[Congressional Record Volume 143, Number 50 (Thursday, April 24, 1997)]
[Senate]
[Pages S3662-S3687]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Mr. McCAIN:
S. 641. A bill to require the Federal Communications Commission to
eliminate from its regulations the restrictions on the cross-ownership
of broadcasting stations and newspapers; to the Committee on Commerce,
Science, and Transportation.
THE NEWSPAPER OWNERSHIP ACT
Mr. McCAIN. Mr. President, I am pleased to introduce the Newspaper
Ownership Act. This legislation would eliminate one of the most archaic
provisions remaining in telecommunications law: that which prohibits a
[[Page S3663]]
newspaper from being co-owned with a local radio or television station.
Mr. President, at a time when the number of outlets for news,
information, and entertainment has expanded exponentially, and at a
time when other restrictions on ownership of mass media companies have
been rethought and liberalized one fossil from the age of Walter
Winchell and the Dumont Network remains--the law that keeps one entity
from owning both a newspaper and a radio or TV station in the same
market. It's time to finally get rid of this relic.
The newspaper/broadcast cross-ownership prohibition dates from a day
when there was a realistic fear that common control of both media in
the same locale could result in the public's receiving only one point
of view on important issues.
Radio and television outlets abound. Many are supplemented by
multichannel news and entertainment outlets like cable TV and satellite
broadcasting. Even in the smallest markets, diversity of viewpoints is
as close as clicking on the Internet.
It is not surprising that, in this era of media diversity, newspapers
have found it tough going, their numbers steadily declining over the
years. In this environment, the infusion of resources that would result
from allowing them to be owned by local radio and TV station owners
would be most beneficial. Moreover, is there any reason to think that
an attempt to make a newspaper walk in the lock-step with a co-owned
broadcast station would not be readily detected by the public, and
rejected in favor of more diverse sources of information? It is
difficult to believe that, given the almost bewildering variety in the
numbers and types of information sources available in even the smallest
markets, any seeker of information could be either so passive or so
defenseless.
Mr. President, I introduce this bill in an effort to engage informed
debate on this outdated restriction. I ask unanimous consent that the
text of the bill be printed on the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 641
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. CROSS-OWNERSHIP OF BROADCASTING AND NEWSPAPERS.
(a) Rule Changes Required.--The Federal Communications
Commission shall modify section 73.3555 of its regulations
(47 C.F.R. 73.3555) by eliminating any provisions limiting
the granting or renewal of an AM, FM, or TV broadcast station
license to any party (including parties under common control)
on the basis of the ownership, operation, or control by such
party of a daily newspaper.
(b) Deadline for Action.--The Federal Communications
Commission shall complete all action necessary to complete
the modifications required by subsection (a) within 90 days
after the date of enactment of this Act.
______
By Mr. TORRICELLI:
S. 642. A bill to amend section 842 of title 18, United States Code,
relating to explosive materials; to the Committee on the Judiciary.
the explosives protection act of 1997
Mr. TORRICELLI. Mr. President, I introduce the Explosives
Protection Act of 1997. I do so just over two years after the tragic
bombing of the federal building in Oklahoma City, because I hope that
this bill will, in some small way, prevent future bombings--whether by
terrorists of symbolic targets, malcontents of random ones, or even
spouses involved in marital disputes.
This bill, while not directly related to the circumstances in
Oklahoma City, is a first step towards protecting the American people
from those who would use explosives to do them harm.
Not many people realize, Mr. President, just how few restrictions on
the use and sale of explosives really exist. While we have increasingly
restricted the number of people who can obtain and use a firearm, we
have been lax in extending these prohibitions to explosives.
For instance, while we prohibit illegal aliens from obtaining a gun,
we allow them to obtain explosives without restriction. And this same
divergence applies to those who have been dishonorably discharged from
the armed forces, those who have renounced U.S. citizenship, people who
have acted in such a way as to have restraining orders issued against
them, and those with domestic violence convictions. Each of these
categories of persons are prohibited from obtaining firearms, but face
no such prohibition on obtaining explosive material.
Additionally, while this Congress has been moving to prevent
nonimmigrant legal aliens from obtaining a gun, in response to the
recent shooting at the Empire State Building, we have neglected to work
towards this same goal with regards to explosives.
Mr. President, many of these differences in the law are simply
oversights--Congress has often acted to limit the use and sale of
firearms, and has neglected to bring explosives law into line. And in
so doing, we have made it all too easy for many of the most dangerous
or least accountable members of society to obtain materials which can
result in an equal or even greater loss of life.
Congress has already made the determination that certain members of
society should not have access to firearms, and the same logic clearly
applies to dangerous and destructive explosive materials. It is time to
bring the explosives law into line with gun laws, and this is all my
bill does.
Specifically, my bill would take the list of categories of people who
cannot obtain firearms and would add any of those categories not
currently covered under the explosives law. Additionally, my bill would
insert the Durbin-Kennedy nonimmigrant provisions into the law to
protect us from persons entering the country and quickly moving to
purchase and use deadly explosive material.
Mr. President, this is a simple bill meant only to correct
longstanding gaps and loopholes in current law. I urge my colleagues to
support the bill, and I hope we can quickly move to get this passed and
protect Americans from future acts of explosive destruction.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 642
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 ``Explosives Protection Act of
1997''.
SEC 2. PROHIBITIONS RELATING TO EXPLOSIVE MATERIALS.
(a) Prohibition of Sale, Delivery, or Transfer of Explosive
Materials to Certain Individuals.--Section 842 of title 18,
United States Code, is amended by striking subsection (d) and
inserting the following:
``(d) Prohibition of Sale, Delivery, or Transfer of
Explosive Materials to Certain Individuals.--It shall be
unlawful for any licensee to knowingly sell, deliver, or
transfer any explosive materials to any individual who--
``(1) is less than 21 years of age;
``(2) is under indictment for, or has been convicted in any
court of, a crime punishable by imprisonment for a term
exceeding 1 year;
``(3) is a fugitive from justice;
``(4) is an unlawful user of or addicted to any controlled
substance (as defined in section 102 of the Controlled
Substances Act (21 U.S.C. 802));
``(5) has been adjudicated as a mental defective or has
been committed to any mental institution;
``(6) being an alien--
``(A) is illegally or unlawfully in the United States; or
``(B) except as provided in subsection (l), has been
admitted to the United States under a nonimmigrant visa (as
that term is defined in section 101(a)(26) of the Immigration
and Nationality Act (8 U.S.C. 1101(a)(26));
``(7) has been discharged from the Armed Forces under
dishonorable conditions;
``(8) having been a citizen of the United States, has
renounced his citizenship;
``(9) is subject to a court order that restrains such
person from harassing, stalking, or threatening an intimate
partner of such person or child of such intimate partner or
person, or engaging in other conduct that would place an
intimate partner in reasonable fear of bodily injury to the
partner or child, except that this paragraph shall only apply
to a court order that--
``(A) was issued after a hearing of which such person
received actual notice, and at which such person had the
opportunity to participate; and
``(B)(i) includes a finding that such person represents a
credible threat to the physical safety of such intimate
partner or child; and
``(ii) by its terms explicitly prohibits the use, attempted
use, or threatened use of physical force against such
intimate partner or child that would reasonably be expected
to cause bodily injury; or
``(10) has been convicted in any court of a misdemeanor
crime of domestic violence.''.
[[Page S3664]]
(b) Prohibition on Shipping, Transporting, Possession, or
Receipt of Explosives by Certain Individuals.--Section 842 of
title 18, United States Code, is amended by striking
subsection (p) and inserting the following:
``(p) Prohibition on Shipping, Transporting, Possession, or
Receipt of Explosives by Certain Individuals.--It shall be
unlawful for any person to ship or transport in interstate or
foreign commerce, or possess, in or affecting commerce, any
explosive, or to receive any explosive that has been shipped
or transported in interstate or foreign commerce, if that
person--
``(1) is less than 21 years of age;
``(2) has been convicted in any court, of a crime
punishable by imprisonment for a term exceeding 1 year;
``(3) is a fugitive from justice;
``(4) is an unlawful user of or addicted to any controlled
substance (as defined in section 102 of the Controlled
Substances Act (21 U.S.C. 802));
``(5) has been adjudicated as a mental defective or who has
been committed to a mental institution;
``(6) being an alien--
``(A) is illegally or unlawfully in the United States; or
``(B) except as provided in subsection (l), has been
admitted to the United States under a nonimmigrant visa (as
that term is defined in section 101(a)(26) of the Immigration
and Nationality Act (8 U.S.C. 1101(a)(26));
``(7) has been discharged from the Armed Forces under
dishonorable conditions;
``(8) having been a citizen of the United States, has
renounced his citizenship; or
``(9) is subject to a court order that--
``(A) was issued after a hearing of which such person
received actual notice, and at which such person had an
opportunity to participate;
``(B) restrains such person from harassing, stalking, or
threatening an intimate partner of such person or child of
such intimate partner or person, or engaging in other conduct
that would place an intimate partner in reasonable fear of
bodily injury to the partner or child; and
``(C)(i) includes a finding that such person represents a
credible threat to the physical safety of such intimate
partner or child; and
``(ii) by its terms explicitly prohibits the use, attempted
use, or threatened use of physical force against such
intimate partner or child that would reasonably be expected
to cause bodily injury; or
``(10) has been convicted in any court of a misdemeanor
crime of domestic violence.''.
(c) Exceptions and Waiver for Certain Individuals.--Section
842 of title 18, United States Code, is amended by adding at
the end the following:
``(l) Exceptions and Waiver for Certain Individuals.--
``(1) Definitions.--In this subsection--
``(A) the term `alien' has the same meaning as in section
101(a)(3) of the Immigration and Nationality Act (8 U.S.C.
1101(a)(3)); and
``(B) the term `nonimmigrant visa' has the same meaning as
in section 101(a)(26) of the Immigration and Nationality Act
(8 U.S.C. 1101(a)(26)).
``(2) Exceptions.--Subsections (d)(5)(B) and (p)(5)(B) do
not apply to any alien who has been lawfully admitted to the
United States pursuant to a nonimmigrant visa, if that alien
is--
``(A) admitted to the United States for lawful hunting or
sporting purposes;
``(B) a foreign military personnel on official assignment
to the United States;
``(C) an official of a foreign government or a
distinguished foreign visitor who has been so designated by
the Department of State; or
``(D) a foreign law enforcement officer of a friendly
foreign government entering the United States on official law
enforcement business.
``(3) Waiver.--
``(A) In general.--Any individual who has been admitted to
the United States under a nonimmigrant visa and who is not
described in paragraph (2), may receive a waiver from the
applicability of subsection (d)(5)(B) or (p)(5)(B), if--
``(i) the individual submits to the Attorney General a
petition that meets the requirements of subparagraph (B); and
``(ii) the Attorney General approves the petition.
``(B) Petitions.--Each petition under subparagraph (A)(i)
shall--
``(i) demonstrate that the petitioner has resided in the
United States for a continuous period of not less than 180
days before the date on which the petition is submitted under
this paragraph; and
``(ii) include a written statement from the embassy or
consulate of the petitioner, authorizing the petitioner to
engage in any activity prohibited under subsection (d) or
(p), as applicable, and certifying that the petitioner would
not otherwise be prohibited from engaging in that activity
under subsection (d) or (p), as applicable.''.
______
By Mr. DURBIN (for himself, Mr. Gregg, and Mr. Lautenberg):
S. 643. A bill to prohibit the Federal Government from providing
insurance, reinsurance, or noninsured crop disaster assistance for
tobacco; to the Committee on Agriculture, Nutrition, and Forestry.
THE TOBACCO SUBSIDY REDUCTION ACT OF 1997
Mr. DURBIN. Mr. President, people often ask their elected officials,
``If smoking is so dangerous, why does Congress subsidize tobacco?''
Today, my colleagues Senator Gregg of New Hampshire and Senator
Lautenberg of New Jersey are joining me in introducing legislation that
will give my colleagues an answer to this question.
The Tobacco Subsidy Reduction Act of 1997 ends the largest direct
federal subsidy of tobacco. Specifically, this legislation prohibits
the federal government from offering crop insurance or providing crop
insurance subsidies for tobacco. For consistency, it also prohibits
payments for tobacco under the Non-Insured Disaster Assistance Program,
an alternative risk management program created in the 1996 Farm Bill
for crops not eligible for the crop insurance program. I ask that the
full text of the legislation appear in the Record following my
statement.
Tobacco growing and processing is one of the most lucrative
industries in America. To protect their profits despite the health
dangers of their product, tobacco growers created the ``no net cost''
price support program. But a variety of taxpayer subsidies to tobacco
remain, including crop insurance, extension services, and other
programs assisting tobacco production and sales.
Last year, the federal government spent $98 million on tobacco-
related subsidies and programs. These costs include $68 million for
crop insurance losses beyond the premiums tobacco farmers paid, and $11
million for overhead costs of administering the crop insurance program
for tobacco crops. This year, federal tobacco-related subsidies are
estimated to amount to $67 million, including $48 million related to
crop insurance.
In an era of tight budgets, there are better uses for this money. It
makes no budgetary sense to subsidize a crop that causes an enormous
amount of disease, disability, and death.
This amendment will not affect the tobacco price support program, so
it will not drive any tobacco farmers out of business. It will merely
get the federal government out of the business of paying for these
specific subsidies for this deadly crop.
Cigarettes and smokeless tobacco products kill more than 400,000
Americans every year of cancer, heart disease, and other illnesses.
These products also disable hundreds of thousands of other Americans
through emphysema and other respiratory illnesses. It's time to take
another step toward getting the federal government out of this
business.
I invite my colleagues to cosponsor the Tobacco Subsidy Reduction Act
and tell their constituents that they are working to cut government
tobacco subsidies.
I ask unanimous consent that a copy of the bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 643
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 ``Tobacco Subsidy Reduction
Act of 1997''.
SEC. 2. PROHIBITION OF FEDERAL INSURANCE, REINSURANCE, OR
NONINSURED CROP DISASTER ASSISTANCE FOR
TOBACCO.
(a) Crop Insurance.--
(1) Definition of agricultural commodity.--Section 518 of
the Federal Crop Insurance Act (7 U.S.C. 1518) is amended--
(A) by striking the section heading and all that follows
through ``as used in this title, means'' and inserting the
following:
``SEC. 518. DEFINITION OF AGRICULTURAL COMMODITY.
``(a) Definition.--In this title, the term `agricultural
commodity' means'';
(B) by striking ``tobacco,''; and
(C) by adding at the end the following:
``(b) Exception.--In this title, the term `agricultural
commodity' does not include tobacco. The Corporation may not
insure, provide reinsurance for insurers of, or pay any part
of the premium related to the coverage of a crop of
tobacco.''.
(2) Conforming amendments.--Section 508 of the Federal Crop
Insurance Act (7 U.S.C. 1508) is amended--
(A) in the first sentence of subsection (a)(2), by striking
``cases of tobacco and'' and inserting ``case of''; and
(B) in subsection (h)(9)(A), by inserting ``, excluding
tobacco,'' after ``commodity''.
(b) Noninsured Crop Disaster Assistance.--Section 196(a)(2)
of Agricultural Market Transition Act (7 U.S.C. 7333(a)(2))
is amended by adding at the end the following:
``(C) Crops specifically excluded.--The term `eligible
crop' does not include tobacco.
[[Page S3665]]
The Secretary may not make assistance available under this
section to cover losses to a crop of tobacco.''.
(c) Application of Amendments.--
(1) In general.--Subject to paragraph (2), the amendments
made by this section shall apply with respect to the 1997 and
subsequent crops of tobacco.
Existing contracts.--The amendments made by this section
shall not apply to a contract of insurance of the Federal
Crop Insurance Corporation, or a contract of insurance
reinsured by the Corporation, in existence on the date of
enactment of this Act.
______
By Mr. D'AMATO:
S. 644. A bill to amend the Public Health Service Act and the
Employee Retirement Income Security Act of 1974 to establish standards
for relationships between group health plans and health insurance
issuers with enrollees, health professionals, and providers; to the
Committee on Labor and Human Resources.
the patient access to responsible care act
Mr. D'AMATO. Mr. President, I am introducing this bill in an effort
to protect the vast majority of patients in this country. Currently, in
order to control the cost of health care, managed care organizations
often place limits on the delivery of necessary medical services. I
believe American families must be guaranteed basic health rights when
dealing with HMOs and managed care providers. The bottom line in
medicine must be the health of the patient, not the profits of any
given company. This legislation, the Patient Access to Responsible Care
Act, will meet this obligation.
With this Act, I seek to establish basic protections for patients and
health care providers in order to ensure the best medical care for
patients. I envision these basic provisions giving Americans a set of
health rights, in the form of a Patients' Bill of Rights, when dealing
with HMOs and other health insurance plans. These rights include:
The Right to Choose Your Own Doctor. This bill will allow patients to
select their own doctors within their plan and change their selection
of doctor as the patient feels necessary. It also gives patients, who
are in managed care-only health plans, the option to see doctors
outside their HMOs for an additional fee.
The Right to Quality Health Care. This legislation will ensure that
doctors are not prohibited or limited in any way from discussing a
patient's health status, treatment options or any other medical
communications. It also stops HMOs from using financial incentives for
doctors to deny or limit care to patients. We must make sure that
health care decisions are based on sound medical criteria and not the
financial bottom line.
The Right to Justice. This Act closes loopholes in current law that
allow the vast majority of health insurance plans to escape legal
responsibility for decisions causing needless injury or death to a
patient. Currently, self-insured managed care plans cannot be held
liable for a patient's wrongful death or personal injuries resulting
from plan policies even when those policies directly contributed to the
patient's death or injury. This is wrong and this bill would guarantee
that if HMO policies hurt patients, the HMO will be held accountable
for their actions.
In addition, within a patient's health plan, this bill guarantees
patients can quickly and easily appeal adverse decisions by their
manage care plans. We've heard too many horror stories of patients who
have been denied treatment by a health plans' policy. In addition, the
appeals process is too bureaucratic and lengthy, sometimes resulting in
tragic consequences. We must always put the quality of patient care
first.
The Right to Full Disclosure. This bill also provides that health
insurance plans make available to each patient a list of what health
care is covered, what are the plans costs and profits, and how much is
the plan spending on marketing and other non-medical costs. This is a
sort of ``truth-in-lending'' statement for health plans.
When I first considered introducing this Patients' Bill of Rights, I
was concerned about how prevalent a need there was for this type of
legislation. I quickly found numerous instances where patients were
suffering adverse outcomes from poor medical decisions made by managed
care companies. The most publicized recent case is Corcoran versus
United Health Care. In this case, Ms. Corcoran, a Louisiana woman with
a high risk pregnancy, was admitted to a hospital under her physician's
orders. She was discharged from the hospital after her health plan
refused to pay for her care. The health plan would only authorize a
visiting nurse to check on the woman at home. At one point, when the
nurse was absent, the unborn child went into distress and died. The
U.S. Court of Appeals for the 5th Circuit ruled that the woman had no
right to sue the HMO for damages because the insurance plan was
governed under ERISA laws. These laws preempt state insurance laws
allowing patients to seek due process. Americans cannot expect health
care with this type of managed health care.
As I said before, there are numerous instances where managed care is
revealed to be ruled by a company's profits. In New York, a diabetic
developed an infection in his foot that had become gangrenous and had
spread all the way to his groin. Almost his entire leg was infected and
the blood vessels clogged. His doctor, a cardio-vascular specialist,
feared that the gentleman could lose his foot if treatment was not
initiated immediately. So, as a responsible physician, he admitted his
patient to the hospital where he was immediately treated with
intravenous antibiotics to combat the infection. Once in the hospital,
the gentleman's HMO contacted the doctor to find out how long he
anticipated the hospital stay would be. Since the man had clogged blood
vessels and had to undergo a vascular bypass in order to be treated,
the doctor estimated a stay between 10 and 15 days.
Upon learning this, an HMO official went to the gentleman's hospital
room, and without even notifying the doctor, told the man that ``he
could watch Oprah and be treated as well from home with a visiting
nurse.'' The gentleman's doctor repeatedly argued with the HMO that it
was not medically safe to release his patient from the hospital. But,
with fluid still draining from his wounds and the doctor still
protesting against the early discharge, the gentleman was sent home
just a week after being admitted. The next day, the HMO sent a nurse--
not a cardiovascular specialist or even a doctor, but a nurse--to his
home to evaluate his condition and to show his wife how to change the
dressing covering his wounds. With this state of affairs, the man
eventually required surgery. With the early discharge and the lack of
responsible care on the part of the HMO, the surgery had to be
postponed because the patient's blood had become too thin to safely
perform surgery.
In Georgia, a 2-year old boy was suffering from a high fever which
did not respond to medication. His parents followed the insurance
company's instructions for pre-authorization of emergency room care and
attempted to drive 42 miles to the preferred hospital. The couple
passed five emergency rooms along the way. Before they could reach the
preferred hospital, their son went into cardiac arrest and stopped
breathing. The child slipped into a coma, developed gangrene in his
extremities, and subsequently lost his arms and legs to amputation.
In California, a young girl was diagnosed with Wilm's tumor, a rare
childhood kidney cancer. The families new HMO required that the girl's
surgery be performed by a surgeon within the managed care plan. None of
the plan's surgeons had any experience with Wilm's tumor. The family
chose to use an expert surgeon outside of the plan who had a proven
track record with this type of tumor. The surgery was a success and the
child has fully recovered. However, the HMO denied coverage for going
outside of their system causing the family to enter a 2 year legal
battle with the plan. In the first ever enforcement action against an
HMO for a patient complaint, the state imposed a $500,000 fine against
the plan for denying appropriate medical care.
In Colorado, a 75-year old woman was diagnosed with Kidney Cancer,
but her plan refused to authorize surgery to remove the kidney and
tumor of such an elderly woman. The plan only relented and allowed the
surgery to be performed when a Congressman finally intervened on her
behalf. The lady's cancer is now in full remission.
In Texas, a 17-year old Texas girl was critically injured in a head-
on car crash that left her with severe head trauma, a broken back, a
crushed pelvis, and numerous other injuries. She
[[Page S3666]]
eventually pulled through, but her health plan refused to pay $40,000
of her hospital bill because her family had not received ``prior
authorization'' for her emergency admission to the hospital--even
though the hospital was a preferred provider for the plan.
These stories are not isolated incidents. They do not happen just in
New York and Georgia, but across the nation. They speak for the
thousands of patients across the country who have been denied access to
the responsible care they need and deserve.
Mr. President, I believe it would be beneficial for my colleagues if
I summarized what rights this bill will provide for patients across the
country and how this bill meets those rights.
First of all, we are trying to increase patient access to plans and
doctors. Patients, including those in under served inner-city and rural
areas, are ensured their choice of doctor within the plan. The bill
will ensure that health plans have enough doctors to guarantee this
choice. Patients will also have access to any specialist required by
their medical condition within the plan. In addition, patients are to
have emergency health care without the burden of seeking prior approval
from their health plan.
Also in this Act, patients will have an expanded choice of health
care providers inside and outside of the network. People can either go
through the network, or choose a plan that allows them to go out of the
network, although at a higher cost. They will be allowed to select
their own personal doctors within their plan and change their selection
as the patient feels necessary. Patients will also be given the option
to choose a health insurance plan that covers health care options not
offered in the network. The managed care plan would reimburse the costs
of these services based on rates consistent with those negotiated under
the plan. Patients would be responsible for any remaining costs.
This bill will include a prohibition on gag rules. Patients are
ensured that the health plan will not in any way limit doctors from
discussing the patient's health status, treatment options or any other
medical communication. Health plans can not offer any incentives,
financial or otherwise, for doctors to deny or limit any health care.
In addition, this Bill of Rights forces HMOs to be responsible for
their decisions. Currently, HMOs can not be held liable for wrongful
death or personal injury suffered by the medical decision making
policies of the plan, action may only be brought against the doctor and
the hospital. Even if the HMO or the plan had in place a policy which
directly contributed to death or injury of a patient, they are
protected. This bill changes that by ensuring that managed care plans
are held responsible for any medical decisions that they make. This
bill says that if you make a medical decision, no matter who you are,
you will be responsible for your actions. ERISA was never intended to
be used as a shield for health plans providing negligent medical care.
Also, there will be a provision providing due process on patient
appeals claims made to their heath plans. Within the plan, patients
will be guaranteed the ability to quickly and easily appeal adverse
decisions.
The act will establish an information disclosure provision allowing
patients to make informed decisions about which health plan would be
best for them. This is a sort of ``Truth in Lending'' statement for
HMO's. Every health plan will be required to disclose information about
plan benefits, appeals procedures, plan performance measures, history
of patient satisfaction, as well as the number and type of health care
providers participating in the network. Based on this information,
patients will be guaranteed the ability to make informed decisions
about the quality of their health care and the managed care companies
they choose from.
In addition, there will be doctor and patient protections from
discrimination. The provision allows any doctor who meets a clear set
of standards the opportunity to be a member of any managed care plan.
In addition, patients will not be discriminated against based on their
personal background or preexisting conditions, such as long-term and
costly diseases.
Mr. President, we have an obligation to set minimum health care
standards in the private sector to protect American families and ensure
they have access to quality health care. We cannot allow the profits of
the company to get in the way of patient health.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 644
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Patient
Access to Responsible Care Act of 1997''.
(b) Table of Contents.--The table of contents of this Act
is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Patient protection standards under the Public Health Service
Act.
``Part C--Patient Protection Standards
``Sec. 2770. Notice; additional definitions; construction.
``Sec. 2771. Enrollee access to care.
``Sec. 2772. Enrollee choice of health professionals and providers.
``Sec. 2773. Nondiscrimination against enrollees and in the selection
of health professionals; equitable access to networks.
``Sec. 2774. Prohibition of interference with certain medical
communications.
``Sec. 2775. Development of plan policies.
``Sec. 2776. Due process for enrollees.
``Sec. 2777. Due process for health professionals and providers.
``Sec. 2778. Information reporting and disclosure.
``Sec. 2779. Confidentiality; adequate reserves.
``Sec. 2780. Quality improvement program.
Sec. 3. Patient protection standards under the Employee Retirement
Income Security Act of 1974.
Sec. 4. Non-preemption of State law respecting liability of group
health plans.
SEC. 2. PATIENT PROTECTION STANDARDS UNDER THE PUBLIC HEALTH
SERVICE ACT.
(a) Patient Protection Standards.--Title XXVII of the
Public Health Service Act is amended--
(1) by redesignating part C as part D, and
(2) by inserting after part B the following new part:
``Part C--Patient Protection Standards
``SEC. 2770. NOTICE; ADDITIONAL DEFINITIONS; CONSTRUCTION.
``(a) Notice.--A health insurance issuer under this part
shall comply with the notice requirement under section 711(d)
of the Employee Retirement Income Security Act of 1974 with
respect to the requirements of this part as if such section
applied to such issuer and such issuer were a group health
plan.
``(b) Additional Definitions.--For purposes of this part:
``(1) Enrollee.--The term `enrollee' means, with respect to
health insurance coverage offered by a health insurance
issuer, an individual enrolled with the issuer to receive
such coverage.
``(2) Health professional.--The term `health professional'
means a physician or other health care practitioner licensed,
accredited, or certified to perform specified health services
consistent with State law.
``(3) Network.--The term `network' means, with respect to a
health insurance issuer offering health insurance coverage,
the participating health professionals and providers through
whom the plan or issuer provides health care items and
services to enrollees.
``(4) Network coverage.--The term `network coverage' means
health insurance coverage offered by a health insurance
issuer that provides or arranges for the provision of health
care items and services to enrollees through participating
health professionals and providers.
``(5) Participating.--The term `participating' means, with
respect to a health professional or provider, a health
professional or provider that provides health care items and
services to enrollees under network coverage under an
agreement with the health insurance issuer offering the
coverage.
``(6) Prior authorization.--The term `prior authorization'
means the process of obtaining prior approval from a health
insurance issuer as to the necessity or appropriateness of
receiving medical or clinical services for treatment of a
medical or clinical condition.
``(7) Provider.--The term `provider' means a health
organization, health facility, or health agency that is
licensed, accredited, or certified to provide health care
items and services under applicable State law.
``(8) Service area.--The term `service area' means, with
respect to a health insurance issuer with respect to health
insurance coverage, the geographic area served by the issuer
with respect to the coverage.
``(9) Utilization review.--The term `utilization review'
means prospective, concurrent, or retrospective review of
health care items and services for medical necessity,
appropriateness, or quality of care that includes prior
authorization requirements for coverage of such items and
services.
[[Page S3667]]
``(c) No Requirement for Any Willing Provider.--Nothing in
this part shall be construed as requiring a health insurance
issuer that offers network coverage to include for
participation every willing provider or health professional
who meets the terms and conditions of the plan or issuer.
``SEC. 2771. ENROLLEE ACCESS TO CARE.
``(a) General Access.--
``(1) In general.--Subject to paragraphs (2), and (3), a
health insurance issuer shall establish and maintain adequate
arrangements, as defined by the applicable State authority,
with a sufficient number, mix, and distribution of health
professionals and providers to assure that covered items and
services are available and accessible to each enrollee under
health insurance coverage--
``(A) in the service area of the issuer;
``(B) in a variety of sites of service;
``(C) with reasonable promptness (including reasonable
hours of operation and after-hours services);
``(D) with reasonable proximity to the residences and
workplaces of enrollees; and
``(E) in a manner that--
``(i) takes into account the diverse needs of enrollees,
and
``(ii) reasonably assures continuity of care.
For a health insurance issuer that serves a rural or
medically underserved area, the issuer shall be treated as
meeting the requirement of this subsection if the issuer has
arrangements with a sufficient number, mix, and distribution
of health professionals and providers having a history of
serving such areas. The use of telemedicine and other
innovative means to provide covered items and services by a
health insurance issuer that serves a rural or medically
underserved area shall also be considered in determining
whether the requirement of this subsection is met.
``(2) Rule of construction.--Nothing in this subsection
shall be construed as requiring a health insurance issuer to
have arrangements that conflict with its responsibilities to
establish measures designed to maintain quality and control
costs.
``(3) Definitions.--For purposes of paragraph (1):
``(A) Medically underserved area.--The term `medically
underserved area' means an area that is designated as a
health professional shortage area under section 332 of the
Public Health Service Act or as a medically underserved area
for purposes of section 330 or 1302(7) of such Act.
``(B) Rural area.--The term `rural area' means an area that
is not within a Standard Metropolitan Statistical Area or a
New England County Metropolitan Area (as defined by the
Office of Management and Budget).
``(b) Emergency and Urgent Care.--
``(1) In general.--A health insurance issuer shall--
``(A) assure the availability and accessibility of
medically or clinically necessary emergency services and
urgent care services within the service area of the issuer 24
hours a day, 7 days a week;
``(B) require no prior authorization for items and services
furnished in a hospital emergency department to an enrollee
(without regard to whether the health professional or
hospital has a contractual or other arrangement with the
issuer) with symptoms that would reasonably suggest to a
prudent layperson an emergency medical condition (including
items and services described in subparagraph (C)(iii));
``(C) cover (and make reasonable payments for)--
``(i) emergency services,
``(ii) services that are not emergency services but are
described in subparagraph (B),
``(iii) medical screening examinations and other ancillary
services necessary to diagnose, treat, and stabilize an
emergency medical condition, and
``(iv) urgent care services, without regard to whether the
health professional or provider furnishing such services has
a contractual (or other) arrangement with the issuer; and
``(D) make prior authorization determinations for--
``(i) services that are furnished in a hospital emergency
department (other than services described in clauses (i) and
(iii) of subparagraph (C)), and
``(ii) urgent care services, within the time periods
specified in (or pursuant to) section 2776(a)(8).
``(2) Definitions.--For purposes of this subsection:
``(A) Emergency medical condition.--The term `emergency
medical condition' means a medical condition (including
emergency labor and delivery) manifesting itself by acute
symptoms of sufficient severity (including severe pain) such
that a prudent layperson, who possesses an average knowledge
of health and medicine, could reasonably expect the absence
of immediate medical attention could reasonably be expected
to result in--
``(i) placing the patient's health in serious jeopardy,
``(ii) serious impairment to bodily functions, or
``(iii) serious dysfunction of any bodily organ or part.
``(B) Emergency services.--The term `emergency services'
means health care items and services that are necessary for
the diagnosis, treatment, and stabilization of an emergency
medical condition.
``(C) Urgent care services.--The term `urgent care
services' means health care items and services that are
necessary for the treatment of a condition that--
``(i) is not an emergency medical condition,
``(ii) requires prompt medical or clinical treatment, and
``(iii) poses a danger to the patient if not treated in a
timely manner, as defined by the applicable State authority
in consultation with relevant treating health professionals
or providers.
``(c) Specialized Services.--
``(1) In general.--A health insurance issuer offering
network coverage shall demonstrate that enrollees have access
to specialized treatment expertise when such treatment is
medically or clinically indicated in the professional
judgment of the treating health professional, in consultation
with the enrollee.
``(2) Definition.--For purposes of paragraph (1), the term
`specialized treatment expertise' means expertise in
diagnosing or treating--
``(A) unusual diseases or conditions, or
``(B) diseases and conditions that are unusually difficult
to diagnose or treat.
``(d) Incentive Plans.--
``(1) In general.--In the case of a health insurance issuer
that offers network coverage, any health professional or
provider incentive plan operated by the issuer with respect
to such coverage shall meet the following requirements:
``(A) No specific payment is made directly or indirectly
under the plan to a professional or provider or group of
professionals or providers as an inducement to reduce or
limit medically necessary services provided with respect to a
specific enrollee.
``(B) If the plan places such a professional, provider, or
group at substantial financial risk (as determined by the
Secretary) for services not provided by the professional,
provider, or group, the issuer--
``(i) provides stop-loss protection for the professional,
provider, or group that is adequate and appropriate, based on
standards developed by the Secretary that take into account
the number of professionals or providers placed at such
substantial financial risk in the group or under the coverage
and the number of individuals enrolled with the issuer who
receive services from the professional, provider, or group,
and
``(ii) conducts periodic surveys of both individuals
enrolled and individuals previously enrolled with the issuer
to determine the degree of access of such individuals to
services provided by the issuer and satisfaction with the
quality of such services.
``(C) The issuer provides the Secretary with descriptive
information regarding the plan, sufficient to permit the
Secretary to determine whether the plan is in compliance with
the requirements of this paragraph.
``(2) In this subsection, the term `health professional or
provider incentive plan' means any compensation arrangement
between a health insurance issuer and a health professional
or provider or professional or provide group that may
directly or indirectly have the effect of reducing or
limiting services provided with respect to individuals
enrolled with the issuer.
``SEC. 2772. ENROLLEE CHOICE OF HEALTH PROFESSIONALS AND
PROVIDERS.
``(a) Choice of Personal Health Professional.--A health
insurance issuer shall permit each enrollee under network
coverage to--
``(1) select a personal health professional from among the
participating health professionals of the issuer, and
``(2) change that selection as appropriate.
``(b) Point-of-Service Option.--
``(1) In general.--If a health insurance issuer offers to
enrollees health insurance coverage which provides for
coverage of services only if such services are furnished
through health professionals and providers who are members of
a network of health professionals and providers who have
entered into a contract with the issuer to provide such
services, the issuer shall also offer to such enrollees (at
the time of enrollment) the option of health insurance
coverage which provides for coverage of such services which
are not furnished through health professionals and providers
who are members of such a network.
``(2) Fair premiums.--The amount of any additional premium
required for the option described in paragraph (1) may not
exceed an amount that is fair and reasonable, as established
by the applicable State authority, in consultation with the
National Association of Insurance Commissioners, based on the
nature of the additional coverage provided.
``(3) Cost-sharing.--Under the option described in
paragraph (1), the health insurance coverage shall provide
for reimbursement rates for covered services offered by
health professionals and providers who are not participating
health professionals or providers that are not less than the
reimbursement rates for covered services offered by
participating health professionals and providers. Nothing in
this paragraph shall be construed as protecting an enrollee
against balance billing by a health professional or provider
that is not a participating health professional or provider.
``(c) Continuity of Care.--A health insurance issuer
offering network coverage shall--
``(1) ensure that any process established by the issuer to
coordinate care and control costs does not create an undue
burden, as defined by the applicable State authority, for
enrollees with special health care needs or chronic
conditions;
[[Page S3668]]
``(2) ensure direct access to relevant specialists for the
continued care of such enrollees when medically or clinically
indicated in the judgment of the treating health
professional, in consultation with the enrollee;
``(3) in the case of an enrollee with special health care
needs or a chronic condition, determine whether, based on the
judgment of the treating health professional, in consultation
with the enrollee, it is medically or clinically necessary to
use a specialist or a care coordinator from an
interdisciplinary team to ensure continuity of care; and
``(4) in circumstances under which a change of health
professional or provider might disrupt the continuity of care
for an enrollee, such as--
``(A) hospitalization, or
``(B) dependency on high-technology home medical equipment,
provide for continued coverage of items and services
furnished by the health professional or provider that was
treating the enrollee before such change for a reasonable
period of time.
For purposes of paragraph (4), a change of health
professional or provider may be due to changes in the
membership of an issuer's health professional and provider
network, changes in the health coverage made available by an
employer, or other similar circumstances.
``SEC. 2773. NONDISCRIMINATION AGAINST ENROLLEES AND IN THE
SELECTION OF HEALTH PROFESSIONALS; EQUITABLE
ACCESS TO NETWORKS.
``(a) Nondiscrimination Against Enrollees.--No health
insurance issuer may discriminate (directly or through
contractual arrangements) in any activity that has the effect
of discriminating against an individual on the basis of race,
national origin, gender, language, socioeconomic status, age,
disability, health status, or anticipated need for health
services.
``(b) Nondiscrimination in Selection of Network Health
Professionals.--A health insurance issuer offering network
coverage shall not discriminate in selecting the members of
its health professional network (or in establishing the terms
and conditions for membership in such network) on the basis
of--
``(1) the race, national origin, gender, age, or disability
(other than a disability that impairs the ability of an
individual to provide health care services or that may
threaten the health of enrollees) of the health professional;
or
``(2) the health professional's lack of affiliation with,
or admitting privileges at, a hospital (unless such lack of
affiliation is a result of infractions of quality standards
and is not due to a health professional's type of license).
``(c) Nondiscrimination in Access to Health Plans.--While
nothing in this section shall be construed as an `any willing
provider' requirement (as referred to in section 2770(c)), a
health insurance issuer shall not discriminate in
participation, reimbursement, or indemnification against a
health professional, who is acting within the scope of the
health professional's license or certification under
applicable State law, solely on the basis of such license or
certification.
``SEC. 2774. PROHIBITION OF INTERFERENCE WITH CERTAIN MEDICAL
COMMUNICATIONS.
``(a) In General.--The provisions of any contract or
agreement, or the operation of any contract or agreement,
between a health insurance issuer and a health professional
shall not prohibit or restrict the health professional from
engaging in medical communications with his or her patient.
``(b) Nullification.--Any contract provision or agreement
described in subsection (a) shall be null and void.
``(c) Medical communication defined.--For purposes of this
section, the term `medical communication' means a
communication made by a health professional with a patient of
the health professional (or the guardian or legal
representative of the patient) with respect to--
``(1) the patient's health status, medical care, or legal
treatment options;
``(2) any utilization review requirements that may affect
treatment options for the patient; or
``(3) any financial incentives that may affect the
treatment of the patient.
``SEC. 2775. DEVELOPMENT OF PLAN POLICIES.
``A health insurance issuer that offers network coverage
shall establish mechanisms to consider the recommendations,
suggestions, and views of enrollees and participating health
professionals and providers regarding--
``(1) the medical policies of the issuer (including
policies relating to coverage of new technologies,
treatments, and procedures);
``(2) the utilization review criteria and procedures of the
issuer;
``(3) the quality and credentialing criteria of the issuer;
and
``(4) the medical management procedures of the issuer.
``SEC. 2776. DUE PROCESS FOR ENROLLEES.
``(a) Utilization Review.--The utilization review program
of a health insurance issuer shall--
``(1) be developed (including any screening criteria used
by such program) with the involvement of participating health
professionals and providers;
``(2) to the extent consistent with the protection of
proprietary business information (as defined for purposes of
section 552 of title 5, United States Code) release, upon
request, to affected health professionals, providers, and
enrollees the screening criteria, weighting elements, and
computer algorithms used in reviews and a description of the
method by which they were developed;
``(3) uniformly apply review criteria that are based on
sound scientific principles and the most recent medical
evidence;
``(4) use licensed, accredited, or certified health
professionals to make review determinations (and for services
requiring specialized training for their delivery, use a
health professional who is qualified through equivalent
specialized training and experience);
``(5) subject to reasonable safeguards, disclose to health
professionals and providers, upon request, the names and
credentials of individuals conducting utilization review;
``(6) not compensate individuals conducting utilization
review for denials of payment or coverage of benefits;
``(7) comply with the requirement of section 2771 that
prior authorization not be required for emergency and related
services furnished in a hospital emergency department;
``(8) make prior authorization determinations--
``(A) in the case of services that are urgent care services
described in section 2771(b)(2)(C), within 30 minutes of a
request for such determination, and
``(B) in the case of other services, within 24 hours after
the time of a request for determination;
``(9) include in any notice of such determination an
explanation of the basis of the determination and the right
to an immediate appeal;
``(10) treat a favorable prior authorization review
determination as a final determination for purposes of making
payment for a claim submitted for the item or service
involved unless such determination was based on false
information knowingly supplied by the person requesting the
determination;
``(11) provide timely access, as defined by the applicable
State authority, to utilization review personnel and, if such
personnel are not available, waives any prior authorization
that would otherwise be required; and
``(12) provide notice of an initial determination on
payment of a claim within 30 days after the date the claim is
submitted for such item or service, and include in such
notice an explanation of the reasons for such determination
and of the right to an immediate appeal.
``(b) Appeals Process.--A health insurance issuer shall
establish and maintain an accessible appeals process that--
``(1) reviews an adverse prior authorization
determination--
``(A) for urgent care services, described in subsection
(a)(8)(A), within 1 hour after the time of a request for such
review, and
``(B) for other services, within 24 hours after the time of
a request for such review;
``(2) reviews an initial determination on payment of claims
described in subsection (a)(12) within 30 days after the date
of a request for such review;
``(3) provides for review of determinations described in
paragraphs (1) and (2) by an appropriate clinical peer
professional who is in the same or similar specialty as would
typically provide the item or service involved (or another
licensed, accredited, or certified health professional
acceptable to the plan and the person requesting such
review); and
``(4) provides for review of--
``(A) the determinations described in paragraphs (1), (2),
and (3), and
``(B) enrollee complaints about inadequate access to any
category or type of health professional or provider in the
network of the issuer or other matters specified by this
part,
by an appropriate clinical peer professional who is in the
same or similar specialty as would typically provide the item
or service involved (or another licensed, accredited, or
certified health professional acceptable to the issuer and
the person requesting such review) that is not involved in
the operation of the plan or in making the determination or
policy being appealed.
The procedures specified in this subsection shall not be
construed as preempting or superseding any other reviews or
appeals an issuer is required by law to make available.
``SEC. 2777. DUE PROCESS FOR HEALTH PROFESSIONALS AND
PROVIDERS.
``(a) In General.--A health insurance issuer with respect
to its offering of network coverage shall--
``(1) allow all health professionals and providers in its
service area to apply to become a participating health
professional or provider during at least one period in each
calendar year;
``(2) provide reasonable notice to such health
professionals and providers of the opportunity to apply and
of the period during which applications are accepted;
``(3) provide for review of each application by a
credentialing committee with appropriate representation of
the category or type of health professional or provider;
``(4) select participating health professionals and
providers based on objective standards of quality developed
with the suggestions and advice of professional associations,
health professionals, and providers;
``(5) make such selection standards available to--
``(A) those applying to become a participating provider or
health professional;
``(B) health plan purchasers, and
``(C) enrollees;
``(6) when economic considerations are taken into account
in selecting participating
[[Page S3669]]
health professionals and providers, use objective criteria
that are available to those applying to become a
participating provider or health professional and enrollees;
``(7) adjust any economic profiling to take into account
patient characteristics (such as severity of illness) that
may result in atypical utilization of services;
``(8) make the results of such profiling available to
insurance purchasers, enrollees, and the health professional
or provider involved;
``(9) notify any health professional or provider being
reviewed under the process referred to in paragraph (3) of
any information indicating that the health professional or
provider fails to meet the standards of the issuer;
``(10) offer a health professional or provider receiving
notice pursuant to the requirement of paragraph (9) with an
opportunity to--
``(A) review the information referred to in such paragraph,
and
``(B) submit supplemental or corrected information;
``(11) not include in its contracts with participating
health professionals and providers a provision permitting the
issuer to terminate the contract `without cause';
``(12) provide a due process appeal that conforms to the
process specified in section 412 of the Health Care Quality
Improvement Act of 1986 (42 U.S.C. 11112) for all
determinations that are adverse to a health professional or
provider; and
``(13) unless a health professional or provider poses an
imminent harm to enrollees or an adverse action by a
governmental agency effectively impairs the ability to
provide health care items and services, provide--
``(A) reasonable notice of any decision to terminate a
health professional or provider `for cause' (including an
explanation of the reasons for the determination),
``(B) an opportunity to review and discuss all of the
information on which the determination is based, and
``(C) an opportunity to enter into a corrective action
plan, before the determination becomes subject to appeal
under the process referred to in paragraph (12).
``(b) Rule of Construction.--The requirements of subsection
(a) shall not be construed as preempting or superseding any
other reviews and appeals a health insurance issuer is
required by law to make available.
``SEC. 2778. INFORMATION REPORTING AND DISCLOSURE.
``(a) In General.--A health insurance issuer offering
health insurance coverage shall provide enrollees and
prospective enrollees with information about--
``(1) coverage provisions, benefits, and any exclusions--
``(A) by category of service,
``(B) by category or type of health professional or
provider, and
``(C) if applicable, by specific service, including
experimental treatments;
``(2) the percentage of the premium charged by the issuer
that is set aside for administration and marketing of the
issuer;
``(3) the percentage of the premium charged by the issuer
that is expended directly for patient care;
``(4) the number, mix, and distribution of participating
health professionals and providers;
``(5) the ratio of enrollees to participating health
professionals and providers by category and type of health
professional and provider;
``(6) the expenditures and utilization per enrollee by
category and type of health professional and provider;
``(7) the financial obligations of the enrollee and the
issuer, including premiums, copayments, deductibles, and
established aggregate maximums on out-of-pocket costs, for
all items and services, including--
``(A) those furnished by health professionals and providers
that are not participating health professionals and
providers, and
``(B) those furnished to an enrollee who is outside the
service area of the coverage;
``(8) utilization review requirements of the issuer
(including prior authorization review, concurrent review,
post-service review, post-payment review, and any other
procedures that may lead to denial of coverage or payment for
a service);
``(9) financial arrangements and incentives that may--
``(A) limit the items and services furnished to an
enrollee,
``(B) restrict referral or treatment options, or
``(C) negatively affect the fiduciary responsibility of a
health professional or provider to an enrollee;
``(10) other incentives for health professionals and
providers to deny or limit needed items or services;
``(11) quality indicators for the issuer and participating
health professionals and providers, including performance
measures such as appropriate referrals and prevention of
secondary complications following treatment;
``(12) grievance procedures and appeals rights under the
coverage, and summary information about the number and
disposition of grievances and appeals in the most recent
period for which complete and accurate information is
available; and
``(13) the percentage of utilization review determinations
made by the issuer that disagree with the judgment of the
treating health professional or provider and the percentage
of such determinations that are reversed on appeal.
``(b) Regulations.--The Secretary, in collaboration with
the Secretary of Labor, shall issue regulations to
establish--
``(1) the styles and sizes of type to be used with respect
to the appearance of the publication of the information
required under subsection (a);
``(2) standards for the publication of information to
ensure that such publication is--
``(A) readily accessible, and
``(B) in common language easily understood,
by individuals with little or no connection to or
understanding of the language employed by health
professionals and providers, health insurance issuers, or
other entities involved in the payment or delivery of health
care services, and
``(3) the placement and positioning of information in
health plan marketing materials.
``SEC. 2779. CONFIDENTIALITY; ADEQUATE RESERVES.
``(a) Confidentiality.--
``(1) In general.--A health insurance issuer shall
establish mechanisms and procedures to ensure compliance with
applicable Federal and State laws to protect the
confidentiality of individually identifiable information held
by the issuer with respect to an enrollee, health
professional, or provider.
``(2) Definition.--For purposes of paragraph (1), the term
`individually identifiable information' means, with respect
to an enrollee, a health professional, or a provider, any
information, whether oral or recorded in any medium or form,
that identifies or can readily be associated with the
identity of the enrollee, the health professional, or the
provider.
``(b) Financial Reserves; Solvency.--A health insurance
issuer shall--
``(1) meet such financial reserve or other solvency-related
requirements as the applicable State authority may establish
to assure the continued availability of (and appropriate
payment for) covered items and services for enrollees; and
``(2) establish mechanisms specified by the applicable
State authority to protect enrollees, health professionals,
and providers in the event of failure of the issuer.
Such requirements shall not unduly impede the establishment
of health insurance issuers owned and operated by health care
professionals or providers or by non-profit community-based
organizations.
``SEC. 2780. QUALITY IMPROVEMENT PROGRAM.
``(a) In General.--A health insurance issuer shall
establish a quality improvement program (consistent with
subsection (b)) that systematically and continuously assesses
and improves--
``(1) enrollee health status, patient outcomes, processes
of care, and enrollee satisfaction associated with health
care provided by the issuer; and
``(2) the administrative and funding capacity of the issuer
to support and emphasize preventive care, utilization, access
and availability, cost effectiveness, acceptable treatment
modalities, specialists referrals, the peer review process,
and the efficiency of the administrative process.
``(b) Functions.--A quality improvement program established
pursuant to subsection (a) shall--
``(1) assess the performance of the issuer and its
participating health professionals and providers and report
the results of such assessment to purchasers, participating
health professionals and providers, and administrative
personnel;
``(2) demonstrate measurable improvements in clinical
outcomes and plan performance measured by identified
criteria, including those specified in subsection (a)(1); and
``(3) analyze quality assessment data to determine specific
interactions in the delivery system (both the design and
funding of the health insurance coverage and the clinical
provision of care) that have an adverse impact on the quality
of care.''.
(b) Application to Group Health Insurance Coverage.--
(1) Subpart 2 of part A of title XXVII of the Public Health
Service Act is amended by adding at the end the following new
section:
``SEC. 2706. PATIENT PROTECTION STANDARDS.
``(a) In General.--Each health insurance issuer shall
comply with patient protection requirements under part C with
respect to group health insurance coverage it offers.
``(b) Assuring Coordination.--The Secretary of Health and
Human Services and the Secretary of Labor shall ensure,
through the execution of an interagency memorandum of
understanding between such Secretaries, that--
``(1) regulations, rulings, and interpretations issued by
such Secretaries relating to the same matter over which such
Secretaries have responsibility under part C (and this
section) and section 713 of the Employee Retirement Income
Security Act of 1974 are administered so as to have the same
effect at all times; and
``(2) coordination of policies relating to enforcing the
same requirements through such Secretaries in order to have a
coordinated enforcement strategy that avoids duplication of
enforcement efforts and assigns priorities in enforcement.''.
(2) Section 2792 of such Act (42 U.S.C. 300gg-92) is
amended by inserting ``and section 2706(b)'' after ``of
1996''.
(c) Application to Individual Health Insurance Coverage.--
Part B of title XXVII of the Public Health Service Act is
amended by inserting after section 2751 the following new
section:
[[Page S3670]]
``SEC. 2752. PATIENT PROTECTION STANDARDS.
``Each health insurance issuer shall comply with patient
protection requirements under part C with respect to
individual health insurance coverage it offers.''.
(d) Modification of Preemption Standards.--
(1) Group health insurance coverage.--Section 2723 of such
Act (42 U.S.C. 300gg-23) is amended--
(A) in subsection (a)(1), by striking ``subsection (b)''
and inserting ``subsections (b) and (c)'';
(B) by redesignating subsections (c) and (d) as subsections
(d) and (e), respectively; and
(C) by inserting after subsection (b) the following new
subsection:
``(c) Special Rules in Case of Patient Protection
Requirements.--Subject to subsection (a)(2), the provisions
of section 2706 and part C, and part D insofar as it applies
to section 2706 or part C, shall not be construed to preempt
any State law, or the enactment or implementation of such a
State law, that provides protections for individuals that are
equivalent to or stricter than the protections provided under
such provisions.''.
(2) Individual health insurance coverage.--Section 2762 of
such Act (42 U.S.C. 300gg-62), as added by section
605(b)(3)(B) of Public Law 104-204, is amended--
(A) in subsection (a), by striking ``subsection (b),
nothing in this part'' and inserting ``subsections (b) and
(c)'', and
(B) by adding at the end the following new subsection:
``(c) Special Rules in Case of Patient Protection
Requirements.--Subject to subsection (b), the provisions of
section 2752 and part C, and part D insofar as it applies to
section 2752 or part C, shall not be construed to preempt any
State law, or the enactment or implementation of such a State
law, that provides protections for individuals that are
equivalent to or stricter than the protections provided under
such provisions.''.
(e) Additional Conforming Amendments.--
(1) Section 2723(a)(1) of such Act (42 U.S.C. 300gg-
23(a)(1)) is amended by striking ``part C'' and inserting
``parts C and D''.
(2) Section 2762(b)(1) of such Act (42 U.S.C. 300gg-
62(b)(1)) is amended by striking ``part C'' and inserting
``part D''.
(f) Effective Dates.--(1)(A) Subject to subparagraph (B),
the amendments made by subsections (a), (b), (d)(1), and (e)
shall apply with respect to group health insurance coverage
for group health plan years beginning on or after July 1,
1998 (in this subsection referred to as the ``general
effective date'') and also shall apply to portions of plan
years occurring on and after January 1, 1999.
(B) In the case of group health insurance coverage provided
pursuant to a group health plan maintained pursuant to 1 or
more collective bargaining agreements between employee
representatives and 1 or more employers ratified before the
date of enactment of this Act, the amendments made by
subsections (a), (b), (d)(1), and (e) shall not apply to plan
years beginning before the later of--
(i) the date on which the last collective bargaining
agreements relating to the plan terminates (determined
without regard to any extension thereof agreed to after the
date of enactment of this Act), or
(ii) the general effective date.
For purposes of clause (i), any plan amendment made pursuant
to a collective bargaining agreement relating to the plan
which amends the plan solely to conform to any requirement
added by subsection (a) or (b) shall not be treated as a
termination of such collective bargaining agreement.
(2) The amendments made by subsections (a), (c), (d)(2),
and (e) shall apply with respect to individual health
insurance coverage offered, sold, issued, renewed, in effect,
or operated in the individual market on or after the general
effective date.
SEC. 3. PATIENT PROTECTION STANDARDS UNDER THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974.
(a) In General.--Subpart B of part 7 of subtitle B of title
I of the Employee Retirement Income Security Act of 1974 is
amended by adding at the end the following new section:
``SEC. 713. PATIENT PROTECTION STANDARDS.
``(a) In General.--Subject to subsection (b), a group
health plan (and a health insurance issuer offering group
health insurance coverage in connection with such a plan)
shall comply with the requirements of part C of title XXVII
of the Public Health Service Act.
``(b) References in Application.--In applying subsection
(a) under this part, any reference in such part C--
``(1) to a health insurance issuer and health insurance
coverage offered by such an issuer is deemed to include a
reference to a group health plan and coverage under such
plan, respectively;
``(2) to the Secretary is deemed a reference to the
Secretary of Labor;
``(3) to an applicable State authority is deemed a
reference to the Secretary of Labor; and
``(4) to an enrollee with respect to health insurance
coverage is deemed to include a reference to a participant or
beneficiary with respect to a group health plan.
``(c) Assuring Coordination.--The Secretary of Health and
Human Services and the Secretary of Labor shall ensure,
through the execution of an interagency memorandum of
understanding between such Secretaries, that--
``(1) regulations, rulings, and interpretations issued by
such Secretaries relating to the same matter over which such
Secretaries have responsibility under such part C (and
section 2706 of the Public Health Service Act) and this
section are administered so as to have the same effect at all
times; and
``(2) coordination of policies relating to enforcing the
same requirements through such Secretaries in order to have a
coordinated enforcement strategy that avoids duplication of
enforcement efforts and assigns priorities in enforcement.''.
(b) Modification of Preemption Standards.--Section 731 of
such Act (42 U.S.C. 1191) is amended--
(1) in subsection (a)(1), by striking ``subsection (b)''
and inserting ``subsections (b) and (c)'';
(2) by redesignating subsections (c) and (d) as subsections
(d) and (e), respectively; and
(3) by inserting after subsection (b) the following new
subsection:
``(c) Special Rules in Case of Patient Protection
Requirements.--Subject to subsection (a)(2), the provisions
of section 713 and part C of title XXVII of the Public Health
Service Act, and subpart C insofar as it applies to section
713 or such part, shall not be construed to preempt any State
law, or the enactment or implementation of such a State law,
that provides protections for individuals that are equivalent
to or stricter than the protections provided under such
provisions.''.
(c) Conforming Amendments.--(1) Section 732(a) of such Act
(29 U.S.C. 1185(a)) is amended by striking ``section 711''
and inserting ``sections 711 and 713''.
(2) The table of contents in section 1 of such Act is
amended by inserting after the item relating to section 712
the following new item:
``Sec. 713. Patient protection standards.''.
(3) Section 734 of such Act (29 U.S.C. 1187) is amended by
inserting ``and section 713(d)'' after ``of 1996''.
(d) Effective Date.--(1) Subject to paragraph (2), the
amendments made by this section shall apply with respect to
group health plans for plan years beginning on or after July
1, 1998 (in this subsection referred to as the ``general
effective date'') and also shall apply to portions of plan
years occurring on and after January 1, 1999.
(2) In the case of a group health plan maintained pursuant
to 1 or more collective bargaining agreements between
employee representatives and 1 or more employers ratified
before the date of enactment of this Act, the amendments made
by this section shall not apply to plan years beginning
before the later of--
(A) the date on which the last collective bargaining
agreements relating to the plan terminates (determined
without regard to any extension thereof agreed to after the
date of enactment of this Act), or
(B) the general effective date.
For purposes of subparagraph (A), any plan amendment made
pursuant to a collective bargaining agreement relating to the
plan which amends the plan solely to conform to any
requirement added by subsection (a) shall not be treated as a
termination of such collective bargaining agreement.
SEC. 4. NON-PREEMPTION OF STATE LAW RESPECTING LIABILITY OF
GROUP HEALTH PLANS.
(a) In General.--Section 514(b) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1144(b)) is amended by
redesignating paragraph (9) as paragraph (10) and inserting
the following new paragraph:
``(9) Subsection (a) of this section shall not be construed
to preclude any State cause of action to recover damages for
personal injury or wrongful death against any person that
provides insurance or administrative services to or for an
employee welfare benefit plan maintained to provide health
care benefits.''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to causes of action arising on or after the date
of the enactment of this Act.
______
By Mr. LAUTENBERG (for himself and Mr. Torricelli):
S. 645. A bill to amend the Federal Water Pollution Control Act to
improve and enforce compliance programs; to the Committee on
Environment and Public Works.
the clean water enforcement and compliance improvement act of 1997
Mr. LAUTENBERG. Mr. President, I introduce the Clean Water
Enforcement and Compliance Improvement Act of 1997. This important bill
will put real teeth in the enforcement provisions of the Clean Water
Act, and will help restore and preserve our Nation's already stressed
lakes, rivers and coastal areas. I would like to commend my colleague
from New Jersey, Congressman Pallone, for introducing similar
legislation in the House of Representatives. Senator Torricelli has
joined as a co-sponsor of our bill.
Mr. President, when Congress first enacted the Clean Water Act in
1972, we established lofty goals-to make our Nation's waters fishable
and swimmable. And we mandated strict enforcement and provided for
penalties to assure compliance with the act's provisions.
[[Page S3671]]
We were responding to strong public concern about pollution of our
waterways. That concern is every bit as strong today because people
understand that clean water is essential to human life. The American
people want us to rid our waters of bacteria, toxins, and garbage.
Yet, as we approach the 25th anniversary of the Clean Water Act, and
after several substantial revisions since its enactment, the act has
failed to meet all of our goals. While the Act has resulted in
significant progress and water quality is improving, our waters are not
clean. In 1988, over one-third of our rivers, lakes and estuaries
surveyed throughout the country were either failing to achieve
designated water quality levels or were threatened with failing to
achieve those levels. In my State of New Jersey, a survey of roughly 10
percent of the State's rivers showed that only 15 percent were safe for
swimming.
One reason we haven't made more progress is that the Clean Water Act
is not being adequately enforced.
Mr. President, effective enforcement is essential to achieving the
goals of the act. Not only does effective enforcement deter violations,
but it also helps ensure that appropriate corrective actions are taken
in a timely manner when violations do occur. The Clean Water
Enforcement and Compliance Improvement Act will strengthen enforcement
efforts.
Mr. President, my bill will toughen penalties for polluters, improve
enforcement by EPA and state water pollution agencies, and expand
citizens' right-to-know about violations of the Clean Water Act.
It establishes mandatory minimum penalties for serious violations of
the Clean Water Act.
It requires that civil penalties be no less than the economic benefit
resulting from the violation.
It requires more frequent reporting of water discharges to identify
violations more quickly.
And it requires EPA to publish annually a list of those facilities
that are in significant noncompliance with the Clean Water Act.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 645
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 ``Clean Water Enforcement and
Compliance Improvement Act of 1997''.
SEC. 2. FINDINGS.
(a) In General.--Congress finds that--
(1) a significant number of persons who have been issued
permits under section 402 of the Federal Water Pollution
Control Act are in violation of such permits;
(2) current enforcement programs of the Administrator of
the Environmental Protection Agency and the States fail to
address violations of such permits in a timely and effective
manner;
(3) full, accurate and prompt reporting of possible
violations of the Federal Water Pollution Control Act is
necessary for implementation and well served by assuring that
good faith reporters of possible violations are protected
against adverse personnel actions;
(4) often violations of such permits continue for a
considerable period of time, yielding significant economic
benefits for the violator and thus penalizing similar
facilities which act lawfully;
(5) penalties assessed and collected by the Administrator
from violators of such permits are often less than the
economic benefit gained by the violator;
(6) swift and timely enforcement by the Administrator and
the States of violations of such permits is necessary to
increase levels of compliance with such permits; and
(7) actions of private citizens have been effective in
enforcing such permits and directing funds to environmental
mitigation projects with over $12.8 million in penalties and
interest having been recovered and deposited with the
Treasury of the United States over the fiscal years 1990
through 1994.
(b) Finding With Respect to Harm Caused by Violations.--
Section 101 of the Federal Water Pollution Control Act (33
U.S.C. 1251) is amended by adding at the end the following:
``(h) Finding With Respect to Harm Caused by Violations.--
Congress finds that a discharge which results in a violation
of this Act or a regulation, standard, limitation,
requirement, or order issued pursuant to this Act interferes
with the restoration and maintenance of the chemical,
physical, and biological integrity of any waters into which
the discharge flows (either directly or through a publicly
owned treatment works), including any waters into which the
receiving waters flow, and, therefore, harms those who use or
enjoy such waters and those who use or enjoy nearby lands or
aquatic resources associated with those waters.
``(i) Finding With Respect to Citizen Suits.--Congress
finds that citizen suits are a valuable means of enforcement
of this Act and urges the Administrator to take actions to
encourage such suits, including providing information
concerning violators to citizen groups to assist them in
bringing suits, providing expert witnesses and other evidence
with respect to such suits, and filing amicus curiae briefs
on important issues related to such suits.''.
SEC. 3. VIOLATIONS OF REQUIREMENTS OF LOCAL CONTROL
AUTHORITIES.
Section 307(d) of Federal Water Pollution Control Act (33
U.S.C. 1317(d)) is amended to read as follows:
``(d) Violations.--After the date on which (1) any effluent
standard or prohibition or pretreatment standard or
requirement takes effect under this section, or (2) any
requirement imposed in a pretreatment program under section
402(a)(3) or 402(b)(8) of this Act takes effect, it shall be
unlawful for any owner or operator of any source to operate
such source in violation of the effluent standard,
prohibition, pretreatment standard, or requirement.''.
SEC. 4. INSPECTIONS, MONITORING, AND PROVIDING INFORMATION.
(a) Applicability of Requirements.--Section 308(a) of the
Federal Water Pollution Control Act (33 U.S.C. 1318(a)) is
amended by striking ``the owner or operator of any point
source'' and inserting ``a person subject to a requirement of
this Act''.
(b) Public Access to Information.--The first sentence of
section 308(b) of such Act is amended--
(1) by inserting ``(including information contained in the
Permit Compliance System of the Environmental Protection
Agency)'' after ``obtained under this section'';
(2) by inserting ``made'' after ``shall be''; and
(3) by inserting ``by computer telecommunication and other
means for a period of at least 10 years'' after ``public''
the first place it appears.
(c) Public Information.--Section 308 of such Act is further
amended by adding at the end the following:
``(e) Public Information.--
``(1) Posting of notice of polluted waters.--At each major
point of public access (including, at a minimum, beaches,
parks, recreation areas, marinas, and boat launching areas)
to a body of navigable water that does not meet an applicable
water quality standard or that is subject to a fishing and
shell fishing ban, advisory, or consumption restriction
(issued by a Federal, State, or local authority) due to fish
or shellfish contamination, the State within which boundaries
all or any part of such body of water lies shall, either
directly or through local authorities, post and maintain a
clearly visible sign which--
``(A) indicates the water quality standard that is being
violated or the nature and extent of the restriction on fish
or shellfish consumption, as the case may be;
``(B) includes (i) information on the environmental and
health effects associated with the failure to meet such
standard or with the consumption of fish or shellfish
subject to the restriction, and (ii) a phone number for
obtaining additional information relating to the violation
and restriction; and
``(C) will be maintained until the body of water is in
compliance with the water quality standard or until all fish
and shellfish consumption restrictions are terminated with
respect to the body of water, as the case may be.
``(2) Notice of discharges to navigable waters.--Except for
permits issued to municipalities for discharges composed
entirely of stormwater under section 402 of this Act, each
permit issued under section 402 by the Administrator or by a
State shall ensure compliance with the following
requirements:
``(A) Every permittee shall conspicuously maintain at all
public entrances to the facility a clearly visible sign which
indicates that the facility discharges pollutants into
navigable waters and the location of such discharges; the
name, business address, and phone number of the permittee;
the permit number; and a location at which a copy of the
permit and public information required by this paragraph is
maintained and made available for inspection or a phone
number for obtaining such information.
``(B) Each permittee which is a publicly owned treatment
works shall include in each quarterly mailing of a bill to
each customer of the treatment works information which
indicates that the treatment works discharges pollutants into
the navigable waters and the location of each of such
discharges; the name, business address and phone number of
the permittee; the permit number; a location at which a copy
of the permit and public information required by this
paragraph is maintained and made available for inspection or
a phone number for obtaining such information; and a list of
all violations of the requirements of the permit by the
treatment works over the preceding 12-month period.
``(3) Regulations.--
``(A) Issuance.--The Administrator--
``(i) not later than 6 months after the date of the
enactment of this subsection, shall
[[Page S3672]]
propose regulations to carry out this subsection; and
``(ii) not later than 18 months after such date of
enactment, shall issue such regulations.
``(B) Content.--The regulations issued to carry out this
subsection shall establish--
``(i) uniform requirements and procedures for identifying
and posting bodies of water under paragraph (1);
``(ii) minimum information to be included in signs posted
and notices issued pursuant to this subsection;
``(iii) uniform requirements and procedures for fish and
shellfish sampling and analysis;
``(iv) uniform requirements for determining the nature and
extent of fish and shellfish bans, advisories, and
consumption restrictions which--
``(I) address cancer and noncancer human health risks;
``(II) take into account the effects of all fish and
shellfish contaminants, including the cumulative and
synergistic effects;
``(III) assure the protection of subpopulations who consume
higher than average amounts of fish and shellfish or are
particularly susceptible to the effects of such
contamination;
``(IV) address race, gender, ethnic composition, or social
and economic factors, based on the latest available studies
of national or regional consumption by and impacts on such
subpopulations unless more reliable site-specific data is
available;
``(V) are based on a margin of safety that takes into
account the uncertainties in human health impacts from such
contamination; and
``(VI) evaluate assessments of health risks of contaminated
fish and shellfish that are used in pollution control
programs developed by the Administrator under this Act.''.
(d) State Reports.--Section 305(b)(1) of such Act (33
U.S.C. 1315(b)(1)) is amended--
(1) by striking ``and'' at the end of subparagraph (D);
(2) by striking the period at the end of subparagraph (E)
and inserting ``; and''; and
(3) by adding at the end the following:
``(F) a list identifying bodies of water for which signs
were posted under section 308(e)(1) in the preceding year and
the reason or reasons for such posting.''.
SEC. 5. CIVIL PENALTIES.
(a) Enforcement of Local Pretreatment Requirements.--
(1) Compliance orders.--
(A) Initial action.--Section 309(a)(1) of the Federal Water
Pollution Control Act (33 U.S.C. 1319(a)(1)) is amended by
inserting after ``404 of this Act,'' the following: ``or is
in violation of any requirement imposed in a pretreatment
program approved under section 402(a)(3) or 402(b)(8) of this
Act,''.
(B) Issuance of orders.--Section 309(a)(3) of such Act is
amended by inserting after ``404 of this Act by a State,''
the following: ``or is in violation of any requirement
imposed in a pretreatment program approved under section
402(a)(3) or 402(b)(8) of this Act,''.
(2) Criminal penalties.--Section 309(c)(3)(A) of such Act
is amended by inserting after ``Army or by a State,'' the
following: ``or knowingly violates any requirement imposed in
a pretreatment program approved under section 402(a)(3) or
402(b)(8) of this Act,''.
(3) Administrative penalties.--Section 309(g)(1)(A) of such
Act is amended by inserting after ``404 by a State,'' the
following: ``or has violated any requirement imposed in a
pretreatment program approved under section 402(a)(3) or
402(b)(8) of this Act or an order issued by the Administrator
under subsection (a) of this section,''.
(b) Treatment of Single Operational Upsets.--
(1) Criminal penalties.--Section 309(c) of such Act is
amended by striking paragraph (5) and redesignating
paragraphs (6) and (7) as paragraphs (5) and (6),
respectively.
(2) Civil penalties.--Section 309(d) of such Act is amended
by striking the last sentence.
(3) Administrative penalties.--Section 309(g)(3) of such
Act is amended by striking the last sentence.
(c) Use of Civil Penalties for Mitigation Projects.--
(1) In general.--Section 309(d) of such Act is amended by
inserting after the second sentence the following: ``The
court may, in the court's discretion, order that a civil
penalty be used for carrying out mitigation projects which
are consistent with the purposes of this Act and which
enhance the public health or environment.''.
(2) Conforming amendment.--Section 505(a) of such Act (33
U.S.C. 1365(a)) is amended by inserting before the period at
the end of the last sentence the following: ``, including
ordering the use of a civil penalty for carrying out
mitigation projects in accordance with such section 309(d)''.
(d) Determination of Amount of Penalties.--
(1) Civil penalties.--The second sentence of section 309(d)
of such Act (33 U.S.C. 1319(d)) is amended by inserting ``the
amount of any penalty previously imposed on the violator by a
court or administrative agency for the same violation or
violations,'' after ``economic impact of the penalty on the
violator,''.
(2) Administrative penalties.--Section 309(g)(3) of such
Act is amended--
(A) by striking ``or savings''; or
(B) by inserting ``the amount of any penalty previously
imposed on the violator by a court or administrative agency
for the same violation or violations,'' after ``resulting
from the violation,''.
(e) Limitation on Defenses.--Section 309(g)(1) of such Act
is amended by adding at the end the following: ``In a
proceeding to assess or review a penalty under this
subsection, the adequacy of consultation between the
Administrator or the Secretary, as the case may be, and the
State shall not be a defense to assessment or enforcement of
such penalty.''.
(f) Amounts of Administrative Civil Penalties.--
(1) General rule.--Section 309(g)(2) of such Act is amended
to read as follows:
``(2) Amount of penalties; notice; hearing.--
``(A) Maximum amount of penalties.--The amount of a civil
penalty under paragraph (1) may not exceed $25,000 per
violation per day for each day during which the violation
continues.
``(B) Written notice.--Before issuing an order assessing a
civil penalty under this subsection, the Administrator or the
Secretary, as the case may be, shall give to the person to be
assessed the penalty written notice of the Administrator's or
Secretary's proposal to issue the order and the opportunity
to request, within 30 days of the date the notice is received
by such person, a hearing on the proposed order.
``(C) Hearings not on the record.--If the proposed penalty
does not exceed $25,000, the hearing shall not be subject to
section 554 or 556 of title 5, United States Code, but shall
provide a reasonable opportunity to be heard and to present
evidence.
``(D) Hearings on the record.--If the proposed penalty
exceeds $25,000, the hearing shall be on the record in
accordance with section 554 of title 5, United States Code.
The Administrator and the Secretary may issue rules for
discovery procedures for hearings under this subparagraph.''.
(2) Conforming amendments.--Section 309(g) of such Act is
amended--
(A) in paragraph (1) by striking ``class I civil penalty or
a class II'';
(B) in the second sentence of paragraph (4)(C) by striking
``(2)(A) in the case of a class I civil penalty and paragraph
(2)(B) in the case of a class II civil penalty'' and
inserting ``(2)''; and
(C) in the first sentence of paragraph (8) by striking
``assessment--'' and all that follows through ``by filing''
and inserting ``assessment in the United States District
Court for the District of Columbia or in the district in
which the violation is alleged to have occurred by filing''.
(g) State Enforcement Actions as Bar to Federal Enforcement
Actions.--Section 309(g)(6)(A) of such Act is amended--
(1) by inserting ``or'' after the comma at the end of
clause (i);
(2) by striking clause (ii); and
(3) by redesignating clause (iii) as clause (ii) and in
such clause--
(A) by striking ``, the Secretary, or the State'' and
inserting ``or the Secretary''; and
(B) by striking ``or such comparable State law, as the case
may be,''.
(h) Recovery of Economic Benefit.--Section 309 of such Act
is amended by adding at the end the following:
``(h) Recovery of Economic Benefit.--
``(1) General rule.--Notwithstanding any other provision of
this section, any civil penalty assessed and collected under
this section must be in an amount which is not less than the
amount of the economic benefit (if any) resulting from the
violation for which the penalty is assessed.
``(2) Regulations.--Not later than 2 years after the date
of the enactment of this subsection, the Administrator shall
issue regulations establishing a methodology for calculating
the economic benefits or savings resulting from violations of
this Act. Pending issuance of such regulations, this
subsection shall be in effect and economic benefits shall be
calculated for purposes of paragraph (1) on a case-by-case
basis.''.
(i) Limitation on Compromises.--Such section 309 is further
amended by adding at the end the following:
``(i) Limitation on Compromises of Civil Penalties.--
Notwithstanding any other provision of this section, the
amount of a civil penalty assessed under this section may not
be compromised below the amount determined by adding--
``(1) the minimum amount required for recovery of economic
benefit under subsection (h), to
``(2) 50 percent of the difference between the amount of
the civil penalty assessed and such minimum amount.''.
(j) Minimum Amount for Serious Violations.--Such section
309 is further amended by adding at the end the following:
``(j) Minimum Civil Penalties for Serious Violations and
Significant Noncompliers.--
``(1) Serious violations.--Notwithstanding any other
provision of this section (other than paragraph (2)), the
minimum civil penalty which shall be assessed and collected
under this section from a person--
``(A) for a discharge from a point source of a hazardous
pollutant which exceeds or otherwise violates any applicable
effluent limitation established by or under this Act by 20
percent or more, or
``(B) for a discharge from a point source of a pollutant
(other than a hazardous pollutant) which exceeds or otherwise
violates any applicable effluent limitation established by or
under this Act by 40 percent or more,
shall be $1,000 for the first such violation in a 180-day
period.
[[Page S3673]]
``(2) Significant noncompliers.--Notwithstanding any other
provision of this section, the minimum civil penalty which
shall be assessed and collected under this section from a
person--
``(A) for the second or more discharge in a 180-day period
from a point source of a hazardous pollutant which exceeds or
otherwise violates any applicable effluent limitation
established by or under this Act by 20 percent or more,
``(B) for the second or more discharge in a 180-day period
from a point source of a pollutant (other than a hazardous
pollutant) which exceeds or otherwise violates any applicable
effluent limitation established by or under this Act by 40
percent or more,
``(C) for the fourth or more discharge in a 180-day period
from a point source of any pollutant which exceeds or
otherwise violates the same effluent limitation, or
``(D) for not filing in a 180-day period 2 or more reports
in accordance with section 402(r)(1),
shall be $5,000 for each of such violations.
``(3) Mandatory inspections for significant noncompliers.--
The Administrator shall identify any person described in
paragraph (2) as a significant noncomplier and shall conduct
an inspection described in section 402(q) of this Act of the
facility at which the violations were committed. Such
inspections shall be conducted at least once in the 180-day
period following the date of the most recent violation which
resulted in such person being identified as a significant
noncomplier.
``(4) Annual reporting.--The Administrator shall transmit
to Congress and to the Governors of the States, and shall
publish in the Federal Register, on an annual basis a list of
all persons identified as significant noncompliers under
paragraph (3) in the preceding calendar year and the
violations which resulted in such classifications.
``(5) Hazardous pollutant defined.--For purposes of this
subsection, the term `hazardous pollutant' has the meaning
the term `hazardous substance' has under subsection (c)(6) of
this section.''.
(k) State Program.--Section 402(b)(7) of such Act (33
U.S.C. 1342(b)(7)) is amended to read as follows:
``(7) To abate violations of the permit or the permit
program which shall include, beginning on the last day of the
2-year period beginning on the date of the enactment of the
Clean Water Compliance and Enforcement Improvement Amendments
Act of 1995, a penalty program comparable to the Federal
penalty program under section 309 of this Act and which shall
include at a minimum criminal, civil, and civil
administrative penalties, and may include other ways and
means of enforcement, which the State demonstrates to the
satisfaction of the Administrator are equally effective as
the Federal penalty program;''.
(l) Federal Procurement Compliance Incentive.--Section
508(a) of such Act (33 U.S.C. 1368(a)) is amended by
inserting after the second comma ``or who is identified under
section 309(j)(3) of this Act,''.
SEC. 6. NATIONAL POLLUTANT DISCHARGE ELIMINATION PERMITS.
(a) Withdrawal of State Program Approval.--Section 402(b)
of the Federal Water Pollution Control Act (33 U.S.C.
1342(b)) is amended by striking ``unless he determines that
adequate authority does not exist:'' and inserting the
following: ``only when he determines that adequate
authority exists and shall withdraw program approval
whenever he determines that adequate authority no longer
exists:''.
(b) Judicial Review of Rulings on Applications for State
Permits.--Section 402(b)(3) of such Act is amended by
inserting ``and to ensure that any interested person who
participated in the public comment process and any other
person who could obtain judicial review of that action under
any other applicable law has the right to judicial review of
such ruling'' before the semicolon at the end.
(c) Inspections for Major Industrial and Municipal
Dischargers.--Section 402(b) of such Act is amended--
(1) by striking ``and'' at the end of paragraph (8);
(2) by striking the period at the end of paragraph (9) and
inserting a semicolon; and
(3) by adding at the end the following:
``(10) To ensure that any permit for a discharge from a
major industrial or municipal facility, as defined by the
Administrator by regulation, includes conditions under which
such facility will be subject to at least annual inspections
by the State in accordance with subsection (q) of this
section;''.
(d) Monthly Reports for Significant Industrial Users of
POTWs.--Section 402(b) of such Act is further amended by
adding at the end the following:
``(11) To ensure that any permit for a discharge from a
publicly owned treatment works in the State includes
conditions under which the treatment works will require any
significant industrial user of the treatment works, as
defined by the Administrator by regulation, to prepare and
submit to the Administrator, the State, and the treatment
works a monthly discharge monitoring report as a condition to
using the treatment works;''.
(e) Permits Required for Introduction of Pollutants Into
POTWs.--Section 402(b) of such Act is further amended by
adding at the end the following:
``(12) To ensure that, after the last day of the 2-year
period beginning on the date of the enactment of this
paragraph, any significant industrial user, or other source
designated by the Administrator, introducing a pollutant into
a publicly owned treatment works has, and operates in
accordance with, a permit issued by the treatment works or
the State for introduction of such pollutant; and''.
(f) Granting of Authority to POTWs for Inspections and
Penalties.--Section 402(b) of such Act is further amended by
adding at the end the following:
``(13) To ensure that the State will grant to publicly
owned treatment works in the State, not later than 3 years
after the date of the enactment of this paragraph, authority,
power, and responsibility to conduct inspections under
subsection (q) of this section and to assess and collect
civil penalties and civil administrative penalties under
paragraph (7) of this subsection.''.
(g) Inspection.--Section 402 of such Act is amended by
adding at the end the following:
``(q) Inspection.--
``(1) General rule.--Each permit for a discharge into the
navigable waters or introduction of pollutants into a
publicly owned treatment works issued under this section
shall include conditions under which the effluent being
discharged will be subject to random inspections in
accordance with this subsection by the Administrator or the
State, in the case of a State permit program under this
section.
``(2) Minimum standards.--Not later than 6 months after the
date of enactment of this subsection, the Administrator shall
establish minimum standards for inspections under this
subsection. Such standards shall require, at a minimum, the
following:
``(A) An annual representative sampling by the
Administrator or the State, in the case of a State permit
program under this section, of the effluent being discharged;
except that if the discharge is not from a major industrial
or municipal facility such sampling shall be conducted at
least once every 3 years.
``(B) An analysis of all samples collected under
subparagraph (A) by a Federal or State owned and operated
laboratory or a State approved laboratory, other than one
that is being used by the permittee or that is directly or
indirectly owned, operated, or managed by the permittee.
``(C) An evaluation of the maintenance record of any
treatment equipment of the permittee.
``(D) An evaluation of the sampling techniques used by the
permittee.
``(E) A random check of discharge monitoring reports of the
permittee for each 12-month period for the purpose of
determining whether or not such reports are consistent with
the applicable analyses conducted under subparagraph (B).
``(F) An inspection of the sample storage facilities and
techniques of the permittee.''.
(h) Reporting.--Section 402 of such Act is further amended
by adding at the end the following:
``(r) Reporting.--
``(1) General rule.--Each person holding a permit issued
under this section which is determined by the Administrator
to be a major industrial or municipal discharger of
pollutants into the navigable waters shall prepare and submit
to the Administrator a monthly discharge monitoring report.
Any other person holding a permit issued under this section
shall prepare and submit to the Administrator quarterly
discharge monitoring reports or more frequent discharge
monitoring reports if the Administrator requires. Such
reports shall contain, at a minimum, such information as the
Administrator shall require by regulation.
``(2) Reporting of hazardous discharges.--
``(A) General rule.--If a discharge from a point source for
which a permit is issued under this section exceeds an
effluent limitation contained in such permit which is based
on an acute water quality standard or any other discharge
which may cause an exceedance of an acute water quality
standard or otherwise is likely to cause injury to persons or
damage to the environment or to pose a threat to human health
and the environment, the person holding such permit shall
notify the Administrator and the affected States and
municipalities, in writing, of such discharge not later than
2 hours after the later of the time at which such discharge
commenced or the time at which the permittee knew or had
reason to know of such discharge.
``(B) Special rule for hazardous pollutants.--If a
discharge described in subparagraph (A) is of a hazardous
pollutant (as defined in section 309(j) of this Act), the
person holding such permit shall provide the Administrator
with such additional information on the discharge as may be
required by the Administrator. Such additional information
shall be provided to the Administrator within 24 hours after
the later of the time at which such discharge commenced or
the time at which the permittee became aware of such
discharge. Such additional information shall include, at a
minimum, an estimate of the danger posed by the discharge to
the environment, whether the discharge is continuing, and the
measures taken or being taken (i) to remediate the problem
caused by the discharge and any damage to the environment,
and (ii) to avoid a repetition of the discharge.
``(3) Signature.--All reports filed under paragraph (1)
must be signed and dated by the highest ranking official
having day-to-
[[Page S3674]]
day managerial and operational responsibility for the
facility at which the discharge occurs or, in the absence of
such person, by another responsible high ranking official at
such facility. Such highest ranking official shall be
responsible for the accuracy of all information contained in
such reports; except that such highest ranking official may
file with the Administrator amendments to any such report if
the report was signed in the absence of the highest ranking
official by another high ranking official and if such
amendments are filed within 7 days of the return of the
highest ranking official.''.
(i) Limitation on Issuance of Permits to Significant
Noncompliers.--Section 402 of such Act is further amended by
adding at the end the following:
``(s) Significant Noncompliers.--No permit may be issued
under this section to any person (other than a publicly owned
treatment works) identified under section 309(j)(3) of this
Act or to any other person owned or controlled by the
identified person, owning or controlling the identified
person, or under common control with the identified person,
until the Administrator or the State or States in which the
violation or violations occur determines that the condition
or conditions giving rise to such violation or violations
have been corrected. No permit application submitted after
the date of the enactment of this subsection may be approved
unless the application includes a list of all violations of
this Act by a person identified under section 309(j) of this
Act during the 3-year period preceding the date of submission
of the application and evidence indicating whether the
underlying cause of each such violation has been
corrected.''.
(j) Applicability.--The amendments made by this section
shall apply to permits issued before, on, or after the date
of the enactment of this Act; except that--
(1) with respect to permits issued before such date of
enactment to a major industrial or municipal discharger, such
amendments shall take effect on the last day of the 1-year
period beginning on such date of enactment; and
(2) with respect to all other permits issued before such
date of enactment, such amendments shall take effect on the
last day of the 2-year period beginning on such date of
enactment.
SEC. 7. EXPIRED STATE PERMITS.
Section 402(d) of the Federal Water Pollution Control Act
(33 U.S.C. 1342(d)) is amended by adding at the end the
following:
``(5) Expired state permits.--In any case in which--
``(A) a permit issued by a State for a discharge has
expired,
``(B) the permittee has submitted an application to the
State for a new permit for the discharge, and
``(C) the State has not acted on the application before the
last day of the 18-month period beginning on the date the
permit expired,
the Administrator may issue a permit for the discharge under
subsection (a).''.
SEC. 8. COMPLIANCE SCHEDULE.
Section 302(b)(2)(B) of the Federal Water Pollution Control
Act (33 U.S.C. 1312(b)(2)(B)) is amended by adding at the end
the following: ``The Administrator may only issue a permit
pursuant to this subparagraph for a period exceeding 2 years
if the Administrator makes the findings described in clauses
(i) and (ii) of this subparagraph on the basis of a public
hearing.''.
SEC. 9. EMERGENCY POWERS.
Section 504 of the Federal Water Pollution Control Act (33
U.S.C. 1364) is amended to read as follows:
``SEC. 504. COMMUNITY PROTECTION.
``(a) Issuance of Orders; Court Action.--Notwithstanding
any other provision of this Act, whenever the Administrator
finds that, because of an actual or threatened direct or
indirect discharge of a pollutant, there may be an imminent
and substantial endangerment to the public health or welfare
(including the livelihood of persons) or the environment, the
Administrator may issue such orders or take such action as
may be necessary to protect public health or welfare or the
environment and commence a suit (or cause it to be commenced)
in the United States district court for the district where
the discharge or threat occurs. Such court may grant such
relief to abate the threat and to protect against the
endangerment as the public interest and the equities require,
enforce, and adjudge penalties for disobedience to orders of
the Administrator issued under this section, and grant other
relief according to the public interest and the equities of
the case.
``(b) Enforcement of Orders.--Any person who, without
sufficient cause, violates or fails to comply with an order
of the Administrator issued under this section, shall be
liable for civil penalties to the United States in an amount
not to exceed $25,000 per day for each day on which such
violation or failure occurs or continues.''.
SEC. 10. CITIZEN SUITS.
(a) Suits for Past Violations.--Section 505 of the Federal
Water Pollution Control Act (33 U.S.C. 1365) is amended--
(1) in subsection (a)(1) by inserting ``to have violated
(if there is evidence that the alleged violations has been
repeated) or'' after ``who is alleged'';
(2) in subsection (b)(1)(A)(ii) by striking ``occurs'' and
inserting ``has occurred or is occurring''; and
(3) in subsection (f)(6) by inserting ``has been or'' after
``which''.
(b) Time Limit.--Section 505(b)(1)(A) of such Act is
amended by striking ``60 days'' and inserting ``30 days''.
(c) Effect of Judgments on Citizen Suits.--Section 505(b)
of such Act is further amended--
(1) in paragraph (1)(B)--
(A) by striking ``, or a State''; and
(B) by striking ``right.'' and inserting ``right and may
obtain costs of litigation under subsection (d), or''; and
(2) by adding at the end the following: ``The notice under
paragraph (1)(A) need set forth only violations which have
been specifically identified in the discharge monitoring
reports of the alleged violator. An action by a State under
subsection (a)(1) may be brought at any time. No judicial
action by the Administrator or a State shall bar an action
for the same violation under subsection (a)(1) unless the
action is by the Administrator and meets the requirements of
this paragraph. No administrative action by the Administrator
or a State shall bar a pending action commenced after
February 4, 1987, for the same violation under subsection
(a)(1) unless the action by the Administrator or a State
meets the requirements of section 309(g)(6) of this Act.''.
(d) Consent Judgments.--Section 505(c)(3) of such Act is
amended by adding at the end the following: ``Consent
judgments entered under this section may provide that the
civil penalties included in the consent judgment be used for
carrying out mitigation projects in accordance with section
309(d).''.
(e) Pretreatment Requirements.--Section 505(f)(4) of such
Act is amended by striking ``or pretreatment standards'' and
inserting ``or pretreatment standard or requirement described
in section 307(d)''.
(f) Effluent Standard Definition.--Section 505(f)(6) of
such Act is amended by inserting ``narrative or
mathematical'' before ``condition''.
(g) Offers of Judgment.--Section 505 of such Act is further
amended by adding at the end the following:
``(g) Applicability of Offers of Judgment.--Offers of
judgment pursuant to Rule 68 of the Federal Rules of Civil
Procedure shall not be applicable to actions brought under
subsection (a)(1) of this section.''.
SEC. 11. EMPLOYEE PROTECTION.
Section 507 of the Federal Water Pollution Control Act (33
U.S.C. 1367) is amended--
(1) in subsection (e) by inserting ``Continuing
Evaluations'' after ``(e)'';
(2) by redesignating subsection (e) as subsection (f); and
(3) by striking subsections (a), (b), (c), and (d) and
inserting the following:
``(a) In General.--No employer or other person may harass,
prosecute, hold liable, or discriminate against any employee
or other person because the person--
``(1) is assisting or demonstrating an intent to assist in
achieving compliance with any provision of this Act
(including a rule or regulation issued to carry out this
Act);
``(2) is refusing to violate or assist in the violation of
any provision of this Act (including a rule or regulation
issued to carry out this Act);
``(3) has commenced, caused to be commenced, or is about to
commence a proceeding, has testified or is about to testify
at a proceeding, or has assisted or participated or is about
to assist or participate in any manner in such a proceeding
or in any other action to carry out the purposes of this Act.
``(b) Filing Complaints and Procedures.--
``(1) Filing deadline.--An employee alleging a violation of
subsection (a), or another person at the employee's request,
may file a complaint with the Secretary of Labor not later
than 365 days after the alleged violation occurred.
``(2) Procedures.--
``(A) Investigation; preliminary orders.--Not later than 60
days after receiving a complaint, the Secretary shall conduct
an investigation, decide whether it is reasonable to believe
the complaint has merit, and notify the complainant and the
person alleged to have committed the violation of the
findings. If the Secretary decides it is reasonable to
believe a violation occurred, the Secretary shall include
with the decision findings and a preliminary order for the
relief provided under paragraph (3).
``(B) Objections to preliminary order.--Not later than 30
days after the notice under subparagraph (A) of this
paragraph, the complainant and the person alleged to have
committed the violation may file objections to the findings
or preliminary order, or both, and request a hearing on the
record. The filing of objections does not stay a
reinstatement ordered in the preliminary order. If a hearing
is not requested within the 30 days, the preliminary order is
final and not subject to judicial review.
``(C) Hearing; final order; settlement agreement.--A
hearing shall be conducted expeditiously. Not later than 120
days after the end of the hearing, the Secretary shall issue
a final order. Before the final order is issued, the
proceeding may be ended by a settlement agreement made by the
Secretary, the complainant, and the person alleged to have
committed the violation.
``(3) Order.--
``(A) Penalties.--If the Secretary decides, on the basis of
a complaint, a person violated subsection (a), the Secretary
shall order the person to--
``(i) take affirmative action to abate the violation;
[[Page S3675]]
``(ii) reinstate the complainant to the former position
with the same pay and terms and privileges of employment; and
``(iii) pay compensatory damages, including back pay.
``(B) Costs.--If the Secretary issues an order under
subparagraph (A) and the complainant requests, the Secretary
may assess against the person against whom the order is
issued the costs (including attorney's fees) reasonably
incurred by the complainant in bringing the complaint. The
Secretary shall determine the costs that reasonably were
incurred.
``(4) Judicial review and venue.--A person adversely
affected by an order issued after a hearing under this
subsection may file a petition for review, not later than 60
days after the order is issued, in the court of appeals of
the United States for the circuit in which the violation
occurred or the person resided on the date of the violation.
The review shall be heard and decided expeditiously. An order
of the Secretary subject to review under this paragraph is
not subject to judicial review in a criminal or other civil
proceeding.
``(5) Civil actions to enforce.--If a person fails to
comply with an order issued under this subsection, the
Secretary shall bring a civil action to enforce the order in
the district court of the United States for the judicial
district in which the violation occurred.
``(c) Burdens of Proof.--The legal burdens of proof with
respect to a violation of subsection (a) shall be governed by
the applicable provisions of sections 1214 and 1221 of title
5, United States Code.
``(d) Subpoena Authority.--With respect to an alleged
violation of subsection (a), the Secretary of Labor may issue
a subpoena for the attendance and testimony of any person and
the production of documentary or other evidence from any
person if the testimony or production requested is not unduly
burdensome and appears reasonably calculated to lead to the
discovery of admissible evidence.
``(e) Posting Requirement.--The provisions of this section
shall be prominently posted in any place of employment to
which this section applies.''.
SEC. 12. ISSUANCE OF SUBPOENAS.
Section 509(a)(1) of the Federal Water Pollution Control
Act (33 U.S.C. 1369(a)(1)) is amended by striking ``obtaining
information under section 305 of this Act, or carrying out
section 507(e) of this Act,'' and inserting ``carrying out
this Act,''.
SEC. 13. JUDICIAL REVIEW OF EPA ACTIONS.
Section 509(b)(1) of the Federal Water Pollution Control
Act (33 U.S.C. 1369(b)(1)) is amended--
(1) by inserting after the comma at the end of clause (D)
``including a decision to deny a petition by interested
person to veto an individual permit issued by a State,'';
(2) by inserting after the comma at the end of clause (E)
``including a decision not to include any pollutant in such
effluent limitation or other limitation if the Administrator
has or is made aware of information indicating that such
pollutant is present in any discharge subject to such
limitation,''; and
(3) by striking ``and (G)'' and inserting the following:
``(G) in issuing or approving any water quality standard
under section 303(c) or 303(d), (H) in issuing any water
quality criterion under section 304(a), including a decision
not to address any effect of the pollutant subject to such
criterion if the Administrator has or is made aware of
information indicating that such effect may occur, and (J)''.
SEC. 14. NATIONAL CLEAN WATER TRUST FUND.
(a) In General.--Title V of the Federal Water Pollution
Control Act (33 U.S.C. 1361-1377) is amended by redesignating
section 519 as section 520 and by inserting after section 518
the following new section:
``SEC. 519. NATIONAL CLEAN WATER TRUST FUND.
``(a) Creation of Trust Fund.--There is established in the
Treasury of the United States a trust fund to be known as the
`Clean Water Trust Fund'.
``(b) Transfers to Trust Fund.--There are hereby
appropriated to the Clean Water Trust Fund amounts equivalent
to the penalties collected under section 309 of this Act and
the penalties collected under section 505(a) of this Act
(excluding any amounts ordered to be used to carry out
mitigation projects under section 309 or 505(a), as the case
may be).
``(c) Administration of Trust Fund.--The Administrator
shall administer the Clean Water Trust Fund. The
Administrator may use moneys in the Fund to carry out
inspections and enforcement activities pursuant to this Act.
In addition, the Administrator may make such amounts of money
in the Fund as the Administrator determines appropriate
available to carry out title VI of this Act.''.
(b) Conforming Amendment to State Revolving Fund Program.--
Section 607 of such Act (33 U.S.C. 1387) is amended--
(1) by inserting ``(a) In General.--'' before ``There is'';
and
(2) by adding at the end the following:
``(b) Treatment of Transfers From Clean Water Trust Fund.--
For purposes of this title, amounts made available from the
Clean Water Trust Fund under section 519 of this Act to carry
out this title shall be treated as funds authorized to be
appropriated to carry out this title and as funds made
available under this title.''.
SEC. 15. APPLICABILITY.
Sections 101(h), 309(g)(6)(A), 505(a)(1), 505(b), 505(g),
and 505(i) of the Federal Water Pollution Control Act, as
inserted or amended by this Act, shall be applicable to all
cases pending under such Act on the date of the enactment of
this Act and all cases brought on or after such date of
enactment relating to violations which occurred before such
date of enactment.
______
By Mr. FEINGOLD:
S. 647. A bill to amend the Congressional Budget and Impeachment
Control Act of 1974 to limit consideration of nonemergency matters in
emergency legislation; to the Committee on the Budget and the Committee
on Governmental Affairs, jointly, pursuant to the order of August 4,
1977, as modified by the order of April 11, 1986, with instructions
that if one committee reports, the other committee have 30 days to
report or be discharged.
THE EMERGENCY SPENDING CONTROL ACT OF 1997
Mr. FEINGOLD. Mr. President, I am pleased to re-introduce a
measure designed to limit consideration of non-emergency matters in
emergency legislation. This bill, S. 647, the Emergency Spending
Control Act of 1997, passed the Senate during the last Congress as part
of the Senate's version of the line-item veto act, though it was later
dropped in conference. Identical language passed the other body during
the 103d Congress with overwhelming bipartisan support, first as a
substitute amendment by a vote of 322 to 99, and then, as amended, by a
vote of 406 to 6.
Mr. President, the support this measure has received in both Houses
is a reflection of the keen awareness Members have of the abuses of the
emergency appropriations process that have taken place. This measure
helps address one aspect of that abuse by limiting emergency spending
bills solely to emergencies by establishing a new point of order
against nonemergency matters, other than rescissions of budget
authority or reductions in direct spending, in any bill that contains
an emergency measure, or an amendment to an emergency measure, or a
conference report that contains an emergency measure.
As an additional enforcement mechanism, the legislation adds further
protection by prohibiting the Office of Management and Budget from
adjusting the caps on discretionary spending, or from adjusting the
sequester process for direct spending and receipts measures, for any
emergency appropriations bill if the bill includes extraneous items
other than rescissions of budget authority or reductions in direct
spending.
Mr. President, though this proposal relates to shoring up our budget
rules, I want to stress that the rules themselves do not solve the
deficit problem. No rule can--whether it is a procedural rule of the
Senate, a statute, or a constitutional amendment. The only way we will
balance the budget is through specific spending cuts and exercising
fiscal restraint.
However, we have made some progress over the past 4 years, and that
progress, as well as the continued work we need to do, can be sustained
through the budget rules we impose on ourselves by ensuring the
sacrifices that have been made, and that we will ask in the future,
will not be hollow or futile.
The rules that have been developed over the past twenty years have
proven useful in this regard, though it bears repeating that the
deficit has begun to come down only as a result of our willingness to
vote for tough measures.
In general, the rules require that new spending, whether through
direct spending, tax expenditures, or discretionary programs, be offset
with spending cuts or revenue increases. However, the rules provide for
exceptions in the event of true emergencies.
The deliberate review through the federal budget process, weighing
one priority against another, may not permit a timely response to an
international crisis, a natural disaster, or some other emergency. We
do not ask that earthquake victims find a funding source before we send
them aid. But that should not, even in dire circumstances, be read to
imply we must not find ways to pay for emergencies, rather than simply
add their costs to the deficit.
But, Mr. President, the emergency exception to our budget rules,
designed to expedite a response to an urgent need, has become a
loophole, abused by those trying to circumvent the scrutiny of the
budget process, in particular, by adding non-emergency matters to
emergency legislation that is receiving special, accelerated
consideration.
[[Page S3676]]
Mr. President, the measure I introduce today targets that abuse by
helping to keep emergency measures clean of extraneous matters on which
there is no emergency designation.
When the appropriations bill to provide relief for the Los Angeles
earthquake was introduced in the 103rd Congress, it initially did four
things: provided $7.8 billion for the Los Angeles quake, $1.2 billion
for the Department of Defense peacekeeping operations; $436 million for
Midwest flood relief, and $315 million more for the 1989 California
earthquake.
But, Mr. President, by the time the Los Angeles earthquake bill
became law, it also provided $1.4 million to fight potato fungus, $2.3
million for FDA pay raises, $14.4 million for the National Park
Service, $12.4 million for the Bureau of Indian Affairs, $10 million
for a new Amtrak station in New York, $40 million for the space
shuttle, $20 million for a fingerprint lab, $500,000 for United States
Trade Representative travel office, and $5.2 million for the Bureau of
Public Debt.
Though non-emergency matters attached to emergency bills are still
subject to the spending caps established in the concurrent budget
resolution, as long as total spending remains under those caps, these
unrelated spending matters are not required to be offset with spending
cuts. In the case of the LA earthquake bill, because the caps had been
reached the new spending was offset by rescissions, but those
rescissions might otherwise have been used for deficit reduction.
Moreover, by using emergency appropriations bills as a vehicle, these
extraneous proposals avoid the examination through which legislative
proposals must go to justify Federal spending. If there is truly a need
to shift funds to these programs, an alternative vehicle--a regular
supplemental appropriations bill, not an emergency spending bill --
should be used.
The measure I am introducing today will restrict that kind of misuse
of the emergency appropriations process. Adding non-emergency,
extraneous matters to emergency appropriations not only is an attempt
to avoid the legitimate scrutiny of our normal budget process, it can
also jeopardize our ability to provide relief to those who are
suffering from the disaster to which we are responding.
Just as importantly, adding superfluous material to emergency
appropriations bills degrades those budget rules on which we rely to
impose fiscal discipline, and that only encourages further erosion of
our efforts to reduce the deficit.
Mr. President, as I noted earlier, this legislation has passed both
Houses in recent years--in the Senate during the 104th Congress as the
amendment I offered to the Line Item Veto Act, and in the other body,
during the 103rd Congress, by a vote of 406 to 6. I urge my colleagues
to join in this effort to pass this measure through both Houses during
this Congress, and help end this abusive practice.
Mr. President, I ask unanimous consent that the text of bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 647
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 ``Emergency Spending Control
Act of 1997''.
SEC. 2. TREATMENT OF EMERGENCY SPENDING.
(a) Emergency Appropriations.--Secton 251(b)(2)(D)(i) of
the Balanced Budget and Emergency Deficit Control Act of 1985
is amended by adding at the end the following new sentence:
``However, OMB shall not adjust any discretionary spending
limit under this clause for any statute that designates
appropriations as emergency requirements if that statute
contains an appropriation for any other matter, event, or
occurrence, but that statute may contain rescissions of
budget authority.''.
(b) Emergency Legislation.--Section 252(e) of the Balanced
Budget and Emergency Deficit Control Act of 1985 is amended
by adding at the end the following new sentence: ``However,
OMB shall not designate any such amounts of new budget
authority, outlays, or receipts as emergency requirements in
the report required under subsection (d) if that statute
contains any other provisions that are not so designated, but
that statute may contain provisions that reduce direct
spending.''.
(c) New Point of Order.--Title IV of the Congressional
Budget Act of 1974 is amended by adding at the end the
following new section:
``point of order regarding emergencies
``Sec. 408. It shall not be in order in the House of
Representatives or the Senate to consider any bill or joint
resolution, or amendment thereto or conference report
thereon, containing an emergency designation for purposes of
section 251(b)(2)(D) or 252(e) of the Balanced Budget and
Emergency Deficit Control Act of 1985 if it also provides an
appropriation or direct spending for any other item or
contains any other matter, but that bill or joint resolution,
amendment, or conference report may contain rescissions of
budget authority or reductions of direct spending, or that
amendment may reduce amounts for that emergency.''.
(d) Conforming Amendment.--The table of contents set forth
in section 1(b) of the Congressional Budget and Impoundment
Control Act of 1974 is amended by inserting after the item
relating to section 407 the following new item:
``Sec. 408. Point of order regarding emergencies.''.
______
By Mr. GORTON (for himself, Mr. Ashcroft, Mr. McCain, and Mr.
Lott:
S. 648. A bill to establish legal standards and procedures for
product liability litigation, and for other purposes; to the Committee
on Commerce, Science, and Transportation.
the product liability reform act of 1997
Mr. GORTON. Mr. President, I am introducing this evening, along with
Senators Ashcroft, McCain, and Lott, a bill to reform and rationalize
our product liability system.
At the beginning of this session, Senator Ashcroft and others
introduced S.5, another measure to address product liability. Although
I agreed with the substance of S.5, which was identical to the
conference report on Product Liability that the President vetoed in the
104th Congress, I did not co-sponsor S.5 because I knew that that
particular bill would not be enacted into law and because I wanted to
craft another bill that would obtain bi-partisan support in the Senate,
address the President's legitimate concerns with the conference report,
and accomplish meaningful reform.
Mr. President, I cannot say that the measure I am introducing tonight
fully accomplishes that. But it comes very close. I introduce this
measure without the co-sponsorship of my good friend and long-time
companion on this worthy mission, Senator Rockefeller, but I introduce
it with the sincere belief that we will continue to work together to
enact product liability reform in 1997.
I introduce this measure to get the process started. It is a good
measure that I believe goes a long way toward meeting the goals I
described above. But as I said, the process is just starting. I welcome
input from my Republican and Democratic colleagues.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 648
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Product
Liability Reform Act of 1997''.
(b) Table of Contents.--The table of contents is as
follows:
Sec. 1. Short title and table of contents.
Sec. 2. Findings and purposes.
TITLE I--PRODUCT LIABILITY REFORM
Sec. 101. Definitions.
Sec. 102. Applicability; preemption.
Sec. 103. Liability rules applicable to product sellers, renters, and
lessors.
Sec. 104. Defense based on claimant's use of intoxicating alcohol or
drugs.
Sec. 105. Misuse or alteration.
Sec. 106. Uniform time limitations on liability.
Sec. 107. Alternative dispute resolution procedures.
Sec. 108. Uniform standards for award of punitive damages.
Sec. 109. Liability for certain claims relating to death.
Sec. 110. Several liability for noneconomic loss.
TITLE II--BIOMATERIALS ACCESS ASSURANCE
Sec. 201. Short title.
Sec. 202. Findings.
Sec. 203. Definitions.
Sec. 204. General requirements; applicability; preemption.
Sec. 205. Liability of biomaterials suppliers.
Sec. 206. Procedures for dismissal of civil actions against
biomaterials suppliers.
[[Page S3677]]
TITLE III--LIMITATIONS ON APPLICABILITY; EFFECTIVE DATE
Sec. 301. Effect of court of appeals decisions.
Sec. 302. Federal cause of action precluded.
Sec. 303. Effective date.
SEC. 2. FINDINGS AND PURPOSES.
(A) Findings.--The Congress finds that--
(1) our Nation is overly litigious, the civil justice
system is overcrowded, sluggish, and excessively costly and
the costs of lawsuits, both direct and indirect, are
inflicting serious and unnecessary injury on the national
economy;
(2) excessive, unpredictable, and often arbitrary damage
awards and unfair allocations of liability have a direct and
undesirable effect on interstate commerce by increasing the
cost and decreasing the availability of goods and services;
(3) the rules of law governing product liability actions,
damage awards, and allocations of liability have evolved
inconsistently within and among the States, resulting in a
complex, contradictory, and uncertain regime that is
inequitable to both plaintiffs and defendants and unduly
burdens interstate commerce.
(4) as a result of excessive, unpredictable, and often
arbitrary damage awards and unfair allocations of liability,
consumers have been adversely affected through the withdrawal
of products, producers, services, and service providers from
the marketplace, and from excessive liability costs passed on
to them through higher prices;
(5) excessive, unpredictable, and often arbitrary damage
awards and unfair allocations of liability jeopardize the
financial well-being of many individuals as well as entire
industries, particularly the Nation's small businesses and
adversely affects government and taxpayers;
(6) the excessive costs of the civil justice system
undermine the ability of American companies to compete
internationally, and serve to decrease the number of jobs and
the amount of productive capital in the national economy;
(7) the unpredictability of damage awards is inequitable to
both plaintiffs and defendants and has added considerably to
the high cost of liability insurance, making it difficult for
producers, consumers, volunteers, and nonprofit organizations
to protect themselves from liability with any degree of
confidence and at a reasonable cost;
(8) because of the national scope of the problems created
by the defects in the civil justice system, it is not
possible for the States to enact laws that fully and
effectively respond to those problems;
(9) it is the constitutional role of the national
government to remove barriers to interstate commerce and to
protect due process rights; and
(10) there is a need to restore rationality, certainty, and
fairness to the civil justice system in order to protect
against excessive, arbitrary, and uncertain damage awards and
to reduce the volume, costs, and delay of litigation.
(b) Purposes.--Based upon the powers contained in Article
I, Section 8, Clause 3 and the Fourteenth Amendment of the
United States Constitution, the purposes of this Act are to
promote the free flow of goods and services and to lessen
burdens on interstate commerce and to uphold constitutionally
protected due process rights by--
(1) establishing certain uniform legal principles of
product liability which provide a fair balance among the
interests of product users, manufacturers, and product
sellers;
(2) placing reasonable limits on damages over and above the
actual damages suffered by a claimant;
(3) ensuring the fair allocation of liability in civil
actions;
(4) reducing the unacceptable costs and delays of our civil
justice system caused by excessive litigation which harm both
plaintiffs and defendants; and
(5) establishing greater fairness, rationality, and
predictability in the civil justice system.
TITLE I--TITLE PRODUCT LIABILITY REFORM
SEC. 101. DEFINITIONS.
For purposes of this title--
(1) Actual malice.--The term ``actual malice'' means
specific intent to cause serious physical injury, illness,
disease, death, or damage to property.
(2) Claimant.--The term ``claimant'' means any person who
brings an action covered by this title and any person on
whose behalf such an action is brought. If such an action is
brought through or on behalf of an estate, the term includes
the claimant's decedent. If such an action is brought through
or on behalf of a minor or incompetent, the term includes the
claimant's legal guardian.
(3) Clear and convincing evidence.--The term ``clear and
convincing evidence'' is that measure or degree of proof that
will produce in the mind of the trier of fact a firm belief
or conviction as to the truth of the allegations sought to be
established. The level of proof required to satisfy such
standard is more than that required under preponderance of
the evidence, but less than that required for proof beyond a
reasonable doubt.
(4) Commercial loss.--The term ``commercial loss'' means
any loss or damage solely to a product itself, loss relating
to a dispute over its value, or consequential economic loss,
the recovery of which is governed by the Uniform Commercial
Code or analogous State commercial or contract law.
(5) Compensatory damages.--The term ``compensatory
damages'' means damages awarded for economic and non-economic
loss.
(6) Economic loss.--The term ``economic loss'' means any
pecuniary loss resulting from harm (including the loss of
earnings or other benefits related to employment, medical
expense loss, replacement services loss, loss due to death,
burial costs, and loss of business or employment
opportunities) to the extent recovery for such loss is
allowed under applicable State law.
(7) Harm.--The term ``harm'' means any physical injury,
illness, disease, or death or damage to property caused by a
product. The term does not include commercial loss.
(8) Manufacturer.--The term ``manufacturer'' means--
(A) any person who is engaged in a business to produce,
create, make, or construct any product (or component part of
a product) and who (i) designs or formulates the product (or
component part of the product), or (ii) has engaged another
person to design or formulate the product (or component part
of the product);
(B) a product seller, but only with respect to those
aspects of a product (or component part of a product) which
are created or affected when, before placing the product in
the stream of commerce, the product seller produces, creates,
makes or constructs and designs, or formulates, or has
engaged another person to design or formulate, an aspect of
the product (or component part of the product) made by
another person; or
(C) any product seller not described in subparagraph (B)
which holds itself out as a manufacturer to the user of the
product.
(9) Noneconomic loss.--The term ``noneconomic loss'' means
subjective, nonmonetary loss resulting from harm, including
pain, suffering, inconvenience, mental suffering, emotional
distress, loss of society and companionship, loss of
consortium, injury to reputation, and humiliation.
(10) Person.--The term ``person'' means any individual
corporation, company, association, firm, partnership,
society, joint stock company, or any other entity (including
any governmental entity).
(11) Product.--
(A) In general.--The term ``product'' means any object,
substance, mixture, or raw material in a gaseous, liquid, or
solid state which--
(i) is capable of delivery itself or as an assembled whole,
in a mixed or combined state, or as a component part or
ingredient;
(ii) is produced for introduction into trade or commerce;
(iii) has intrinsic economic value; and
(iv) is intended for sale or lease to persons for
commercial or personal use.
(B) Exclusions.--The term does not include--
(i) tissue, organs, blood, and blood products used for
therapeutic or medical purposes, except to the extent that
such tissue, organs, blood, and blood products (or the
provision thereof) are subject, under applicable State law,
to a standard of liability other than negligence; or
(ii) electricity, water delivered by a utility, natural
gas, or steam.
(12) Product liability action.-- The term ``product
liability action'' means a civil action brought on any theory
for harm caused by a product.
(13) Product seller--
(A) In general.--The term ``product seller'' means a person
who in the course of a business conducted for that purpose--
(i) sells, distributes, rents, leases, prepares, blends,
packages, labels, or otherwise is involved in placing a
product in the stream of commerce; or
(ii) installs, repairs, refurbishes, reconditions, or
maintains the harm-causing aspect of the product.
(B) Exclusion.--The term ``product seller'' does not
include--
(i) a seller or lessor of real property;
(ii) a provider of professional services in any case in
which the sale or use of a product is incidental to the
transaction and the essence of the transaction is the
furnishing of judgment, skill, or services; or
(iii) any person who--
(I) acts in only a financial capacity with respect to the
sale of a product; or
(II) leases a product under a lease arrangement in which
the lessor does not initially select the leased product and
does not during the lease term ordinarily control the daily
operations and maintenance of the product.
(14) Punitive damages.--The term ``punitive damages'' means
damages awarded against any person or entity to punish or
deter such person or entity, or others, from engaging in
similar behavior in the future.
(15) State.--The term ``State'' means any State of the
United States, the District of Columbia, Commonwealth of
Puerto Rico, the Northern Mariana Islands, the Virgin
Islands, Guam, American Samoa, and any other territory or
possession of the United States or any political subdivision
of any of the foregoing.
SEC. 102. APPLICABILITY; PREEMPTION.
(a) Preemption.--
(1) In general.--This Act governs any product liability
action brought in any State or Federal court on any theory
for harm caused by a product.
(2) Actions excluded.--A civil action brought for
commercial loss shall be governed only by applicable
commercial or contract law.
(b) Relationship to State Law.--This title supersedes State
law only to the extent that State law applies to an issue
covered by this title. Any issue that is not governed by
[[Page S3678]]
this title, including any standard of liability applicable to
a manufacturer, shall be governed by otherwise applicable
State or Federal law.
(c) Effect on Other Law.--Nothing in this Act shall be
construed to--
(1) waive or affect any defense of sovereign immunity
asserted by any State under any law;
(2) supersede or alter any Federal law;
(3) waive or affect any defense of sovereign immunity
asserted by the United States;
(4) affect the applicability of any provision of chapter 97
of title 28, United States Code;
(5) preempt State choice-of-law rules with respect to
claims brought by a foreign nation or a citizen of a foreign
nation;
(6) affect the right of any court to transfer venue or to
apply the law of a foreign nation or to dismiss a claim of a
foreign nation or of a citizen of a foreign nation on the
ground of inconvenient forum; or
(7) supersede or modify any statutory or common law,
including any law providing for an action to abate a
nuisance, that authorizes a person to institute an action for
civil damages or civil penalties, cleanup costs, injunctions,
restitution, cost recovery, punitive damages, or any other
form of relief for remediation of the environment (as
defined in section 101(8) of the Comprehensive
Environmental Response, Compensation, and Liability Act of
1980 (42 U.S.C. 9601(8)).
(d) Actions for Negligent Entrustment.--A civil action for
negligent entrustment, or any action brought under any theory
of dramshop or third-party liability arising out of the sale
or provision of alcohol products to intoxicated persons or
minors, shall not be subject to the provisions of this Act
but shall be subject to any applicable State law.
SEC. 103. LIABILITY RULES APPLICABLE TO PRODUCT SELLERS,
RENTERS, AND LESSORS.
(a) General Rule.--
(1) In general.--In any product liability action, a product
seller other than a manufacturer shall be liable to a
claimant only if the claimant establishes--
(A) that--
(i) the product that allegedly caused the harm that is the
subject of the complaint was sold, rented, or leased by the
product seller;
(ii) the product seller failed to exercise reasonable care
with respect to the product; and
(iii) the failure to exercise reasonable care was a
proximate cause of harm to the claimant;
(B) that--
(i) the product seller made an express warranty applicable
to the product that allegedly caused the harm that is the
subject of the complaint, independent of any express warranty
made by a manufacturer as to the same product;
(ii) the product failed to conform to the warranty; and
(iii) the failure of the product to conform to the warranty
caused harm to the claimant; or
(C) that--
(i) the product seller engaged in intentional wrongdoing,
as determined under applicable State law; and
(ii) such intentional wrongdoing was a proximate cause of
the harm that is the subject of the complaint.
(2) Reasonable opportunity for inspection.--For purposes of
paragraph (1)(A)(ii), a product seller shall not be
considered to have failed to exercise reasonable care with
respect to a product based upon an alleged failure to inspect
the product--
(A) if the failure occurred because there was no reasonable
opportunity to inspect the product; or
(B) if the inspection, in the exercise of reasonable care,
would not have revealed the aspect of the product which
allegedly caused the claimant's harm.
(b) Special Rule.--
(1) In general.--A product seller shall be deemed to be
liable as a manufacturer of a product for harm caused by the
product if--
(A) the manufacturer is not subject to service of process
under the laws of any State in which the action may be
brought; or
(B) the court determines that the claimant would be unable
to enforce a judgment against the manufacturer.
(2) Statute of limitations.--For purposes of this
subsection only, the statute of limitations applicable to
claims asserting liability of a product seller as a
manufacturer shall be tolled from the date of the filing of a
complaint against the manufacturer to the date that judgment
is entered against the manufacturer.
(c) Rented or Leased Products.--
(1) Notwithstanding any other provision of law, any person
engaged in the business of renting or leasing a product
(other than a person excluded from the definition of product
seller under section 101(13)(B)) shall be subject to
liability in a product liability action under subsection (a),
but any person engaged in the business of renting or leasing
a product shall not be liable to a claimant for the tortious
act of another solely by reason of ownership of such product.
(2) For purposes of paragraph (1), and for determining the
applicability of this title to any person subject to
paragraph (1), the term ``product liability action'' means a
civil action brought on any theory for harm caused by a
product or product use.
SEC. 104. DEFENSE BASED ON CLAIMANT'S USE OF INTOXICATING
ALCOHOL OR DRUGS.
(a) General Rule.--In any product liability action, it
shall be a complete defense to such action if the defendant
proves that--
(1) the claimant was intoxicated or was under the influence
of intoxicating alcohol or any drug when the accident or
other event which resulted in such claimant's harm occurred;
and
(2) the claimant, as a result of the influence of the
alcohol or drug, was more than 50 percent responsible for
such accident or other event.
(b) Construction.--For purposes of subsection (a)--
(1) the determination of whether a person was intoxicated
or was under the influence of intoxicating alcohol or any
drug shall be made pursuant to applicable State law; and
(2) the term ``drug'' mean any controlled substance as
defined in the Controlled Substances Act (21 U.S.C. 802(6))
that was not legally prescribed for use by the claimant or
that was taken by the claimant other than in accordance with
the terms of a lawfully issued prescription.
SEC. 105. MISUSE OR ALTERATION.
(a) General Rule.--
(1) In general.--In a product liability action, the damages
for which a defendant is otherwise liable under Federal or
State law shall be reduced by the percentage of
responsibility for the claimant's harm attributable to misuse
or alteration of a product by any person if the defendant
establishes that such percentage of the claimant's harm was
proximately caused by a use or alteration of a product--
(A) in violation of, or contrary to, a defendant's express
warnings or instructions if the warnings or instructions are
adequate as determined pursuant to applicable State law; or
(B) involving a risk of harm which was known or should have
been known by the ordinary person who uses or consumes the
product with the knowledge common to the class of persons who
used or would be reasonably anticipated to use the product.
(2) Use intended by a manufacturer is not misuse or
alteration.--For the purposes of this Act, a use of a product
that is intended by the manufacturer of the product does not
constitute a misuse or alteration of the product.
(b) Workplace Injury.--Notwithstanding subsection (a), the
damages for which a defendant is otherwise liable under State
law shall not be reduced by the percentage of responsibility
for the claimant's harm attributable to misuse or alteration
of the product by the claimant's employer or any coemployee
who is immune from suit by the claimant pursuant to the State
law applicable to workplace injuries.
SEC. 106. UNIFORM TIME LIMITATIONS ON LIABILITY.
(a) Statute of Limitations.--
(1) In general.--Except as provided in paragraphs (2) and
(3) and subsection (b), a product liability action may be
filed not later than 2 years after the date on which the
claimant discovered or, in the exercise of reasonable care,
should have discovered--
(A) the harm that is the subject of the action; and
(B) the cause of the harm.
(2) Exception.--A person with a legal disability (as
determined under applicable law) may file a product liability
action not later than 2 years after the date on which the
person ceases to have the legal disability.
(3) Effect of stay or injunction.--If the commencement of a
civil action that is subject to this title is stayed or
enjoined, the running of the statute of limitations under
this section shall be suspended until the end of the period
that the stay or injunction is in effect.
(b) Statute of Repose.--
(1) In general.--Subject to paragraphs (2) and (3), no
product liability action that is subject to this Act
concerning a product alleged to have caused harm (other than
toxic harm) may be filed after the 18-year period beginning
at the time of delivery of the product to the first purchaser
or lessee.
(2) Exceptions.--
(A) A motor vehicle, vessel, aircraft, or train, that is
used primarily to transport passengers for hire, shall not be
subject to this subsection.
(B) Paragraph (1) does not bar a product liability action
against a defendant who made an express warranty in writing
as to the safety or life expectancy of the specific product
involved which was longer than 18 years, but it will apply at
the expiration of that warranty.
(c) Transitional Provision Relating to Extension of Period
for Bringing Certain Actions.--If any provision of subsection
(a) or (b) shortens the period during which a product
liability action could be otherwise brought pursuant to
another provision of law, the claimant may,
notwithstanding subsections (a) and (b), bring the product
liability action not later than 1 year after the date of
enactment of this Act.
SEC. 107. ALTERNATIVE DISPUTE RESOLUTION PROCEDURES.
(a) Service of Offer.--A claimant or a defendant in a
product liability action may, not later than 60 days after
the service of--
(1) the initial complaint; or
(2) the applicable deadline for a responsive pleading;
whichever is later, serve upon an adverse party an offer to
proceed pursuant to any voluntary, nonbinding alternative
dispute
[[Page S3679]]
resolution procedure established or recognized under the law
of the State in which the product liability action is brought
or under the rules of the court in which such action is
maintained.
(b) Written Notice of Acceptance or Rejection.--Except as
provided in subsection (c), not later than 10 days after the
service of an offeree to proceed under subsection (a), an
offeree shall file a written notice of acceptance or
rejection of the offer.
(c) Extension.--The court may, upon motion by an offeree
made prior to the expiration of the 10-day period specified
in subsection (b), extend the period for filing a written
notice under such subsection for a period of not more than 60
days after the date of expiration of the period specified in
subsection (b). Discovery may be permitted during such
period.
SEC. 108. UNIFORM STANDARDS FOR AWARD OF PUNITIVE DAMAGES.
(a) General Rule.--Punitive damages may, to the extent
permitted by applicable State law, be awarded against a
defendant if the claimant establishes by clear and convincing
evidence that conduct carried out by the defendant with a
conscious, flagrant indifference to the rights or safety of
others was the proximate cause of the harm that is the
subject of the action in any product liability action.
(b) Limitation on Amount.--
(1) In general.--The amount of punitive damages that may be
awarded in an action described in subsection (a) may not
exceed the greater of--
(A) 2 times the sum of the amount awarded to the claimant
for economic loss and non-economic loss; or
(B) $250,000.
(2) Special rule.--Notwithstanding paragraph (1), in any
action described in subsection (a) against an individual
whose net worth does not exceed $500,000 or against an owner
of an unincorporated business, or any partnership,
corporation, association, unit of local government, or
organization which has fewer than 25 full-time employees, the
punitive damages shall not exceed the lesser of--
(A) 2 times the sum of the amount awarded to the claimant
for economic loss and non-economic loss; or
(B) $250,000.
For the purpose of determining the applicability of this
paragraph to a corporation, the number of employees of a
subsidiary or wholly-owned corporation shall include all
employees of a parent or sister corporation.
(3) Exception for Insufficient award in cases of egregious
conduct.--
(A) Determination by court.--If the court makes a
determination, after considering each of the factors in
subparagraph (B), that the application of paragraph (1) would
result in an award of punitive damages that is insufficient
to punish the egregious conduct of the defendant against whom
the punitive damages are to be awarded or to deter such
conduct in the future, the court shall determine the
additional amount of punitive damages (referred to in this
paragraph as the ``additional amount'') in excess of the
amount determined in accordance with paragraph (1) to be
awarded against the defendant in a separate proceeding in
accordance with this paragraph.
(B) Factors for consideration.--In any proceeding under
paragraph (A), the court shall consider--
(i) the extent to which the defendant acted with actual
malice;
(ii) the likelihood that serious harm would arise from the
conduct of the defendant;
(iii) the degree of the awareness of the defendant of that
likelihood;
(iv) the profitability of the misconduct to the defendant;
(v) the duration of the misconduct and any concurrent or
subsequent concealment of the conduct by the defendant;
(vi) the attitude and conduct of the defendant upon the
discovery of the misconduct and whether the misconduct has
terminated;
(vii) the financial condition of the defendant; and
(viii) the cumulative deterrent effect of other losses,
damages, and punishment suffered by the defendant as a result
of the misconduct, reducing the amount of punitive damages on
the basis of the economic impact and severity of all measures
to which the defendant has been or may be subjected,
including--
(I) compensatory and punitive damage awards to similarly
situated claimants;
(II) the adverse economic effect of stigma or loss of
reputation;
(III) civil fines and criminal and administrative
penalties; and
(IV) stop sale, cease and desist, and other remedial or
enforcement orders.
(C) Requirements for awarding additional amount.--If the
court awards an additional amount pursuant to this
subsection, the court shall state its reasons for setting the
amount of the additional amount in findings of fact and
conclusions of law.
(D) Preemption.--This section does not create a cause of
action for punitive damages and does not preempt or supersede
any State or Federal law to the extent that such law would
further limit the award of punitive damages. Nothing in this
subsection shall modify or reduce the ability of courts to
order remittiturs.
(4) Application by court.--This subsection shall be applied
by the court and application of this subsection shall not be
disclosed to the jury. Nothing in this subsection shall
authorize the court to enter an award of punitive damages in
excess of the jury's initial award of punitive damages.
(c) Bifurcation at Request of Any Party.--
(1) In general.--At the request of any party the trier of
fact in any action that is subject to this section shall
consider in a separate proceeding, held subsequent to the
determination of the amount of compensatory damages, whether
punitive damages are to be awarded for the harm that is the
subject of the action and the amount of the award.
(2) Inadmissibility of evidence relative only to a claim of
punitive damages in a proceeding concerning compensatory
damages.--If any party requests a separate proceeding under
paragraph (1), in a proceeding to determine whether the
claimant may be awarded compensatory damages, any evidence,
argument, or contention that is relevant only to the claim of
punitive damages, as determined by applicable State law,
shall be inadmissible.
SEC. 109. LIABILITY FOR CERTAIN CLAIMS RELATING TO DEATH.
In any civil action in which the alleged harm to the
claimant is death and, as of the effective date of this Act,
the applicable State law provides, or has been construed to
provide, for damages only punitive in nature, a defendant may
be liable for any such damages without regard to section 108,
but only during such time as the State law so provides. This
section shall cease to be effective September 1, 1997.
SEC. 110. SEVERAL LIABILITY FOR NONECONOMIC LOSS.
(a) General Rule.--In a product liability action, the
liability of each defendant for noneconomic loss shall be
several only and shall not be joint.
(b) Amount of Liability.--
(1) In general.--Each defendant shall be liable only for
the amount of noneconomic loss allocated to the defendant in
direct proportion to the percentage of responsibility of the
defendant (determined in accordance with paragraph (2)) for
the harm to the claimant with respect to which the defendant
is liable. The court shall render a separate judgment against
each defendant in an amount determined pursuant to the
preceding sentence.
(2) Percentage of responsibility.--For purposes of
determining the amount of noneconomic loss allocated to a
defendant under this section, the trier of fact shall
determine the percentage of responsibility of each person
responsible for the claimant's harm, whether or not such
person is a party to the action.
TITLE II--BIOMATERIALS ACCESS ASSURANCE
SEC. 201. SHORT TITLE.
This title may be cited as the ``Biomaterials Access
Assurance Act of 1997''.
SEC. 202. FINDINGS.
Congress finds that--
(1) each year millions of citizens of the United States
depend on the availability of lifesaving or life enhancing
medical devices, many of which are permanently implantable
within the human body;
(2) a continued supply of raw materials and component parts
is necessary for the invention, development, improvement, and
maintenance of the supply of the devices;
(3) most of the medical devices are made with raw materials
and component parts that--
(A) are not designed or manufactured specifically for use
in medical devices; and
(B) come in contact with internal human tissue;
(4) the raw materials and component parts also are used in
a variety of nonmedical products;
(5) because small quantities of the raw materials and
component parts are used for medical devices, sales of raw
materials and component parts for medical devices constitute
an extremely small portion of the overall market for the raw
materials and medical devices;
(6) under the Federal Food, Drug, and Cosmetic Act (21
U.S.C. 301 et seq.), manufacturers of medical devices are
required to demonstrate that the medical devices are safe and
effective, including demonstrating that the products are
properly designed and have adequate warnings or
instructions;
(7) notwithstanding the fact that raw materials and
component parts suppliers do not design, produce, or test a
final medical device, the suppliers have been the subject of
actions alleging inadequate--
(A) design and testing of medical devices manufactured with
materials or parts supplied by the suppliers; or
(B) warnings related to the use of such medical devices;
(8) even though suppliers of raw materials and component
parts have very rarely been held liable in such actions, such
suppliers have ceased supplying certain raw materials and
component parts for use in medical devices because the costs
associated with litigation in order to ensure a favorable
judgment for the suppliers far exceeds the total potential
sales revenues from sales by such suppliers to the medical
device industry;
(9) unless alternate sources of supply can be found, the
unavailability of raw materials and component parts for
medical devices will lead to unavailability of lifesaving and
life-enhancing medical devices;
(10) because other suppliers of the raw materials and
component parts in foreign nations are refusing to sell raw
materials or component parts for use in manufacturing certain
medical devices in the United States,
[[Page S3680]]
the prospects for development of new sources of supply for
the full range of threatened raw materials and component
parts for medical devices are remote;
(11) it is unlikely that the small market for such raw
materials and component parts in the United States could
support the large investment needed to develop new suppliers
of such raw materials and component parts;
(12) attempts to develop such new suppliers would raise the
cost of medical devices;
(13) courts that have considered the duties of the
suppliers of the raw materials and component parts have
generally found that the suppliers do not have a duty--
(A) to evaluate the safety and efficacy of the use of a raw
material or component part in a medical device; and
(B) to warn consumers concerning the safety and
effectiveness of a medical device;
(14) attempts to impose the duties referred to in
subparagraphs (A) and (B) of paragraph (13) on suppliers of
the raw materials and component parts would cause more harm
than good by driving the suppliers to cease supplying
manufacturers of medical devices; and
(15) in order to safeguard the availability of a wide
variety of lifesaving and life-enhancing medical devices,
immediate action is needed--
(A) to clarify the permissible bases of liability for
suppliers of raw materials and component parts for medical
devices; and
(B) to provide expeditious procedures to dispose of
unwarranted suits against the suppliers in such manner as to
minimize litigation costs.
SEC. 203. DEFINITIONS.
As used in this title:
(1) Biomaterials supplier.--
(A) In general.--The term ``biomaterials supplier'' means
an entity that directly or indirectly supplies a component
part or raw material for use in the manufacture of an
implant.
(B) Persons included.--Such term includes any person who--
(i) has submitted master files to the Secretary for
purposes of premarket approval of a medical device; or
(ii) licenses a biomaterials supplier to produce component
parts or raw materials.
(2) Claimant.--
(A) In general.--The term ``claimant'' means any person who
brings a civil action, or on whose behalf a civil action is
brought, arising from harm allegedly caused directly or
indirectly by an implant, including a person other than the
individual into whose body, or in contact with whose blood or
tissue, the implant is placed, who claims to have suffered
harm as a result of the implant.
(B) Action brought on behalf of an estate.--With respect to
an action brought on behalf of or through the estate of an
individual into whose body, or in contact with whose blood or
tissue the implant is placed, such term includes the decedent
that is the subject of the action.
(C) Action brought on behalf of a minor or incompetent.--
With respect to an action brought on behalf of or through a
minor or incompetent, such term includes the parent or
guardian of the minor or incompetent.
(D) Exclusions.--Such term does not include--
(i) a provider of professional health care services, in any
case in which--
(I) the sale or use of an implant is incidental to the
transaction; and
(II) the essence of the transaction is the furnishing of
judgment, skill, or services;
(ii) a person acting in the capacity of a manufacturer,
seller, or biomaterials supplier;
(iii) a person alleging harm caused by either the silicone
gel or the silicone envelope utilized in a breast implant
containing silicone gel, except that--
(I) neither the exclusion provided by this clause nor any
other provision of this Act may be construed as a finding
that silicone gel (or any other form of silicone) may or may
not cause harm; and
(II) the existence of the exclusion under this clause may
not--
(aa) be disclosed to a jury in any civil action or other
proceeding; and
(bb) except as necessary to establish the applicability of
this Act, otherwise be presented in any civil action or other
proceeding; or
(iv) any person who acts in only a financial capacity with
respect to the sale of an implant.
(3) Component part.--
(A) In general.--The term ``component part'' means a
manufactured piece of an implant.
(B) Certain components.--Such term includes a manufactured
piece of an implant that--
(i) has significant non-implant applications; and
(ii) alone, has no implant value or purpose, but when
combined with other component parts and materials,
constitutes an implant.
(4) Harm.--
(A) In general.--The term ``harm'' means--
(i) any injury to or damage suffered by an indiviudal;
(ii) any illness, disease, or death of that individual
resulting from that injury or damage; and
(iii) any loss to that individual or any other individual
resulting from that injury or damage.
(B) Exclusion.--The term does not include any commercial
loss or loss of or damage to an implant.
(5) Implant.--The term ``implant'' means--
(A) a medical device that is intended by the manufacturer
of the device--
(i) to be placed into a surgically or naturally formed or
existing cavity of the body for a period of at least 30 days;
or
(ii) to remain in contact with bodily fluids or internal
human tissue through a surgically produced opening for a
period of less than 30 days; and
(B) suture materials used in implant procedures.
(6) Manufacturer.--The term ``manufacturer'' means any
person who, with respect to an implant--
(A) is engaged in the manufacture, preparation,
propagation, compounding, or processing (as defined in
section 510(a)(1)) of the Federal Food, Drug, and Cosmetic
Act (21 U.S.C. 360(a)(1)) of the implant; and
(B) is required--
(i) to register with the Secretary pursuant to section 510
of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360)
and the regulations issued under such section; and
(ii) to include the implant on a list of devices filed with
the Secretary pursuant to section 501(j) of such Act (21
U.S.C. 360(j)) and the regulations issued under such section.
(7) Medical device.--The term ``medical device'' means a
device, as defined in section 201(h) of the Federal Food,
Drug, and Cosmetic Act (21 U.S.C. 321(h)) and includes any
device component of any combination product as that term is
used in section 503(g) of such Act (21 U.S.C. 353(g)).
(8) Raw material.--The term ``raw material'' means a
substance or product that--
(A) has a generic use; and
(B) may be used in an application other than an implant.
(9) Secretary.--The term ``Secretary'' means the Secretary
of Health and Human Services.
(10) Seller.--
(A) In general.--The term ``seller'' means a person who, in
the course of a business conducted for that purpose, sells,
distributes, leases, packages, labels, or otherwise places an
implant in the stream of commerce.
(B) Exclusions.--The term does not include--
(i) a seller or lessor of real property;
(ii) a provider of professional services, in any case in
which the sale or use of an implant is incidental to the
transaction and the essence of the transaction is the
furnishing of judgment, skill, or services; or
(iii) any person who acts in only a financial capacity with
respect to the sale of an implant.
SEC. 204. GENERAL REQUIREMENTS; APPLICABILITY; PREEMPTION.
(a) General Requirements.--
(1) In general.--In any civil action covered by this title,
a biomaterials supplier may raise any defense set forth in
section 205.
(2) Procedures.--Notwithstanding any other provision of
law, the Federal or State court in which a civil action
covered by this title is pending shall, in connection with a
motion for dismissal or judgment based on a defense described
in paragraph (1), use the procedures set forth in section
206.
(b) Applicability.--
(1) In general.--Except as provided in paragraph (2),
notwithstanding any other provision of law, this title
applies to any civil action brought by a claimant, whether in
a Federal or State court, against a manufacturer, seller, or
biomaterials supplier, on the basis of any legal theory, for
harm allegedly caused by an implant.
(2) Exclusion.--A civil action brought by a purchaser of a
medical device for use in providing professional services
against a manufacturer, seller, or biomaterials supplier for
loss or damage to an implant or for commercial loss to the
purchaser--
(A) shall not be considered an action that is subject to
this title; and
(B) shall be governed by applicable commercial or contract
law.
(c) Scope of Preemption.--
(1) In general.--This title supersedes any State law
regarding recovery for harm caused by an implant and any rule
of procedure applicable to a civil action to recover damages
for such harm only to the extent that this title establishes
a rule of law applicable to the recovery of such damages.
(2) Applicability of other laws.--Any issue that arises
under this title and that is not governed by a rule of law
applicable to the recovery of damages described in paragraph
(1) shall be governed by applicable Federal or State law.
(d) Statutory Construction.--Nothing in this title may be
construed--
(1) to affect any defense available to a defendant under
any other provisions of Federal or State law in an action
alleging harm caused by an implant; or
(2) to create a cause of action or Federal court
jurisdiction pursuant to section 1331 or 1337 of title 28.
United States Code, that otherwise would not exist under
applicable Federal or State law.
SEC. 205. LIABILITY OF BIOMATERIALS SUPPLIERS.
(a) In General.--
(1) Exclusion from liability.--Except as provided in
paragraph (2), a biomaterials supplier shall not be liable
for harm to a claimant caused by an implant.
(2) Liability.--A biomaterials supplier that--
[[Page S3681]]
(A) is a manufacturer may be liable for harm to a claimant
described in subsection (b);
(B) is a seller may be liable for harm to a claimant
described in subsection (c); and
(C) furnishes raw materials or component parts that fail to
meet applicable contractual requirements or specifications
may be liable for harm to a claimant described in subsection
(d).
(b) Liability as Manufacturer.--
(1) In general.--A biomaterials supplier may, to the extent
required and permitted by any other applicable law, be liable
for harm to a claimant caused by an implant if the
biomaterials supplier is the manufacturer of the implant.
(2) Grounds for liability.--The biomaterials supplier may
be considered the manufacturer of the implant that allegedly
caused harm to a claimant only if the biomaterials supplier--
(A)(i) has registered with the Secretary pursuant to
section 510 of the Federal Food, Drug, and Cosmetic Act (21
U.S.C. 360) and the regulations issued under such section;
and
(ii) included the implant on a list of devices filed with
the Secretary pursuant to section 510(j) of such Act (21
U.S.C. 360(j)) and the regulations issued under such section;
(B) is the subject of a declaration issued by the Secretary
pursuant to paragraph (3) that states that the supplier, with
respect to the implant that allegedly caused harm to the
claimant, was required to--
(i) register with the Secretary under section 510 of such
Act (21 U.S.C. 360), and the regulations issued under such
section, but failed to do so; or
(ii) include the implant on a list of devices filed with
the Secretary pursuant to section 510(j) of such Act (21
U.S.C. 360(j)) and the regulations issued under such section,
but failed to do so; or
(C) is related by common ownership or control to a person
meeting all the requirements described in subparagraph (A) or
(B), if the court deciding a motion to dismiss in accordance
with section 206(c)(3)(B)(i) finds, on the basis of
affidavits submitted in accordance with section 206, that it
is necessary to impose liability on the biomaterials supplier
as a manufacturer because the related manufacturer meeting
the requirements of subparagraph (A) or (B) lacks sufficient
financial resources to satisfy any judgment that the court
feels it is likely to enter should the claimant prevail.
(3) Administrative procedures.--
(A) In general.--The Secretary may issue a declaration
described in paragraph (2)(B) on the motion of the Secretary
or on petition by any person, after providing--
(i) notice to the affected persons; and
(ii) an opportunity for an informal hearing.
(B) Docketing and final decision.--Immediately upon receipt
of a petition filed pursuant to this paragraph, the Secretary
shall docket the petition. Not later than 180 days after the
petition is filed, the Secretary shall issue a final decision
on the petition.
(C) Applicability of statute of limitations.--Any
applicable statute of limitations shall toll during the
period during which a claimant has filed a petition with the
Secretary under this paragraph.
(c) Liability as Seller.--A biomaterials supplier may, to
the extent required and permitted by any other applicable
law, be liable as a seller for harm to a claimant caused by
an implant if--
(1) the biomaterials supplier--
(A) held title to the implant that allegedly caused harm to
the claimant as a result of purchasing the implant after--
(i) the manufacture of the implant; and
(ii) the entrance of the implant in the stream of commerce;
and
(B) subsequently resold the implant; or
(2) the biomaterials supplier is related by common
ownership or control to a person meeting all the requirements
described in paragraph (1), if a court deciding a motion to
dismiss in accordance with section 206(c)(3)(B)(ii) finds, on
the basis of affidavits submitted in accordance with section
206, that it is necessary to impose liability on the
biomaterials supplier as a seller because the related seller
meeting the requirements of paragraph (1) lacks sufficient
financial resources to satisfy any judgment that the court
feels it is likely to enter should the claimant prevail.
(d) Liability for Violating Contractual Requirements or
Specifications.--A biomaterials supplier may, to the extent
required and permitted by any other applicable law, be liable
for harm to a claimant caused by an implant, if the claimant
in an action shows, by a preponderance of the evidence,
that--
(1) the raw materials or component parts delivered by the
biomaterials supplier either--
(A) did not constitute the product described in the
contract between the biomaterials supplier and the person who
contracted for delivery of the product; or
(B) failed to meet any specifications that were--
(i) provided to the biomaterials supplier and not expressly
repudiated by the biomaterials supplier prior to acceptance
of delivery of the raw materials or component parts;
(ii)(I) published by the biomaterials supplier;
(II) provided to the manufacturer by the biomaterials
supplier; or
(III) contained in a master file that was submitted by the
biomaterials supplier to the Secretary and that is currently
maintained by the biomaterials supplier for purposes of
premarket approval of medical devices; or
(iii) included in the submissions for purposes of premarket
approval or review by the Secretary under section 510, 513,
515, or 520 of the Federal Food, Drug, and Cosmetic Act (21
U.S.C. 360, 360c, 360e, or 360j), and received clearance from
the Secretary if such specifications were provided by the
manufacturer to the biomaterials supplier and were not
expressly repudiated by the biomaterials supplier prior to
the acceptance by the manufacturer of delivery of the raw
materials or component parts; and
(2) such conduct was an actual and proximate cause of the
harm to the claimant.
SEC. 206. PROCEDURES FOR DISMISSAL OF CIVIL ACTIONS AGAINST
BIOMATERIALS SUPPLIERS.
(a) Motion To Dismiss.--In any action that is subject to
this title, a biomaterials supplier who is a defendant in
such action may, at any time during which a motion to dismiss
may be filed under an applicable law, move to dismiss the
action against it on the grounds that--
(1) the defendant is a biomaterials supplier; and
(2)(A) the defendant should not, for the purposes of--
(i) section 205(b), be considered to be a manufacturer of
the implant that is subject to such section; or
(ii) section 205(c), be considered to be a seller of the
implant that allegedly caused harm to the claimant; or
(B)(i) the claimant has failed to establish, pursuant to
section 205(d), that the supplier furnished raw materials or
component parts in violation of contractual requirements or
specifications; or
(ii) the claimant has failed to comply with the procedural
requirements of subsection (b).
(b) Manufacturer of Implant Shall Be Named a Party.--The
claimant shall be required to name the manufacturer of the
implant as a party to the action, unless--
(1) the manufacturer is subject to service of process
solely in a jurisdiction in which the biomaterials supplier
is not domiciled or subject to a service of process; or
(2) an action against the manufacturer is barred by
applicable law.
(c) Proceeding on Motion To Dismiss.--The following rules
shall apply to any proceeding on a motion to dismiss filed
under this section:
(1) Affidavits relating to listing and declarations.--
(A) In general.--The defendant in the action may submit an
affidavit demonstrating that defendant has not included the
implant on a list, if any, filed with the Secretary pursuant
to section 510(j) of the Federal Food, Drug, and Cosmetic Act
(21 U.S.C. 360(j)).
(B) Response to motion to dismiss.--In response to the
motion to dismiss, the claimant may submit an affidavit
demonstrating that--
(i) the Secretary has, with respect to the defendant and
the implant that allegedly caused harm to the claimant,
issued a declaration pursuant to section 205(b)(2)(B); or
(ii) the defendant who filed the motion to dismiss is a
seller of the implant who is liable under section 205(c).
(2) Effect of motion to dismiss on discovery.--
(A) In general.--If a defendant files a motion to dismiss
under paragraph (1) or (2) of subsection (a), no discovery
shall be permitted in connection to the action that is the
subject of the motion, other than discovery necessary to
determine a motion to dismiss for lack of jurisdiction, until
such time as the court rules on the motion to dismiss in
accordance with the affidavits submitted by the parties in
accordance with this section.
(B) Discovery.--If a defendant files a motion to dismiss
under subsection (a)(2)(B)(i) on the grounds that the
biomaterials supplier did not furnish raw materials or
component parts in violation of contractual requirements or
specifications, the court may permit discovery, as ordered by
the court. The discovery conducted pursuant to this
subparagraph shall be limited to issues that are directly
relevant to--
(i) the pending motion to dismiss; or
(ii) the jurisdiction of the court.
(3) Affidavits relating status of defendant.--
(A) In general.--Except as provided in clauses (i) and (ii)
of subparagraph (B), the court shall consider a defendant to
be a biomaterials supplier who is not subject to an action
for harm to a claimant caused by an implant, other than an
action relating to liability for a violation of contractual
requirements or specifications described in subsection (d).
(B) Responses to motion to dismiss.--The court shall grant
a motion to dismiss any action that asserts liability of the
defendant under subsection (b) or (c) of section 205 on the
grounds that the defendant is not a manufacturer subject to
such section 205(b) or seller subject to section 205(c),
unless the claimant submits a valid affidavit that
demonstrates that--
(i) with respect to a motion to dismiss contending the
defendant is not a manufacturer, the defendant meets the
applicable requirements for liability as a manufacturer under
section 205(b); or
(ii) with respect to a motion to dismiss contending that
the defendant is not a seller, the defendant meets the
applicable requirements for liability as a seller under
section 205(c).
[[Page S3682]]
(4) Basis of ruling on motion to dismiss.--
(A) In general.--The court shall rule on a motion to
dismiss filed under subsection (a) solely on the basis of the
pleadings of the parties made pursuant to this section and
any affidavits submitted by the parties pursuant to this
section.
(B) Motion for summary judgment.--Notwithstanding any other
provision of law, if the court determines that the pleadings
and affidavits made by parties pursuant to this section raise
genuine issues concerning material facts with respect to a
motion concerning contractual requirements and
specifications, the court may deem the motion to dismiss to
be a motion for summary judgment made pursuant to subsection
(d).
(d) Summary Judgment.--
(1) In general.--
(A) Basis for entry of judgment.--A biomaterials supplier
shall be entitled to entry of judgment without trial if the
court finds there is no genuine issue concerning any material
fact for each applicable element set forth in paragraphs (1)
and (2) of section 205(d).
(B) Issues of material fact.--With respect to a finding
made under subparagraph (A), the court shall consider a
genuine issue of material fact to exist only if the evidence
submitted by claimant would be sufficient to allow a
reasonable jury to reach a verdict for the claimant if the
jury found the evidence to be credible.
(2) Discovery made prior to a ruling on a motion for
summary judgment.--If, under applicable rules, the court
permits discovery prior to a ruling on a motion for summary
judgment made pursuant to this subsection, such discovery
shall be limited solely to establishing whether a genuine
issue of material fact exists as to the applicable elements
set forth in paragraphs (1) and (2) of section 205(d).
(3) Discovery with respect to a biomaterials supplier.--A
biomaterials supplier shall be subject to discovery in
connection with a motion seeking dismissal or summary
judgment on the basis of the inapplicability of section
205(d) or the failure to establish the applicable elements of
section 205(d) solely to the extent permitted by the
applicable Federal or State rules for discovery against
nonparties.
(e) Stay Pending Petition for Declaration.--If a claimant
has filed a petition for a declaration pursuant to section
205(b)(3)(A) with respect to a defendant, and the Secretary
has not issued a final decision on the petition, the court
shall stay all proceedings with respect to that defendant
until such time as the Secretary has issued a final decision
on the petition.
(f) Manufacturer Conduct of Proceeding.--The manufacturer
of an implant that is the subject of an action covered under
this title shall be permitted to file and conduct a
proceeding on any motion for summary judgment or dismissal
filed by a biomaterials supplier who is a defendant under
this section if the manufacturer and any other defendant in
such action enter into a valid and applicable contractual
agreement under which the manufacturer agrees to bear the
cost of such proceeding or to conduct such proceeding.
(g) Attorney Fees.--The court shall require the claimant to
compensate the biomaterials supplier (or a manufacturer
appearing in lieu of a supplier pursuant to subsection (f))
for attorney fees and costs, if--
(1) the claimant named or joined the biomaterials supplier;
and
(2) the court found the claim against the biomaterials
supplier to be without merit and frivolous.
TITLE III--LIMITATIONS ON APPLICABILITY; EFFECTIVE DATE
SEC. 301. EFFECT OF COURT OF APPEALS DECISIONS.
A decision by a Federal circuit court of appeals
interpreting a provision of this Act (except to the extent
that the decision is overruled or otherwise modified by the
Supreme Court) shall be considered a controlling precedent
with respect to any subsequent decision made concerning the
interpretation of such provision by any Federal or State
court within the geographical boundaries of the area under
the jurisdiction of the circuit court of appeals.
SEC. 302. FEDERAL CAUSE OF ACTION PRECLUDED.
The district courts of the United States shall not have
jurisdiction pursuant to this Act based on section 1331 or
1337 of title 28, United States Code.
SEC. 303. EFFECTIVE DATE.
This Act shall apply with respect to any action commenced
on or after the date of the enactment of this Act without
regard to whether the harm that is the subject of the action
or the conduct that caused the harm occurred before such date
of enactment.
______
By Ms. SNOWE (for herself, Mr. Grassley, Mr. Glenn, Mr. D'Amato,
Mr. Inouye, Mr. Rockefeller and Mr. Mack):
S. 649. A bill to amend title XVIII of the Social Security Act to
provide for coverage of bone mass measurements for certain individuals
under part B of the Medicare program; to the Committee on Finance.
the bone mass measurement standardization act of 1997
Ms. SNOWE. Mr. President, today I am introducing the Bone Mass
Measurement Standardization Act of 1997.
Millions of women in their post-menopausal years face a silent
killer, a stalker disease we know as osteoporosis. This unforgiving
bone disease afflicts 28 million Americans; causes 50,000 deaths each
year; 1.5 million bone fractures annually; and the direct medical costs
of osteoporosis fracture patients are $13.8 billion each year, or $38
million every single day. This cost is projected to reach $60 billion
by the year 2020 and $240 billion by the year 2040 if medical research
has not discovered an effective treatment.
The facts also show that one out of every two women have a lifetime
risk of bone fractures due to osteoporosis, and that it affects half of
all women over the age of 50 and an astounding 90% of all women over
75. Perhaps the most tragic consequences of osteoporosis occur with the
300,000 individuals annually who suffer a hip fracture. Twelve to
thirteen percent of these persons will die within six months following
a hip fracture, and of those who survive, 20% will never walk again,
and 20% will require nursing home care--often for the rest of their
lives.
We all know that osteoporosis cannot be cured, although with a
continued commitment to research in this area I remain hopeful that we
will find one. We also know that once bone mass is lost, it cannot be
replaced. Therefore, early detection is our best weapon because it is
only through early detection that we can thwart the progress of the
disease and initiate preventive efforts to stop further loss of bone
mass.
Bone mass measurement can be used to determine the status of a
person's bone health and to predict the risk of future fractures. These
tests are safe, painless, accurate and quick. Our expanding technology
is adding new methods to determine bone mass and we need to keep up
with this technology. The most commonly used test currently is DXA
(Dual energy X-ray Absorptiometry).
In order to ensure that we detect bone loss early, we need to ensure
that older women have coverage for bone mass tests. Unfortunately,
Medicare coverage is inconsistent in its coverage depending on where an
individual resides. Instead of national coverage of the DXA test,
Medicare leaves coverage decisions to local Medicare insurance
carriers. The definition of who is qualified to receive a bone mass
measurement varies from carrier to carrier. Some carriers require
beneficiaries to have suffered substantial bone loss before allowing
coverage for a bone density test. For example, in about 20 States, the
carriers require x-ray proof of low bone mass or other abnormalities.
Unfortunately, standard x-rays do not reveal osteoporosis until 25 to
40 percent of bone mass has been lost.
One carrier allows pre-menopausal women to have a DXA test to
determine whether hormone replacement therapy is indicated. However, it
does not allow the test to determine treatment for the post-menopausal
women--the majority of Medicare beneficiaries. Other carriers have no
specific rules to guide reimbursement and cover the tests on a
haphazard case-by-case basis.
Frequency of testing also varies from carrier to carrier. Re-testing
is important to monitor treatment, yet only eight states specifically
allow coverage for people who are under treatment for osteoporosis.
This patchwork coverage is confusing to beneficiaries, and means that
an older woman who lives in one State will be covered, but if she moves
to another state, she may not be. A woman may also lose coverage if she
moves to another city within a given State.
Mr. President, a woman shouldn't have to change zip codes to obtain
coverage for a preventive test, especially when early intervention is
the only action we can take right now to slow the loss of bone mass.
Once it is lost, it cannot be replaced.
The Medicare Bone Mass Measurement Standardization Act will clarify
the Medicare coverage policy for DXA testing to make it uniform in all
states. We all know that an ounce of prevention is worth a pound of
cure. This bill will ensure that older women, regardless of where they
live, will have access to bone mass measurement technology that will
help detect bone loss and allow preventive steps to be taken.
[[Page S3683]]
I urge my colleagues to support this important bill.
Mr. GRASSLEY. Mr. President, I am pleased to join my colleague
from Maine, Senator Snowe, to introduce legislation to standardize
Medicare eligibility for the diagnosis of osteoporosis. It is estimated
that osteoporosis results in 1.5 million fractures and $20 billion in
medical costs each year. The Centers for Disease Control and
Prevention, through the use of 1992 incidence data of bone fractures
related to osteoporosis, determined that such fractures represent three
percent of all Medicare costs. A recent report issued by the Alliance
for Aging Research examined the dramatic savings realized when the
onset of age-related disability is delayed. The report indicates that
delaying the onset of osteoporosis by 5 years could save the economy up
to as much as $10 billion annually.
In the state of Iowa, 15 percent of men and women over the age of 50,
which is approximately 340,000 Iowans, have osteoporosis. Women are
particularly prone to getting osteoporosis, which can lead to bone
fractures that result in loss of independence and eventually to nursing
home care. Early detection is critical, and there are effective
treatments available to prevent bone mass deterioration. An ounce of
prevention is worth a pound of cure.
Medicare currently covers bone mass measurement, which is the
diagnostic tool used to detect osteoporosis. However, Medicare carriers
have discretion regarding eligibility requirements. States cover bone
mass measurement on a case-by-case basis; some States cover it when an
individual is in the early stages of or already has the disease; and
some States allow early detection of the disease based on whether or
not the patient is at high risk of developing osteoporosis.
Medicare carriers in states such as Iowa and Maine promote early
detection of osteoporosis by covering bone mass measurement for
individuals at-risk of the disease. However, carriers in more than half
the States do not allow testing until the person already has the
disease or is at very high-risk of getting it.
The legislation I am co-sponsoring with Senator Snowe would help
reduce the economic and social costs of osteoporosis through early
detection of this crippling disease. The bill would establish uniform
eligibility requirements for coverage of bone mass measurement,
eliminating the variation in Medicare coverage that currently exists.
It would not require that every individual be screened for the disease,
only those that are considered at-risk. Medicare is a federal program
where everyone pays 2.9 percent of their pay. Therefore, everyone
deserves to have access to the same benefits.
I congratulate my colleague, Senator Snowe, for taking the lead on
this very important health issue. I urge my colleagues on both sides of
the aisle to support this legislation.
______
By Mr. NICKLES:
S. 650. A bill to amend the Internal Revenue Code of 1986 to reduce
estate taxes by providing a 20 percent rate of tax on estates exceeding
$1,000,000, and a 30 percent rate of tax on estates exceeding
$10,000,000, and for other purposes; to the Committee on Finance.
the estate tax reduction act of 1997
Mr. NICKLES. Mr. President, an April 15, 1997 letter to the Wall
Street Journal, which I will insert for the Record, describes one
family's recent experience with the estate tax.
The letter states, ``We finally did it. We didn't want to, but we had
no choice. Exactly nine months after my father-in-law died, my wife and
I signed a check for $1,285,000 payable to the Internal Revenue
Service.''
The man who wrote this letter goes on to talk about what his family
could have used that money for, such as buying a beach house, prepaying
their kids' college education, or even retiring.
Instead, he calculates that the federal government will spend in 26.8
seconds what took his father-in-law 75 years to accumulate.
After I read this letter, I decided to do some calculations of my
own. In 1997, the federal government will collect $19.2 billion in
estate taxes from 37,200 Americans. The federal government will spend
that $19.2 billion in 4.3 days. Assuming each of those decedents was 70
years old when they died, that represents more than 2.6 million years'
worth of work and savings which will be wiped-out forever and spent by
the government in less than five days.
Mr. President, some people mistakenly believe estate taxes only
affect the rich. In the Washington Post this week, Deputy Treasury
Secretary Larry Summers says in response to a question about the estate
tax, ``You have to raise revenue somewhere, and ability to pay seems
like a good way to do it.''
The truth is that there are thousands of small businesses and farms
throughout the country owned and operated by middle-income Americans
that are affected by the estate tax. In Oklahoma alone, statistics from
the U.S. Census of Agriculture indicate that over 7,500 farms and
ranches have a value that could trigger estate tax. Even those who do
not end up paying the tax will spend thousands of dollars planning to
avoid it or insuring against it.
What is the ultimate impact of all this uneconomic activity?
According to the Small Business Administration, only 30 percent of
family businesses are passed down to a second generation, and only 13
percent make it to a third generation.
It does not take a lot of success in business or investing these days
to become a ``taxable estate'' in the eyes of Uncle Sam. With the
explosive growth in mutual fund investments over the last several
years, and the corresponding increase in stock prices, workers will
retire and discover their pension plan to be much larger than they had
anticipated. Aggressive business owners who reinvest all their profits
back into their business will find themselves asset-rich and cash-poor.
Under current law, a taxable estate of $1 million faces a marginal
tax rate of 39 percent. A taxable estate of $3 million qualifies you
for a confiscatory 55 percent marginal tax rate. A tax credit limits
the tax on the first $600,000 of the estate.
If a person starts a small business--be it a farm, a restaurant, or a
car dealership--and they work hard, expand, and become successful, why
should Uncle Sam be entitled to 39 percent or 55 percent of it? What
did the government do to build that business?
This business owner has already paid annual income tax (twice if
organized as a corporation), self-employment tax, FICA tax, FUTA tax,
and capital gains tax. Why should the Government come in and say, after
all these taxes are paid, ``We want over half of everything that's
left''?
Mr. President, the current estate tax is unfair and it is
counterproductive. In the long term, it needs to be repealed. In the
short term, it needs to be dramatically changed.
I am introducing legislation today which represents dramatic change
in the short term and provides a stepping-stone to eventual repeal. My
bill goes right to the basic problem, which is estate tax rates. With
seventeen marginal tax rate brackets ranging from 18 percent to 55
percent, estate tax rates are too complex and too high.
Under my legislation, taxable estates and gifts under $1 million will
pay no tax, taxable estates and gifts from $1 million to $10 million
will be taxed at a marginal rate of 20 percent, and taxable estates and
gifts over $10 million will be taxed at a marginal rate of 30 percent.
Mr. President, this legislation benefits all taxpayers by simplifying
the structure of the estate tax and reducing the number of tax brackets
from seventeen to three. Further, by increasing the basic exemption
from $600,000 to $1 million, it will reduce the number of estates
subject to taxation by more than 40 percent and greatly reduce the need
for and cost of estate tax planning.
The benefits of this legislation are also progressive. A taxable
estate worth $1 million will have its tax liability completely
eliminated. A taxable estate worth $5 million will receive a 64 percent
reduction in tax liability, and a taxable estate worth $50 million will
receive a 50 percent reduction in tax liability.
Finally, the benefits of this legislation are fair. It does not
single-out certain types of estate assets for preferential treatment,
and thus avoids the problems of picking winners and losers.
The enactment of estate tax reform this year will not be very easy,
Mr. President, despite broad, bipartisan support in the Senate and the
House.
[[Page S3684]]
The Clinton administration continues to block estate tax reform with
partisan, class-warfare rhetoric. In the Washington Post article I
mentioned earlier about estate tax reform, Deputy Secretary Summers
even said, ``When it comes to the estate tax, there is no case other
than selfishness.''
I find that statement offensive, and I wonder if President Clinton
agrees with his lieutenant. Is passing your life's work on to your
children is ``selfish''?
I encourage all my colleagues to read the letter I submitted with my
statement today and ask themselves, ``Is our estate tax policy
promoting freedom, family, and opportunity, or does it just promote the
redistribution of wealth?''
Mr. President, I ask unanimous consent that additional material be
printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
S. 650
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 ``Estate Tax Reduction Act of
1997''.
SEC. 2. 20 PERCENT RATE OF TAX ON ESTATES EXCEEDING
$1,000,000; 30 PERCENT RATE OF TAX ON ESTATES
EXCEEDING $10,000,000.
(a) In General.--Section 2001(c) of the Internal Revenue
Code of 1986 (relating to imposition and rate of tax) is
amended to read as follows:
``(c) Rate Schedule.--
``If the amount with respect to which the tentative tax to be computed
The tentative tax is:..................................................
20 percent.0,000,000...................................................
$2,000,000 plus 30 percent of the excess over $10,000,000.''...........
(b) Increase in Unified Credit.--
(1) In general.--Section 2010(a) of the Internal Revenue
Code of 1986 (relating to unified credit against estate tax)
is amended by striking ``$192,800'' and inserting
``$200,000''.
(2) Gift tax credit.--Section 2505(a)(1) of such Code
(relating to unified credit against gift tax) is amended by
striking ``$192,800'' and inserting ``$200,000''.
(3) Conforming amendments.--
(A) Section 2102(c)(3)(A) of such Code is amended by
striking ``$192,800'' and inserting ``$200,000''.
(B) Section 6018(a)(1) of such Code is amended by striking
``$600,000'' and inserting ``$1,000,000''.
(c) Effective Date.--The amendments made by this section
shall apply to the estates of decedents dying, and gifts
made, after the date of the enactment of this Act.
____
[From the Wall St. Journal, Apr. 15, 1997]
Eliminate the Middleman
(By Sanford F. Young)
We finally did it. We didn't want to, but we had no choice.
Exactly nine months after my father-in-law died, my wife
and I signed a check for $1,285,000, payable to the Internal
Revenue Service.
Now, you may ask what we are complaining about. After all,
we were born into enlightened, liberal upper-middle-income
families in the 1950s. Our fathers extolled our obligation to
pay taxes so that the government can provide for the less
fortunate. Indeed, it may have been those principles that
dissuaded my father-in-law from engaging in any estate
planning. So we had to sign away--in addition to state
inheritance taxes, deferred income taxes, excise taxes and
countless legal and accounting fees incurred just so we could
compute how much tax we must pay--the great bulk of my
father-in-law's estate.
Having had the privilege of holding on to this much money
for these past months--as executors of the estate we are
legally obligated to accumulate and preserve the assets for
paying taxes--we dreamed of what we could have done with the
funds: buy a beach house, prepay our kids' college education,
even quit our jobs and retire. Instead, the reality of how
fast that money will be spent by the government is hammered
home by the giant billboard tallying government debt at the
intersection of Sixth Avenue and 43rd Street in New York. I
calculate that the federal government will spend in 26.8
seconds what took my father-in-law 75 years to accumulate--
after the taxes he paid during his lifetime. Not a satisfying
thought.
We thus propose the following: Rather than paying my
father-in-law's hard-earned money to the government, which
acts as no more than a greedy and inefficient middleman
between the haves and have-nots, it should simply identify
three of the neediest families and let us hand over a half-
million dollars or so to each. This way we can know that my
father-in-law's money will make a difference. And at least
someone would give my father-in-law a posthumous thank-you.
____
NICKLES ESTATE TAX PROPOSAL
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Current law Proposal Impact
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Marginal Marginal As a % of
tax rate Tax before Unified Tax after Effective tax rate Tax before Unified Tax after Effective Reduction in tax current
(%) unified credit credit unified credit tax rate (%) unified credit credit unified credit tax rate liability law
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Taxable estate:
10,000........... 18 1,800 192,800 0 0 20 2,000 200,000 0 0 ................. ..........
20,000........... 20 3,800 192,800 0 0 20 4,000 200,000 0 0 ................. ..........
40,000........... 22 8,200 192,800 0 0 20 8,000 200,000 0 0 ................. ..........
60,000........... 24 13,000 192,800 0 0 20 12,000 200,000 0 0 ................. ..........
80,000........... 26 18,200 192,800 0 0 20 16,000 200,000 0 0 ................. ..........
100,000.......... 28 23,800 192,800 0 0 20 20,000 200,000 0 0 ................. ..........
150,000.......... 30 38,800 192,800 0 0 20 30,000 200,000 0 0 ................. ..........
250,000.......... 32 70,800 192,800 0 0 20 50,000 200,000 0 0 ................. ..........
500,000.......... 34 155,800 193,800 0 0 20 100,000 200,000 0 0 ................. ..........
750,000.......... 37 248,300 192,800 55,500 7 20 150,000 200,000 0 0 (55,500) -100
1,000,000........ 39 345,800 192,800 153,000 15 20 200,000 200,000 0 0 (153,000) -100
1,250,000........ 41 448,300 192,800 255,500 20 20 250,000 200,000 50,000 4 (205,500) -80
1,500,000........ 43 555,800 192,800 363,000 24 20 300,000 200,000 100,000 7 (263,000) -72
2,000,000........ 45 780,800 192,800 588,000 29 20 400,000 200,000 200,000 10 (388,000) -66
2,500,000........ 49 1,025,800 192,800 833,000 33 20 500,000 200,000 300,000 12 (533,000) -64
3,000,000........ 53 1,290,800 192,800 1,098,000 37 20 600,000 200,000 400,000 13 (698,000) -64
5,000,000........ 55 2,390,800 192,800 2,198,000 44 20 1,000,000 200,000 800,000 16 (1,398,000) -64
10,000,000....... 55 5,140,800 192,800 4,948,000 49 20 2,000,000 200,000 1,800,000 18 (3,148,000) -64
20,000,000....... 55 11,000,000 0 11,000,000 55 30 5,000,000 200,000 4,800,000 24 (6,200,000) -56
50,000,000....... 55 27,500,000 0 27,500,000 55 30 14,000,000 200,000 13,800,000 28 (13,700,000) -50
100,000,000...... 55 55,000,000 0 55,000,000 55 30 29,000,000 200,000 28,800,000 29 (26,200,000) -48
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Replace the current unified transfer tax rate structure with two rates, 20% under $10 million and 30% over $10 million. Increase the unified credit equivalent to $1 million.
Staff estimates assume reductions are fully phased-in.
Estate Tax Reform Comparision--$1 Million Estate
S. 2 increases the basic exemption to $1 million, excludes
100% of the first $1.5 million in family business assets, and
excludes 50% of any remaining family business assets.
S. 479 increases the unified credit equivalent to $1
million, excludes 100% of the first $1.5 million in family
business assets, and excludes 50% of the next $8.5 million in
family business assets.
The Nickles Plan imposes no tax on estates up to $1
million, taxes estates up to $10 million at 20%, and taxes
estates over $10 million at 30%.
----------------------------------------------------------------------------------------------------------------
Current law S. 2 S. 479 Nickles Plan
----------------------------------------------------------------------------------------------------------------
ALL FAMILY BUSINESS
Family business assets.............. 1,000,000 1,000,000 1,000,000 1,000,000
Other assets........................ 0 0 0 0
---------------------------------------------------------------------------
Total estate.................. 1,000,000 1,000,000 1,000,000 1,000,000
Family business exclusion........... (\1\) (1,000,000) (1,000,000) (\1\)
Taxable estate...................... 1,000,000 0 0 1,000,000
Tax before unified credit........... 345,800 0 0 200,000
Unified credit...................... 192,800 345,800 345,800 200,000
Tax after UC........................ 153,000 0 0 0
Effective tax rate (percent)........ 15 0 0 0
===========================================================================
[[Page S3685]]
NO FAMILY BUSINESS
Family business assets.............. 0 0 0 0
Other assets........................ 1,000,000 1,000,000 1,000,000 1,000,000
---------------------------------------------------------------------------
Total estate.................. 1,000,000 1,000,000 1,000,000 1,000,000
Family business exclusion........... (\1\) 0 0 (\1\)
Taxable estate...................... 1,000,000 1,000,000 1,000,000 1,000,000
Tax before unified credit........... 345,800 345,800 345,800 200,000
Unified credit...................... 192,800 345,800 345,800 200,000
Tax after UC........................ 153,000 0 0 0
Effective tax rate (percent)........ 15 0 0 0
===========================================================================
SPLIT
Family business assets.............. 500,000 500,000 500,000 500,000
Other assets........................ 500,000 500,000 500,000 500,000
---------------------------------------------------------------------------
Total estate.................. 1,000,000 1,000,000 1,000,000 1,000 000
Family business exclusion........... (\1\) (500,000) (500,000) (\1\)
Taxable estate...................... 1,000,000 500,000 500,000 1,000,000
Tax before unified credit........... 345,800 155,800 155,800 200,000
Unified credit...................... 192,800 345,800 345,800 200,000
Tax after UC........................ 153,000 0 0 0
Effective tax rate (percent)........ 15 0 0 0
----------------------------------------------------------------------------------------------------------------
\1\ Not applicable.
Note.--For simplicity, the current law phase-out of the unified credit and marginal rate benefits for estates
between $10,000,000 and $21,040,000 is not computed in these examples.
Estate Tax Reform Comparison--$5 Million Estate
S. 2 increases the basic exemption to $1 million, excludes
100% of the first $1.5 million in family business assets, and
excludes 50% of any remaining family business assets.
S. 479 increases the unified credit equivalent to $1
million, excludes 100% of the first $1.5 million in family
business assets, and excludes 50% of the next $8.5 million in
family business assets.
The Nickles Plan imposes no tax on estates up to $1
million, taxes estates up to $10 million at 20%, and taxes
estates over $10 million at 30%.
----------------------------------------------------------------------------------------------------------------
Current law S. 2 S. 479 Nickles Plan
----------------------------------------------------------------------------------------------------------------
ALL FAMILY BUSINESS
Family business assets.............. 5,000,000 5,000,000 5,000,000 5,000,000
Other assets........................ 0 0 0 0
---------------------------------------------------------------------------
Total estate.................. 5,000,000 5,000,000 5,000,000 5,000,000
Family business exclusion........... (\1\) (3,250,000) (3,250,000) (\1\)
Taxable estate...................... 5,000,000 1,750,000 1,750,000 5,000,000
Tax before unified credit........... 2,398,000 668,300 668,300 1,000,000
Unified credit...................... 192,800 345,800 345,800 200,000
Tax after UC........................ 2,205,200 322,500 322,500 800,000
Effective tax rate (percent)........ 44 6 6 16
===========================================================================
NO FAMILY BUSINESS
Family business assets.............. 0 0 0 0
Other assets........................ 5,000,000 5,000,000 5,000,000 5,000,000
---------------------------------------------------------------------------
Total estate.................. 5,000,000 5,000,000 5,000,000 5,000,000
Family business exclusion........... (\1\) 0 0 (\1\)
Taxable estate...................... 5,000,000 5,000,000 5,000,000 5,000,000
Tax before unified credit........... 2,398,000 2,398,000 2,398,000 1,000,000
Unified credit...................... 192,800 345,800 345,800 200,000
Tax after UC........................ 2,205,200 2,052,200 2,052,200 800,000
Effective tax rate (percent)........ 44 41 41 16
===========================================================================
SPLIT
Family business assets.............. 2,500,000 2,500,000 2,500,000 2,500,000
Other assets........................ 2,500,000 2,500,000 2,500,000 2,500,000
---------------------------------------------------------------------------
Total estate.................. 5,000,000 5,000,000 5,000,000 5,000,000
Family business exclusion........... (\1\) (2,000,000) (2,000,000) (\1\)
Taxable estate...................... 5,000,000 3,000,000 3,000,000 5,000,000
Tax before unified credit........... 2,398,000 1,298,000 1,298,000 1,000,000
Unified credit...................... 192,800 345,800 345,800 200,000
Tax after UC........................ 2,205,200 952,200 952,200 800,000
Effective tax rate (percent)........ 44 19 19 16
----------------------------------------------------------------------------------------------------------------
\1\ Not applicable.
Note.--For simplicity, the current law phase-out of the unified credit and marginal rate benefits for estates
between $10,000,000 and $21,040,000 is not computed in these examples.
Estate Tax Reform Comparison--$50 Million Estate
S. 2 increases the basic exemption to $1 million, excludes
100% of the first $1.5 million in family business assets, and
excludes 50% of any remaining family business assets.
S. 479 increases the unified credit equivalent to $1
million, excludes 100% of the first $1.5 million in family
business assets, and excludes 50% of the next $8.5 million in
family business assets.
The Nickles Plan imposes no tax on estates up to $1
million, taxes estates up to $10 million at 20%, and taxes
estates over $10 million at 30%.
----------------------------------------------------------------------------------------------------------------
Current law S. 2 S. 479 Nickles Plan
----------------------------------------------------------------------------------------------------------------
ALL FAMILY BUSINESS
Family business assets.............. 50,000,000 50,000,000 50,000,000 50,000,000
Other assets........................ 0 0 0 0
---------------------------------------------------------------------------
Total estate.................. 50,000,000 50,000,000 50,000,000 50,000,000
Family business exclusion........... (\1\) (25,750,000) (5,750,000) (\1\)
Taxable estate...................... 50,000,000 24,250,000 44,250,000 50,000,000
Tax before unified credit........... 27,148,000 12,985,500 23,985,500 14,000,000
Unified credit...................... 192,800 345,800 345,800 200,000
Tax after UC........................ 26,955,200 12,639,700 23,639,700 13,800,000
Effective tax rate (percent)........ 54 25 47 28
===========================================================================
NO FAMILY BUSINESS
Family business assets.............. 0 0 0 0
Other assets........................ 50,000,000 50,000,000 50,000,000 50,000,000
---------------------------------------------------------------------------
Total estate.................. 50,000,000 50,000,000 50,000,000 50,000,000
Family business exclusion........... (\1\) 0 0 (\1\)
Taxable estate...................... 50,000,000 50,000,000 50,000,000 50,000,000
Tax before unified credit........... 27,148,000 27,148,000 27,148,000 14,000,000
[[Page S3686]]
Unified credit...................... 192,800 345,800 345,800 200,000
Tax after UC........................ 26,955,200 26,802,200 26,802,200 13,800,000
Effective tax rate (percent)........ 54 54 54 28
===========================================================================
SPLIT
Family business assets.............. 25,000,000 25,000,000 25,000,000 25,000,000
Other assets........................ 25,000,000 25,000,000 25,000,000 25,000,000
---------------------------------------------------------------------------
Total estate.................. 50,000,000 50,000,000 50,000,000 50,000,000
Family business exclusion........... (\1\) (13,250,000) (5,750,000) (\1\)
Taxable estate...................... 50,000,000 36,750,000 44,250,000 50,000,000
Tax before unified credit........... 27,148,000 19,860,500 23,985,500 14,000,000
Unified credit...................... 192,800 345,800 345,800 200,000
Tax after UC........................ 26,955,200 19,514,700 23,639,700 13,800,000
Effective tax rate (percent)........ 54 39 47 28
----------------------------------------------------------------------------------------------------------------
\1\ Not applicable.
Note.--For simplicity, the current law phase-out of the unified credit and marginal rate benefits for estates
between $10,000,000 and $21,040,000 is not computed in these examples.
______
By Mr. ALLARD:
Senate Joint Resolution 28. A joint resolution proposing an amendment
to the Constitution of the United States granting the President the
authority to exercise an item veto of individual appropriations in an
appropriations bill; to the Committee on the Judiciary.
the line-item veto constitutional amendment
Mr. ALLARD. Mr. President, today I am pleased to introduce a
line-item veto constitutional amendment.
This action is particularly timely in light of the decision by a
Federal district court judge which declared the recently enacted
statutory line-item veto, or more accurately, enhanced rescission
authority, to be unconstitutional.
This judge's decision may be overturned, or Congress may be able to
modify the language in a way that satisfies the courts. Baring either
of these, a line-item veto can only be provided by amending the
Constitution.
Fortunately, Congress provided for expedited judicial review of the
constitutionality of the 1996 Line Item Veto legislation, and the
Supreme Court has agreed to hear arguments in the case next month, and
to render a decision by July.
Prior to my election to the Senate I served in the House of
Representatives. In that body I introduced a constitutional line-item
veto on several occasions. This was motivated by my view that the
greatest threat to our economy is the continued deficits which Congress
piles on top of the accumulated $5.3 trillion national debt.
Obviously, the budget system that we have in place is not working. We
need a balanced budget amendment and a line-item veto.
Last year, Congress gave the President what is generally referred to
as expanded rescission authority. The Republican Congress committed to
give this authority to whoever was elected President in 1996, Democrat
or Republican. It was immaterial to us, our objective was to provide a
bi-partisan tool to help eliminate wasteful spending beginning on
January 1, 1997.
Last year's legislation was an expansion of the very limited
rescission authority granted to the President in 1974 under the
Impoundment Control Act. Under that earlier statute, the President
could indicate items in the budget that he wanted to rescind, but he
was required to obtain the support of both Houses of Congress in order
for the rescission to actually be enacted. The budget history of the
past two decades demonstrates better than I could why this is akin to
the fox guarding the henhouse.
The Line-Item Veto Act reversed this burden and required the Congress
to disapprove any rescissions identified by the President within 30
days. If this deadline was not met, then the item was eliminated.
This new authority permitted three types of rescissions. First,
discretionary appropriations could be rescinded. Discretionary spending
is about one-third of the budget and is where most of what is
considered pork barrel spending occurs.
Second, the law permitted the rescission of any new item of
entitlement spending. While currently existing entitlements would be
exempt, any new item could be stricken--entitlements constitute the
remaining two-thirds of the budget and is certainly the fastest growing
portion of the budget.
Finally, certain limited tax benefits could be rescinded. These
limited tax provisions were generally defined as provisions that
provided a federal tax deduction, credit, exclusion, or preference to
100 or fewer beneficiaries.
The judge who ruled the line item veto statute unconstitutional
focused on the fact that the cancellation or rescission authority under
the statue exists only after the President signs a bill. He has up to 5
days after signature to identify these rescissions. The judge concluded
that this was an unconstitutional delegation of Congressional power.
I find this reasoning puzzling since the statute was crafted in a
manner that Congress believed to be consistent with past Supreme Court
decisions concerning Congressional delegation of authority. The statute
also provides nearly identical authority to the impoundment authority
held by all Presidents from George Washington up through 1974 when
Congress voted to deny this authority to future presidents.
Obviously, we will hear the final word on this in July. One thing
however, is certain. The authority given to the President last year was
different from that authority held by 43 state governors. In the states
the governor has the explicit authority to line item veto provisions in
a bill as part of the actual bill-signing process.
I believe it is time that we take the approach of the states. In
order to do this we must enact a Constitutional Amendment. Under
article I, section 7 of the Constitution, the President's veto
authority has been interpreted to mean that he must sign or veto an
entire piece of legislation--he cannot pick and choose.
This language reads: ``Every Bill which shall have passed the House
of Representatives and the Senate, shall, before it becomes a Law, be
presented to the President of the United States; If he approve he shall
sign it, but if not he shall return it, with his Objections to that
House in which it shall have originated, . . .'' this section then
proceeds to outline the procedures by which Congress may override this
veto with a two-thirds vote of both houses.
The amendment that I am introducing today amends this language as it
pertains to appropriations bills. It specifically provides that the
President shall have the power to disapprove any appropriation of an
appropriations bill at the time the President approves the bill.
This change will make explicit that the President is no longer
confined to either vetoing or signing an entire bill, but that he may
choose to single out certain appropriations for veto and still sign a
portion of the bill.
I noted earlier that 43 state governors have some type of line item
veto. This is consistent with the approach taken in most state
constitutions of providing a greater level of detail concerning the
budget process than is contained in the U.S. Constitution. In my view,
the line item veto has been an important factor in the more responsible
budgeting that occurs at the state level.
Colorado is one of the states that gives line item veto authority to
the governor. That power, along with a balanced budget requirement in
the state constitution, has worked well and insured that Colorado has
been governed in a fiscally responsible manner regardless of who served
in the legislature or in the governor's office.
Mr. President, I look forward to further discussion on this important
issue. I realize that the Supreme Court may overturn the lower court
decision and declare the line item veto statute
[[Page S3687]]
constitutional. However, in my mind, this is no substitute for moving
ahead on a constitutional amendment. It is time to eliminate the
uncertainly, and provide for explicit line item veto authority for the
President.
____________________