[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.

                          ____________________