be imprisoned for 10-25 years. If a child is injured,
the penalty would be increased to 20-35 years. If a child is killed,
the penalty would be life imprisonment.
No law can ever assure that children will be kept free from harm. But
this legislation will help assure that children do not become
inadvertent, innocent pawns when violent situations arise. It will
provide a deterrent to involving a child in any standoff--and severe
penalties for those who ignore the law.
Both of the bills I introduce today are aimed at protecting the
innocents in our society, and I urge my colleagues to support them.
America needs to be a place where innocent citizens do not have to fear
for their life

[[Page S3350]]

because gun-toting criminals and drug pushers linger on the streets. It
needs to be a place where children are not the captives of adults
intent upon resisting arrest. Freedom from violence and captivity are
basic tenets of our society, which most Americans enjoy and respect.
Those among us who don't share our respect for the laws of our society
must realize that their actions are criminal, and that in America,
criminal actions have repercussions. The passage of these bills will
make sure that they do.
______

By Mr. SPECTER (for himself, Mr. Feingold, and Mr. Kohl):
S. 603. A bill to require the Secretary of Agriculture to collect and
disseminate statistically reliable information from milk manufacturing
plants on prices received for bulk cheese and to provide the Secretary
with the authority to require reporting by such manufacturing plants
throughout the United States on prices received for cheese, butter, and
nonfat dry milk; to the Committee on Agriculture, Nutrition, and
Forestry.
By Mr. SPECTER:
S. 604. A bill to amend the Agricultural Market Transition Act to
require the Secretary of Agriculture to use the price of feed grains
and other cash expenses as factors that are used to determine the basic
formula price for milk and any other milk price regulated by the
Secretary; to the Committee on Agriculture, Nutrition, and Forestry.

agricultural legislation

Mr. SPECTER. Mr. President, I have sought recognition to introduce
two pieces of legislation which will respond to a very serious problem
on the falling prices of milk which have occurred in Pennsylvania,
especially in northeastern Pennsylvania, and across the country.
In introducing this legislation, I am pleased to have a chance to
address this issue in the presence of the distinguished Senator from
Kansas, who was the chairman of the House Agriculture Committee, and is
making quite an addition to the U.S. Senate. It is not inappropriate to
note that Senator Roberts is from Kansas, as I am a native of Kansas. I
was born in Wichita, grew up in Russell, and worked on a farm as a
teenager and have some appreciation of the problems of the farmers.
During my tenure in the U.S. Senate, I have been on the Agriculture
Subcommittee of the Appropriations Committee. There are more people
living in rural Pennsylvania than live in the rural part of any State
in the Union. Mr. President, my colleague from Kansas, we have 2\1/2\
million people living in rural Pennsylvania. When I last looked, which
is a while ago, there were not 2\1/2\ million people living in all of
Kansas, let alone 2 million people--slightly reduced--when I moved into
Pennsylvania. So I approach this issue with some due regard for the
expert presiding over the U.S. Senate. Having discussed this issue with
him before, I am not sure he agrees with me on all aspects.
I am of the firm opinion that something needs to be done to help the
milk farmers. I say that because the price of milk has fallen
precipitously from almost $16 per hundredweight down to $11 per
hundredweight. It has gone back up a little, but not a great deal.
In responding to that problem, I asked the distinguished Secretary of
Agriculture, Dan Glickman, also a Kansan, to accompany me to
northeastern Pennsylvania, which he did, on February 10. We met a crowd
of approximately 500 to 750 angry farmers who complained about the
precipitous drop in the price of milk.
During the course of my analysis of this pricing problem, I found
that the price of milk depended upon a number of factors, one of which
was the price of cheese. For every 10 cents the price of cheese was
raised, the price of milk would be raised by $1 per hundredweight. Then
I found that the price of cheese was determined by the National Cheese
Exchange in Green Bay, WI. At least according to a survey made by the
University of Wisconsin, there was an issue as to whether the price of
cheese established by the Green Bay exchange was accurate or not. The
authors of the report used a term as tough as manipulation. Whether
that is so or not, there was a real question as to whether that price
was accurate.
Since this controversy has arisen--perhaps it brought the matter to a
head, perhaps not; perhaps it would have happened anyway--it has been
announced that the Green Bay exchange will close and will be replaced
by a new commodity market on May 1. In any event, in my discussions
with Secretary Glickman, I found he had the power to raise the price of
milk unilaterally by establishing a different price of cheese.
This subject was aired during the course of his testimony when he
came before the appropriations subcommittee. It is a very good time to
find a more-agreeable-than-usual Cabinet officer when a Cabinet officer
comes in for the appropriations process for his Department's budget.
During the course of that hearing, we could not explore fully the
issue of the price of milk and the price of cheese, so our
distinguished chairman, Senator Cochran, agreed to have a special
hearing, which we had a couple of weeks later. At that time, Secretary
Glickman said that they had ascertained the identity of 118 people or
entities who had cheese transactions that could establish a different
price of cheese. He told me they had written to the 118 and were having
problems getting responses. I suggested it might be faster to telephone
those people.

Secretary Glickman provided my staff and me with the list of people,
and we telephoned them and found, after reaching approximately half of
them, that the price of cheese was, in fact, 16 cents higher by those
individuals than otherwise.
I have been pressing Secretary Glickman since. If he has C-SPAN2, or
if he knows someone who has C-SPAN2 or if he talks to someone who has
C-SPAN2, my staff has been exhorting his staff daily to act on it, and
I am going to send him a fax letter before the day is up to try to get
a determination on this issue, because I am on my way to northeastern
Pennsylvania again next Monday on a routine trip to the Wilkes-Barre/
Scranton area. The Presiding Officer knows what that is like. There
will be people who want answers to questions, and I shall answer with
due diligence, which I think I have. I hope the Secretary of
Agriculture will note this different price of cheese and act
accordingly to raise the price of milk.
The legislation which I am introducing today goes to two points. One
is to amend the Agriculture Market Transition Act to require the
Secretary to use the price of feed grains and other cash expenses in
the dairy industry as factors that are used to determine the basic
formula for the price of milk and other milk prices regulated by the
Secretary.
Simply stated, the Government should use what it costs for production
to establish the price of milk, so that if the farmers are caught with
rising prices of feed and other rising costs of production, they can
have those rising costs reflected in the cost of milk.
The second piece of legislation would require the Secretary of
Agriculture to collect and disseminate statistically reliable
information from milk manufacturing plants on prices received for bulk
cheese and provide the Secretary with the authority to require
reporting by such manufacturing plants throughout the United States on
the prices for cheese, butter, and nonfat dry milk.
Frankly, I am reluctant to impose this obligation anywhere, but I
think it is a fair request to make since the Secretary told the
Subcommittee on Agriculture of the Appropriations Committee that the
Secretary could not get this information on a voluntary basis. People
would not comply. My staff found that corroborated when we telephoned
the individuals who had these transactions. Burdensome as it is, I
think it is fair to give the Secretary the authority to require this
reporting.
Mr. President, I am authorized to say that the distinguished Senator
from Wisconsin, Senator Feingold, wishes to cosponsor the piece of
legislation requiring the information to be collected.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. SPECTER. Mr. President, I ask unanimous consent that the full
text of the bills be printed in the Record.
There being no objection, the bills were ordered to be printed in the
Record, as follows:

S. 603

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

[[Page S3351]]

SECTION 1.

(1) Not later than 30 days after the enactment of this Act,
the Secretary shall collect and disseminate, on a weekly
basis, statistically reliable information, obtained from
cheese manufacturing areas in the United States on prices
received and terms of trade involving bulk cheese, including
information on the national average price for bulk cheese
sold through spot and forward contract transactions. To the
extent practicable, the Secretary shall report the prices and
terms of trade for spot and forward contract transaction
separately,
(2) The Secretary may require dairy product manufacturing
plants in the United States to report to the Secretary on a
weekly basis the price they receive for cheese, butter and
nonfat dry milk sold through spot sales arrangements, forward
contracts or other sales arrangements.
(3) All information provided to, or acquired by, the
Secretary under subsections (1) and (2) shall be kept
confidential by each officer and employee of the Department
of Agriculture except that general weekly statements may be
issued that are based on the information and that do not
identify the information provided by any person.
____

S. 604

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

SECTION 1. BASIC FORMULA PRICE.

Section 143(a) of the Agricultural Market Transition Act (7
U.S.C. 7253(a)) is amended by adding at the end the
following:
``(5) Basic formula price.--In carrying out this subsection
and 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, the Secretary
shall use as factors that are used to determine the basic
formula price for milk and any other milk price regulated by
the Secretary--
``(A) the price of feed gains, including the cost of
concentrates, byproducts, liquid whey, hay, silage, pasture,
and other forage; and
``(B) other cash expenses, including the cost of hauling,
artificial insemination, veterinary services and medicine,
bedding and litter, marketing, custom services and supplies,
fuel, lubrication, electricity, machinery and building
repairs, labor, association fees, and assessments.''.

Mr. FEINGOLD. Mr. President, I am pleased today to introduce with the
Senator from Pennsylvania, Senator Specter, a bill which attempts to
address problems in the dairy industry stemming from the lack of
adequate price discovery in manufactured dairy product markets.
There has been a great deal of controversy surrounding the National
Cheese Exchange [NCE], currently located in Green Bay, WI. The NCE is a
small cash market that trades less than 1 percent of all bulk cheese
sold nationally, has few traders, short trading periods, and infrequent
trading sessions. Those characteristics make this exchange vulnerable
to price manipulation. Trading on this exchange would not be a concern
if it did not have such tremendous influence over cheese prices
nationally. However, because the Cheese Exchange is the only source of
cheese price information in the country, it acts as a benchmark or
reference price for most off-exchange cheese sales. There simply is no
other reliable source of information, no other source of price
discovery, available for buyers and sellers in this industry to use as
an indicator of market conditions. Because the price for cheese
directly and indirectly affects the price of milk, dairy farmers are
justifiably concerned about the lack of adequate cheese price
information and the influence of the NCE on prices they receive for
milk.
Concern about the Cheese Exchange among dairy farmers, while on-going
for many years, heightened late last year when cheese prices at the
exchange fell dramatically in just a few weeks, causing record declines
in milk prices paid to farmers. While milk prices have recovered
slightly, they are expected to fall again next month as a result of
further price declines at the National Cheese Exchange.
While the National Cheese Exchange is closing its doors at the end of
this month, a new but nearly identical cash market for cheese is
opening at the Chicago Mercantile Exchange. It is expected that this
new market, which appears to share a number of the flaws of the Cheese
Exchange, will serve as the reference price for cheese throughout the
country. It is unclear whether this market will be capable of providing
adequate price discovery for the dairy industry.
That is why the Senator from Pennsylvania, Senator Specter, and I are
introducing this bill today. This legislation requires the Secretary to
collect and disseminate statistically reliable cheese price information
collected from cheese manufacturing plants throughout the country--a
provision also included in my bill, S. 258, which I introduced in
February. A price series of this type will not only provide more price
information, it will provide more reliable information based on
transactions throughout the country rather than on one thinly traded
cash market.
Secretary of Agriculture Dan Glickman has already begun this process.
Last August, I asked the Secretary to use his existing administrative
authority to initiate a weekly price survey of cheese plants to improve
cheese price discovery and lessen the influence of the small but
powerful National Cheese Exchange on milk prices. Secretary Glickman
graciously agreed to conduct such a survey, which formally began this
January on a monthly basis, and became a weekly survey last month. I
have been very pleased with the Secretary's response to the concerns
about cheese pricing and effect of the National Cheese Exchange on
farm-level milk prices and I appreciate his efforts on this matter.
Since that survey is relatively new, it is still unclear whether it
will produce prices which reflect market conditions. That depends upon
the voluntary participation of those manufacturers reporting prices as
well as on the integrity of the data reported.

On March 13, both Secretary Glickman and I testified before the
Senate Agriculture Appropriations Committee about the problem of the
Cheese Exchange and the lack of reliable price information in the dairy
industry and the potential for this new price series to address that
problem. At that time, the Secretary indicated that if participation by
cheese manufacturers in his new survey was inadequate, the Department
may need to consider requiring participation in that survey. However,
under current law, the Secretary has only very limited authority to
require cheese price reporting by manufacturing plants.
The bill we are introducing today requires the Secretary to continue
his cheese price collection and reporting activities and provides him
with broader authority to require participation by cheese manufacturers
in that survey. I want to make clear that this bill does not mandate
that the Secretary require participation in the cheese price survey,
but merely provides him with the authority to do so if it is necessary
to ensure the new cheese price survey is statistically reliable. Under
the current survey procedures, many cheese manufacturers are already
participating voluntarily, so this new Secretarial authority may not be
necessary.
Mr. President, it is essential that dairy farmers have some
assurances that cheese prices, which have such a dramatic impact on the
price of milk, are reflective of market conditions and not vulnerable
to manipulation. By improving price discovery, the new USDA cheese
price survey implemented by Secretary Glickman may help accomplish that
goal. If mandatory price reporting is necessary to produce accurate
survey data, our bill provides the Secretary with the authority to
require participation. However, I am hopeful that participation in the
survey will continue to be high so that mandatory reporting never
becomes necessary.
I thank the Senator from Pennsylvania for working with me to devise
legislation that might effectively improve price discovery in the dairy
industry and I welcome his interest in this important issue. I urge my
colleagues to support this legislation.
______

By Mr. CONRAD (for himself and Mr. Dorgan):
S. 605. A bill to require the Secretary of Agriculture to provide
emergency assistance to producers for cattle losses that are due to
damaging weather or related condition occurring during the 1996-97
winter season, and for other purposes; to the Committee on Agriculture,
Nutrition, and Forestry.

AGRICULTURAL EMERGENCY ASSISTANCE LEGISLATION

Mr. CONRAD. Mr. President, my State has been hit by one of the most
remarkable series of events ever in the history of our State.
First we had the greatest snowfall in our State's history, over 100
inches of snow. Then the last of eight major blizzards hit. The eighth
and final blizzard

[[Page S3352]]

was the most powerful winter storm in 50 years. It included almost 2
feet of snow as well as major ice storms, then followed by 70 mile-an-
hour winds that were devastating--80,000 people lost their electricity,
many of them for a week. The economic devastation is truly remarkable.
Now in the last 12 hours even more disaster is occurring. I am going
to read just briefly from the major newspaper in my State, which is in
the largest city of our State, Fargo, ND.
The article begins this way:

At 12:15 a.m. today, the flood of 1997 officially became
the worst in Fargo-Moorhead's history.
The National Weather Service said a reading taken at that
time put the Red River's level at 39.12 feet. That exceeds .
. . the river level measured in the flood of 1897--until this
morning, the worst ever.
That also means the Red [River] has hit the 500-year flood
level.
Speaking on [a local] radio [station] at 1:15 a.m., city
Operations Manager Dennis Walaker struck an ominous note.
Walaker said, ``We are at river stages that exceed the 1897
level. No one has ever seen this much water in the Fargo
area, ever. All we can do is react.''

I just talked to the mayor, and I just talked to Mr. Walaker. He
tells me they have 15 square miles of water headed for Fargo, ND. This
on top of the river which is 20 feet above flood stage. There is just a
mass scramble to try to deal with this extraordinary flood threat.

The crest is not expected to be much higher than [about
39.5 feet] but officials will reevaluate the situation this
morning. . . .
Iced-over farm fields liquefied. Shelterbelt snowdrifts
shrank. Drainage ditches whooshed into coulees and merged
with rivers.
In rural Cass County . . . winter turned into water.
By noon, sheets of melted snow rolled toward the Red River.
Water that couldn't fit into engorged rivers, particularly
the Wild Rice River, took off over land. The overland flows
crossed I-29--

The major north-south Federal highway--

near the Horace exit and threatened homes in southwest
Fargo.
At midmorning, [the mayor] warned residents of approaching
overland flooding. He suggested people leave work and check
their property if they live in--

Certain residential areas.

By midafternoon, some students were leaving [schools]
because of the flood threat.
The situation was even more urgent next to the Red River.
Fargo-Moorhead homeowners who hadn't lost the battle Tuesday
asked for more sandbags and sandbaggers. North Dakota State
University canceled classes so students could help in the
fight.

I will not go further, Mr. President, other than to say this is
absolutely an extraordinary time. One of the areas in which we have
been hit the hardest is cattle death losses. The number of cattle
losses are at least 112,000 head at this point. North Dakota Farm
Service Agency reports that nearly 80,000 of them are from the weekend
storm of April 4 through 6 alone, a storm that is being called Blizzard
Hannah. I fear, Mr. President, that many more calves may die.
This is such an extraordinary set of events. These pictures depict
some of the situations and scenes that we are seeing across the State
of North Dakota. Here, one cow is nuzzling a calf with a dead cow
alongside. What happened in this storm, which was so powerful, is that
not only did cattle freeze to death, but many suffocated because the
winds were so intense that compacted snow was blown up into their
nostrils and they suffocated.
Mr. President, this next picture shows what we are seeing all too
often. Here a farmer is coming down the road to inspect the herd. Here
is a cow dead in a ditch. All across North Dakota, carcasses are
littered after this devastation.
Here is an all-too-often sight. This is a cow frozen in a snow bank.
It is not just a snow bank, it is actually ice and snow together.
People report that these snow banks are like concrete. There was first
this heavy snowfall, then the ice, then these incredible winds. These
cattle did not have a chance.
For that reason, today I am introducing legislation that will provide
for an indemnification payment. I hope that this legislation will be
enacted. I hope that my colleagues will understand the massive economic
loss in my State.
Under this legislation, producers who have experienced a 5-percent
loss of their cattle herd or calf crop would receive indemnity payments
of $200 per head, up to 200 of lost livestock. In some cases, losses
will be covered by private insurance. In these instances, producers
will be able to receive indemnity payments under my program, but the
total payments of private insurance and Government indemnity cannot
exceed the expected value of a cow.
I have been working with my colleagues from the Dakotas, Senator
Dorgan from North Dakota, and Senator Daschle and Senator Johnson from
South Dakota to implement assistance to livestock producers in North
Dakota and South Dakota. We will continue working to provide
meaningful, comprehensive relief.
Cattle producers in my State have asked for something simple and
something that will help them overcome these overwhelming difficulties.
My legislation accomplishes those goals, and I call on my colleagues to
offer this assistance to livestock producers.
I understand I have a colleague standing by who would like to have
time as well, so I do not want to extend this, other than to send the
legislation to the desk and ask it be appropriately referred. I
introduce it on behalf of myself and my colleague from North Dakota,
Senator Dorgan. I urge my colleagues' close attention to it.
Again, Mr. President, we are faced with what I call a slow-motion
disaster, because it is a circumstance in which you do not have the
flood come and leave. In this circumstance, the flood has come, and it
is staying. In addition to that, we have all of these other severe
weather factors to cope with.
I, again, hope that we will move expeditiously with the supplemental
disaster legislation so that we can fund the programs necessary to help
in the recovery that is so urgently needed, not only in my State but in
the States of Minnesota and South Dakota as well.
______

By Mr. FEINGOLD:
S. 608. A bill to authorize the enforcement by State and local
governments of certain Federal Communications Commission regulations
regarding use of citizens band radio equipment; to the Committee on
Commerce, Science, and Transportation.

CB RADIO FREQUENCY INTERFERENCE LEGISLATION

Mr. FEINGOLD. Mr. President, I rise to introduce legislation designed
to provide a practical solution to the all too common problem of
interference with residential home electronic equipment caused by
unlawful use of citizens band [CB] radios. This problem can be
extremely distressing for residents who cannot have a telephone
conversation, watch television, or listen to the radio without being
interrupted by a neighbor's illegal use of a CB radio. Unfortunately,
under the current law, those residents have little recourse. The bill I
am introducing today will provide those residents with a practical
solution to this problem.
Up until recently, the FCC has enforced its rules outlining what
equipment may or may not be used for CB radio transmissions, how long
transmissions may be broadcast, what channels may be used, as well as
many other technical requirements. FCC also investigated complaints
that a CB radio enthusiast's transmissions interfered with a neighbor's
use of home electronic and telephone equipment. FCC receives thousands
of such complaints annually.
Mr. President, for the past 3 years I have worked with constituents
who have been bothered by persistent interference of nearby CB radio
transmissions in some cases caused by unlawful use of radio equipment.
In each case, the constituents have sought my help in securing an FCC
investigation of the complaint. In each case, Mr. President, the FCC
indicated that due to a lack of resources, the Commission no longer
investigates radio frequency interference complaints. Instead of
investigation and enforcement, the FCC is able to provide only self-
help information which the consumer may use to limit the interference
on their own.
In many cases, residents implement the self-help measures recommended
by FCC such as installing filtering devices to prevent the unwanted
interference, working with their telephone company, or attempting to
work with the neighbor they believe is causing

[[Page S3353]]

the interference. In many cases these self-help measures are effective.
However, in some cases filters and other technical solutions fail to
solve the problem because the interference is caused by unlawful use of
CB radio equipment such as unauthorized linear amplifiers.
Municipal residents, after being denied investigative or enforcement
assistance from the FCC, frequently contact their city or town
government and ask them to police the interference. However, the
Communications Act of 1934 provides exclusive authority to the Federal
Government for the regulation of radio, preempting municipal ordinances
or State laws to regulate radio frequency interference caused by
unlawful use of CB radio equipment. This has created an interesting
dilemma for municipal governments. They can neither pass their own
ordinances to control CB radio interference, nor can they rely on the
agency with exclusive jurisdiction over interference to enforce the
very Federal law which preempts them.
Let me give an example of the kind of frustrations people have
experienced in attempting to deal with these problems. Shannon Ladwig,
a resident of Beloit, WI has been fighting to end CB interference with
her home electronic equipment that has been plaguing her family for
over a year. Shannon worked within the existing system, asking for an
FCC investigation, installing filtering equipment on her telephone,
attempting to work with the neighbor causing the interference, and so
on. Nothing has been effective. Shannon's answering machine picks up
calls for which there is no audible ring, and at times records ghost
messages. Often, she cannot get a dial tone when she or her family
members wish to place an outgoing call. During telephone conversations,
the content of the nearby CB transmission can frequently be heard and
on occasion, her phone conversations are inexplicably cut off. Her TV
transmits audio from the CB transmission rather than the television
program her family is watching. Shannon never knows if the TV program
she taped with her VCR will actually record the intended program or
whether it will contain profanity from a nearby CB radio conversation.

Shannon did everything she could to solve the problem and a year
later she still feels like a prisoner in her home, unable to escape the
broadcasting whims of a CB operator using illegal equipment with
impunity. Shannon even went to her city council to demand action. The
Beloit City Council responded by passing an ordinance allowing local
law enforcement to enforce FCC regulations--an ordinance the council
knows is preempted by Federal law. Earlier this year, the Beloit City
Council passed a resolution supporting the legislation I am introducing
today, which will allow at least part of that ordinance to stand.
The problems experienced by Beloit residents are by no means isolated
incidents. I have received very similar complaints from at least 10
other Wisconsin communities in the last several years in which whole
neighborhoods are experiencing persistent radio frequency interference.
Since I have begun working on this legislation, my staff has also been
contacted by a number of other congressional offices who are also
looking for a solution to the problem of radio frequency interference
in their States or districts caused by unlawful CB use. The city of
Grand Rapids, MI, in particular, has contacted me about this
legislation because they face a persistent interference problem very
similar to that in Beloit. In all, FCC receives more than 30,000 radio
frequency interference complaints annually--most of which are caused by
CB radios. Unfortunately, FCC no longer has the staff, resources, or
the field capability to investigate these complaints and localities are
blocked from exercising any jurisdiction to provide relief to their
residents.
The legislation I am introducing today attempts to resolve this
dilemma by allowing States and localities to enforce existing FCC
regulations regarding authorized CB equipment and frequencies while
maintaining exclusive Federal jurisdiction over the regulation of radio
services. It is a commonsense solution to a very frustrating and real
problem which cannot be addressed under existing law. Residents should
not be held hostage to a Federal law which purports to protect them but
which cannot be enforced.
This legislation is by no means a panacea for the problem of radio
frequency interference. My bill is intended only to help localities
solve the most egregious and persistent problems of interference--those
caused by unauthorized use of CB radio equipment and frequencies. In
cases where interference is caused by the legal and licensed operation
of any radio service, residents will need to resolve the interference
using FCC self-help measures that I mentioned earlier.
In many cases, interference can result from inadequate home
electronic equipment immunity from radio frequency interference. Those
problems can only be resolved by installing filtering equipment and by
improving the manufacturing standards of home telecommunications
equipment. The electronic equipment manufacturing industry, represented
by the Telecommunications Industry Association and the Electronics
Industry Association, working with the Federal Communications
Commission, has adopted voluntary standards to improve the immunity of
telephones from interference. Those standards were adopted by the
American National Standards Institute last year. Manufacturers of
electronic equipment should be encouraged to adopt these new ANSI
standards. Consumers have a right to expect that the telephones they
purchase will operate as expected without excessive levels of
interference from legal radio transmissions. Of course, Mr. President,
these standards assume legal operation of radio equipment and cannot
protect residents from interference from illegal operation of CB
equipment.
This bill also does not address interference caused by other radio
services, such as commercial stations or amateur stations. Mr.
President, last year, I introduced S. 2025, a bill with intent similar
to that of the bill I am introducing today. The American Radio Relay
League [ARRL], an organization representing amateur radio operators,
frequently referred to as ``ham'' operators, raised a number of
concerns about that legislation. ARRL was concerned that while the bill
was intended to cover only illegal use of CB equipment, FCC-licensed
amateur radio operators might inadvertently be targeted and prosecuted
by local law enforcement. ARRL also expressed concern that local law
enforcement might not have the technical abilities to distinguish
between ham stations and CB stations and might not be able to determine
what CB equipment was FCC-authorized and what equipment is illegal.
Over the past several months, I have worked with the ARRL
representatives and amateur operators from Wisconsin to address these
concerns. As a result of those discussions, the bill I am introducing
today incorporates a number of provisions suggested by the league.
First, my legislation makes clear that the limited enforcement
authority provided to localities in no way diminishes or affects FCC's
exclusive jurisdiction over the regulation of radio. Second, the bill
clarifies that possession of an FCC license to operate a radio service
for the operation at issue, such as an amateur station, is a complete
protection against any local law enforcement action authorized by this
bill. Amateur radio enthusiasts are not only individually licensed by
FCC, unlike CB operators, but they also self-regulate. The ARRL is very
involved in resolving interference concerns both among their own
members and between ham operators and residents experiencing problems.
Third, my legislation also provides for an FCC appeal process by any
radio operator who is adversely affected by a local law enforcement
action under this bill. FCC will make determinations as to whether the
locality acted properly within the limited jurisdiction this
legislation provides. FCC will have the power to reverse the action of
the locality if local law enforcement acted improperly. And fourth, my
legislation requires FCC to provide States and localities with
technical guidance on how to determine whether a CB operator is acting
within the law.
Again, Mr. President, my legislation is narrowly targeted to resolve
persistent interference with home electronic equipment caused by
illegal CB operation. Under my bill, localities cannot establish their
own regulations on CB

[[Page S3354]]

use. They may only enforce existing FCC regulations on authorized CB
equipment and frequencies. This bill will not resolve all interference
problems and it is not intended to do so. Some interference problems
need to continue to be addressed by the FCC, the telecommunications
manufacturing industry, and radio service operators. This bill merely
provides localities with the tools they need to protect their residents
while preserving FCC's exclusive regulatory jurisdiction over the
regulation of radio services.
I urge my colleagues to support this legislation.
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. 608

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

SECTION 1. ENFORCEMENT OF REGULATIONS REGARDING CITIZENS BAND
RADIO EQUIPMENT.

Section 302 of the Communications Act of 1934 (47 U.S.C.
302) is amended by adding at the end the following:
``(f)(1) Except as provided in paragraph (2), a State or
local government may enforce the following regulations of the
Commission under this section:
``(A) A regulation that prohibits a use of citizens band
radio equipment not authorized by the Commission.
``(B) A regulation that prohibits the unauthorized
operation of citizens band radio equipment on a frequency
between 24 MHz and 35 MHz.
``(2) Possession of a station license issued by the
Commission pursuant to section 301 in any radio service for
the operation at issue shall preclude action by a State or
local government under this subsection.
``(3) The Commission shall provide technical guidance to
State and local governments regarding the detection and
determination of violations of the regulations specified in
paragraph (1).
``(4)(A) In addition to any other remedy authorized by law,
a person affected by the decision of a State or local
government enforcing a regulation under paragraph (1) may
submit to the Commission an appeal of the decision on the
grounds that the State or local government, as the case may
be, acted outside the authority provided in this subsection.
``(B) A person shall submit an appeal on a decision of a
State or local government to the Commission under this
paragraph, if at all, not later than 30 days after the date
on which the decision by the State or local government
becomes final.
``(C) The Commission shall make a determination on an
appeal submitted under subparagraph (B) not later than 180
days after its submittal.
``(D) If the Commission determines under subparagraph (C)
that a State or local government has acted outside its
authority in enforcing a regulation, the Commission shall
reverse the decision enforcing the regulation.
``(5) The enforcement of a regulation by a State or local
government under paragraph (1) in a particular case shall not
preclude the Commission from enforcing the regulation in that
case concurrently.
``(6) Nothing in this subsection shall be construed to
diminish or otherwise affect the jurisdiction of the
Commission under this section over devices capable of
interfering with radio communications.''.
______

By Mr. KENNEDY (for himself, Ms. Mikulski, Mr. Daschle, Mr. Dodd,
Mr. Harkin, Mr. Wellstone, Mrs. Murray, Mrs. Boxer, Ms.
Moseley-Braun, Mrs. Feinstein, Mr. Ford, and Mr. Inouye):
S. 609. 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 reconstructive breast surgery if they provide coverage for
mastectomies; to the Committee on Labor and Human Resources.

RECONSTRUCTIVE BREAST SURGERY BENEFITS ACT OF 1997

Mr. KENNEDY. Mr. President, today I am introducing the Reconstructive
Breast Surgery Benefits Act of 1997. An identical bill is being
introduced by Representative Anna Eshoo in the House of
Representatives. Our purpose in introducing this legislation is to
improve the lives of thousands of women who suffer from breast cancer.
Breast cancer is the most common form of cancer in American women,
affecting one woman out of every nine. Nearly three million American
women are living with the disease, and 46,000 die from it each year.
Over 180,000 more women will be diagnosed with breast cancer this year,
and nearly half of the women will suffer the loss of one or both
breasts in order to survive.
Reconstructive surgery or use of a prothesis can help women cope with
the consequences of this deadly illness. Every woman deserves the
opportunity to have these important options available if breast cancer
strikes. It is also a distressing fact that some women avoid early
detection procedures, for fear that it may result in the loss of a
breast if cancer is detected. For these women, breast reconstruction
surgery should be available as a part of treatment, since its
availability can alleviate fears about the disease and encourage life-
saving early detection and treatment.
Many insurers classify this important medical procedure as cosmetic,
however, and deny coverage for it. In addition, as many as 25 percent
of women who undergo breast cancer treatments are affected by
lymphedema, a complication resulting from mastectomy. Many insurers
also refuse to cover treatment and management of this condition. This
legislation will end these types of discrimination.
Currently, 12 States have laws that require coverage for breast
reconstruction following mastectomy. Nine States require coverage for
prosthesis. This legislation will extend these protections to all
women.
This bill will amend the Public Health Service Act and the Employee
Retirement Income Security Act in order to accomplish the following
important actions:
It requires insurers and companies that provide coverage for
mastectomy to provide coverage for reconstructive breast surgery,
prosthesis and other treatments which may be necessary as a result of
surgical complications, including lymphedema;
It prohibits monetary payments or rebates that encourage a woman to
accept less than the minimum medical protection available; and
Finally, it prohibits insurers using penalties or incentives to
encourage providers to furnish levels of care inconsistent with this
legislation.
This bill has been endorsed by major national organizations involved
in the diagnosis and treatment of breast cancer, including the American
Cancer Society, the National Breast Cancer Coalition, the National
Women's Health Network, and the national medical and nursing groups
concerned with this disease.
Our goal is to end the cruel and arbitrary practice that unfairly
discriminates against breast cancer patients and their needs. I look
forward to early action by Congress, and I hope that it will receive
the overwhelming bipartisan support it deserves.
______

By Mr. LUGAR (for himself and Mr. Biden):
S. 610. A bill to implement the obligations of the United States
under the Convention on the Prohibition of the Development, Production,
Stockpiling and Use of Chemical Weapons and on Their Destruction, known
as ``the Chemical Weapons Convention'' and opened for signature and
signed by the United States on January 13, 1993; to the Committee on
the Judiciary.

THE CHEMICAL WEAPONS CONVENTION IMPLEMENTATION ACT OF 1997

Mr. LUGAR. Mr. President, I introduce, by request, on behalf of
Senator Biden and myself, the Chemical Weapons Convention
Implementation Act.
The Chemical Weapons Convention was signed by the United States on
January 13, 1993, and was submitted by President Clinton to the United
States Senate on November 23, 1993, for its advice and consent to
ratification.
The Chemical Weapons Convention contains a number of provisions that
require implementing legislation to give them effect within the United
States. These include: international inspections of U.S. facilities;
declarations by U.S. chemical and related industry; and establishment
of a ``National Authority'' to serve as the liaison between the United
States and the international organization established by the Chemical
Weapons Convention and States Parties to the Convention.
Mr. President, I ask unanimous consent that this Implementation Act
that we are introducing at the request of the administration be printed
in the Record together with the transmitted letter to the President of
the Senate from ACDA Director John D. Holum.

[[Page S3355]]

There being no objection, the material was ordered to be printed in
the Record, as follows:

S. 610

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 ``Chemical Weapons Convention
Implementation Act of 1997.''

SEC. 2. TABLE OF CONTENTS.

The table of contents for this Act is as follows:
Sec. 1. Short title.
Sec. 2. Table of contents.
Sec. 3. Congressional findings.
Sec. 4. Congressional declarations.
Sec. 5. Definitions.
Sec. 6. Severability.

TITLE I--NATIONAL AUTHORITY

Sec. 101. Establishment.

TITLE II--APPLICATION OF CONVENTION PROHIBITIONS TO NATURAL AND LEGAL
PERSONS

Sec. 201. Criminal provisions.
Sec. 202. Effective date.
Sec. 203. Restrictions on scheduled chemicals.

TITLE III--REPORTING

Sec. 301. Reporting of information.
Sec. 302. Confidentiality of information.
Sec. 303. Prohibited acts.

TITLE IV--INSPECTIONS

Sec. 401. Inspections pursuant to Article VI of the Chemical Weapons
Convention.
Sec. 402. Other inspections pursuant to the Chemical Weapons Convention
and lead agency.
Sec. 403. Prohibited acts.
Sec. 404. Penalties.
Sec. 405. Specific enforcement.
Sec. 406. Legal proceedings.
Sec. 407. Authority.
Sec. 408. Saving provision.

SEC. 3. CONGRESSIONAL FINDINGS.

The Congress makes the following findings:
(1) Chemical weapons pose a significant threat to the
national security of the United States and are a scourge to
humankind.
(2) The Chemical Weapons Convention is the best means of
ensuring the nonproliferation of chemical weapons and their
eventual destruction and forswearing by all nations.
(3) The verification procedures contained in the Chemical
Weapons Convention and the faithful adherence of nations to
them, including the United States, are crucial to the success
of the Convention.
(4) The declarations and inspections required by the
Chemical Weapons Convention are essential for the
effectiveness of the verification regime.

SEC. 4. CONGRESSIONAL DECLARATIONS.

The Congress makes the following declarations:
(1) It shall be the policy of the United States to
cooperate with other States Parties to the Chemical Weapons
Convention and to afford the appropriate form of legal
assistance to facilitate the implementation of the
prohibitions contained in title II of this Act.
(2) It shall be the policy of the United States, during the
implementation of its obligations under the Chemical Weapons
Convention, to assign the highest priority to ensuring the
safety of people and to protecting the environment, and to
cooperate as appropriate with other States Parties to the
Convention in this regard.
(3) It shall be the policy of the United States to
minimize, to the greatest extent practicable, the
administrative burden and intrusiveness of measures to
implement the Chemical Weapons Convention placed on
commercial and other private entities, and to take into
account the possible competitive impact of regulatory
measures on industry, consistent with the obligations of the
United States under the Convention.

SEC. 5. DEFINITIONS.

(a) In General.--Except as otherwise provided in this Act,
the definitions of the terms used in this Act shall be those
contained in the Chemical Weapons Convention. Nothing in
paragraphs 2 or 3 of Article II of the Chemical Weapons
Convention shall be construed to limit verification
activities pursuant to Parts X or XI of the Annex on
Implementation and Verification of the Convention.
(b) Other Definitions.--
(1) The term ``Chemical Weapons Convention'' means the
Convention on the Prohibition of the Development, Production,
Stockpiling and Use of Chemical Weapons and on Their
Destruction, opened for signature on January 13, 1993.
(2) The term ``national of the United States'' has the same
meaning given such term in section 101(a)(22) of the
Immigration and Nationality Act (8 U.S.C. 1101(a)(22)).
(3) The term ``United States,'' when used in a geographical
sense, includes all places under the jurisdiction or control
of the United States, including (A) any of the places within
the provisions of section 101(41) of the Federal Aviation Act
of 1958, as amended (49 U.S.C. Sec. 40102(41)), (B) any
public aircraft or civil aircraft of the United States, as
such terms are defined in sections 101(36) and (18) of the
Federal Aviation Act of 1958, as amended (49 U.S.C. Secs.
40102(37) and 40102(17)), and (C) any vessel of the United
States, as such term is defined in section 3(b) of the
Maritime Drug Enforcement Act, as amended (46 U.S.C. App.
Sec. 1903(b)).
(4) The term ``person,'' except as used in section 201 of
this Act and as set forth below, means (A) any individual,
corporation, partnership, firm, association, trust, estate,
public or private institution, any State or any political
subdivision thereof, or any political entity within a State,
any foreign government or nation or any agency,
instrumentality or political subdivision or any such
government or nation, or other entity located in the United
States; and (B) any legal successor, representative, agent or
agency of the foregoing located in the United States. The
phrase ``located in the United States'' in the term
``person'' shall not apply to the term ``person'' as used in
the phrases ``person located outside the territory'' in
sections 203(b) and 302(d) of this Act and ``person located
in the territory'' in section 203(b) of this Act.
(5) The term ``Technical Secretariat'' means the Technical
Secretariat of the Organization for the Prohibition of
Chemical Weapons established by the Chemical Weapons
Convention.

SEC. 6. SEVERABILITY.

If any provision of this Act, or the application of such
provision to any person or circumstance, is held invalid, the
remainder of this Act, or the application of such provision
to persons or circumstances other than those as to which it
is held invalid, shall not be affected thereby.

TITLE I--NATIONAL AUTHORITY

SEC. 101. ESTABLISHMENT.

Pursuant to paragraph 4 of Article VII of the Chemical
Weapons Convention, the President or the designee of the
President shall establish the ``United States National
Authority'' to, inter alia, serve as the national focal point
for effective liaison with the Organization for the
Prohibition of Chemical Weapons and other States Parties to
the Convention.

TITLE II--APPLICATION OF CONVENTION PROHIBITIONS TO NATURAL AND LEGAL
PERSONS

SEC. 201. CRIMINAL PROVISIONS.

(a) In General.--Part I of title 18, United States Code, is
amended by--
(1) redesignating chapter 11A relating to child support as
chapter 11B; and
(2) inserting after chapter 11 relating to bribery, graft
and conflicts of interest the following new chapter:

``CHAPTER 11A--CHEMICAL WEAPONS

``Sec.
``227. Penalties and prohibitions with respect to chemical weapons.
``227A. Seizure, forfeiture, and destruction.
``227B. Injunctions.
``227C. Other prohibitions.
``227D. Definitions.

``SEC. 227. PENALTIES AND PROHIBITIONS WITH RESPECT TO
CHEMICAL WEAPONS.

``(a) In General.--Except as provided in subsection (b),
whoever knowingly develops, produces, otherwise acquires,
stockpiles, retains, directly or indirectly transfers, uses,
owns or possesses any chemical weapon, or knowingly assists,
encourages or induces, in any way, any person to do so, or
attempts or conspires to do so, shall be fined under this
title or imprisoned for life or any term of years, or both.
``(b) Exclusion.--Subsection (a) shall not apply to the
retention, ownership or possession of a chemical weapon, that
is permitted by the Chemical Weapons Convention pending the
weapon's destruction, by any agency or department of the
United States. This exclusion shall apply to any person,
including members of the Armed Forces of the United States,
who is authorized by any agency or department of the United
States to retain, own or possess a chemical weapon, unless
that person knows or should have known that such retention,
ownership or possession is not permitted by the Chemical
Weapons Convention.
``(c) Jurisdiction.--There is jurisdiction by the United
States over the prohibited activity in subsection (a) if (1)
the prohibited activity takes place in the United States or
(2) the prohibited activity takes place outside of the United
States and is committed by a national of the United States.
``(d) Additional Penalty.--The court shall order that any
person convicted of any offense under this section pay to the
United States any expenses incurred incident to the seizure,
storage, handling, transportation and destruction or other
disposition of property seized for the violation of this
section.

``SEC. 227A. SEIZURE, FORFEITURE, AND DESTRUCTION.

``(a) Seizure.--
``(1) Except as provided in paragraph (2), the Attorney
General may request the issuance, in the same manner as
provided for a search warrant, of a warrant authorizing the
seizure of any chemical weapon defined in section 227D(2)(A)
of this title that is of a type or quantity that under the
circumstances is inconsistent with the purposes not
prohibited under the Chemical Weapons Convention.
``(2) In the exigent circumstances, seizure and destruction
of any such chemical weapon described in paragraph (1) may be
made by the Attorney General upon probable cause without the
necessity for a warrant.
``(b) Procedure for Forfeiture and Destruction.--Except as
provided in paragraph (2) of subsection (a), property seized
pursuant to subsection (a) shall be forfeited to the United
States after notice to potential claimants and an opportunity
for a hearing.

[[Page S3356]]

At such a hearing, the Government shall bear the burden of
persuasion by a preponderance of the evidence. Except as
inconsistent herewith, the provisions of chapter 46 of this
title related to civil forfeitures shall extend to a seizure
or forfeiture under this section. The Attorney General shall
provide for the destruction or other appropriate disposition
of any chemical weapon seized and forfeited pursuant to this
section.
``(c) Affirmative Defense.--It is an affirmative defense
against a forfeiture under subsection (b) that--
``(1) such alleged chemical weapon is for a purpose not
prohibited under the Chemical Weapons Convention; and
``(2) such alleged chemical weapon is of a type and
quantity that under the circumstances is consistent with that
purpose.
``(d) Other Seizure, Forfeiture, and Destruction.--
``(1) Except as provided in paragraph (2), the
Attorney General may request the issuance, in the same
manner as provided for a search warrant, of a warrant
authorizing the seizure of any chemical weapon defined in
section 227D(2) (B) or (C) of this title that exists by
reason of conduct prohibited under section 227 of this
title.
``(2) In exigent circumstances, seizure and destruction of
any such chemical weapon described in paragraph (1) may be
made by the Attorney General upon probable cause without the
necessity for a warrant.
``(3) Property seized pursuant to this subsection shall be
summarily forfeited to the United States and destroyed.
``(e) Assistance.--The Attorney General may request
assistance from any agency or department in the handling,
storage, transportation or destruction of property seized
under this section.
``(f) Owner Liability.--The owner or possessor of any
property seized under this section shall be liable to the
United States for any expenses incurred incident to the
seizure, including any expenses relating to the handling,
storage, transportation and destruction or other disposition
of the seized property.

``SEC. 227B. INJUNCTIONS.

``(a) In General.--The United States may obtain in a civil
action an injunction against--
``(1) the conduct prohibited under section 227 of this
title;
``(2) the preparation or solicitation to engage in conduct
prohibited under section 227 of this title; or
``(3) the development, production, other acquisition,
stockpiling, retention, direct or indirect transfer, use,
ownership or possession, or the attempted development,
production, other acquisition, stockpiling, retention, direct
or indirect transfer, use, ownership or possession, of any
alleged chemical weapon defined in section 227D(2)(A) of this
title that is of a type or quantity that under the
circumstances is inconsistent with the purposes not
prohibited under the Chemical Weapons Convention, or the
assistance to any person to do so.
``(b) Affirmative Defense.--It is an affirmative defense
against an injunction under subsection (a)(3) that--
``(1) the conduct sought to be enjoined is for a purpose
not prohibited under the Chemical Weapons Convention; and
``(2) such alleged chemical weapon is of a type and
quantity that under the circumstances is consistent with that
purpose.

``SEC. 227C. OTHER PROHIBITIONS.

``(a) In General.--Except as provided in subsection (b),
whoever knowingly uses riot control agents as a method of
warfare, or knowingly assists any person to do so, shall be
fined under this title or imprisoned for a term of not more
than ten years, or both.
``(b) Exclusion.--Subsection (a) shall not apply to members
of the Armed Forces of the United States. Members of the
Armed Forces of the United States who use riot control agents
as a method of warfare shall be subject to appropriate
military penalties.
``(c) Jurisdiction.--There is jurisdiction by the United
States over the prohibited activity in subsection (a) if (1)
the prohibited activity takes place in the United States or
(2) the prohibited activity takes place outside of the United
States and is committed by a national of the United States.

``SEC. 227D. DEFINITIONS.

``As used in this chapter, the term--
``(1) `Chemical Weapons Convention' means the Convention on
the Prohibition of the Development, Production, Stockpiling
and Use of Chemical Weapons and on Their Destruction, opened
for signature on January 13, 1993;
``(2) `chemical weapon' means the following, together or
separately:
``(A) a toxic chemical and its precursors, except where
intended for a purpose not prohibited under the Chemical
Weapons Convention, as long as the type and quantity is
consistent with such a purpose;
``(B) a munition or device, specifically designed to cause
death or other harm through the toxic properties of those
toxic chemicals specified in subparagraph (A), which would be
released as a result of the employment of such munition or
device; or
``(C) any equipment specifically designed for use directly
in connection with the employment of munitions or devices
specified in subparagraph (B);
``(3) `toxic chemical' means any chemical which through its
chemical action on life processes can cause death, temporary
incapacitation or permanent harm to humans or animals. This
includes all such chemicals, regardless of their origin or of
their method of production, and regardless of whether they
are produced in facilities, in munitions or elsewhere. (For
the purpose of implementing the Chemical Weapons Convention,
toxic chemicals which have been identified for the
application of verification measures are listed in Schedules
contained in the Annex on Chemicals of the Chemical Weapons
Convention.);
``(4) `precursor' means any chemical reactant which takes
part at any stage in the production by whatever method of a
toxic chemical. This includes any key component of a binary
or multicomponent chemical system. (For the purpose of
implementing the Chemical Weapons Convention, precursors
which have been identified for the application of
verification measures are listed in Schedules contained in
the Annex on Chemicals of the Chemical Weapons convention.);
``(5) `key component of a binary or multicomponent chemical
system' means the precursor which plays the most important
role in determining the toxic properties of the final product
and reacts rapidly with other chemicals in the binary or
multicomponent system;
``(6) `purpose not prohibited under the Chemical Weapons
Convention' means--
``(A) industrial, agricultural, research, medical,
pharmaceutical or other peaceful purposes;
``(B) protective purposes, namely those purposes directly
related to protection against toxic chemicals and to
protection against chemical weapons;
``(C) military purposes not connected with the use of
chemical weapons and not dependent on the use of the toxic
properties of chemicals as a method of warefare; or
``(D) law enforcement purposes, including domestic riot
control purposes;
``(7) `national of the United States' has the same
meaning given such term in section 101(a)(22) of the
Immigration and Nationality Act (8 U.S.C. 1101(a)(22));
``(8) `United States,' when used in a geographical sense,
includes all places under the jurisdiction or control of the
United States, including (A) any of the places within the
provisions of section 101(41) of the Federal Aviation Act of
1958, as amended (49 U.S.C. Sec. 40102(41)), (B) any public
aircraft or civil aircraft of the United States, as such
terms are defined in sections 101(36) and (18) of the Federal
Aviation Act of 1958, as amended (49 U.S.C. Secs. 40102(37)
and 40102(17)), and (C) any vessel of the United States, as
such term is defined in section 3(b) of the Maritime Drug
Enforcement Act, as amended (46 U.S.C. App. Sec. 1903(b));
``(9) `person' means (A) any individual, corporation,
partnership, firm, association, trust, estate, public or
private institution, any State or any political subdivision
thereof, or any political entity within a State, any foreign
government or nation or any agency, instrumentality or
political subdivision of any such government or nation, or
other entity; and (B) any legal successor, representative,
agent, or agency of the foregoing; and
``(10) `riot control agent' means any chemical not listed
in a Schedule in the Annex on Chemicals of the Chemical
Weapons Convention, which can produce rapidly in humans
sensory irritation or disabling physical effects which
disappear within a short time following termination of
exposure.

Nothing in paragraphs (3) or (4) of this section shall be
construed to limit verification activities pursuant to part X
or part XI of the Annex on Implementation and Verification of
the Chemical Weapons Convention.''
(b) Clerical Amendments.--The table of chapters for part I
of title 18, United States Code, is amended by--
(1) in the item for chapter 11A relating to child support,
redesignating ``11A'' as ``11B''; and
(2) inserting after the item for chapter 11 the following
new item:

``11A. CHEMICAL WEAPONS......................................227.''....

SEC. 202. EFFECTIVE DATE.

This title shall take effect on the date the Chemical
Weapons Convention enters into force for the United States.

SEC. 203. RESTRICTIONS ON SCHEDULED CHEMICALS.

(a) Schedule 1 Activities.--It shall be unlawful for any
person, or any national of the United States located outside
the United States, to produce, acquire, retain, transfer or
use a chemical listed on Schedule 1 of the Annex on Chemicals
of the Chemical Weapons Convention, unless--
(1) the chemicals are applied to research, medical,
pharmaceutical or protective purposes;
(2) the types and quantities of chemicals are strictly
limited to those that can be justified for such purposes; and
(3) the amount of such chemicals per person at any given
time for such purposes does not exceed a limit to be
determined by the United States National Authority, but in
any case, does not exceed one metric ton.
(b) Extraterritorial Acts.--
(1) It shall be unlawful for any person, or any national of
the United States located outside the United States, to
produce, acquire, retain or use a chemical listed on Schedule
1 of the Annex on Chemicals of the Chemical Weapons
Convention outside the territories of the States Parties to
the Convention or to transfer such chemicals to any person
located outside the territory of the United States, except as
provided for in the Convention for transfer to a person
located

[[Page S3357]]

in the territory of another State Party to the Convention.
(2) Beginning three years after the entry into force of the
Chemical Weapons Convention, it shall be unlawful for any
person, or any national of the United States located outside
the United States, to transfer a chemical listed on Schedule
2 of the Annex on Chemicals of the Convention to any person
located outside the territory of a State Party to the
Convention or to receive such a chemical from any person
located outside the territory of a State Party to the
Convention.
(c) Jurisdiction.--There is jurisdiction by the United
States over the prohibited activity in subsections (a) and
(b) if (1) the prohibited activity takes place in the United
States or (2) the prohibited activity takes place outside of
the United States and is committed by a national of the
United States.

TITLE III--REPORTING

SEC. 301. REPORTING OF INFORMATION.

(a) Reports.--The Department of Commerce shall promulgate
regulations under which each person who produces, processes,
consumes, exports or imports, or proposes to produce,
process, consume, export or import, a chemical substance
subject to the Chemical Weapons Convention shall maintain and
permit access to such records and shall submit to the
Department of Commerce such reports as the United States
National Authority may reasonably require pursuant to the
Chemical Weapons Convention. The Department of Commerce shall
promulgate regulations pursuant to this title expeditiously,
taking into account the written decisions issued by the
Organization for the Prohibition of Chemical Weapons, and may
amend or change such regulations as necessary.
(b) Coordination.--To the extent feasible, the United
States National Authority shall not require any reporting
that is unnecessary, or duplicative of reporting required
under any other Act. Agencies and departments shall
coordinate their actions with other agencies and departments
to avoid duplication of reporting by the affected persons
under this Act or any other Act.

SEC. 302. CONFIDENTIALITY OF INFORMATION.

(a) Freedom of Information Act Exemption for Certain
Chemical Weapons Convention Information.--Any information
reported to, or otherwise obtained by, the United States
National Authority, the Department of Commerce, or any other
agency or department under this Act or under the Chemical
Weapons Convention shall not be required to be publicly
disclosed pursuant to section 552 of title 5, United States
Code.
(b) Prohibited Disclosure and Exceptions.--Information
exempt from disclosure under subsection (a) shall not be
published or disclosed, except that such information--
(1) shall be disclosed or otherwise provided to the
Technical Secretariat or other States Parties to the Chemical
Weapons Convention in accordance with the Convention, in
particular, the provisions of the Annex on the Protection of
Confidential Information;
(2) shall be made available to any committee or
subcommittee of Congress of appropriate jurisdiction upon
the written request of the chairman or ranking minority
member of such committee or subcommittee, except that no
such committee or subcommittee, or member thereof, shall
disclose such information or material;
(3) shall be disclosed to other agencies or departments for
law enforcement purposes with regard to this Act or any other
Act, and may be disclosed or otherwise provided when relevant
in any proceeding under this Act or any other Act, except
that disclosure or provision in such a proceeding shall be
made in such manner as to preserve confidentiality to the
extent practicable without impairing the proceeding; and
(4) may be disclosed, including in the form of categories
of information, if the United States National Authority
determines that such disclosure is in the national interest.
(c) Notice of Disclosure.--If the United States National
Authority, pursuant to subsection (b)(4), proposes to publish
or disclose or otherwise provide information exempted from
disclosure in subsection (a), the United States National
Authority shall, where appropriate, notify the person who
submitted such information of the intent to release such
information. Where notice has been provided, the United
States National Authority may not release such information
until the expiration of 30 days after notice has been
provided.
(d) Criminal Penalty for Wrongful Disclosure.--Any officer
or employee of the United States or former officer or
employee of the United States, who by virtue of such
employment or official position has obtained possession of,
or has access to, information the disclosure or other
provision of which is prohibited by subsection (a), and who
knowing that disclosure or provision of such information is
prohibited by such subsection, willfully discloses or
otherwise provides the information in any manner to any
person, including person located outside the territory of the
United States, not entitled to receive it, shall be fined
under title 18, United States Code, or imprisoned for not
more than five years, or both.
(e) International Inspectors.--The provisions of this
section on disclosure or provision of information shall also
apply to employees of the Technical Secretariat.

SEC. 303. PROHIBITED ACTS.

It shall be unlawful for any person to fail or refuse to
(a) establish or maintain records, (b) submit reports,
notices, or other information to the Department of Commerce
or the United States National Authority, or (c) permit access
to or copying of records, as required by this Act or a
regulation thereunder.

TITLE IV--INSPECTIONS

SEC. 401. INSPECTIONS PURSUANT TO ARTICLE VI OF THE CHEMICAL
WEAPONS CONVENTION.

(a) Authority.--For purposes of administering this Act--
(1) any duly designated member of an inspection team of the
Technical Secretariat may inspect any plant, plant site, or
other facility or location in the United States subject to
inspection pursuant to the Chemical Weapons Convention; and
(2) the National Authority shall designate representatives
who may accompany members of an inspection team of the
Technical Secretariat during the inspection specified in
paragraph (1). The number of duly designated representatives
shall be kept to the minimum necessary.
(b) Notice.--An inspection pursuant to subjection (a) may
be made only upon issuance of a written notice to the owner
and to the operator, occupant or agent in charge of the
premises to be inspected, except that failure to receive a
notice shall not be a bar to the conduct of an inspection.
The notice shall be submitted to the owner and to the
operator, occupant or agent in charge as soon as possible
after the United States National Authority receives it from
the Technical Secretariat. The notice shall include all
appropriate information supplied by the Technical Secretariat
to the United States National Authority regarding the basis
for the selection of the plant site, plant, or other facility
or location for the type of inspection sought, including, for
challenge inspections pursuant to Article IX of the Chemical
Weapons Convention, appropriate evidence or reasons provided
by the requesting State Party to the Convention with regard
to its concerns about compliance with the Chemical Weapons
Convention at the facility or location. A separate notice
shall be given for each such inspection, but a notice shall
not be required for each entry made during the period covered
by the inspection.
(c) Credentials.--If the owner, operator, occupant or agent
in charge of the premises to be inspected is presented, a
member of the inspection team of the Technical Secretariat,
as well as, if present, the representatives of agencies or
departments, shall present appropriate credentials before the
inspection is commenced.
(d) Time Frame for Inspections.--Consistent with the
provisions of the Chemical Weapons Convention, each
inspection shall be commenced and completed with reasonable
promptness and shall be conducted at reasonable times, within
reasonable limits, and in a reasonable manner. The Department
of Commerce shall endeavor to ensure that, to the extent
possible, each inspection is commenced, conducted and
concluded during ordinary working hours, but no inspection
shall be prohibited or otherwise disrupted for commencing,
continuing or concluding during other hours. However, nothing
in this subsection shall be interpreted as modifying the time
frames established in the Chemical Weapons Convention.
(e) Scope.--
(1) Except as provided in paragraph (2) of this subsection
and subsection (f), an inspection conducted under this title
may extend to all things within the premises inspected
(including records, files, papers, processes, controls,
structures and vehicles) related to whether the requirements
of the Chemical Weapons Convention applicable to such
premises have been complied with.
(2) To the extent possible consistent with the obligations
of the United States pursuant to the Chemical Weapons
Convention, no inspection under this title shall extend to--
(A) financial data;
(B) sales and marketing data (other than shipment data);
(C) pricing data;
(D) personnel data;
(E) research data;
(F) patent data;
(G) data maintained for compliance with environmental or
occupational health and safety regulations; or
(H) personnel and vehicles entering and personnel and
personal passenger vehicles exiting the facility.
(f) Facility Agreements.--
(1) Inspection of plants, plant sites, or other facilities
or locations for which the United States has a facility
agreement with the Organization for the Prohibition of
Chemical Weapons shall be conducted in accordance with the
facility agreement.
(2) Facility agreements shall be concluded for plants,
plant sites, or other facilities or locations that are
subject to inspection pursuant to paragraph 4 of Article VI
of the Chemical Weapons Convention unless the owner and the
operator, occupant or agent in charge of the facility and the
Technical Secretariat agree that such an agreement is not
necessary. Facility agreements should be concluded for
plants, plant sites, or other facilities or locations that
are subject to inspection pursuant to paragraphs 5 or 6 of
Article VI of the Chemical Weapons Convention if so requested
by the owner and the operator, occupant or agent in charge of
the facility.
(3) The owner and the operator, occupant or agent in charge
of a facility shall be notified prior to the development of
the agreement relating to that facility and, if they so

[[Page S3358]]

request, may participate in the preparations for the
negotiation of such an agreement. To the extent practicable
consistent with the Chemical Weapons Convention, the owner
and the operator, occupant or agent in charge of a facility
may observe negotiations of the agreement between the United
States and the Organization for the Prohibition of Chemical
Weapons concerning that facility.
(g) Sampling and Safety.--
(1) The Department of Commerce is authorized to require the
provision of samples to a member of the inspection team of
the Technical Secretariat in accordance with the provisions
of the Chemical Weapons Convention. The owner or the
operator, occupant or agent in charge of the premises to be
inspected shall determine whether the sample shall be taken
by representatives of the premises or the inspection team or
other individuals present.
(2) In carrying out their activities, members of the
inspection team of the Technical Secretariat and
representatives of agencies or departments accompanying the
inspection team shall observe safety regulations established
at the premises to be inspected, including those for
protection of controlled environments within a facility and
for personal safety.
(h) Coordination.--To the extent possible consistent with
the obligations of the United States pursuant to the Chemical
Weapons Convention, the representatives of the United States
National Authority, the Department of Commerce and any other
agency or department, if present, shall assist the owner and
the operator, occupant or agent in charge of the premises to
be inspected in interacting with the members of the
inspection team of the Technical Secretariat.

SEC. 402. OTHER INSPECTIONS PURSUANT TO THE CHEMICAL WEAPONS
CONVENTION AND LEAD AGENCY.

(a) Other Inspections.--The provisions of this title shall
apply, as appropriate, to all other inspections authorized by
the Chemical Weapons Convention. For all inspections other
than those conducted pursuant to paragraphs 4, 5 or 6 of
Article VI of the Convention, the term ``Department of
Commerce'' shall be replaced by the term ``Lead Agency'' in
section 401.
(b) Lead Agency.--For the purposes of this title, the term
``Lead Agency'' means the agency or department designated by
the President or the designee of the President to exercise
the functions and powers set forth in the specific provision,
based, inter alia, on the particular responsibilities of the
agency or department within the United States Government and
the relationship of the agency or department to the premises
to be inspected.

SEC. 403. PROHIBITED ACTS.

It shall be unlawful for any person to fail or refuse to
permit entry or inspection, or to disrupt, delay or otherwise
impede an inspection as required by this Act or the Chemical
Weapons Convention.

SEC. 404. PENALTIES.

(a) Civil.--
(1) (A) Any person who violates a provision of section 203
of this Act shall be liable to the United States for a civil
penalty in an amount not to exceed $50,000 for each such
violation.
(B) Any person who violates a provision of section 303 of
this Act shall be liable to the United States for a civil
penalty in an amount not to exceed $5,000 for each such
violation.
(C) Any person who violates a provision of section 403 of
this Act shall be liable to the United States for a civil
penalty in an amount not to exceed $25,000 for each such
violation. For purposes of this subsection, each day such a
violation of section 403 continues shall constitute a
separate violation of section 403.
(2)(A) A civil penalty for a violation of section 203, 303
or 403 of this Act shall be assessed by the Lead Agency by an
order made on the record after opportunity (provided in
accordance with this subparagraph) for a hearing in
accordance with section 554 of title 5, United States Code.
Before issuing such an order, the Lead Agency shall give
written notice to the person to be assessed a civil penalty
under such order of the Lead Agency's proposal to issue such
order and provide such person an opportunity to request,
within 15 days of the date the notice is received by such
person, such a hearing on the order.
(B) In determining the amount of a civil penalty, the Lead
Agency shall take into account the nature, circumstances,
extent and gravity of the violation or violations and, with
respect to the violator, ability to pay, effect on ability to
continue to do business, any history of prior such
violations, the degree of culpability, the existence of an
internal compliance program, and such other matters as
justice may require.
(C) The Lead Agency may compromise, modify or remit, with
or without conditions, any civil penalty which may be imposed
under this subsection. The amount of such penalty, when
finally determined, or the amount agreed upon in compromise,
may be deducted from any sums owing by the United States to
the person charged.
(3) Any person who requested in accordance with paragraph
(2)(A) a hearing respecting the assessment of a civil penalty
and who is aggrieved by an order assessing a civil penalty
may file a petition for judicial review of such order with
the United States Court of Appeals for the District of
Columbia Circuit or for any other circuit in which such
person resides or transacts business. Such a petition may be
filed only within the 30-day period beginning on the date the
order making such assessment was issued.
(4) If any person fails to pay an assessment of a civil
penalty--
(A) after the order making the assessment has become a
final order and if such person does not file a petition for
judicial review of the order in accordance with paragraph
(3); or
(B) after a court in an action brought under paragraph (3)
has entered a final judgment in favor of the Lead Agency;

the Attorney General shall recover the amount assessed (plus
interest at currently prevailing rates from the date of the
expiration of the 30-day period referred to in paragraph (3)
or the date of such final judgment, as the case may be) in an
action brought in any appropriate district court of the
United States. In such an action, the validity, amount and
appropriateness of such penalty shall not be subject to
review.
(b) Criminal.--Any person who knowingly violates any
provision of section 203, 303 or 403 of this Act, shall, in
addition to or in lieu of any civil penalty which may be
imposed under subsection (a) for such violation, be fined
under title 18, United States Code, imprisoned for not more
than two years, or both.

SEC. 405. SPECIFIC ENFORCEMENT.

(a) Jurisdiction.--The district courts of the United States
shall have jurisdiction over civil actions to--
(1) restrain any violation of section 203, 303 or 403 of
this Act; and
(2) compel the taking of any action required by or under
this Act or the Chemical Weapons Convention.
(b) Civil Actions.--A civil action described in subsection
(a) may be brought--
(1) in the case of a civil action described in subsection
(a)(1), in the United States district court for the judicial
district wherein any act, omission, or transaction
constituting a violation of section 203, 303 or 403 of this
Act occurred or wherein the defendant is found or transacts
business; or
(2) in the case of a civil action described in subsection
(a)(2), in the United States district court for the judicial
district wherein the defendant is found or transacts
business. In any such civil action process may be served on a
defendant wherever the defendant may reside or may be found,
whether the defendant resides or may be found within the
United States or elsewhere.

SEC. 406. LEGAL PROCEEDINGS.

(a) Warrants.--
(1) The Lead Agency shall seek the consent of the owner or
the operator, occupant or agent in charge of the premises to
be inspected prior to the initiation of any inspection.
Before or after seeking such consent, the Lead Agency may
seek a search warrant from any official authorized to issue
search warrants. Proceedings regarding the issuance of a
search warrant shall be conducted ex parte, unless otherwise
requested by the Lead Agency. The Lead Agency shall provide
to the official authorized to issue search warrants all
appropriate information supplied by the Technical Secretariat
to the United States National Authority regarding the basis
for the selection of the plant site, plant, or other facility
or location for the type of inspection sought, including, for
challenge inspections pursuant to Article IX of the Chemical
Weapons Convention, appropriate evidence or reasons provided
by the requesting State Party to the Convention with regard
to its concerns about compliance with the Chemical Weapons
Convention at the facility or location. The Lead Agency shall
also provide any other appropriate information available to
it relating to the reasonableness of the selection of the
plant, plant site, or other facility or location for the
inspection.
(2) The official authorized to issue search warrants shall
promptly issue a warrant authorizing the requested inspection
upon an affidavit submitted by the Lead Agency showing that--
(A) the Chemical Weapons Convention is in force for the
United States;
(B) the plant site, plant, or other facility or location
sought to be inspected is subject to the specific type of
inspection requested under the Chemical Weapons Convention;
(C) the procedures established under the Chemical Weapons
Convention and this Act for initiating an inspection have
been complied with; and
(D) the Lead Agency will ensure that the inspection is
conducted in a reasonable manner and will not exceed the
scope or duration set forth in or authorized by the Chemical
Weapons Convention or this Act.
(3) The warrant shall specify the type of inspection
authorized; the purpose of the inspection; the type of plant
site, plant, or other facility or location to be inspected;
to the extent possible, the items, documents and areas that
may be inspected; the earliest commencement and latest
concluding dates and times of the inspection; and the
identities of the representatives of the Technical
Secretariat, if known, and, if applicable, the
representatives of agencies or departments.
(b) Subpoenas.--In carrying out this Act, the Lead Agency
may by subpoena require the attendance and testimony of
witnesses and the production of reports, papers, documents,
answers to questions and other information that the Lead
Agency deems necessary. Witnesses shall be paid the same fees
and mileage that are paid witnesses in the

[[Page S3359]]

courts of the United States. In the event of contumacy,
failure or refusal of any person to obey any such subpoena,
any district court of the United States in which venue is
proper shall have jurisdiction to order any such person to
comply with such subpoena. Any failure to obey such an order
of the court is punishable by the court as a contempt
thereof.
(c) Injunctions and Other Orders.--No court shall issue an
injunction or other order that would limit the ability of the
Technical Secretariat to conduct, or the United States
National Authority or the Lead Agency to facilitate,
inspections as required or authorized by the Chemical Weapons
Convention.

SEC. 407. AUTHORITY.

(a) Regulations.--The Lead Agency may issue such
regulations as are necessary to implement and enforce this
title and the provisions of the Chemical Weapons Convention,
and amend or revise them as necessary.
(b) Enforcement.--The Lead Agency may designate officers or
employees of the agency or department to conduct
investigations pursuant to this Act. In conducting such
investigations, those officers or employees may, to the
extent necessary or appropriate for the enforcement of this
Act, or for the imposition of any penalty or liability
arising under this Act, exercise such authorities as are
conferred upon them by other laws of the United States.

SEC. 408. SAVING PROVISION.

The purpose of this Act is to enable the United States to
comply with its obligations under the Chemical Weapons
Convention. Accordingly, in addition to the authorities set
forth in this Act, the President is authorized to issue such
executive orders, directives or regulations as are necessary
to fulfill the obligations of the United States under the
Chemical Weapons Convention, provided such executive orders,
directives or regulations do not exceed the requirements
specified in the Chemical Weapons Convention.
____

U.S. Arms Control and

Disarmament Agency,

Washington, DC, March 27, 1997.
Hon. Richard G. Lugar,
Committee on Foreign Relations,
U.S. Senate.
Dear Senator Lugar: On behalf of the Administration, I
hereby submit for consideration the ``Chemical Weapons
Convention Implementation Act of 1997.'' This proposed
legislation is identical to the legislation submitted by the
Administration in 1995. The Chemical Weapons Convention (CWC)
was signed by the United States in Paris on January 13, 1993,
and was submitted by President Clinton to the United States
Senate on November 23, 1993, for its advice and consent to
ratification. The CWC prohibits, inter alia, the use,
development, production, acquisition, stockpiling, retention,
and direct or indirect transfer of chemical weapons.
The President has urged the Senate to provide its advice
and consent to ratification as early as possible this year so
that the United States will be an original State Party and
can continue to lead the fight against these terrible
weapons. The CWC will enter into force, with or without the
United States, on April 29, 1997. if the United States has
not ratified by that time, we will not have a seat on the
governing council which will oversee implementation of the
Convention and U.S. nationals will not be able to serve as
inspectors and in other key positions. Here at home, the U.S.
chemical industry could lose hundreds of millions of dollars
and many well-paying jobs because of CWC-mandated trade
restrictions against non-Parties. As Secretaries Albright and
Cohen have recently underscored, ratifying the CWC before it
enters into force is in the best interests of the United
States.
The CWC contains a number of provisions that require
implementing legislation to give them effect within the
United States. These include: carrying out verification
activities, including inspections of U.S. facilities;
collecting and protecting the confidentiality of data
declarations by U.S. chemical and related companies; and
establishing a ``National Authority'' to serve as the liaison
between the United States and the international organization
established by the CWC.
In addition, the CWC requires the United States to prohibit
all individuals and legal entities, such as corporations,
within the United States, as well as all individuals outside
the United States, possessing U.S. citizenship, from engaging
in activities that are prohibited under the Convention. As
part of this obligation, the CWC requires the United States
to enact ``penal'' legislation implementing this prohibition
(i.e., legislation that penalizes conduct, either by
criminal, administrative, military or other sanctions).
Expeditious enactment of implementing legislation is very
important to the ability of the United States to fulfill its
obligations under the Convention. Enactment will enable the
United States to collect the required information from
industry, to provide maximum protection for confidential
information, and to allow the inspections called for in the
Convention. It will also enable the United States to outlaw
all activities related to chemical weapons, except CWC
permitted activities such as chemical defense programs. This
will help fight chemical terrorism by penalizing not just the
use, but also the development, production and transfer of
chemical weapons. Thus, the enactment of legislation by the
United States and other CWC States Parties will make it much
easier for law enforcement officials to investigate and
punish chemical terrorists early, before chemical weapons are
used.
As the President indicated in his transmittal letter of the
Convention: ``The CWC is in the best interests of the United
States. Its provisions will significantly strengthen United
States, allied and international security, and enhance global
and regional stability.'' Therefore, I urge the Congress to
enact the necessary implementing legislation as soon as
possible.
The Office of Management and Budget advises that there is
no objection to the submission of this proposal and its
enactment is in accord with the President's program.
Sincerely,
John D. Holum,
Director.
______

By Mr. ROTH (for himself and Mr. Moynihan):
S. 612. A bill to amend section 355 of the Internal Revenue Code of
1986 to prevent the avoidance of corporate tax on prearranged sales of
corporate stock, and for other purposes; to the Committee on Finance.

CORPORATE ACQUISITION TRANSACTIONS LEGISLATION

Mr. ROTH. Mr. President, I ask unanimous consent that the following
joint statement by the ranking member of the Finance Committee, Senator
Moynihan, and myself, be inserted in the Record at this point, along
with the text of a bill we are introducing today.
There being no objection, the material was ordered to be printed in
the Record, as follows:

S. 612

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

SECTION 1. APPLICATION OF SECTION 355 TO DISTRIBUTIONS
FOLLOWED BY ACQUISITIONS AND TO INTRAGROUP
TRANSACTIONS.

(a) Distributions Followed by Acquisitions.--Section 355 of
the Internal Revenue Code of 1986 (relating to distribution
of stock and securities of a controlled corporation) is
amended by adding at the end the following new subsection:
``(e) Recognition of Gain Where Certain Distributions of
Stock or Securities Are Followed by Acquisition.--
``(1) General rule.--If there is a distribution to which
this subsection applies, the following rules shall apply:
``(A) Acquisition of controlled corporation.--If there is
an acquisition described in paragraph (2)(A)(ii) with respect
to any controlled corporation (or any successor thereof), any
stock or securities in the controlled corporation shall not
be treated as qualified property for purposes of subsection
(c)(2) of this section or section 361(c)(2).
``(B) Acquisition of distributing corporation.--If there is
an acquisition described in paragraph (2)(A)(ii) with respect
to the distributing corporation (or any successor thereof),
the controlled corporation shall recognize gain in an amount
equal to the amount of net gain which would be recognized if
all the assets of the distributing corporation (immediately
after the distribution) were sold (at such time) for fair
market value. Any gain recognized under the preceding
sentence shall be treated as long-term capital gain and shall
be taken into account for the taxable year which includes the
day after the date of such distribution.
``(2) Distributions to which subsection applies.--
``(A) In general.--This subsection shall apply to any
distribution--
``(i) to which this section (or so much of section 356 as
relates to this section) applies, and
``(ii) which is part of a plan (or series of related
transactions) pursuant to which a person acquires stock
representing a 50-percent or greater interest in the
distributing corporation or any controlled corporation (or
any successor of either).
``(B) Plan presumed to exist in certain cases.--If a person
acquires stock representing a 50-percent or greater interest
in the distributing corporation or any controlled corporation
(or any successor of either) during the 4-year period
beginning on the date which is 2 years before the date of the
distribution, such acquisition shall be treated as pursuant
to a plan described in subparagraph (A)(ii) unless it is
established that the distribution and the acquisition are not
pursuant to a plan or series of related transactions.
``(C) Certain acquisitions not taken into account.--If--
``(i) a person acquires stock in any controlled corporation
by reason of holding stock in the distributing corporation,
and
``(ii) such person did not acquire the stock in the
distributing corporation pursuant to a plan described in
subparagraph (A)(ii),

the acquisition described in clause (i) shall not be taken
into account for purposes of subparagraph (A)(ii) or (B).
``(D) Coordination with subsection (d).--This subsection
shall not apply to any distribution to which subsection (d)
applies.
``(3) Definition and special rules.--For purposes of this
subsection--
``(A) 50-percent or greater interest.--The term `50-percent
or greater interest' has

[[Page S3360]]

the meaning given such term by subsection (d)(4).
``(B) Distributions in title 11 or similar case.--Paragraph
(1) shall not apply to any distribution made in a title 11 or
similar case (as defined in section 368(a)(3)).
``(C) Aggregation and attribution rules.--
``(i) Aggregation.--The rules of paragraph (7) of
subsection (d) shall apply.
``(ii) Attribution.--Section 318(a)(2) shall apply in
determining whether a person holds stock or securities in any
corporation. Except as provided in regulations, section
318(a)(2)(C) shall be applied without regard to the phrase
`50 percent or more in value' for purposes of the preceding
sentence.
``(D) Statute of limitations.--If there is an acquisition
to which paragraph (1) (A) or (B) applies--
``(i) the statutory period for the assessment of any
deficiency attributable to any part of the gain recognized
under this subsection by reason of such acquisition shall not
expire before the expiration of 3 years from the date the
Secretary is notified by the taxpayer (in such manner as the
Secretary may by regulations prescribe) that such acquisition
occurred, and
``(ii) such deficiency may be assessed before the
expiration of such 3-year period notwithstanding the
provisions of any other law or rule of law which would
otherwise prevent such assessment.
``(4) Regulations.--The Secretary shall prescribe such
regulations as may be necessary to carry out the purposes of
this subsection, including regulations--
``(A) providing for the application of this subsection
where there is more than 1 controlled corporation,
``(B) treating 2 or more distributions as 1 distribution
where necessary to prevent the avoidance of such purposes,
and
``(C) providing for the application of rules similar to the
rules of subsection (d)(6) where appropriate for purposes of
paragraph (2)(B).''
(b) Section 355 Not To Apply to Certain Intragroup
Transactions.--Section 355 of the Internal Revenue Code of
1986, as amended by subsection (a), is amended by adding at
the end the following new subsection:
``(f) Section Not To Apply to Certain Intragroup
Transactions.--Except as provided in regulations, this
section shall not apply to the distribution of stock from 1
member of an affiliated group filing a consolidated return to
another member of such group, and the Secretary shall provide
proper adjustments for the treatment of such distribution,
including (if necessary) adjustments to--
``(1) the adjusted basis of any stock which--
``(A) is in a corporation which is a member of such group,
and
``(B) is held by another member of such group, and
``(2) the earnings and profits of any member of such
group.''
(c) Effective Date.--
(1) In general.--The amendments made by this section shall
apply to distributions after April 16, 1997.
(2) Transition rule for distributions followed by
acquisitions.--The amendments made by subsection (a) shall
not apply to any distribution after April 16, 1997, if such
distribution is--
(A) made pursuant to a written agreement which was (subject
to customary conditions) binding on such date and at all
times thereafter,
(B) described in a ruling request submitted to the Internal
Revenue Service on or before such date, or
(C) described on or before such date in a public
announcement or in a filing with the Securities and Exchange
Commission required solely by reason of the distribution.

This paragraph shall not apply to any written agreement,
ruling request, or public announcement or filing unless it
identifies the acquirer of the distributing corporation or
any controlled corporation, whichever is applicable.
____

JOINT INTRODUCTORY STATEMENT OF SENATORS ROTH AND MOYNIHAN

Background

Several recent news reports describe corporate acquisition
transactions in which one corporation distributes the stock of one--or
more--of its subsidiaries to its shareholders--in a so-called spin-
off--and, pursuant to a pre-arranged plan, either the distributed
subsidiary or the old parent corporation is acquired by another,
unrelated corporation. Often, the corporation that is to be acquired
borrows or assumes a large amount of debt incurred prior to the spin-
off, while the proceeds of such indebtedness are retained by the other
corporation.
For Federal income tax purposes, the initial distribution generally
is tax free pursuant to section 355 of the Internal Revenue Code and
the subsequent acquisition is tax free pursuant to one of the various
reorganization provisions described in section 368. Such positions are
consistent with the holding in the case of Commissioner v. Mary Archer
W. Morris Trust, 367 F.2d 794 (4th Cir. 1966) and published IRS
rulings.
Congress did not intend that section 355 apply to insulate these
transactions from tax. Section 355 was intended to permit tax free
restructurings of several businesses among existing shareholders, with
limitations to prevent the bail-out of corporate earnings and profits
to the shareholders as capital gains. The recent transactions that
raise concerns have very little to do with individual shareholder tax
planning. Rather, they are pre-arranged structures designed to avoid
corporate-level gain recognition. In essence, these transactions
resemble sales.
Today's introduced legislation is intended to treat transactions
occurring after April 16, 1997, the general effective date of the bill,
as sales at the corporate level.
A technical explanation of the legislation is provided below. This
legislation affects complex transactions and additional or alternative
legislative changes also may be appropriate. For example, it may be
appropriate to amend or repeal present-law section 355(d), and to treat
certain asset acquisitions as stock acquisitions. Written comments on
the issues raised by this bill are welcome.

Description of Proposal

Acquisitions of distributing or controlled corporations pursuant to
plan

The proposal would adopt additional restrictions under section 355.
Under the proposal, if pursuant to a plan or arrangement in existence
on the date of distribution, either the controlled or distributing
corporation is acquired, gain would be recognized by the other
corporation as of the date of the distribution.
Whether a corporation is acquired would be determined under rules
similar to those of present-law section 355(d), except that
acquisitions would not be restricted to purchase transactions. Thus, an
acquisition would occur if a person--or persons acting in concert--
acquired more than 50 percent of the vote or value of the stock of the
controlled or distributing corporation pursuant to a plan or
arrangement. For example, assume a corporation (``P'') distributes the
stock of its wholly-owned subsidiary (``S'') to its shareholders. If,
pursuant to a plan or arrangement, either P or S is acquired, the
proposal would apply to require gain recognition by the corporation not
acquired. It is anticipated that certain asset acquisitions would be
treated as stock acquisitions.
Acquisitions occurring within the 4-year period beginning 2 years
before the date of distribution would be presumed to have occurred
pursuant to a plan or arrangement. Taxpayers could avoid gain
recognition by showing that an acquisition occurring during this 4-year
period was unrelated to the distribution.
In the case of an acquisition of the controlled corporation, the
amount of gain recognized by the distributing corporation would be the
amount of gain that the distributing corporation would have recognized
had the stock of the controlled corporation been sold for fair market
value on the date of distribution. In the case of an acquisition of the
distributing corporation, the amount of gain recognized by the
controlled corporation would be the amount of net gain that the
distributing corporation would have recognized had it sold its assets
for fair market value immediately after the distribution. This gain
would be treated as long-term capital gain. No adjustment to the basis
of the stock or assets of either corporation would be allowed by reason
of the recognition of the gain.
The proposal would not apply to a distribution pursuant to a title 11
or similar case.
The Treasury Department would be authorized to prescribe regulations
as necessary to carry out the purposes of the proposal, including
regulations to provide for the application of the proposal in the case
of multiple distributions.

Treatment of distributions within affiliated groups

Except as provided in Treasury regulations, section 355 would not
apply to a distribution of stock of one member of an affiliated group
of corporations filing a consolidated return to another member. In the
case of a distribution of stock within an affiliated group, the
Secretary of the Treasury would be instructed to provide appropriate
rules for the treatment of the distribution,

[[Page S3361]]

including rules governing adjustments to the adjusted basis of the
stock and the earnings and profits of the members of the group.

Effective Date

The proposal would be effective for distributions after April 16,
1997, unless the distribution is: First, made pursuant to a written
agreement with an acquirer which was (subject to customary conditions)
binding on or before such date and at all times thereafter; second,
described in a ruling request that identifies the acquirer and is
submitted to the IRS on or before such date; third, described in a
Securities and Exchange Commission (``SEC'') filing made on or before
such date, to the extent such filing was required to be made on account
of the distribution and identifies the acquirer; or fourth, described
in a public announcement that identifies the acquirer on or before such
date. The exceptions for written agreements, IRS ruling requests, SEC
filings, and public announcements would not apply to distributions of
stock within a consolidated group of corporations.
______

By Mr. THOMPSON (for himself and Mr. FRIST):

S. 613. A bill to provide that Kentucky may not tax compensation paid
to a resident of Tennessee for certain services performed at Fort
Campbell, KY; to the Committee on Finance.

FORT CAMPBELL TAX FAIRNESS ACT OF 1997

Mr. THOMPSON. Mr. President, today I am introducing legislation to
provide much-needed tax relief to the residents of my State who are
employed as civilians on Fort Campbell, KY. These Clarksville area
Tennesseans are hard working citizens who, I believe, are being taxed
unfairly by the Commonwealth of Kentucky.
Fort Campbell is the home of the Army's famous 101st Airborne
Division. This installation straddles the border between Tennessee and
Kentucky. In fact, 80 percent of it lies within the State of Tennessee.
But because the post office is located on the Kentucky side of the
base, it is best known to most people as Fort Campbell, KY.
Civilian residents of both Tennessee and Kentucky are employed by the
Federal Government to perform important nonmilitary functions at Fort
Campbell. Approximately 2,000 of the Tennesseans who work on post are
employed on the Kentucky side in the schools, at the post office, at
the post exchange, and on the primary airfield. Unfortunately, these
Tennesseans are forced to pay income tax to the Commonwealth of
Kentucky of up to 6 percent of their wages, in addition to the sales
and excise taxes they pay to their home State of Tennessee.
Because the State of Tennessee does not have an income tax,
Kentuckians employed on the Tennessee side of Fort Campbell do not pay
income tax to the State of Tennessee. Nor are Kentuckians required to
pay Tennessee sales tax on Fort Campbell. All of the facilities on the
Tennessee side of Fort Campbell to which Kentuckians have access, the
KFC and the Taco Bell, for example, are exempt from State sales tax. It
is only when a Kentucky resident leaves post that he or she becomes
subject to Tennessee sales tax on purchases made in the State.
Mr. President, I believe it is unfair of Kentucky to impose income
tax on Tennesseans, because Tennesseans who work on the Kentucky side
of Fort Campbell do not consume any services provided by the
Commonwealth. Fort Campbell is a Federal installation. All emergency
fire, police, and medical services on post are provided by the Federal
Government, not the Commonwealth of Kentucky. All roads on Fort
Campbell, both on the Kentucky and the Tennessee side, are maintained
by the Federal Government. Water and sewer services are paid for by the
Federal Government. If a Tennessean who worked on the Kentucky side of
Fort Campbell were laid off, he or she would not be eligible to
obtain unemployment benefits from Kentucky, despite the fact that he or
she had been paying income tax to the Commonwealth of Kentucky.
Finally, Tennesseans have no voice in the Kentucky legislature to
affect change to this law. Tennesseans are being unfairly taxed without
the benefit of representation--a principle anathema to this country. As
I see it, the Commonwealth of Kentucky is receiving free money from
residents of Tennessee who work on a Federal installation that happens
to border their State.

And although Kentucky likes to argue that the residents of
Clarksville are not forced to work on the Kentucky side of Fort
Campbell, employees are often moved on the base where a change of
buildings means a change of State. A Tennessean forced to move into a
Fort Campbell job across the border takes an automatic pay cut of up to
6 percent--just for moving across the street. This situation has been
the cause of significant morale problems at Fort Campbell. According to
Kentucky, however, those employees can escape paying the income tax by
quitting their jobs. I find this alternative an unacceptable one. It is
for this reason that I am introducing legislation to prohibit Kentucky
from imposing its income tax on these Tennesseans employed either by
the Federal Government or by a contractor with the Federal Government
at Fort Campbell. I am pleased to be joined by my colleague, Senator
Frist. Congressman Ed Bryant has introduced the similar legislation in
the other body.
Let me provide some history on this issue. According to legislation
enacted by Congress in 1940, the Commonwealth of Kentucky is permitted
to impose its income tax on Federal employees working in the State.
This legislation, the Buck Act, repealed a prior law prohibiting States
from imposing income tax on individuals who live or work on Federal
property. However, Congress has also granted exemptions from State
income tax to classes of Federal employees based on their obvious
special circumstances: military personnel and Members of Congress and
their employees. In addition, Congress enacted legislation in 1990 to
exempt Amtrak employees from State taxation in the States in which they
do not reside but through which they travel while working. Congress
intended these exemptions to provide relief from inequitable
situations. The Tennesseans employed at Fort Campbell also merit an
exemption.
Mr. President, I firmly believe that a State has the right to raise
revenue in whatever manner its residents believe is most appropriate.
In the case of Tennessee, residents have chosen sales and excise taxes
to fund their cost of government--only one of six States in the United
States without an income tax. But it should be noted that Kentucky has
entered into reciprocal tax agreements with surrounding income tax
States to ensure that Kentuckians are treated fairly. Unfortunately,
Kentucky has refused to negotiate any type of reciprocal tax agreement
with Tennessee, because it knows it has Tennesseans over a barrel.
Prohibiting the Commonwealth of Kentucky from taxing Tennesseans
working on the Kentucky side of Fort Campbell is the best way to
resolve this inequitable situation.
During this week in April Americans are reminded of their obligations
to government. I believe that Americans are willing to pay their fair
share of taxes, but citizens should not be expected to pay tax to a
government from which they receive nothing and in which they have no
voice.

____________________