[Congressional Record Volume 143, Number 82 (Thursday, June 12, 1997)]
[Senate]
[Pages S5596-S5621]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. DOMENICI (for himself, Mr. Bond, Mr. Kerry, Ms. Snowe, Ms. 
        Landrieu, Mr. Kempthorne, Mr. Bumpers, Mr. Harkin, Mr. Kohl, 
        Mr. Lautenberg, Mr. Daschle, Mr. Levin, Ms. Mikulski, Mr. 
        Lieberman, Mr. Cleland, Mr. Wellstone, Ms. Moseley-Braun, Mrs. 
        Hutchison, Mr. Burns, Mrs. Boxer, Mr. Specter, Mr. Moynihan, 
        Mr. Santorum, and Mr. Bingaman):
  S. 888. A bill to amend the Small Business Act to assist the 
development of small business concerns owned and controlled by women, 
and for other purposes; to the Committee on Small Business.


                THE WOMEN'S BUSINESS CENTERS ACT OF 1997

  Mr. DOMENICI. Mr. President, I am pleased to introduce today a bill 
that strengthens this country's small business sector, and that is the 
Women's Business Centers Act of 1997. I am also extremely pleased to 
have the chairman of the Committee on Small Business, Senator Bond, 
join me on this bill as my principal cosponsor, along with the ranking 
Democrat from the Small Business Committee who is also an original 
cosponsor. I note the arrival on the floor of Senator Kerry from 
Massachusetts. He is the ranking member of the Committee on Small 
Business.
  There are a number of Senators in a very limited period of time who 
have joined us from both sides of the aisle. I ask unanimous consent 
that those Senators who are listed in my statement be original 
cosponsors, because they have indicated a desire to do that.
  I thank the ranking member from Massachusetts for his diligence. He 
has procured a number of cosponsors, and we have also. I believe from 
the committee itself we have overwhelming support. I would like to take 
a couple of minutes to explain what we are doing.
  First, let me acknowledge that in the U.S. House of Representatives, 
starting last year, Congresswoman Nancy Johnson took a lead in this 
matter and introduced a women's business bill. I introduced the 
companion bill in the Senate. By way of the recent history of this 
issue, we have been funding the women's business centers through 
appropriations. I take a great deal of pride in saying for the last few 
years, while the administration either did not fund this effort or 
reduced it in half, we funded it fully with the assistance of Chairman 
Bond, Senator Hutchison, and others, at $4 million a year. We are 
asking that this effort, which we will explain briefly, now be funded 
at $8 million a year.
  Mr. President, I say to my fellow Senators, it might come as a shock 
to many that the fastest growing part of America's small business is 
women's small business. As a matter of fact, 2 years ago, we had a 
startling statistic that women-owned businesses employed more people--
even then, 2 years ago--than all of the 500 major corporations in 
America. That means that there is a major business impact in America. 
Women are doing marvelously well by adding more women's ownership to 
the business sector. There is more diversification and more segments of 
the American population are becoming owners of businesses or have a 
real opportunity to do so.
  In my particular State, there exists an entity that helps women's 
small businesses expand, in some instances, get started. I am very 
proud of that organization, and, frankly, it is growing. One will note 
that our bill varies a little bit from Representative Johnson's

[[Page S5597]]

in that we don't want the funds under our bill to be restricted to only 
those 22 or so States who do not have centers, but rather with the 
discretion of the administrator, to also use the funds in those States 
to expand growing programs.
  In a very orderly and organized way, without a lot of overhead, 
women's business centers, by various names, are helping women who have 
an idea about a small business, providing them with technical 
assistance, in some instances to provide micro loans, and in all 
instances to provide the knowledge and wherewithal and planning that is 
necessary so that they start off on the right foot.
  I have had the luxury of visiting with many of the women who are 
being helped in our State by our women's business center. I have been 
startled. If I could share by way of anecdote with the Senate, if we 
had enough time, some of the exciting things women are doing in trying 
to set up their own businesses and how successful they are, it would 
take me a long, long time. But let me suggest, there is no lack of 
willingness to compete and take a risk, which is very, very important 
to being entrepreneurs, and that is not something that is solely in the 
province of men. Across America, women are succeeding in business with 
relish and gusto.
  There are many statistics and numbers that we could now talk about in 
terms of how we go about concluding that this is an important part of 
the private sector--this women's entrepreneurship in America, and the 
creation of new jobs in America. Suffice it to say that it is the 
fastest growing portion of the American small business group.
  Women are succeeding and they are not succeeding in any less numbers, 
less percentages of success than are men. So what we are encouraging is 
that every State has one of these centers, and it is modeled after 
successful ones across this country. In my case, we have the Women's 
Economic Self-Sufficiency Team, which has a corporate name of WESST 
corp. It is the only technical assistance group of this type in our 
State devoted to women's business needs. It is doing a marvelous job of 
helping hundreds of women find out whether their business idea has a 
chance of succeeding, giving them technical assistance, in some 
instances getting them loans through normal loan channels, and in some 
instances using some of the small moneys they get for startup loans.
  Funds for this program are small, but the women's business centers 
derive from a grand idea with a marvelous goal. You can't do much 
better. Senator Burns, who occupies the Chair, wants to be added as a 
cosponsor, and I so request.
  We are also very pleased the ranking member of the committee, Senator 
Kerry, is joining us in support of this measure, along with other 
Senators serving on the committee: Senators Kempthorne, Snowe, 
Landrieu, Bumpers, Harkin, Levin, Lieberman, and Wellstone. As well, we 
welcome and appreciate the support of other non-committee cosponsors: 
Senators Kay Bailey Hutchison, Moseley-Braun, Kohl, Lautenberg, 
Daschle, Mikulski, and Cleland.
  Mr. President, the Women's Business Centers Act of 1997 bill reflects 
our commitment for a stronger and more dynamic program for women-owned 
businesses. Supporting women's businesses is not just common sense, it 
makes economic sense.
  The National Foundation for Women Business Owners cites these 
statistics to illustrate the importance of women-owned businesses to 
our U.S. firms, and provide employment to 26 percent of U.S. workers. 
They contribute over $2.3 trillion in annual revenues to the U.S. 
economy. Since 1987, women-owned businesses have grown in number by 78 
percent. And, they have done so in nontraditional areas such as 
construction, wholesale trade, transportation, communications, and 
manufacturing. Forty percent of women business owners have been in 
business 9 years or longer.
  Given these phenomenal statistics, it is time we give more attention 
to this critical segment of our business community. Women-owned 
businesses are run by creative and professional entrepreneurs who 
employ millions of workers and deliver trillions of dollars into our 
communities. At the same time, these entrepreneurs are far too often 
overlooked and underestimated by our banking and financial communities, 
as well as by the Small Business Administration.
  I believe it is fair to say that a significant number, if not most, 
women entrepreneurs have achieved their goals and successes because 
they are disciplined and committed. We can probably say the same about 
men who have achieved their business objectives. The difference, 
however, is that we know there has been a disproportionate amount of 
training, technical assistance, procurement opportunities, and ready 
access to capital for male entrepreneurs compared to women.
  Despite these disparities, women business owners have achieved their 
monumental feats because of their business acumen, self-reliance, 
ingenuity, and dogged determination. Since it is projected that women 
will own 50 percent of all businesses by the year 2000, the time is now 
to assist these women entrepreneurs.
  Looking at the Small Business Administration's [SBA] record, we can 
congratulate them on their slowly but surely improvement in the 
percentage of loan guarantees to women borrowers. Within SBA's 7(a) and 
504 loan programs, the agency reports that it has tripled its number of 
loans to women borrowers from 3,588 in 1992 to 11,452 in 1996. That 
represents an increase in the dollar amount from $634 million in 1992 
to $1.6 billion in 1996. That is the pretty side of the picture.
  Turn the picture over, however, and these figures mean that women 
recipients constitute approximately one-fifth of the total loan 
clientele and receive approximately one-seventh of the loan guarantee 
funds. This is at a time when the SBA reports that over the last 
decade, ``new women-owned firms--one-third of all firms--have grown at 
twice the rate of men-owned businesses.'' I do not suggest this SBA 
picture is all bleak, but I do believe the record is less than optimal, 
and considerably more effort must be given to addressing women's 
business needs.
  This year we are committed to improving and enlarging the scope of 
the SBA's women's program.
  One of the most beneficial programs within the SBA is the Women's 
Business Centers Program, managed by the Office of Women's Business 
Ownership. I personally know the excellent record of these centers, of 
which there are 53 sites in 28 States.
  In my State of New Mexico, I have talked with the clients and toured 
their businesses. Thanks to the able leadership of the centers' 
personnel, these businesses are growing financially, employing new 
personnel, and creating new markets for their goods and services.
  In New Mexico, the Women's Economic Self-Sufficiency Team--WESST 
corp--is the only business and technical assistance organization 
specifically focused on the needs of women. Its mission is to 
facilitate the startup and growth of women- and minority-owned 
businesses.
  Its target market is low-income, unemployed, and underemployed women. 
Among its important accomplishments is its expansion to five additional 
sites, thereby providing much-needed assistance to both rural and urban 
women across our vast State. Since incorporating in 1988, WESST corp 
has facilitated the startup and growth of over 500 small businesses. 
This has created more than 750 jobs and businesses which have average 
annual gross receipts of $75,000. WESST corp has also established a 
low-interest revolving loan fund, with 75 percent of the loans extended 
to rural women and 65 percent to startups.
  Under the direction of the very able and creative Agnes Noonan, WESST 
corp is one of New Mexico's best business services. WESST corp is one 
of the 28 State organizations that participates in the SBA's Women's 
Business Centers Program. It is obvious that its contributions are 
critical to our State's economy.
  Between 1987 and 1996, U.S. census figures indicate that the number 
of New Mexico women-owned firms increased by 60 percent, employment 
increased by 138 percent, and sales grew by 154 percent. Women-owned 
firms in New Mexico employ nearly 115,000 people and generate nearly 
$11 billion in sales. Moreover, women-owned firms

[[Page S5598]]

account for 41 percent of all firms in New Mexico, provide employment 
for 35 percent of its workers, and generate 21 percent of its business 
sales.
  As Agnes Noonan says,

       Women's business centers across the United States play a 
     critical role in helping women develop and grow successful 
     small businesses. The acquisition of technical business 
     skills is obviously important. Equally important, however, is 
     the provision of long-term mentoring and support without 
     which many women would never make it beyond an initial 
     orientation session.

  It is important that Women's Business Centers, like WESST corp, 
continue to target their expertise to the thousands of potential and 
existing women entrepreneurs. These centers are able to leverage public 
and private resources to help their clients develop new businesses or 
expand existing ones. The centers' personnel are skilled professionals 
who give specialized assistance to women.
  For example, the Women's Business Development Center in Miami, FL, 
reports that its programs are:

     tailored to meet the specific needs of the community, i.e., 
     evening and weekend classes, counseling at business sites 
     and other non-traditional methods of providing 
     entrepreneurial training and technical assistance. Classes 
     are often held in Spanish and other languages. Many sites 
     provide child care, transportation and distance training 
     when necessary.

  I am 100 percent behind establishing business centers in States that 
do not have them. At the same time, based upon the extraordinary record 
of WESST corp in New Mexico, it is also equally important that an 
existing business center be allowed to expand its services into other 
geographical sites that will serve women entrepreneurs who would not, 
or could not, otherwise be served at the so-called flagship center. The 
primary business site has established its record of activities and 
services, and it is able to offer valuable expertise and guidance to 
the new center. Therefore, I believe very strongly that requests for 
replication of existing programs into new sites must also be given a 
fair and honest appraisal for financial assistance.
  This bill will strengthen the Women's Business Centers Program across 
the United States. The bill will allow the SBA program to extend its 
assistance to the individual State organizations from 3 years to 5 
years. This will enable the State centers to have a longer period of 
time to develop their private sector funding base.
  Additionally, we have modified the Federal to private matching 
requirements to ensure the centers have sufficient time to develop the 
one Federal to each non-Federal dollar match by the 4th year of 
activity. Most important, this bill authorizes up to $8 million for 
assisting existing centers, developing new State programs, or for 
replicating business center sites in other geographical areas. This is 
an increase in funding for the business centers' programs from the 
present, and modest, $4 million annual funding.
  Senator Bond and I, along with the other cosponsors of the bill, 
strongly support expansion of the SBA's Women's Business Centers 
Program. We know how instrumental these programs are in helping women 
entrepreneurs, and how very critical these businesses are to families, 
communities, and the overall economic well-being of our States. We urge 
other Members of the Senate to join us in support of this small but 
powerful program.
  I yield the floor now for Senator Bond who does a marvelous job with 
the Small Business Committee, has made it a viable active entity, and I 
thank him for his support.
  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. 888

       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 ``Women's Business Centers Act 
     of 1997''.

     SEC. 2, WOMEN'S BUSINESS TRAINING CENTERS.

       (a) In General.--Section 29 of the Small Business Act (15 
     U.S.C. 656) is amended to read as follows:

     ``SEC. 29. WOMEN'S BUSINESS TRAINING CENTERS.

       ``(a) Financial Assistance.--The Administration may provide 
     financial assistance to private organizations to conduct 5-
     year projects for the benefit of small business concerns 
     owned and controlled by women. The projects shall provide--
       ``(1) financial assistance, including training and 
     counseling in how to apply for and secure business credit and 
     investment capital, preparing and presenting financial 
     statements, and managing cash flow and other financial 
     operations of a business concern;
       ``(2) management assistance, including training and 
     counseling in how to plan, organize, staff, direct and 
     control each major activity and function of a small business 
     concern; and
       ``(3) marketing assistance, including training and 
     counseling in identifying and segmenting domestic and 
     international market opportunities, preparing and executing 
     marketing plans, developing pricing strategies, locating 
     contract opportunities, negotiating contracts, and utilizing 
     varying public relations and advertising techniques.
       ``(b) Conditions.--
       ``(1) Non-federal contributions.--As a condition of 
     receiving financial assistance authorized by this section, 
     the recipient organization shall agree to obtain, after its 
     application has been approved and notice of award has been 
     issued, cash contributions from non-Federal sources as 
     follows:
       ``(A) in the first, second, and third years, 1 non-Federal 
     dollar for each 2 Federal dollars;
       ``(B) in the fourth year, 1 non-Federal dollar for each 
     Federal dollar; and
       ``(C) in the fifth year, 2 non-Federal dollars for each 
     Federal dollar.
       ``(2) Form of non-federal contributions.--One-half of the 
     non-Federal matching assistance under this section may be in 
     the form of in-kind contributions which are budget line items 
     only, including office equipment and office space.
       ``(3) Form of federal contributions.--The Federal financial 
     assistance authorized pursuant to this section may be made by 
     grant, contract, or cooperative agreement and may contain 
     such provision, as necessary, to provide for payments in lump 
     sum or installments, and in advance or by way of 
     reimbursement. The Administration may disburse up to 25 
     percent of each year's Federal share awarded to a recipient 
     organization after notice of the award has been issued and 
     before the non-Federal sector matching funds are obtained.
       ``(4) Failure to obtain private funding. If any recipient 
     of assistance fails to obtain the required non-Federal 
     contribution during any project--
       ``(A) it shall not be eligible thereafter for advance 
     disbursements pursuant to paragraph (3) during the remainder 
     of that project, or for any other project for which it is or 
     may be funded by the Administration; and
       ``(B) prior to approving assistance to such organization 
     for any other projects, the Administration shall specifically 
     determine whether the Administration believes that the 
     recipient will be able to obtain the requisite non-Federal 
     funding and enter a written finding setting forth the reasons 
     for making such determination.
       ``(c) Submission of 5-Year Plan.--Each applicant 
     organization for assistance under this section initially 
     shall submit a 5-year plan to the Administration on proposed 
     fundraising and training activities, and a recipient 
     organization may receive financial assistance under this 
     program for a maximum of 5 years per women's business 
     center site.
       ``(d) Evaluation of Applicants.--
       ``(1) In general.--The Administration shall evaluate and 
     rank applicants in accordance with predetermined selection 
     criteria that shall be stated in terms of relative 
     importance. Such criteria and their relative importance shall 
     be made publicly available and stated in each solicitation 
     for applications made by the Administration.
       ``(2) Criteria.--The selection criteria referred to in 
     paragraph (1) shall include--
       ``(A) the experience of the applicant in conducting 
     programs or on-going efforts designed to impart or upgrade 
     the business skills of women business owners or potential 
     owners;
       ``(B) the present ability of the applicant to commence a 
     project within a minimum amount of time; and
       ``(C) the ability of the applicant to provide training and 
     services to a representative number of women who are both 
     socially and economically disadvantaged.
       ``(e) Establishment of Office.--There is established within 
     the Administration the Office of Women's Business Ownership, 
     which shall be responsible for the administration of the 
     Administration's programs for the development of women's 
     business enterprises, as such term is defined in section 408 
     of the Women's Business Ownership Act of 1988. The Office of 
     Women's Business Ownership shall be administered by an 
     Assistant Administrator, who shall be appointed by the 
     Administrator.
       ``(f) Definitions.--For purposes of this section--
       ``(1) the term `small business concern owned and controlled 
     by women', either start-up or existing, includes any small 
     business concern--
       ``(A) that is not less than 51 percent owned by one or more 
     women; and
       ``(B) the management and daily business operations of which 
     are controlled by one or more women; and
       ``(2) the term `women's business center site' means one or 
     more women's business centers established in conjunction with 
     another women's business center in another location within a 
     State or region--

[[Page S5599]]

       ``(A) that reaches a distinct population that would 
     otherwise not be served;
       ``(B) whose services are targeted to women;
       ``(C) whose scope, function, and activities are similar to 
     those of the primary women's business center in conjunction 
     with which it was established.
       ``(g) Reports to Congress.--
       ``(1) In general.--The Administration shall prepare and 
     transmit a biennial report to the Committee on Small Business 
     of the House of Representatives and the Committee on Small 
     Business of the Senate on the effectiveness of all projects 
     conducted under the authority of this section.
       ``(2) Contents.--The reports required by paragraph (1) 
     shall provide information concerning--
       ``(A) the number of individuals receiving assistance;
       ``(B) the number of start-up business concerns formed;
       ``(C) the gross receipts of assisted concerns;
       ``(D) increases or decreases in profits of assisted 
     concerns; and
       ``(E) the employment increases or decreases of assisted 
     concerns.
       ``(h) Authorization of Appropriations.--There is authorized 
     to be appropriated $8,000,000 per year to carry out the 
     projects authorized by this section. Notwithstanding any 
     other provision of law, the Administration may use such 
     expedited acquisition methods as it deems appropriate to 
     achieve the purposes of this section, except that it shall 
     ensure that all eligible sources are provided a reasonable 
     opportunity to submit proposals.''.
       (b) Applicability.--Any organization conducting a 3-year 
     project under section 29 of the Small Business Act (15 U.S.C. 
     656) on the day before the effective date of this Act may 
     extend such project to 5 years and receive financial 
     assistance according to section 29(b) of the Small Business 
     Act, as amended by this Act, and subject to procedures 
     established by the Administrator in coordination with the 
     Office of Women's Business Ownership established by this Act.
  Mr. BOND addressed the Chair.
  The PRESIDING OFFICER. The Senator from Missouri.
  Mr. BOND. Mr. President, it is with great pleasure that I rise today 
to join my distinguished colleague, Senator Domenici, in introducing 
the Women's Business Centers Act of 1997. I appreciate the kind words, 
but Senator Domenici has long been the leading proponent of women-owned 
businesses. He has worked hard to secure the additional funding for the 
centers. I am delighted to work with him on the bill.
  Also I am very pleased that my ranking member on the Small Business 
Committee, Senator Kerry, and many of our colleagues are working 
together with Senator Domenici and us as original cosponsors of the 
bill.
  I think once again this is an opportunity for Congress to demonstrate 
its strong support for effective programs serving current and future 
women entrepreneurs. It was just 1 year ago that many of my colleagues 
will remember that the administration sought to zero out the budget for 
women's business demonstration sites, and Congress stepped in to ensure 
full funding. Now we are reaching for new heights--making the program 
an ongoing effort to fund women's business centers through 5-year 
grants.
  The Committee on Small Business began its work in this session of 
Congress with the cooperation of my ranking member at a hearing on 
women-owned and home-based businesses. I will talk more about that in 
just a few moments. But the hearing we held then and others has 
provided the committee with extensive testimony and letters of 
endorsement on the important economic contribution being made by women 
entrepreneurs and the role played by women business centers. With 
nearly 8 million firms owned by women--a third of all firms--and 18.5 
million people are employed by women-owned firms, which is 1 of 4 
working men and women in the U.S., the contribution of women-owned 
businesses to the economy, which includes nearly $2.3 trillion in 
sales, deserves recognition and encouragement.
  In my home State of Missouri, there are approximately 120,000 women-
owned businesses. And, in 1997, the recipient of the Avon Women of 
Enterprise Award is Georgia Buchanan, president and CEO of All Pro 
Construction in Grandview, MO. In 1995, Georgia's company was also 
recognized by the SBA as the National Minority Construction Firm of the 
Year.
  Last year, Missouri's entrepreneurs were recognized as well when 
Phyllis Hannan, owner of Laser Mark It and Laser Light Technologies, 
was named SBA's National Small Businessperson of the Year.
  We have other women business leaders, including Carol Jones, of 
Springfield, who operates a large and well-respected realty company, in 
addition to her civic work and service on the Federal Home Loan Bank 
Board, and Stella Olson, who is serving as a member of the Small 
Business Fairness Board for SBA region 7 and is the owner of STAT 
Enterprises, Inc., a transcription company.
  These women are all local success stories taking an active role in 
expanding their own businesses with management financing and market 
training necessary for its success.
  The Women's Business Centers Act of 1997 recognizes the important 
contributions made by the 53 women's business centers located in 28 
States. The bill increases the level of funding authorized for 
establishing additional women's business centers to $8 million per year 
for 3 years, double when compared to the current authorization of $4 
million per year. The Clinton administration's budget request for 
fiscal year 1998 is $4 million. Significantly, the additional funding 
is intended to ensure that women's business centers exist in all 50 
States.
  Other important provisions of this bill include allowing Centers 
receiving funds on the day prior to enactment to apply to extend their 
eligibility for funding for 2 additional years. Also, for all women's 
business centers receiving funds under this bill, the private sector 
match is structured to facilitate a smoother transition to self-
sufficiency. The program is designed to provide seed money for women's 
business centers that can then flourish with the financial support of 
the local community. Training and services are to be tailored to the 
local community, and the grantees running the centers must have the 
requisite experience and commitment to deliver the services suited to 
women in the area.
  The introduction of this bill coincides with the work of the 
Committee on Small Business to reauthorize the programs of the Small 
Business Administration, the SBA. The committee has supported the 
creation and expansion of business development centers dedicated to the 
unique needs of women who are either current or potential business 
owners. The women's business centers created under this bill will 
provide the tried and true ongoing training and assistance, offered by 
the current demonstration sites, to ensure that their clients have the 
skills and know-how to build and maintain successful businesses.
  This is a win-win bill. It provides women owning businesses or those 
women preparing to start new small businesses with the tools necessary 
to support their transition and the challenges faced when trying to 
expand.
  I look forward to working with my colleagues to advance this bill as 
part of the Small Business Reauthorization Act of 1997. The concepts 
endorsed today will be incorporated with other reforms so that the 
services delivered by SBA and its numerous resource partners are 
beneficial to men and women alike. The committee has important work to 
do in this regard, and we appreciate Senator Domenici and 
Representative Johnson's efforts in this regard.
  Mr. DOMENICI. Mr. President, I have sent the bill to the desk for 
appropriate referral, but I ask unanimous consent that it be held at 
the desk before being referred for the remainder of the day in case 
others want to cosponsor it. They can be original cosponsors.
  The PRESIDING OFFICER. Without objection, it will be held at the 
desk.
  Mr. DOMENICI. Mr. President, whatever time I have remaining --I do 
not believe Senator Bond needs any additional time--I yield to Senator 
Kerry, and he can control it with other Members. I think there is 
adequate time for others who need it, but I yield whatever time I have 
to Senator Kerry.
  The PRESIDING OFFICER. The Senator from Massachusetts is recognized, 
and the Chair informs him he has 12 minutes.
  Mr. KERRY. I thank the Senator from New Mexico. I want to thank the 
distinguished Senator for his leadership on this issue and also the 
Senator from Missouri, the chairman of the Small Business Committee. I 
am delighted to join with both of them. I think this will have an 
enormous, positive impact, and their leadership is greatly appreciated.
  I am pleased to stand in support as we introduce the Women's Business

[[Page S5600]]

Centers Act of 1997. Nine years ago, when we first established a 
demonstration program for helping women-owned businesses attain capital 
and assistance in business development, a lot of people had some doubts 
about it. The legislation brought together the SBA and independent 
organizations in order to deliver assistance to women-owned businesses.
  Nine years ago, Mr. President, many people in the country were 
skeptical about the need for women-owned business assistance. There was 
a kind of perception problem with respect to whether or not it was 
needed and whether or not a lot of women in the country were going to 
take advantage of it and, in some cases, doubts even by some about 
whether or not they could. Everything in the years since then has 
destroyed the stereotypes. It changed attitudes and has proven that the 
people who believed in this effort were correct.
  The program has matured since its creation. And, to date, nearly 
50,000 American women have been served by 54 sites in 28 States and the 
District of Columbia.
  The bill that we introduce today is really only underscoring a small 
part of the many contributions that women make to the economy of this 
country. One of the reasons that we are currently enjoying such a 
significant economic boom is because of the contributions in the last 
few years from women-owned entrepreneurs.
  The Committee on Small Business is particularly pleased to champion 
this program. All of my Democratic colleagues from the Small Business 
Committee--Senators Bumpers, Levin, Harkin, Lieberman, Wellstone, 
Cleland, and Landrieu--have joined us in sponsoring this bill which 
will make the program permanent.
  The program is operated by SBA's Women's Business Ownership Office, 
which also would become permanent under the legislation. With the SBA's 
help, we have begun to tap the remarkable resource of women-owned 
businesses that has been proven to exist over the course of the last 
years. I know that many knew it always existed, but this pilot project 
has really given the evidence greater weight than it has ever had 
before. And I think this should pass overwhelmingly.
  Mr. President, women-owned businesses have been a critical component 
of the remarkable growth spurt we are enjoying in the country. 
According to the Census Bureau, women-owned businesses represent one-
third of all U.S. companies, and they annually contribute more than 
$1.5 trillion in sales to the U.S. economy. The National Federation of 
Women Business Owners and Dun & Bradstreet reported that 7.7 million 
women-owned businesses employ more people than the Fortune 500 
companies. So we must provide a strong policy that allows these women 
to meet their greatest potential and allow this country to benefit from 
the full measure of their endeavors.
  We know that women entrepreneurs are breaking records. Women-owned 
sole proprietorships have a startup rate twice that of male-owned 
businesses. Between 1987 and 1992, the number of women-owned businesses 
increased by 43 percent, while businesses overall only grew by 26 
percent. During the same time, employment by women-owned firms grew 100 
percent. Particularly notable, women-owned companies with 100 or more 
workers increased employment by 158 percent, more than double the rate 
for all U.S. firms of similar size.
  This country needs to preserve and to foster that special 
entrepreneurial spirit. And the Women's Business Centers Act is a great 
way to do that.
  In Massachusetts, the 147,000 women-owned businesses represent over 
one-third of all the companies in our State. And through the SBA's 
women demonstration program--the program which this bill would make 
permanent--the Center for Women & Enterprise, Inc., was established in 
Boston in 1995. In just 2 years, the center has served over 1,000 women 
business owners, 40 percent of which are minorities.

  The center offers scholarships for low-income women and provides 
courses, workshops, and one-on-one counseling. One hundred cities and 
towns in eastern Massachusetts are benefiting from the work of the 
center. I want to see that success continue. We can do that, and we can 
replicate it in State after State by making the women's business 
centers and the Women's Business Ownership Office permanent assets of 
the SBA programs.
  In addition to counseling, women business owners need access to 
capital. Women are vital players in business, and yet their access to 
capital for funding business enterprise has been limited, and it is 
still limited. The SBA is trying to meet that demand by increasing 
access to capital.
  From 1992 until 1995, the number of SBA guaranteed loans going to 
women quadrupled. They received $3.8 billion in SBA guaranteed loans 
during that period of time. And in fiscal year 1996, women-owned 
businesses received nearly $2 billion in loans from SBA guarantees.
  So access to capital is beginning to improve for women business 
owners, but we need to guarantee that we support programs that continue 
that trend.
  Last month, I helped kick off a national initiative undertaken by the 
SBA's Women's Business Ownership Office, the National Women's Business 
Council, and the Federal Reserve Bank in Boston, to convene workshops 
throughout the United States. These meetings bring together women 
business owners, lenders, and policymakers to discuss how to expand 
capital markets to meet the increasing demand of women-owned 
businesses.
  With input from the women's community, I have concluded that this 
issue is one that is going to be addressed at different levels. We need 
more micro-loans for startup businesses. We need more business 
development and technical assistance, more loan package counseling, and 
more access to venture and angel capital sources.
  This program is one key way to maximize women-owned businesses and to 
wisely use Government resources to boost the private sector's success.
  I join with Senator Domenici and Senator Bond in urging our 
colleagues to support the Women's Business Centers Act of 1997. It will 
provide $8 million in funding that will be used to provide matching 
grants for women's centers, and the bill will make the program and the 
Women's Business Ownership Office a permanent part of the important 
work that the SBA is doing to guarantee opportunity for all of those 
who wish to create jobs in this country.
  We hope to establish sites in every State to serve women 
entrepreneurs with the passage of this act. And I hope that our 
colleagues will overwhelmingly support it.
  Mr. President, I ask unanimous consent that Senator Specter and 
Senator Boxer also be added as cosponsors.
  Mr. President, I reserve the balance of time for other Senators 
wishing to speak on this bill.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. SPECTER. Mr. President, I have sought recognition to announce my 
cosponsorship of the Domenici-Bond Women's Business Centers Act of 
1997, which will reauthorize this valuable program administered by the 
Small Business Administration's, the SBA's, Office of Women's Business 
Ownership.
  Women-owned businesses are a major driving force for America's 
economy. As of 1996, there were nearly 8 million women-owned businesses 
nationwide, employing more than 18.5 million people and generating 
close to $2.3 trillion in sales. According to the National Foundation 
for Women Business Owners, women-owned businesses are growing faster 
than the overall economy in each of the top 50 metropolitan areas in 
the United States, including Philadelphia and Pittsburgh. In a study 
released in March 1997, the foundation reported that as of 1996, 
Philadelphia's 127,100 women-owned enterprises employed 448,500 people 
and generated over $56 billion in sales, and Pittsburgh's 54,800 women-
owned enterprises employed 141,800 people and generated over $17 
billion in sales. These numbers are truly impressive and highlight the 
significant impact of women in business on Pennsylvania's economy.
  Established through the Women's Business Ownership Act of 1988, the 
women's business centers have been vital in providing services and 
programs that support and accelerate women's business ownership. My 
constituents are fortunate to be served by the Women's Business 
Development Center, located in Philadelphia. Since

[[Page S5601]]

its formation in July 1995, the center has provided information, 
business assessment, training, and counseling sessions to over 3,000 
prospective, emerging, and established women business owners. It is 
critical to reauthorize the activities of these centers to ensure that 
women-owned businesses have the resources necessary to prosper and 
grow.
  Specifically, the Women's Business Centers Act of 1997 would double 
the authorized appropriation for the women's business centers to $8 
million, authorize 5 years of project funding for new centers, extend 
funding for existing centers for an additional 2 years, and modify the 
Federal funding match requirements to facilitate self-sufficiency of 
the centers.
  This legislation complements my efforts on behalf of minority and 
women-owned business enterprises. On April 23, 1997, I reintroduced the 
Minority and Women Capital Formation Act, S. 635, which provides 
targeted tax incentives for investors to invest equity capital in 
minority and women-owned small businesses, as well as venture capital 
funds dedicated to investing in minority and/or women-owned businesses.
  I also worked to secure a $500,000 grant through the Small Business 
Administration in fiscal year 1997 to support the activities of the 
National Education Center for Women in Business, located at Seton Hill 
College in Greensburg, PA. The center promotes women's business 
ownership by conducting collaborative research, providing educational 
programs and curriculum development, and serving as an informational 
clearinghouse for women entrepreneurs.
  In conclusion, Mr. President, I urge my colleagues to support swift 
adoption of the Women's Business Centers Act of 1997 so that we can 
meet the needs of America's emerging women business owners, which are 
critical to the economic health of our Nation.
  Mr. WELLSTONE. Mr. President, I am very pleased to join my colleagues 
today as an original cosponsor of the Women's Business Centers Act of 
1997. I thank the chairman of the Small Business Committee, Senator 
Bond, as well as Senators Domenici and Kerry, for their leadership on 
this issue.
  As a member of the Small Business Committee, I have followed the 
success of the women's business demonstration sites--two of which are 
in Minnesota. I would like to note the effectiveness and good work of 
those two organizations: Women in New Development, or WIND, of Bemidji, 
MI, and the Women's Business Center, which is operated in association 
with the White Earth Reservation Tribal Council in Mahnomen, MI.
  This program, and these centers, fill a crucial need in many 
communities across the country. They deliver needed technical 
assistance, and they ultimately help provide tremendous economic 
benefits.
  I recently received a letter from Mary Turner, director of the White 
Earth center. She pointed out that her center and others operated 
through the program are committed to delivering services aimed at 
promoting self-sufficiency, and which are ``as diverse as the women we 
serve--women of color, women on public assistance moving on to self-
employment, rural and urban women, and women starting home-based 
businesses.''
  Mr. President, the bill will reauthorize the women's demonstration 
sites, increasing the program's annual funding and authorizing 
demonstration sites to receive funding for 5 years rather than the 
current 3 years. I look forward to working with the chairman and other 
members of our committee to include this measure as part of our broader 
reauthorization of SBA programs.
                                 ______
                                 
      By Mr. GRAHAM (for himself, Mr. Grassley, Mr. Hatch, Mrs. Boxer 
        and Mr. Jeffords):
  S. 889. A bill to provide for pension reform, and for other purposes; 
to the Committee on Finance.


            THE RETIREMENT SECURITY FOR THE 21ST CENTURY ACT

  Mr. GRAHAM. Mr. President, today, as I did once before in January of 
this year, I rise to speak about an issue which is of vital importance 
to this Nation, the retirement security of our people into the 21st 
century.
  Mr. President, the facts are startling. Fifty-one million working 
Americans are not covered by any type of retirement plan. An incredible 
87 percent of workers employed by small businesses, businesses with 
fewer than 20 employees, have no private retirement or pension 
coverage. Less than 40 percent of the 33 million Americans, age 65 and 
older, today collect a pension. These numbers are very, very 
disturbing.
  There are three foundations for a secure retirement: Social Security, 
personal savings, and a pension. Each one of these foundations is 
eroding. Social Security is unlikely to increase. Personal savings 
rates are falling. Fewer of today's workers will retire with a lifetime 
pension.
  In January, I spoke and mentioned some of the reasons that pension 
coverage fails to reach so many workers. Some of those reasons include 
the fact that our work force is changing. For the most part, our 
pension laws have not kept pace with the changes in the American work 
force. Think about current workers in an era of tremendous employee 
mobility--you don't work an entire career for one company, as was the 
typical pattern for our parents and grandparents. Small business is a 
tremendously vital part of our economy. Yet, those very small 
businesses are faced with obstacles in establishing retirement plans.
  There has been a decline in union membership, and unionized workers 
are the most apt to be covered under a defined benefit retirement plan. 
There is a shift away from manufacturing jobs toward service and 
retail, and, again, pension coverage is higher in manufacturing sectors 
than in these new expanding areas of the American economy.
  Knowing that these trends will continue, it is obvious that we need 
to make certain that our pension laws have kept pace with the changing 
American work force. My goal is to ensure that each American who works 
hard for 30, 40 years, or more, has every opportunity for a secure and 
comfortable retirement. I share this goal with many of my colleagues, 
including Senators Orrin Hatch, Charles Grassley, and John Breaux, all 
of whom join me today in introducing this bipartisan bill.
  To achieve the goal that every American who works hard for a lifetime 
will have a secure retirement and pension, we have focused on five 
areas: Expanded coverage for small businesses, women's equity issues, 
portability, pension security and enforcement, and simplification. 
Those, Mr. President, are the five areas of impact for the legislation 
that we introduce today.
  I have been honored to participate with some of my colleagues' 
efforts to build retirement security for American workers. Senator 
Daschle has created a Democratic pension task force, which led to the 
introduction of S. 14 on the first day of this session.
  Senators Moseley-Braun, Murray, and Snowe have furthered the debate 
in helping women achieve a sound retirement, with the Comprehensive 
Women's Pension Protection Act.
  Senators Conrad and Hatch have focused on clarifying 
nondiscrimination rules for governmental plans.
  Senator Boxer has fought to protect pension assets from abuse in 
401(k) plans.
  Senator Gregg's leadership has guided the Republican pension task 
force to introduce its pension proposal earlier this week.
  The attention that this issue has received in the Congress highlights 
its importance to the American people. I am ready to work together and 
find the common ground that will form the foundation for a secure 
retirement for millions of Americans.
  We will take a common bipartisan approach that will be necessary for 
both sides of the aisle, both employers and employees, in order to 
build that foundation for the future. We need to be able to offer 
businessowners and their workers uncumbersome portability, 
administrative simplicity and the confidence that their plans are 
secure and well funded.
  To be honest, when I first saw the statistics of how many people are 
ill prepared for retirement, I was amazed. I started asking ``Why?'' 
Why do we have over 50 million Americans not prepared for their 
retirement? I asked Floridians directly. I have spoken with large and 
small chambers of commerce.
  In my career, I have had the opportunity to spend a workday working 
directly with the people of our State at

[[Page S5602]]

more than 300 businesses. I have worked side by side with small 
business owners, with executives, and their employees.
  My staff, visiting a chamber of commerce in central Florida, recalls 
the answer given as to why small businesses have few pension plans: 
``Administrative costs and red tape.''
  When I traveled to Orlando to discuss this bill, I had the arduous 
task of bringing along the United States Code books and current 
regulations dealing with pension and retirement. They are overwhelming 
just by their weight alone.
  Our Nation's small businesses need simple options. They should be 
focusing on what they do best--growing their businesses, growing our 
economy, not attempting to apply a pension law that was written 30 or 
more years ago for large businesses to their current circumstances. It 
is crucial that we make it as uncomplicated as possible for our 
Nation's businesses to offer their employees retirement security.
  We need to cut back on paperwork, eliminate obstacles to starting 
pension plans, streamline the complex regulations, and provide 
employers with the guidance and support they need to continue their 
valuable efforts.
  In the end, all of these provisions will encourage employers to offer 
pension plans because of the lower administrative costs and reduction 
of red tape.
  Let me mention a few specific ideas which are incorporated in this 
legislation.
  Small businesses are the most vital sector of today's economy. This 
is where job growth is, and all indications are where it will 
accelerate in the future. Yet, small businesses face many challenges in 
providing a secure retirement for their employees: Higher 
administrative costs to manage a plan; a fluctuating income stream--
some years profits are up; and sometimes they are down--and a lack of 
resources to keep current with changing laws and regulations.
  This chart demonstrates the problem. Workers in America with a 
retirement plan: According to the Small Business Administration, if you 
work for a company that employs 20 or fewer persons, your chances of 
having a retirement plan are 13 percent; if you work for a firm with 
between 21 and 100 employees, your chances are 38 percent; if you work 
for a firm that employs over 500 people, 72 percent of the time you 
will be covered by a pension and retirement program.
  We need to make it a wise business decision for small businessowners 
to establish a retirement plan for themselves and for their employees. 
We need to offer simple creative solutions to expand pension coverage 
for small businesses.
  Payroll deductions for individual retirement accounts is one example, 
Mr. President, of the kind of change which is made in this legislation.
  Even with every effort made for simplification, some businesses won't 
be able to establish a retirement plan. But even the smallest of small 
businesses can help their employees. Any step we take to facilitate 
putting money away for retirement is a step in the right direction.
  Payroll deductions are the easiest manner of savings. This provision 
will facilitate the contributions to IRAs by direct deduction from 
payrolls.
  Modification of the topheavy rules is another step that will 
facilitate small businesses providing retirement programs. What are 
topheavy rules? These are rules which were created to assure that 
private pension plans were not disproportionately tilted toward highly 
compensated individuals. These rules affect small businesses much more 
than large companies. Because topheavy rules are excessively 
cumbersome, small businesses simply don't offer retirement plans for 
any of their employees.
  Our provisions attempt to address this inequity by repealing the 
family aggregation rules and simplifying the definition of key 
employees and compensation.
  It is important that retirement plans benefit all employees--but, if 
we can modify these rules to help small family businesses prepare for 
retirement, millions of Americans would be better off in their 
retirement years.
  Another area of special concern, Mr. President, in this legislation 
is the impact that old pension and retirement policies have on women. 
We know that women are coming into the work force in much larger 
numbers than they did in previous generations. We know that women are 
the most mobile component of our work force. They change jobs more 
frequently. They move in and out of the work force as family and other 
responsibilities dictate. Women tend, during their career, to care for 
children and aging parents, which makes it difficult for them to stay 
in one job long enough to secure the benefits that require long periods 
of employment.

  Statistics show that women will live longer in retirement than men. 
Therefore, they need more, not less, financial resources for their 
retirement years. Historically during a career, women will earn less 
than men, thus making it more difficult for them to save for 
retirement. The provisions that we include in our women and family 
equity section help both women and men, but they disproportionately 
help women.
  Some of the specific concerns women face during their working 
careers:
  Time away from work for child care, lower salaries, or divorce.
  This section can provide a growing sector of our working population a 
fair chance at a productive and secure retirement.
  It provides for faster vesting of employers' matching contribution. 
Under current law, employers may require up to 5 years of service 
before an employee is entitled to the employer's matching contribution 
to the business' defined contribution plan.
  Twenty percent of our work force age 45 to 64 have been in their 
current jobs less than 4 years. That is a huge sector of the work force 
who are most likely not to stay long enough to vest in their retirement 
plan. Women are a disproportionate share of that huge portion of the 
work force. By reducing the vesting period from 5 years to 3 years, we 
more accurately reflect the changes in our work force.
  Spousal IRA is another example of a provision in the current law 
which particularly adversely affects women. In an American culture 
where we see more and more two-career couples, we need to encourage 
each of them to save in every way possible.
  Under current law, if one spouse is participating in a retirement 
program at his or her job, no matter how small, the other spouse is 
precluded from a tax deductible individual retirement account. Senators 
Roth and Breaux have worked long and hard on this issue, and we have 
included the results of their efforts in this proposal. It eliminates 
one barrier that has stood in the way of many two-career families 
providing for two individuals' pension and retirement security. 
Individual retirement accounts have proven to be one of the most 
effective ways to plan for future financial security. Working couples 
should be encouraged to plan and save through this option. We want to 
eliminate this barrier to save.
  Another aspect that particularly affects women is the fact that they 
are subject to periodic discontinuity in their employment careers.
  As the father of four daughters and eight grandchildren, I know all 
the joy a child can bring a family and how much planning is needed for 
the new parents to assure that they and their children can provide for 
their future years.
  Many employees today are taking unpaid leave to spend a few weeks or 
months with a newborn or a newly adopted child. But by doing so, they 
may be taking a step away from their own retirement security by not 
being able to make their usual contributions to their retirement plan. 
Our provision allows them to do so when they return to the job.
  This proposal is modeled after legislation that Congress adopted 
after the gulf war in which returning veterans were allowed to make a 
contribution to their retirement programs to cover the period that they 
were away from their job serving their Nation. We will help our 
Nation's new parents in the same way that we helped returning veterans.
  Saving for retirement is not an easy task. It takes dedication month 
after month. Under this provision, we will make certain that the good 
savings habits that parents have started can be sustained even if they 
take time away from work to be with a newborn child.
  Another factor that peculiarly affects women is the issue of 
portability--the ability to move retirement benefits from one job to 
the next.

[[Page S5603]]

  Just looking at some of the current statistics, we know that the 
average American worker over the course of a 40-year career will have 
seven different employers. The average worker in a 40-year career will 
have seven different employers. Our pension laws were written in an era 
that didn't anticipate this modern mobility of the work force.
  Americans' retirement dreams can be dimmed by the consequences of 
moving from job to job. They will have less retirement assets. Often 
there is no choice but to make a job change. A spouse gets transferred 
to another city to keep the family together; the other spouse moves as 
well. We in Congress have been in favor of keeping families together. 
Let's make certain that the family is not hurt in later years by a 
difficult retirement, a constrained retirement, because of that very 
mobility. An employee can be downsized. Companies can go bankrupt. 
Hard-working recent college graduates can move up the career leader. 
Each of these involve job changes.
  Mr. President, one of the things that has distinguished the American 
economy from many other industrialized nations has been this very 
factor of our mobile work force, that people were willing to move where 
there were new opportunities, where the changes in the economy dictate 
that it was to their advantage as well as to the Nation's advantage for 
people to move from one job to the other. We shouldn't constrain that 
by imposing a penalty on their long-term retirement security because 
they have done what is in their interest and what is in the interest of 
our dynamic economy.
  When such moves occur, we need to mobilize the pension money, to put 
wheels under it, to make it as portable as the people who will benefit 
by those retirement savings. Providing employees with a vehicle to take 
their pension money with them during their working careers will allow 
the accrual of larger pensions making it easier on the worker and the 
employers to keep track of retirement funds.
  How can we do this? We can do it through several proposals which are 
incorporated in the bill that I introduce today. Similar defined 
contribution plans should be able to roll over one into the other. 
Money in a retirement stream should be kept there until retirement. 
When you leave one job for another, your retirement savings should be 
able to travel with you.
  Mr. President, today American workers have their retirement plans in 
many different types of specific forms. Well known is the 401(k) plan; 
also, plans for workers who are employed by nonprofit organizations, 
workers who are employed by the Government, individual retirement 
accounts.
  What we provide in our legislation is that, if a worker moves, for 
instance, from a Government employment to a private employment, they 
would be able to carry with them their accumulated retirement benefits 
from their previous plan into their new employment.
  This will require the consent of both the employees and the new 
employer to do so. But the law will no longer erect arbitrary barriers 
against such transition of employment benefits.
  All of these plans have their own specific but generally relatively 
marginal differences. But they all have one common purpose--that is, 
allowing workers to save for retirement. This ability to move plans as 
employment history requires a movement will facilitate achieving that 
objective.
  Mr. President, we also need to encourage businesses to allow their 
employees to do this. We will eliminate the fear among businesses that 
by accepting a new employee's previous retirement assets, the business 
risks the disqualification of its own plan.
  Once a pension plan is in place, Congress needs to assure that the 
assets are invested wisely and securely. America's workers are 
depending on the assets that are accumulating in retirement plans. Our 
laws protecting pension assets need to give them the confidence that 
they need to rely on these plans in retirement.
  There should be stronger penalties for fraud and embezzlement of 
plans. We say clearly to the pension fund managers and administrators: 
If you are guilty of fraud or embezzlement, then your own pension will 
be at risk. Workers who are hurt by your action will be compensated out 
of your pension. America's pension fund managers have a sacred trust to 
millions of employees who will depend on their expertise and skills for 
a sound retirement. If that trust is broken, harsh sanctions are in 
order for the guilty party, or managers.
  There should be greater access to information by employees as to what 
is the status of their pension retirement fund. Pension security will 
be enhanced by an educated work force. Employees with the necessary 
information will be able to watch over their own retirement assets. A 
vital aspect of retirement security is keeping pension participants 
fully informed of what they have in their plans and what to expect when 
they retire.
  Senator Grassley is to be commended for his efforts in this area, 
making sure that employees receive accurate information and properly 
computed pensions.
  To help employees plan for their retirement, we propose annual 
benefit statements for all defined contributions plans and every 3 
years for defined benefits plans.
  These statements will help all employees plan carefully and would 
also help to reduce pension miscalculations. We are acting in an 
anticipatory way to cut off what we think could be a future threat to 
retirement security.
  Once we have made every effort to keep our Nation's pension assets 
protected from fraud and abuse, let us protect these assets from 
ourselves.
  There is already a consumer credit crisis in this country. Millions 
of American families are overextended, carrying huge balances on 
multiple credit cards month to month.
  Our measure will prohibit 401(k) or similar retirement assets from 
being tied to credit cards. If these credit cards were allowed, we 
would be putting Americans on the slippery slope, spending retirement 
assets before retiring.
  Mr. President, I mentioned that one of our principal areas of concern 
is simplification, to make it easier for all the participants in the 
retirement security process to know, to be in compliance with the 
standards and therefore to be encouraged to provide more adequately for 
their retirement.
  Summary plan descriptions and a summary of major modifications will 
now be substituted for the detailed reporting requirements which are 
currently required. One less report will be filed. The Department of 
Labor probably has millions of these current detailed reports 
stockpiled.
  Under our proposal, the Labor Department retains the right to request 
one of these reports from a company, but for simplification's sake let 
us not require the reports to be sent in unless they are actually 
needed.
  We are also sanctioning the use of electronic communications. Our 
pension laws should get on the information highway. We have asked the 
Department of the Treasury to look to the use of e-mail and modern 
technology in administering pension plans. It is common sense. It is 
simpler to use. It is less expensive. It will encourage particularly 
small businesses to provide retirement plans.
  Mr. President, common sense is the foundation of this proposal, to 
make the punishment for failure to comply with the standards fit the 
crime. Under current law, the IRS can threaten to disqualify an entire 
pension plan for inadvertent errors. We are proposing intermediate 
sanctions, sanctions which are proportionate to the error that has been 
committed.
  The IRS is to be commended for several programs they have initiated 
to work with businesses in this area. We want to codify elements of 
those plans that are already in practice. As an example, a plan should 
not be disqualified if a company finds and fixes an error prior to an 
Internal Revenue Service audit. Rank-and-file employees will not be 
taxed even if a plan is disqualified.
  Senators Hatch and Conrad have led the effort to permanently exclude 
governmental plans from nondiscriminatory rules. Congress placed a 
temporary moratorium on those rules in 1977. Since then, we have 
addressed this issue every few years. After two decades, common sense 
says let us make this permanent.
  Mr. President, preparing this generation of workers for retirement 
is, in my view, almost an issue of national security. We know that 
beginning early in

[[Page S5604]]

the 21st century there will be a surge of Americans who will reach 
retirement age. How well prepared those millions of Americans are for 
the years after retirement will have a significant impact on the 
economic, personal, and national security of this Nation. A strong 
economic future depends upon this.
  Mr. President, you represent a State with significant numbers of 
persons who have chosen to live there in retirement. That is also true 
of my State of Florida. Every time I go home to my State, I see the 
result of persons who have conscientiously planned for their 
retirement--families that have worked hard, invested wisely, saved 
diligently, and are now enjoying the benefits of retirement in our 
State.
  Collectively, we Americans could learn a lot from this generation. I 
want to provide this generation with every possible opportunity to have 
the same lifestyle as our parents are currently enjoying. To achieve 
this goal, we need businesses to work together with their employees. We 
need Republicans and Democrats to collaborate in a bipartisan solution 
to those inhibitions which are currently resulting in over 50 million 
Americans not having pension retirement plans. We need to work together 
to find the common ground and to take steps now on the items upon which 
we agree. Every time we can make pensions more portable, simpler, 
fairer to women, more attractive to small businesses, more secure, we 
are helping every American reach their retirement goal. We are making a 
significant contribution to a better America.
                                 ______
                                 
      By Mr. BENNETT (for himself and Mr. Hatch):
  S. 890. A bill to dispose of certain Federal properties located in 
Dutch John, UT, to assist the local government in the interim delivery 
of basic services to the Dutch John community, and for other purposes; 
to the Committee on Energy and Natural Resources.


                The Dutch John Privatization Act of 1997

  Mr. BENNETT. Mr. President, I am pleased to introduce the Dutch John 
Privatization Act of 1997 with my colleague from Utah, Senator Hatch.
  I want to explain to my colleagues the history of this community. The 
town of Dutch John, UT, was established in 1958 by the Bureau of 
Reclamation to house personnel and equipment during the construction of 
the Flaming Gorge Dam and Reservoir on the Green River. During this 
construction period, the town housed over 2,000 people. After the 
completion of the dam, Dutch John continued to serve as the residence 
of approximately 175 people, including Federal Government employees and 
others associated with the Flaming Gorge Dam and Recreation Area.
  To this day, basic services for Dutch John, as well as the operative 
and administrative costs for the town, have been an unnecessary 
financial burden for the Bureau of Reclamation and the U.S. Forest 
Service. The cost of providing the full range of community facilities 
and services--including that of the landlord for the town--have 
substantially risen over the years, approaching $1 million annually. 
The time has arrived to transfer the ownership and maintenance of this 
town into local hands.
  For several years, the involved Federal agencies have worked with 
Daggett County officials and residents in drafting a Dutch John 
privatization proposal that would protect all affected interests. The 
outcome of this process is the Dutch John Privatization Act of 1997. 
This legislation would provide for the transfer of selected Federal 
property into private ownership; dispose several residential units, 
public building and facilities; provide for a transition to local 
government administration and reduce long-term Federal expenditures.
  This legislation would transfer approximately 2,400 acres of land, 
identified by the U.S. Forest Service and the Bureau of Reclamation as 
no longer necessary to fulfill the agencies' mission, out of Federal 
ownership. Residents would have the ability to purchase the homes they 
currently rent from the Bureau of Reclamation at fair market value. 
Federal agencies would retain ownership of identified needed 
facilities, including the U.S. Forest Service warehouse and office 
complex, the Bureau of Reclamation industrial complex, certain 
personnel housing and the heliport.
  As the Federal Government ceases to provide basic community services, 
such as roads, water, and sewer, local government would be required to 
assume these responsibilities. Daggett County would receive an annual 
grant from public power revenues, for 15 years, in order to offset the 
costs of transition while a traditional community tax base is created.
  This bill is a win-win situation. The Federal Government will 
initially save more than one-half million dollars per year, and after 
15 years, will eliminate altogether an expensive obligation. Dutch John 
will be a self-sustaining community while providing necessary services 
for the 2 million people that visit the Flaming Gorge National 
Recreation Area each year.
  After 25 years, Dutch John as a government-run town has become an 
anachronism. This legislation is in the best long-term interest of 
Federal, State, and local governments. I urge my colleagues to join me 
in saving the Federal Government the costs of administering the town of 
Dutch John while providing the means to start a community with a small-
resort commercial base in one of the most remote parts of Utah.
  Mr. HATCH. Mr. President, I rise, along with Senator Bennett, to 
introduce the Dutch John Privatization Act. Dutch John, a city in 
Daggett County, UT, was established in 1958 by the Bureau of 
Reclamation to provide a community for the construction and operation 
of the Flaming Gorge Dam on the Green River. The dam was completed in 
1964.
  This bill will remove the 2,400 acre township from Federal ownership 
by allowing for a buy-out of homes by existing lessees and permittees 
at fair market value and for a transition to local government ownership 
over 15 years.
  This legislation is the result of years of discussion among local, 
State, and Federal officials, including the Bureau of Reclamation, U.S. 
Forest Service, and Daggett County.
  During the construction of Flaming Gorge Dam, the population of Dutch 
John reached more than 2,000 people. Today this remote town has 
approximately 175 persons. As small as it is, the Federal Government 
still pays about $1 million each year to run the city. As the landlord 
for Dutch John, the Federal Government must provide the water 
infrastructure, the sewer system, city roads, and various other public 
goods and services.
  Privatizing Dutch John would release the Federal Government from the 
burden of the operation and maintenance of this town. The current 
mandate and budget constraints of the Bureau of Reclamation and the 
U.S. Forest Service act as disincentives for the Federal Government to 
invest in Dutch John.
  This legislation will allow Federal agencies to retain control and 
ownership of facilities they have identified as needed for continued 
Government operation. Homes and properties not retained by the Federal 
Government will be sold at fair market value to current renters. 
Holders of federally issued permits and leases would have the right to 
purchase their underlying leased or permitted land at fair market 
value. All other properties will be transferred to Daggett County, and 
the revenues from these sales would be used for costs related to Dutch 
John.
  Under this bill, Daggett County will receive a $300,000 annual grant 
for the next 15 years as it takes over responsibility for the town's 
governance and infrastructure. During this transition period, Daggett 
County would be able to create a local tax base to fund future 
maintenance, sanitary, and public safety services.
  Currently, an environmental assessment is underway that will analyze 
the need for additional commercial recreation services for national 
recreation area and Ashley National Forest visitors. We will certainly 
review these recommendations carefully.
  Nevertheless, this legislation reflects the work of many individuals 
who have worked hard to create a viable plan for the future of Dutch 
John and that will allow residents to become self-governed. Self-
governance, after all, is the cornerstone of our federal system, and 
Dutch John has been, for all intents and purposes, a Federal colony.
  We urge our colleagues to join us in supporting independence for 
Dutch John.

[[Page S5605]]

                                 ______
                                 
      By Mr. ABRAHAM (for himself, Mr. Faircloth, Mr. Sessions, Mr. 
        Hutchinson, Mr. DeWine, Mr. Coats, Mr. Ashcroft, and Mr. 
        Coverdell):
  S. 891. A bill to require Federal agencies to assess the impact of 
policies and regulations on families, and for other purposes; to the 
Committee on Governmental Affairs.


                THE FAMILY IMPACT STATEMENT ACT OF 1997

  Mr. ABRAHAM. Mr. President, on April 21 President Clinton issued an 
Executive order purporting to defend America's children from 
environmental health and safety risks. At the very end of this order 
was a simple, but cryptic statement. That statement was, ``Executive 
Order 12606 of September 2, 1987 is revoked.''
  With that simple statement, Mr. President, without consulting this 
body or so much as naming the order revoked, President Clinton struck 
an unnecessary and uncalled for blow against American families and 
children.
  Executive Order 12606 of September 2, 1987, signed by President 
Reagan, was one of the most important policy statements of the last 25 
years.
  As stated in its preamble, that Executive order was intended ``to 
ensure that the autonomy and rights of the family are considered in the 
formulation and implementation of policies by Executive departments and 
agencies.''
  That Executive order, which President Clinton so blithely, almost 
mutely discarded, required our Federal bureaucracy for the first time 
to consider their actions' effects on the families of this nation.
  More than any Government program, America's children are protected, 
nurtured and given the means they need to lead good lives by their 
families. No national village can replace the constant care and 
attention of parents.
  By allowing Executive agencies to ignore the effects of their 
policies on families, President Clinton promises more harm to children 
than any Executive order he signs could possibly cure.
  Because of President Reagan's Executive order, it was the official 
policy of this country that our bureaucrats must think about families 
as they formulate and apply rules and regulations.
  Do we seriously believe, Mr. President, that the American family no 
longer needs protection?
  Do we seriously believe that Federal rules, regulations, and programs 
no longer have serious effects on our families?
  Do we seriously believe that bureaucrats here in Washington will just 
naturally craft everything they do so as to serve the interests of our 
families?
  I do not think so, Mr. President. In fact I am convinced that now 
more than ever our families need our protection. I am convinced that we 
must ensure that those who work for the Federal Government stop and 
think about how what they are doing effects our families.
  That is why, along with Senators Faircloth, Sessions, Tim Hutchinson, 
DeWine, Coats, and Ashcroft, I am introducing the Family Impact 
Statement Act of 1997. This legislation will reinstate our national 
policy requiring that Federal bureaucrats consider the effects of their 
actions on our families.
  Specifically, and mirroring the Executive order recently revoked by 
the President, the Abraham-Faircloth Family Impact Statement Act would 
require that executive departments assess measures that may have 
significant impact on family formation, maintenance and general well-
being in light of the following questions:
  1. Does this action by Government strengthen or erode the stability 
of the family and, particularly, the marital bond?

  2. does this action strengthen or erode the authority and rights of 
parents in the education, nurture, and supervision of their children?
  3. does this action help the family perform its functions, or does it 
substitute governmental activity for that function?
  4. does this action by Government increase or decrease family 
earnings? Do the proposed benefits of this action justify the impact on 
the family budget?
  5. can this activity be carried out by a lower level of Government or 
by the family itself?
  6. what message, intended or otherwise, does this program send to the 
public concerning the status of the family?
  7. what message does it send to young people concerning the 
relationship between their behavior, their personal responsibility, and 
the norms of our society?
  Again, mirroring the Executive order President Clinton recently 
revoked, Abraham-Faircloth would require that the head of the 
department or agency involved in any policy significantly effecting 
family well-being certify in writing that such measures has been 
assessed in light of these criteria. The department or agency head also 
must provide an explanation of how such measures will enhance family 
well-being.
  The Office of Management and Budget will then, to the extent 
permitted by law, ensure that the policies of the executive departments 
and agencies are applied in light of these criteria.
  In addition, Mr. President, this legislation will require that the 
White House Office of Policy Development assess existing and proposed 
policies and regulations that impact family well-being in light of the 
same criteria. That office will then provide evaluations on those 
measures to the Office of Management and Budget, and advise the 
President on policy and regulatory actions that may be taken to 
strengthen the institutions of marriage and the family in America.
  Mr. President, this legislation will restore a crucial protection for 
the fundamental institution on which our society is based. By requiring 
that our departments and agencies consider the impact of their actions 
on our families it will protect those families from intrusive policies 
that undermine them, their children's lives, and our social fabric.
  I urge my colleagues to join with me to make bureaucrats consider our 
families' well-being before they act. I urge them to support Abraham-
Faircloth.
  I yield the floor.
                                 ______
                                 
      By Mr. GRAHAM (for himself, Mr. McCain, Mr. Smith of Oregon, Mr. 
        Wyden, Mr. Bumpers, Mr. Thomas, Mr. Hutchinson, Mr. Bond, Mr. 
        Gregg, Mr. Reid, Mr. Ford, Mr. Robb, Mr. Inouye, Mr. Santorum, 
        Mr. Breaux, Mr. Hollings, Mr. Glenn, and Mr. Durbin):
  S. 892. A bill to amend title VII of the Public Health Service Act to 
revise and extend the area health education center program; to the 
Committee on Labor and Human Resources.


         the area health education center program extension act

  Mr. GRAHAM. Mr. President, I rise today to introduce legislation in 
conjunction with Senator McCain and 16 of our colleagues to reauthorize 
the Area Health Education Center Program under title VII of the Public 
Health Service Act.
  Unfortunately, the law of supply and demand does not always operate 
to the benefit of rural Americans or the working poor in the health 
care marketplace. Whether individuals live three counties away from the 
nearest full-service clinic or just across town, often their access to 
primary and preventive care is limited.
  While recent attention has focused on controlling run-away health 
care costs, the problem is not only one of cost, but also one of 
allocation. We need to allocate both our abundant supply of health 
professionals and the highly concentrated resources of our world class 
academic health centers to individuals who are underserved in the 
health care marketplace.
  Since its inception in 1973, one of the most effective means of 
redistributing and reallocating manpower has been the Federal and 
State-funded Area Health Education Centers Program [AHEC]. AHEC's serve 
as bridges between medical schools and our Nation's underserved rural 
and inner-city communities, recruiting and training primary care 
providers and health professionals, and providing continuing education 
to existing providers. Nine years ago, the AHEC Program was expanded to 
include the Health Education Training Centers Program [HETC], which are 
designed to address the persistent unmet health care needs of 
population groups such as migrants, minorities, and others.
  As Governor of Florida, I became aware of the accomplishments of 
AHEC's in addressing the maldistribution of health professionals in 
underserved areas of other southern States

[[Page S5606]]

such as North Carolina and helped catalyze the initial interest for the 
development of AHEC's in my State. Since then, I have been pleased to 
see AHEC's and more recently HETC's grow and flourish throughout 
Florida and throughout the country.
  Based at each of the State's medical schools, Florida's four AHEC 
programs now cover all 67 counties in the State. The programs and their 
10 affiliated centers conduct activities that address regional and 
State priorities in areas such as public and school health, recruitment 
of health professionals to medically underserved communities, and 
special health needs of migrant and immigrant populations.
  With more than 44 AHEC programs operating in 42 States, we are 
finally approaching the full evolution of AHEC into a national system 
with an infrastructure through which to reach those communities and 
populations in greatest need of basic health services. In 1994, 80 of 
142 allopathic and osteopathic medical schools were involved with AHEC 
and HETC programs nationally, and 13 percent of the Nation's total 
medical school enrollment obtained community-based training through the 
program.
  AHEC's effectiveness lies in this unique ability to combine the 
resources of academic health centers with those of medically 
underserved communities and in such a way that enhances the primary 
care training while increasing access to care. This role continues to 
increase in importance as States struggle to adjust to changes in 
medical reimbursements, limitations on welfare, and cutbacks in social 
services.

  One of the most important contributions AHEC's have made in Florida 
and around the Nation is in the training of health professionals in 
collaboration with local health education institutions, public health 
departments, community health centers, rural hospitals, local school 
systems, and volunteer organizations. As a result AHEC's have generated 
a great deal of academic and community support. During fiscal year 
1994, 32 AHEC programs received $22 million in Federal allocations; 
this was matched by approximately $106 million in State and local 
funds. These programs have had such success in gaining local and State 
funds because State legislators and community leaders have witnessed 
the very real impact and benefits that AHEC's bring to the lives of the 
people in their States and communities.
  Despite promising health care reforms and increased enrollment in 
managed care networks, the number of uninsured and underinsured 
Americans continues to rise. Hundreds of counties throughout the United 
States are still without doctors, and for many low-income families, 
whether they be located in the inner-city or a small, rural community, 
preventive dental care is considered a luxury.
  Because these problems have yet to be resolved, and because AHEC is 
needed as much today as when it was created, Senator McCain and I are 
sponsoring this legislation to reauthorize AHEC, as we did successfully 
in 1992. This reauthorization already enjoys widespread bipartisan 
support--a testament to the pliable nature of this program in meeting 
the needs of diverse communities. In their first 25 years, AHEC's 
around the country have repeatedly shown that the sum total of Federal 
and State dollars that they have been allocated has been money well 
spent. We would like to see this successful program extended for 5 more 
years.
  Thanks to AHEC, the face of health professions education is changing 
into a more community-centered enterprise that places higher priority 
on the everyday needs of all Americans, including those who 
historically have been underserved. While we have already begun to see 
the results of this change, many challenges lie ahead in the ongoing 
effort to ensure access to health care for all Americans. With the 
contribution of AHEC, our communities and academic health centers will 
have the means necessary to work together and meet those challenges.
  Mr. President, I invite my colleagues to join Senator McCain and me 
in supporting the reauthorization of this important program which 
targets health care services to our Nation's most underserved areas. I 
ask unanimous consent that the full text of the bill and letters of 
support from the Association of American Medical Colleges and the 
American Association of Colleges of Osteopathic Medicine be printed in 
the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                 S. 892

       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 ``Area Health Education Center 
     Program Extension Act''.

     SEC. 2. AREA HEALTH EDUCATION CENTER PROGRAM.

       Section 746 of the Public Health Service Act (42 U.S.C. 
     293j et seq.) is amended to read as follows:

     ``SEC. 746. AREA HEALTH EDUCATION CENTER PROGRAMS.

       ``(a) Authority for Provision of Financial Assistance.--
       ``(1) Assistance for planning, development, and operation 
     of programs.--
       ``(A) In general.--The Secretary shall award grants to and 
     enter into contracts with schools of medicine and osteopathic 
     medicine and incorporated consortia made up of such schools, 
     or the parent institutions of such schools, for projects for 
     the planning, development and operation of area health 
     education center programs that--
       ``(i) improve the recruitment, distribution, supply, 
     quality and efficiency of personnel providing health services 
     in underserved rural and urban areas and personnel providing 
     health services to populations having demonstrated serious 
     unmet health care needs;
       ``(ii) increase the number of primary care physicians and 
     other primary care providers who provide services in 
     underserved areas through the offering of an educational 
     continuum of health career recruitment through clinical 
     education concerning underserved areas in a comprehensive 
     health workforce strategy;
       ``(iii) carry out recruitment and health career awareness 
     programs to recruit individuals from underserved areas and 
     under-represented populations into the health professions;
       ``(iv) prepare individuals to more effectively provide 
     health services to underserved areas or underserved 
     populations through field placements, preceptorships, the 
     conduct of or support of community-based primary care 
     residency programs, and agreements with community-based 
     organizations such as community health centers, migrant 
     health centers, Indian health centers, public health 
     departments and others;
       ``(v) conduct health professions education and training 
     activities for students and medical residents;
       ``(vi) conduct at least 10 percent of medical student 
     required clinical education at sites remote to the primary 
     teaching facility of the contracting institution; and
       ``(vii) provide information dissemination and educational 
     support to reduce professional isolation, increase retention, 
     enhance the practice environment, and improve health care 
     through the timely dissemination of research findings using 
     relevant resources.
       ``(B) Project terms.--
       ``(i) In general.--Except as provided in clause (ii), the 
     period during which payments may be made under an award under 
     subparagraph (A) may not exceed--

       ``(I) in the case of a project, 12 years or
       ``(II) in the case of a center within a project, 6 years.

       ``(ii) Exception.--The periods described in clause (i) 
     shall not apply to--

       ``(I) projects that have completed the initial period of 
     Federal funding under this section and that desire to compete 
     for model awards under paragraph (2)(A); and
       ``(II) projects that apply for awards under subsection (d) 
     regardless of whether such projects have completed their 
     initial period of Federal funding under this section.

       ``(2) Assistance for operation of model programs.--
       ``(A) In general.--In the case of any entity described in 
     paragraph (1)(A) that--
       ``(i) has previously received funds under this section;
       ``(ii) is operating an area health education center 
     program; and
       ``(iii) is no longer receiving financial assistance under 
     paragraph (1);

     the Secretary may provide financial assistance to such entity 
     to pay the costs of operating and carrying out the 
     requirements of the program as described in 746(a)(1).
       ``(B) Matching requirement.--With respect to the costs of 
     operating a model program under subparagraph (A), an entity, 
     to be eligible for financial assistance under subparagraph 
     (A), shall make available (directly or through contributions 
     from State, county or municipal governments, or the private 
     sector) recurring non-Federal contributions in cash toward 
     such costs in an amount that is equal to not less than 50 
     percent of such costs.
       ``(C) Limitation.--The aggregate amount of awards provided 
     under subparagraph (A) to entities in a State for a fiscal 
     year may not exceed the lesser of--
       ``(i) $2,000,000; or
       ``(ii) an amount equal to the product of $250,000 and the 
     aggregate number of area health education centers operated in 
     the State by such entities.

[[Page S5607]]

       ``(b) Requirements for Centers.--
       ``(1) General requirement.--Each area health education 
     center that receives funds under this section shall encourage 
     the regionalization of health professions schools through the 
     establishment of partnerships with community-based area 
     health education centers.
       ``(2) Service area.--Each area health education center that 
     receives funds under this section shall specifically 
     designate a geographic area or medically underserved 
     population to be served by the center. Such area or 
     population shall be in a location removed from the main 
     location of the teaching facilities of the schools 
     participating in the program with such center.
       ``(3) Other requirements.--Each area health education 
     center that receives funds under this section shall--
       ``(A) assess the health personnel needs of the area to be 
     served by the center and assist in the planning and 
     development of training programs to meet such needs;
       ``(B) arrange and support rotations for students and 
     residents in family medicine, general internal medicine or 
     general pediatrics, with at least one center in each program 
     being affiliated with or conducting a rotating osteopathic 
     internship or medical residency training program in family 
     medicine, general internal medicine, or general pediatrics in 
     which no fewer than 4 individuals are enrolled in first-year 
     positions;
       ``(C) conduct interdisciplinary training that involves 
     physicians and other health personnel including, where 
     practicable, public health professionals, physician 
     assistants, nurse practitioners, and nurse midwives; and
       ``(D) have an advisory board, at least 75 percent of the 
     members of which shall be individuals, including both health 
     service providers and consumers, from the area served by the 
     center.
       ``(c) Certain Provisions Regarding Funding.--
       ``(1) Allocation to centers.--Not less than 75 percent of 
     the total amount of Federal funds provided to an entity under 
     this section shall be allocated by an area health education 
     center program to the area health education centers. Such 
     entity shall enter into an agreement with each center for 
     purposes of specifying the allocation of such 75 percent of 
     funds.
       ``(2) Operating costs.--With respect to the operating costs 
     of the area health education program of an entity receiving 
     funds under this section, the entity shall make available 
     (directly or through contributions from State, county or 
     municipal governments, or the private sector) non-Federal 
     contributions in cash toward such costs in an amount that is 
     equal to not less than 50 percent of such costs, except that 
     the Secretary may grant a waiver for up to 75 percent of the 
     amount of the required non-Federal match in the first three 
     years in which an entity receives funds under this section.
       ``(d) Health Education and Training Centers.--
       ``(1) Requirements.--A health education training center 
     shall be an entity eligible for funds under this section 
     that--
       ``(A) addresses the persistent and severe unmet health care 
     needs in States along the border between the United States 
     and Mexico and in the State of Florida, and in other urban 
     and rural areas with populations with serious unmet health 
     care needs;
       ``(B) establishes an advisory board comprised of health 
     service providers, educators and consumers from the service 
     area;
       ``(C) conducts training and education programs for health 
     professions students in these areas;
       ``(D) conducts training in health education services, 
     including training to prepare community health workers; and
       ``(E) supports health professionals practicing in the area 
     through educational and other services.
       ``(2) Allocation of funds.--The Secretary shall make 
     available 50 percent of the amounts appropriated for each 
     fiscal year under subsection (e) for the establishment or 
     operation of health education training centers through 
     projects in States along the border between the United States 
     and Mexico and in the State of Florida.
       ``(e) Authorization of Appropriations.--
       ``(1) Area health education center programs.--
       ``(A) In general.--There is authorized to be appropriated 
     to carry out this section, other than subsection (d), 
     $40,000,000 for each of the fiscal years 1998 through 2002.
       ``(B) Required obligation.--Of the amounts appropriated 
     under subparagraph (A) for each fiscal year, the Secretary 
     may obligate for awards under subsection (a)(2)--
       ``(i) not less than 20 percent of such amounts in fiscal 
     year 1998;
       ``(ii) not less than 25 percent of such amounts in fiscal 
     year 1999;
       ``(iii) not less than 30 percent of such amounts in fiscal 
     year 2000;
       ``(iv) not less than 35 percent of such amounts in fiscal 
     year 2001; and
       ``(v) not less than 40 percent of such amounts in fiscal 
     year 2002.
       ``(C) Health education and training centers.--There is 
     authorized to be appropriated to carry out subsection (d), 
     $10,000,000 for each of the fiscal years 1998 through 2002.
       ``(2) Sense of Congress.--It is the sense of the Congress 
     that--
       ``(A) every State have an active area health education 
     center program in effect under this section; and
       ``(B) the ratio of Federal funding for the model program 
     under section 746(a)(2) should increase over time and that 
     Federal funding for other awards under this section shall 
     decrease so that the national program will become entirely 
     comprised of programs that are funded at least 50 percent by 
     State and local partners.''.
                                  ____

                                           Association of American


                                             Medical Colleges,

                                    Washington, DC, June 11, 1997.
     Hon. Bob Graham,
     U.S. Senate, Washington, DC.
       Dear Senator Graham: The Association of American Medical 
     Colleges (AAMC) strongly supports your legislation to 
     reauthorize the Area Health Education Centers (AHEC) and 
     Health Education Training Centers (HETC) programs, which are 
     authorized under Title VII of the Public Health Service Act.
       The Area Health Education Center Program Extension Act will 
     protect the primary objectives of the AHEC and HETC programs, 
     which seek to train physicians and other health professionals 
     to provide primary and preventive medical services to 
     communities that are medically underserved. The flexibility 
     and innovativeness of AHEC programs distinguish them among 
     Title VII programs. Medical schools have led AHEC programs 
     successfully since the inception of the program by Congress. 
     The success of the AHEC program is very much due to the 
     ability of the centers to make the substantial resources of 
     medical schools and their parent institutions available to 
     medically underserved communities. It is essential to these 
     communities that these linkages be preserved.
       In a nation with over 2,000 health professionals shortage 
     areas and a changing health care delivery system, the federal 
     government and health professions community must continue to 
     develop innovative ways to train physicians and other health 
     professionals to address the health care needs of the 
     medically underserved. The goal of the AHEC and HETC programs 
     is to provide the catalyst to develop long-term 
     collaborations between medical schools and the community-
     based health care delivery centers.
       Thank you for your leadership on this issue. We look 
     forward to working with you to sustain this vital partnership 
     between medical schools and the communities they serve.
           Sincerely,
     Jordan J. Cohen, M.D.
                                  ____

         American Association of Colleges of Osteopathic Medicine,
                                   Chevy Chase, MD, June 12, 1997.
     Hon. Bob Graham,
     U.S. Senate, Washington, DC.
       Dear Senator Graham: The American Association of Colleges 
     of Osteopathic Medicine is very pleased to endorse the Area 
     Health Education Centers Program Extension Act. The AHEC 
     program provides clinical training opportunities to health 
     professions students in rural settings by extending the 
     resources of academic health centers in need of health care 
     and education. Through this linkage, AHEC projects form 
     networks of health related institutions to provide 
     educational services to students, faculty, and practitioners, 
     and ultimately improve health care delivery.
       Senator Graham, we applaud your and Senator McCain's 
     leadership in introducing this important legislation. Please 
     contact us if we can be of assistance.
           Sincerely,
                                     Douglas L. Wood, D.O., Ph.D.,
                                                        President.

  Mr. McCAIN. Mr. President, I am proud to join my colleague Senator 
Bob Graham in sponsoring the reauthorization legislation for the 
national Area Health Education Center Program.
  The Graham-McCain reuthorization legislation represents the consensus 
opinion of the Area Health Education Center community nation-wide. The 
Area Health Education Center Program Extension Act strives to not only 
reauthorize the existing act, but to do so in an innovative manner.
  Currently, 42 States participate in the AHEC program which originated 
in 1976 when Congress recognized the lack of quality health care 
available in our country--especially in our rural and low income urban 
communities. Too many of these cities and towns did not have access to 
primary medical care services. Too many communities were losing their 
bright, educated youth to the larger, economically strong cities and 
medical communities. Our rural and low income communities were faced 
with many disadvantages including shortages of physicians and a lack of 
access to basic health care services.
  In response to the health care problems facing our rural and low 
income urban communities, Congress created the Area Health Education 
Center Program to generate partnerships between medical schools or 
academic health centers and rural areas throughout a State. Through 
these partnerships the AHEC program strives to improve the supply and 
distribution of health care

[[Page S5608]]

professionals while increasing access to quality health care.
  The AHEC programs work to meet the medical needs of undeserved areas 
by creating and implementing innovative methods and educational 
partnerships. Each AHEC program is individually established and created 
on a State-by-State basis and provides health professional student 
training, continuing professional education, student recruitment and 
placement, development of remote site learning resources, and other 
projects designed to influence the quantity and distribution of health 
personnel. Several years ago, this program was expanded to include the 
Health Education Training Center (HETC) program which addresses the 
high impact needs which exist in certain areas--particularly those 
along the Mexican-American border.
  However, despite all the progress and success of the AHEC and HETC 
programs over the last 21 years, the need for recruiting and keeping 
health care professionals still remains a challenge for many of our 
rural and low-income urban communities. This is why Senator Graham and 
I, along with 16 of our colleagues are introducing the Area Health 
Education Center Program Extension Act.
  The Graham-McCain reauthorization of the Area Health Education Center 
Program Extension Act would reauthorize for 5 years the core AHEC 
program and the existing HETC program. This bill would allow the 
Secretary of Health and Human Services to award grants and enter into 
contracts with schools of medicine and osteopathic medicine to develop 
AHEC and HETC programs.
  Under this bill, AHEC and HETC programs are required to continue 
improving the distribution of health professionals in communities with 
serious, unmet health care needs. The programs are also required to 
increase the number of primary care providers in under served areas 
while recruiting individuals from these areas and from populations not 
equally represented into health professions. In addition, the AHEC and 
HETC programs are responsible for conducting training and education 
activities for health care students, including medical residents.
  Initially, funding for AHEC programs is a Federal responsibility. 
However, after the first 6 years of operation the AHEC program must 
obtain 50 percent of their funding from their State, county or 
municipal government or the private sector in order to continue 
receiving matching Federal funding.
  It is important that we continue to support and promote programs like 
AHEC and HETC which have developed and are implementing innovative, 
effective and efficient approaches for making high quality health care 
accessible throughout our Nation, particularly in rural communities, 
border States and low-income urban areas.
  I believe the AHEC and HETC programs are both bright lights with 
regard to the potential for addressing the health provider shortage and 
unmet medical needs in our country. Both the AHEC and HETC programs 
have clearly demonstrated they are fulfilling a very definite need and 
ought to be reauthorized and extended. These programs have tremendous 
potential to continue assisting in effectively addressing the critical 
health problems in our communities. I urge all of my colleagues to 
review this important legislation and consider joining us as a 
cosponsor of this bill.
                                 ______
                                 
      By Mrs. BOXER:
  S. 893. A bill to provide for the conveyance of a parcel of unused 
agricultural land in Dos Palos, CA, to the Dos Palos Ag Boosters for 
use as a farm school; to the Committee on Energy and Natural Resources.


           DOS PALOS MIDDLE SCHOOL LAND EXCHANGE LEGISLATION

  Mrs. BOXER. Mr. President, I am pleased to introduce legislation that 
would provide the U.S. Department of Agriculture [USDA] the authority 
to sell much needed land to a local school district in my State of 
California.
  This legislation will grant the USDA the authority to sell 22 acres 
of land in Dos Palos, CA to either a non-profit group or the Dos Palos 
School District. The transfer would be based upon an established fair 
market value of the land, determined by the USDA.
  The local community will reap many benefits from this legislation. 
The school district plans to use the land to establish a farm school to 
educate and train students and beginning farmers. Under the district's 
farm school proposal, high school and middle school students will 
actually farm the land in order to learn all aspects of modern 
agriculture practices--including irrigation and conservation methods, 
integrated pest management, agricultural marketing and administration. 
In addition, the proceeds from the farm school will enable the students 
to purchase their own equipment and supplies for use at the site. 
Implementation of this proposal ensures that the land remain in 
agricultural use for years to come.
  This legislation enjoys bi-partisan support, and companion 
legislation has been introduced by Congressman Gary A. Condit in the 
House. The local school district, the community of Dos Palos, CA, and 
the USDA have also expressed their support. During the 104th Congress 
the legislation received expedited review by the House Agriculture 
Committee, and passed the House by voice vote. Unfortunately, the 
Senate failed to pass this legislation before adjournment even though 
there was no known opposition from the leadership or the Senate 
Agriculture Committee.
                                 ______
                                 
      By Mrs. BOXER:
  S. 894. A bill to provide for the conveyance of certain land in the 
Six Rivers National Forest in the State of California for the benefit 
of the Hoopa Valley Tribe; to the Committee on Indian Affairs.


             THE HOOPA VALLEY SOUTH BOUNDARY ADJUSTMENT ACT

  Mrs. BOXER. Mr. President, I am pleased to introduce legislation that 
would allow the Hoopa Valley Tribe to obtain lands of deep cultural and 
historical significance.
  The Hoopa Valley Tribe has resided in Hoopa Valley, beginning at the 
mouth of the Trinity River Canyon in Humboldt County, for 10,000 years. 
In the 1950s, a settlement agreement between the Hoopa Valley Tribe and 
the U.S. Government designated a 12-by-12 mile area for the Hoopa 
Valley Reservation. When this land was surveyed and demarcated, a 
``dog-leg'' was created along the southern boundary which omitted 
certain lands the tribe has deemed culturally and religiously 
significant.
  My legislation will remedy this situation by transferring 2,641 acres 
of the Six Rivers National Forest to the Hoopa Valley Tribe. I join the 
U.S. Forest Service in commending the Hoopa Valley Tribe for its 
history of natural resource management and expertise. This legislation 
enjoys broad bipartisan support in California and in the House, where 
it was sponsored by Congressman Frank D. Riggs.
  During the 104th Congress, the House version of this legislation was 
unanimously approved. Unfortunately, despite approval from the 
administration and the Senate Indian Affairs Committee, the legislation 
was never brought before the full Senate for a vote. I encourage my 
colleagues to act quickly to provide the Hoopa Valley Tribe with lands 
necessary to maintain their cultural and religious heritage.
                                 ______
                                 
      By Mrs. BOXER (for herself and Mrs. Feinstein):
  S. 895. A bill to designate the reservoir created by Trinity Dam in 
the Central Valley project, California, as ``Trinity Lake''; to the 
Committee on Energy and Natural Resources.


                 THE TRINITY LAKE NAME DESIGNATION ACT

  Mrs. BOXER. Mr. President, I am pleased to introduce legislation that 
would change the name of the Clair Engle Lake in northern California to 
its commonly known name, Trinity Lake.
  Clair Engle Lake is the largest body of recreational water in Trinity 
County. Every year, thousands of recreational users from all over 
California come to the lake to fish, boat, hike, and camp.
  Since the reservoir was created by the building of the Trinity Dam, 
local citizens have referred to the lake as Trinity Lake. This usage 
has been widely adopted by almost all of the general public as well as 
by Federal, State, and local officials. In fact, this widespread usage 
of a name other than the official name has become the cause of 
confusion for visitors and tourists, and has had a negative economic 
impact on the lake community.
  My legislation would end this confusion by renaming the lake to 
Trinity

[[Page S5609]]

Lake. My legislation is supported by the Trinity County Board of 
Supervisors as well as the Bureau of Reclamation. I also am pleased to 
be working with Representative Wally Herger who has introduced similar 
legislation in the House of Representatives.
                                 ______
                                 
      By Mr. LEAHY (for himself, Mr. Hagel, Mr. Kerrey, Mr. McCain, Mr. 
        Cleland, Mr. Kempthorne, Mr. Inouye, Mr. Lugar, Mr. McConnell, 
        Mr. Levin, Mr. Hatch, Mr. Lieberman, Ms. Snowe, Mr. Kerry, Mr. 
        Grassley, Mr. Robb, Mr. Chafee, Mr. Breaux, Mr. Smith of 
        Oregon, Mrs. Feinstein, Mr. Moynihan, Mr. Specter, Mr. Bumpers, 
        Ms. Collins, Mr. Durbin, Mr. Jeffords, Mr. Reid, Mr. Dodd, Mr. 
        D'Amato, Mr. Byrd, Mr. Campbell, Mr. Conrad, Mr. Rockefeller, 
        Mr. Johnson, Mr. Bingaman, Mr. Dorgan, Mr. Daschle, Ms. 
        Mikulski, Mr. Torricelli, Mr. Lautenberg, Ms. Landrieu, Mr. 
        Reed, Mr. Wellstone, Mr. Kennedy, Mr. Bryan, Mr. Feingold, Ms. 
        Moseley-Braun, Mr. Sarbanes, Mr. Kohl, Mrs. Boxer, Mr. Harkin, 
        Mrs. Murray, Mr. Ford, Mr. Akaka, Mr. Baucus, Mr. Biden, and 
        Mr. Wyden):
  S. 896. A bill to restrict the use of funds for new deployments of 
antipersonnel landmines, and for other purposes; to the Committee on 
Armed Services.


                  the landmine elimination act of 1997

  Mr. LEAHY. Mr. President, I rise to introduce legislation, with 56 
cosponsors--Democrats and Republicans, conservatives and liberals, men 
and women--to ban new deployments of antipersonnel landmines beginning 
in the year 2000.
  I am honored to be joined by Senator Chuck Hagel, who was injured by 
landmines in Vietnam, and who is the chief cosponsor of this bill.
  I also want to give special thanks to Senators Bob Kerrey and John 
McCain, both decorated Vietnam veterans, who are cosponsors of this 
bill and know far better than I about the terror landmines inflict on 
our own soldiers. In and out of Congress, those who know these weapons 
best, hate them most.
  Landmines have some marginal military value. So, for that matter, do 
chemical weapons. But the damage done by these hidden killers long 
after the guns fall silent and the armies have gone home far outweigh 
whatever small benefits they add to our enormous and unsurpassed 
military arsenal.
  The victims are not only innocent civilians. There were more than 
64,000 American casualties from landmines in Vietnam. If that is not 
appalling enough, the overwhelming majority of those mines contained 
U.S. components. They were made here, and they killed and maimed our 
soldiers half-way around the world.

  In Bosnia, more than 250 soldiers under U.N. and NATO commands have 
been injured, and 29 killed, by landmines. Every American casualty from 
enemy causes in Bosnia has been from landmines.
  And that does not include the thousands of civilians who have fallen 
victim to these indiscriminate weapons, and the thousands more who will 
lose their legs, their arms, their eyesight and their lives in the 
future. For some 68 countries, the bridge to the 21st century is strewn 
and landmines. 100 million of them.
  The purpose of this legislation is to exert U.S. leadership. But what 
we propose here is no different, indeed it does not go as far, as what 
others have already done. Great Britain, Canada, Germany, South Africa 
are some of the countries who have unilaterally renounced their 
production, use, and export of these weapons, and are destroying their 
stockpiles.
  Some 72 nations have said they will meet in Ottawa this December to 
sign a treaty banning the weapons, and I suspect that number will 
continue to climb. Our country has not said if we will go to Ottawa. 
Why is this administration--which showed such moral leadership on 
chemical weapons to isolate the rogue nations--putting the United 
States in the role of a helpless giant when it comes to antipersonnel 
landmines? Why can we not use that same moral suasion, as others have 
done? We are not a pariah nation, and we should not act like one.
  The United States shows leadership worthy of a great and powerful 
nation when we are bold on a practical and moral issue like this. We 
squander that potential and are no different from other nations when we 
sit on the sidelines, as the administration has done here.
  For the past 5 years, the leadership on banning landmines has come 
from Congress. I hope the President will step forward to move the 
United States into the front ranks of this global effort, along with 
Canada and our other allies.
  Before some in the Pentagon start drumming up opposition to this 
bill, I would urge them to consider who is supporting it, and why we 
support it. Every Member of the Senate who has seen combat is a 
cosponsor of this bill. This is not about taking away a weapon the 
Pentagon needs. It is about beginning the next century by renouncing a 
weapon that does not belong in the arsenal of civilized nations. The 
Pentagon has far more to gain if the use of antipersonnel landmines is 
made a war crime.
  Finally, to those in the Pentagon who say that so-called smart 
mines--that are designed to self-destruct automatically--are the 
solution to this problem, I challenge them to find me a landmine that 
is smart enough to tell the difference between a soldier and a child. 
And let us not fool ourselves--the rest of the world does not use self-
destruct mines, and they are not going to. They are not going to feel 
pressured to give up their mines, if we refuse to renounce smart mines. 
We saw that with chemical weapons, and with the nuclear test ban. There 
is no substitute for U.S. leadership.
  I recognize that the Pentagon may be institutionally incapable of 
giving up a weapon that has some value, however marginal. Their job is 
to protect American soldiers, and there are undoubtedly instances when 
antipersonnel landmines have done that. But they should consider the 
horrendous casualties these weapons have inflicted on our troops. And 
they should recognize that just because a weapon has some marginal 
value does not justify its use when the victims are overwhelmingly 
innocent civilians, indeed whole societies.
  Ultimately, it is a political decision, and the President, as 
Commander in Chief, needs to act. The question no longer is whether we 
will ban antipersonnel landmines, but when. This bill moves us closer 
to that goal.
  There is only one way to stop this, and that is to stop it. And the 
sooner the United States does that, as others have done, the sooner the 
world can sweep these weapons into the dustbin of history.
  Mr. HAGEL. Mr. President, I am proud to serve as the principal 
Republican sponsor of this important legislation. I want to express my 
gratitude to my colleague from Vermont, Senator Leahy, for the 
dedication and leadership he has shown in bringing this issue before 
the U.S. Senate.
  I approach this issue from two perspectives. First, I've had a real 
life experience with this issue. My brother and I were wounded twice 
together in Vietnam as a result of landmines. Second, I am a strong 
supporter of our military. It's important that we not take any action 
that would inhibit the military's ability to fight and win wars, do 
their jobs, and maintain valuable weapons options and strategies.
  However, we are dealing with a different world than we fought in 
world wars, Korea and Vietnam. Our recent military actions have been 
actions where we've been in and out relatively quickly. I am concerned 
with the effects of laying down mines and then leaving them behind when 
our troops leave. There are already an estimated 110 million landmines 
in the ground around the world, and the destruction that these mines 
continue to inflict on innocent lives is devastating. It's the 
indiscriminate nature of their killing that makes landmines so hideous.
  I believe this legislation addresses a number of the concerns 
expressed by the military. Exemptions have been provided for when the 
military needs specific options, such as Korea and the use of antitank 
mines and claymores.
  We have a responsibility to those who've served and those who are now 
serving in the military and the peoples

[[Page S5610]]

of the world to take a close look at this issue. This question comes 
down to, is this really a military option we need today? I don't 
believe it is. After careful study and consideration and seeking the 
opinions of many present and former military commanders, I have decided 
that America should show leadership on this issue. We can take the 
moral high ground and still insure a strong, flexible military. I am 
proud that my five Senate colleagues who are also Vietnam combat 
veterans have joined me in support of this legislation.
  Mr. FEINGOLD. Mr. President, I am pleased to rise as an original 
cosponsor of the bill to prohibit U.S. deployment of antipersonnel 
landmines introduced today by the Senator from Vermont [Mr. Leahy] and 
the Senator from Nebraska [Mr. Hagel]. I want to commend the Senator 
from Vermont for his countless hours of work to ban antipersonnel 
landmines.
  As we all know, Mr. President, antipersonnel landmines continue to 
ravage the populations of war-torn areas around the world long after 
the last shot has been fired and the soldiers have gone home. These 
weapons pose an enduring threat to postwar reconstruction efforts and 
to innocent civilians in places such as Bosnia, Angola, and Cambodia. 
These instruments of war lay in fields where children now play or where 
farmers seek to grow food for the local populations. In fact, displaced 
populations are often unable to return to their homes because of the 
presence of unmarked landmines, and roads have been rendered useless 
since they cannot be traveled. Antipersonnel landmines cause such high 
levels of civilian casualties, 500 wounded or killed per week in fact, 
that they have been called weapons of mass destruction in slow motion.
  In 1995, this body went on record against landmines by passing an 
amendment offered by the Senator from Vermont [Mr. Leahy] to the fiscal 
year 1996 Department of Defense authorization bill which I was pleased 
to cosponsor. That amendment imposed a moratorium on the use of 
antipersonnel landmines except in limited circumstances.
  While, unfortunately, we can never be sure that war-torn areas are 
completely clear of all active landmines, the current Leahy-Hagel bill 
will prohibit any U.S. agency from deploying or arming any new 
antipersonnel landmines after January 1, 2000. This bipartisan 
legislation also contains language relating to the deployment of 
landmines on the Korean Peninsula. While I believe that this is an 
important first step in the eventual elimination of new landmines from 
the face of the Earth, there is much work still to be done.
  I, and many other Senators, believe that this legislation represents 
the least we can do on this subject. Because of this view, I wrote to 
President Clinton in February to express my contention that a ban on 
antipersonnel landmines should be an urgent priority for the United 
States.
  In that same letter, I voiced my support for the so-called Ottawa 
initiative, which calls for a total ban on the production, storage, 
trade, or use of antipersonnel landmines and includes a plan to develop 
and sign a treaty by December 1997. In my view, the administration's 
decision to pursue negotiations through the United Nations Conference 
on Disarmament, rather than the Ottawa initiative, jeopardizes the 
likelihood that the Ottawa initiative will succeed. I believe that we 
should work within the framework of the Ottawa initiative because it is 
the best avenue currently available to a total worldwide ban on 
landmines.
  As a member of the Foreign Relations Committee and the ranking member 
of the Subcommittee on African Affairs, I cannot ignore the 
approximately 110 million uncleared landmines across the globe. To 
their credit, some of the countries whose landscapes are riddled with 
these weapons have begun to take positive steps to ban their further 
use. In February, the South African Government announced its intention 
to ban the use, production, development, and stockpiling of 
antipersonnel landmines. In a news conference announcing this decision, 
the South African defense minister said that the ``indiscriminate use 
[of landmines] has had a devastating effect internationally, in Africa 
and in our region. In Angola, the number of amputations resulting from 
antipersonnel landmines is, tragically, one of the highest in the 
world, and in Mozambique, thousands of these mines remain uncleared.''
  The worldwide devastation caused by landmines was discussed earlier 
this year at the Fourth Annual NGO Conference in Landmines in Maputo, 
Mozambique. While the conference focused on clearing landmines from 
Southern Africa, the tales of destruction and death could apply to many 
areas of the globe. Since the 1992 Peace Agreement ending the civil war 
in Mozambique, more than 100 people have been killed by landmines, two-
thirds of them children. Mr. President, we owe it to these children--
who have seen too much violence and death in their young lives--to make 
sure they have a safe place to play. And we owe it to our young men and 
women in uniform, who have represented our Nation so well across the 
globe, to make sure that the United States will cease deploying new 
landmines.
  In closing, Mr. President, this legislation is an important first 
step in protecting future generations from the devastation that many 
face on a daily basis all over the world. This bill gives the United 
States the opportunity to take a leadership role in the banning of 
antipersonnel landmines. This is an opportunity we should not miss.
                                 ______
                                 
      By Mr. WYDEN (for himself and Mr. D'Amato):
  S. 897. A bill to make permanent certain authority relating to self-
employment assistance programs; to the Committee on Finance.


                the self-employment reauthorization act

  Mr. WYDEN. Mr. President, today I am introducing legislation with 
Senator D'Amato to reauthorize the Self-Employment Assistance [SEA] 
Program. The Self-Employment Assistance Program takes an innovative and 
cost-effective approach to helping eligible dislocated workers become 
self-sufficient: It enables them to use their weekly unemployment 
checks to start their own businesses. The law has helped turn the 
unemployment safety net into a trampoline of opportunity for thousands 
of unemployed.
  Today, in 38 States the unemployed who wish to start their own 
businesses are forced to give up their weekly unemployment compensation 
checks as soon as their company starts generating revenue--but before 
it provides enough income to support them. It is exactly this problem 
the Self-Employment Assistance Program is designed to correct. It gives 
many skilled workers the chance to get back to work faster and helps 
create new jobs as well.
  In a few short years, the Self-Employment Assistance Program (Public 
Law 103-182; title V) has enabled thousands of unemployed Americans to 
use their unemployment compensation to establish new businesses. 
Modeled on experiments in Massachusetts and Washington, self-employment 
programs can create jobs at no cost to the taxpayer. Using existing 
funds, the Massachusetts program created dozens of new businesses but 
actually paid $1,400 less unemployment per worker than the State 
average. The Washington program created more than 600 new jobs and the 
firms were paying an average of $10.50 an hour to workers they had 
hired.
  In Oregon, 122 UI claimants enrolled in SEA last year; 76 completed 
the program. These entrepreneurs are now running an auto repair shop, a 
marine maintenance and repair shop, distributing cleaning products to 
resorts and restaurants along the Oregon Coast and setting up a 
computer cleaning service.
  In Grants Pass, OR, one participant said she could not have developed 
her publication business without SEA. It helped keep her afloat 
financially while she pursued her self-employment goal. She received 
counseling from the local Small Business Development Center, and 
through the Center she was able to contact potential customers.
  In Sweet Home, OR, another woman said the SEA program gave her the 
chance to have an income as she was starting up her day care business. 
She presently cares for nine children by herself and has plans to 
increase enrollment and add another teacher and three aides. The Small 
Business Development Center at Linn-Benton Community College helped her 
develop her

[[Page S5611]]

business plan and locate financial resources.
  Over the past 3 years, 10 States used the 1993 legislation to create 
Self-Employment Assistance programs: California, Connecticut, Delaware, 
Maine, Maryland, Minnesota, New Jersey, New York, Oregon and Rhode 
Island. To date, DoL has approved six States plans (California, 
Delaware, Maine, New Jersey, New York and Oregon) and four of these--
Delaware, Maine, New York and Oregon--are actually up and running.
  Here's how the program works. States are given the flexibility to 
establish Self-Employment Assistance [SEA] programs as part of their 
unemployment insurance [UI] programs. It permits States to provide 
income support payments to the unemployed in the same weekly amount as 
the worker's regular unemployment insurance [UI] benefits would 
otherwise be. It permits claimants to work full-time on starting their 
own business instead of searching for traditional wage and salary jobs.
  The law directs the DoL to review and approve State SEA program 
plans. In States that operate SEA programs, new UI claimants who may be 
eligible for SEA are identified through worker profiling--automated 
systems that use a set of criteria to identify those claimants who are 
likely to exhaust their UI benefits and need reemployment assistance. 
State SEA program provide participants on a weekly or biweekly basis 
the same amount as regular UI benefits while they are getting their 
business off the ground. SEA participants are required to participate 
in technical assistance programs--entrepreneurial training (accounting, 
cash flow, finances, taxes, etc), business counseling (business plans, 
marketing, legal requirements, insurance, etc.), and finance--to ensure 
they have the skills necessary to operate a business. Finally, SEA 
programs are required to operate at no additional cost to the 
unemployment trust fund: the law stipulates that the payment of SEA 
allowances may not result in any additional benefits charges the 
unemployment trust fund.
  Individuals may choose at any time to opt out of the SEA program; 
they may resume collection of regular unemployment compensation until 
the total amount of regular unemployment compensation paid and the SEA 
paid equals the maximum benefit amount. States, through the title III 
of the Job Training Partnership Act and Small Business Development 
Centers, support the costs of providing basic SEA program services, 
like business counseling and technical assistance, but may allow 
participants to pay for more intensive counseling and technical 
assistance.
  In effect, the program eliminates a high hurdle for those who have 
the ingenuity, motivation and energy to start their own businesses. In 
those States with SEA programs, an unemployed worker no longer has to 
choose between receiving UI benefits and starting a new business.
  Mr. President, as we move into the global economy of the 21st 
century, we must adopt fresh strategies so that our skilled but 
unemployed workers can start anew in the private sector. Harvard 
Business School reported last year that from 1978 to 1996, 22 percent 
of the workforce, or 3 million workers, at the country's top 100 
companies had been laid off, and that 77 percent of all the layoffs 
involved white collar workers. Many of these highly-skilled and 
motivated workers want to start their own firms. Congress should not 
stand in their way. Renewal of the Self-Employment Assistance Program 
will give those States with programs continued flexibility to help 
unemployed workers create their own businesses and should encourage 
those without programs to establish them.
  Our bipartisan bill promotes the spirit of entrepreneurship. It 
carries forward a reasonable and sensible reform of the unemployment 
insurance system at no cost to the taxpayer.
  I would like to thank Senator D'Amato for joining me as an original 
cosponsor of this bill. New York has a very active and successful Self-
Employment Assistance Program, and I look forward to working closely 
with him to see this important program reauthorized.
  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. 897

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

     SECTION 1. SELF-EMPLOYMENT ASSISTANCE PROGRAMS.

       (a) In General.--Paragraph (2) of section 507(e) of the 
     North American Free Trade Agreement Implementation Act (26 
     U.S.C. 3306 note) is hereby repealed.
       (b) Conforming Amendments.--Subsection (e) of section 507 
     of such Act is further amended--
       (1) by amending the heading after the subsection 
     designation to read ``Effective Date.--''; and
       (2) by striking ``(1) Effective Date.--'' and by running in 
     the remaining text of subsection (e) immediately after the 
     heading therefor, as amended by paragraph (1).
                                 ______
                                 
      By Mr. HATCH (for himself, Mr. Baucus, and Mr. Mack, and Mr. 
        D'Amato):
  S. 898. A bill to amend the Internal Revenue Code of 1986 to simplify 
certain provisions applicable to real estate investment trusts; to the 
Committee on Finance.


          the real estate investment trust simplification act

  Mr. HATCH. Mr. President on behalf of myself and Senators Baucus, 
Mack, and D'Amato, I rise today to introduce the Real Estate Investment 
Trust Tax Simplification Act of 1997. This legislation would simplify 
and reform the tax law concerning Real Estate Investment Trusts 
[REITs]. Similar legislation has been introduced in the House by 
Representative E. Clay Shaw, Jr. along with many of our House 
colleagues.
  REIT's were designed to allow small investors to invest in large real 
estate projects that they otherwise could not afford, including 
apartment buildings, office buildings, shopping centers, malls, 
warehouses, etc. Real Estate Investment Trusts have become a very 
popular form of investment as indicated by the fact that the market 
capitalization in the whole industry has risen from $9 billion in 1991 
to over $100 billion today.
  Mr. President, if a REIT properly follows all of the rules, it is not 
normally taxed at the entity level, but passes through most items of 
income to the shareholders to report on their own individual tax 
returns. However, there are many minefields for the unwary that can 
inadvertently penalize investors and even the general public in some 
circumstances. This bill is designed to alleviate these complexities 
and uncertainties.
  Let me share with my colleagues an example of the difficulties facing 
small investors. Under the current rules, in order to gain the benefits 
of REIT taxation, the investment has to be passive in nature. Hence, 
the normal procedure is for the REIT to buy the underlying property and 
lease it out to tenants. However, the REIT must be careful not to 
provide directly to the tenants any services that are not customary in 
the real estate business. If this rule is violated, severe consequences 
can follow. For example, under a literal interpretation of the law, if 
a REIT that operates a retail mall provides wheelchairs to the 
customers of the retail tenants, or even assists the tenant in moving 
into its space, the entity's very status as a REIT could be placed in 
jeopardy. This is ridiculous and needs to be changed.
  Furthermore, current law imposes a tax on a REIT that retains capital 
gains and imposes a second level of tax on the REIT shareholders when 
they later receive the capital gain distribution. We need to make the 
changes necessary to help unsuspecting investors to avoid double 
taxation. This bill would adopt the corresponding mutual fund rules 
governing taxation of retained capital gains by passing through a 
credit to shareholders capital gains taxes paid at the corporate level. 
The bill would also conform a REIT's 95-percent annual distribution 
requirement to a mutual fund's 90-percent requirement.
  Mr. President, this bill also relaxes some of the current law's 
onerous penalties for failing to perform some recordkeeping 
requirements. Currently, a REIT could lose its favored tax status 
simply by failing to send out or receive back shareholder demand 
letters for the purpose of verifying the fact that no five or fewer 
parties own controlling interest in the REIT. So, even though

[[Page S5612]]

the REIT in fact meets this test, Mr. President, simply by failing to 
have on file sufficient shareholder letters substantiating this fact, 
all of the REIT shareholders could face the extremely harsh penalty of 
REIT disqualification and double taxation.

  Rather than penalizing the REIT so severely for this oversight, Mr. 
President, this bill would impose a $25,000 penalty for failing to 
comply with this requirement, if the failure is inadvertent in nature. 
The penalty would rise to $50,000 in the case of willful noncompliance. 
I believe my colleagues would agree that this approach makes much more 
sense than the current rules. It serves as an adequate incentive to 
keep the appropriate records without causing the unsuspecting, innocent 
investors severe and unnecessary tax penalties.
  Mr. President, this bill also addresses other problems that are 
detailed in the summary of the bill that I ask unanimous consent to be 
included in the Record after my remarks.
  I do not believe this bill is controversial. And, according to the 
Joint Committee on Taxation, it will have a negligible effect on 
revenues. It is also important to note that this bill is endorsed by 
the National Association of Real Estate Investment Trusts, which 
represents a high percentage of the REIT industry. Whenever we can do 
things to simplify the Tax Code without causing substantial revenue 
loss or negative policy consequences we should do it.
  Mr. President, this is an opportunity for us to do just that in the 
area of real estate investment trusts. I urge my colleagues on both 
sides of the aisle to join me in reforming and simplifying the tax law 
regarding this very difficult and complex area of the law.
  Mr. President, I ask unanimous consent that the text of the bill and 
a detailed summary of its provisions be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                 S. 898

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

     SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE.

       (a) Short Title.--This Act may be cited as the ``Real 
     Estate Investment Trust Tax Simplification Act of 1997''.
       (b) Amendment of 1986 Code.--Except as otherwise expressly 
     provided, whenever in this Act an amendment or repeal is 
     expressed in terms of an amendment to, or repeal of, a 
     section or other provision, the reference shall be considered 
     to be made to a section or other provision of the Internal 
     Revenue Code of 1986.
              TITLE I--REMOVAL OF TAX TRAPS FOR THE UNWARY

     SEC. 101. CLARIFICATION OF LIMITATION ON MAXIMUM NUMBER OF 
                   SHAREHOLDERS.

       (a) Rules Relating to Determination of Ownership.--
       (1) Failure to issue shareholder demand letter not to 
     disqualify reit.--Section 857(a) (relating to requirements 
     applicable to real estate investment trusts) is amended by 
     adding ``and'' at the end of paragraph (1), by striking 
     paragraph (2), and by redesignating paragraph (3) as 
     paragraph (2).
       (2) Shareholder demand letter requirement; penalty.--
     Section 857 (relating to taxation of real estate investment 
     trusts and their beneficiaries) is amended by redesignating 
     subsection (f) as subsection (g) and by inserting after 
     subsection (e) the following new subsection:
       ``(f) Real Estate Investment Trusts To Ascertain 
     Ownership.--
       ``(1) In general.--Each real estate investment trust shall 
     each taxable year comply with regulations prescribed by the 
     Secretary for the purposes of ascertaining the actual 
     ownership of the outstanding shares, or certificates of 
     beneficial interest, of such trust.
       ``(2) Failure to comply.--
       ``(A) In general.--If a real estate investment trust fails 
     to comply with the requirements of paragraph (1) for a 
     taxable year, such trust shall pay (on notice and demand by 
     the Secretary and in the same manner as tax) a penalty of 
     $25,000.
       ``(B) Intentional disregard.--If any failure under 
     paragraph (1) is due to intentional disregard of the 
     requirement under paragraph (1), the penalty under 
     subparagraph (A) shall be $50,000.
       ``(C) Failure to comply after notice.--The Secretary may 
     require a real estate investment trust to take such actions 
     as the Secretary determines appropriate to ascertain actual 
     ownership if the trust fails to meet the requirements of 
     paragraph (1). If the trust fails to take such actions, the 
     trust shall pay (on notice and demand by the Secretary and in 
     the same manner as tax) an additional penalty equal to the 
     penalty determined under subparagraph (A) or (B), whichever 
     is applicable.
       ``(D) Reasonable cause.--No penalty shall be imposed under 
     this paragraph with respect to any failure if it is shown 
     that such failure is due to reasonable cause and not to 
     willful neglect.''
       (b) Compliance With Closely Held Prohibition.--
       (1) In general.--Section 856 (defining real estate 
     investment trust) is amended by adding at the end the 
     following new subsection:
       ``(k) Requirement That Entity Not Be Closely Held Treated 
     as Met in Certain Cases.--A corporation, trust, or 
     association--
       ``(1) which for a taxable year meets the requirements of 
     section 857(f)(1), and
       ``(2) which does not know, or exercising reasonable 
     diligence would not have known, whether the entity failed to 
     meet the requirement of subsection (a)(6),

     shall be treated as having met the requirement of subsection 
     (a)(6) for the taxable year.''
       (2) Conforming amendment.--Paragraph (6) of section 856(a) 
     is amended by inserting ``subject to the provisions of 
     subsection (k),'' before ``which is not''.

     SEC. 102. DE MINIMIS RULE FOR TENANT SERVICES INCOME.

       (a) In General.--Paragraph (2) of section 856(d) (defining 
     rents from real property) is amended by striking subparagraph 
     (C) and the last sentence and inserting:
       ``(C) any impermissible tenant service income (as defined 
     in paragraph (7)).''
       (b) Impermissible Tenant Service Income.--Section 856(d) is 
     amended by adding at the end the following new paragraph:
       ``(7) Impermissible tenant service income.--For purposes of 
     paragraph (2)(C)--
       ``(A) In general.--The term `impermissible tenant service 
     income' means, with respect to any real or personal property, 
     any amount received or accrued directly or indirectly by the 
     real estate investment trust for--
       ``(i) services furnished or rendered by the trust to the 
     tenants of such property, or
       ``(ii) managing or operating such property.
       ``(B) Disqualification of all amounts where more than de 
     minimis amount.--If the amount described in subparagraph (A) 
     with respect to a property exceeds 1 percent of all amounts 
     received or accrued during such taxable year directly or 
     indirectly by the real estate investment trust with respect 
     to such property, the impermissible tenant service income of 
     the trust with respect to the property shall include all such 
     amounts.
       ``(C) Exceptions.--For purposes of subparagraph (A)--
       ``(i) services furnished or rendered, or management or 
     operation provided, through an independent contractor from 
     whom the trust itself does not derive or receive any income 
     shall not be treated as furnished, rendered, or provided by 
     the trust, and
       ``(ii) there shall not be taken into account any amount 
     which would be excluded from unrelated business taxable 
     income under section 512(b)(3) if received by an organization 
     described in section 511(a)(2).
       ``(D) Amount attributable to impermissible services.--For 
     purposes of subparagraph (A), the amount treated as received 
     for any service (or management or operation) shall not be 
     less than 150 percent of the direct cost of the trust in 
     furnishing or rendering the service (or providing the 
     management or operation).
       ``(E) Coordination with limitations.--For purposes of 
     paragraphs (2) and (3) of subsection (c), amounts described 
     in subparagraph (A) shall be included in the gross income of 
     the corporation, trust, or association.''

     SEC. 103. ATTRIBUTION RULES APPLICABLE TO TENANT OWNERSHIP.

       Section 856(d)(5) (relating to constructive ownership of 
     stock) is amended by adding at the end the following: ``For 
     purposes of paragraph (2)(B), section 318(a)(3)(A) shall be 
     applied under the preceding sentence in the case of a 
     partnership by taking into account only partners who own 
     (directly or indirectly) 25 percent or more of the capital 
     interest, or the profits interest, in the partnership.''
      TITLE II--CONFORMITY WITH REGULATED INVESTMENT COMPANY RULES

     SEC. 201. CREDIT FOR TAX PAID BY REIT ON RETAINED CAPITAL 
                   GAINS.

       (a) General Rule.--Paragraph (3) of section 857(b) 
     (relating to capital gains) is amended by redesignating 
     subparagraph (D) as subparagraph (E) and by inserting after 
     subparagraph (C) the following new subparagraph:
       ``(D) Treatment by shareholders of undistributed capital 
     gains.--
       ``(i) Every shareholder of a real estate investment trust 
     at the close of the trust's taxable year shall include, in 
     computing his long-term capital gains in his return for his 
     taxable year in which the last day of the trust's taxable 
     year falls, such amount as the trust shall designate in 
     respect of such shares in a written notice mailed to its 
     shareholders at any time prior to the expiration of 60 days 
     after the close of its taxable year (or mailed to its 
     shareholders with its annual report for the taxable year), 
     but the amount so includible by any shareholder shall not 
     exceed that part of the amount subjected to tax in 
     subparagraph (A)(ii) which he would have received if all of 
     such amount had been distributed as capital gain dividends by 
     the trust to the holders of such shares at the close of its 
     taxable year.
       ``(ii) For purposes of this title, every such shareholder 
     shall be deemed to have paid, for

[[Page S5613]]

     his taxable year under clause (i), the tax imposed by 
     subparagraph (A)(ii) on the amounts required by this 
     subparagraph to be included in respect of such shares in 
     computing his long-term capital gains for that year; and such 
     shareholder shall be allowed credit or refund as the case may 
     be, for the tax so deemed to have been paid by him.
       ``(iii) The adjusted basis of such shares in the hands of 
     the shareholder shall be increased with respect to the 
     amounts required by this subparagraph to be included in 
     computing his long-term capital gains, by the difference 
     between the amount of such includible gains and the tax 
     deemed paid by such shareholder in respect of such shares 
     under clause (ii).
       ``(iv) In the event of such designation, the tax imposed by 
     subparagraph (A)(ii) shall be paid by the real estate 
     investment trust within 30 days after the close of its 
     taxable year.
       ``(v) The earnings and profits of such real estate 
     investment trust, and the earnings and profits of any such 
     shareholder which is a corporation, shall be appropriately 
     adjusted in accordance with regulations prescribed by the 
     Secretary.
       ``(vi) As used in this subparagraph, the terms `shares' and 
     `shareholders' shall include beneficial interests and holders 
     of beneficial interests, respectively.''
       (b) Conforming Amendments.--
       (1) Clause (i) of section 857(b)(7)(A) is amended by 
     striking ``subparagraph (B)'' and inserting ``subparagraph 
     (B) or (D)''.
       (2) Clause (iii) of section 852(b)(3)(D) is amended by 
     striking ``by 65 percent'' and all that follows and inserting 
     ``by the difference between the amount of such includible 
     gains and the tax deemed paid by such shareholder in respect 
     of such shares under clause (ii).''

     SEC. 202. REDUCTION OF DISTRIBUTION REQUIREMENT.

       Clauses (i) and (ii) of section 857(a)(1)(A) are each 
     amended by striking ``95 percent (90 percent for taxable 
     years beginning before January 1, 1980)'' and inserting ``90 
     percent''.
                    TITLE III--OTHER SIMPLIFICATION

     SEC. 301. MODIFICATION OF EARNINGS AND PROFITS RULES FOR 
                   DETERMINING WHETHER REIT HAS EARNINGS AND 
                   PROFITS FROM NON-REIT YEAR.

       Subsection (d) of section 857 is amended by adding at the 
     end the following new paragraph:
       ``(3) Distributions to meet requirements of subsection 
     (a)(2)(B).--Any distribution which is made in order to comply 
     with the requirements of subsection (a)(2)(B)--
       ``(A) shall be treated for purposes of this subsection and 
     subsection (a)(2)(B) as made from the earliest accumulated 
     earnings and profits (other than earnings and profits to 
     which subsection (a)(2)(A) applies) rather than the most 
     recently accumulated earnings and profits, and
       ``(B) to the extent treated under subparagraph (A) as made 
     from accumulated earnings and profits, shall not be treated 
     as a distribution for purposes of subsection (b)(2)(B).''

     SEC. 302. TREATMENT OF FORECLOSURE PROPERTY.

       (a) Grace Periods.--
       (1) Initial period.--Paragraph (2) of section 856(e) 
     (relating to special rules for foreclosure property) is 
     amended by striking ``on the date which is 2 years after the 
     date such trust acquired such property'' and inserting ``as 
     of the close of the 3d taxable year following the taxable 
     year in which such trust acquired such property''.
       (2) Extension.--Paragraph (3) of section 856(e) is 
     amended--
       (A) by striking ``or more extensions'' and inserting 
     ``extension'', and
       (B) by striking the last sentence and inserting: ``Any such 
     extension shall not extend the grace period beyond the close 
     of the 3d taxable year following the last taxable year in the 
     period under paragraph (2).''
       (b) Revocation of Election.--Paragraph (5) of section 
     856(e) is amended by striking the last sentence and 
     inserting: ``A real estate investment trust may revoke any 
     such election for a taxable year by filing the revocation (in 
     the manner provided by the Secretary) on or before the due 
     date (including any extension of time) for filing its return 
     of tax under this chapter for the taxable year. If a trust 
     revokes an election for any property, no election may be made 
     by the trust under this paragraph with respect to the 
     property for any subsequent taxable year.''
       (c) Certain Activities Not To Disqualify Property.--
     Paragraph (4) of section 856(e) is amended by adding at the 
     end the following new flush sentence:
     ``For purposes of subparagraph (C), property shall not be 
     treated as used in a trade or business by reason of any 
     activities of the real estate investment trust with respect 
     to such property to the extent that such activities would not 
     result in amounts received or accrued, directly or 
     indirectly, with respect to such property being treated as 
     other than rents from real property.''

     SEC. 303. SPECIAL FORECLOSURE RULE FOR HEALTH CARE 
                   PROPERTIES.

       Section 856(e) (relating to special rules for foreclosure 
     property) is amended by adding at the end the following new 
     paragraph:
       ``(6) Special rule for qualified health care properties.--
     For purposes of this subsection--
       ``(A) Acquisition by lease terminations.--The term 
     `foreclosure property' shall include any qualified health 
     care property acquired by a real estate investment trust as 
     the result of the termination or expiration of a lease of 
     such property.
       ``(B) Grace period.--In the case of a qualified health care 
     property which is foreclosure property solely by reason of 
     subparagraph (A), in lieu of applying paragraphs (2) and 
     (3)--
       ``(i) the qualified health care property shall cease to be 
     foreclosure property on the date which is 2 years after the 
     date such trust acquired such property, and
       ``(ii) if the real estate investment trust establishes to 
     the satisfaction of the Secretary that an extension of the 
     grace period in clause (i) is necessary to the orderly 
     leasing or liquidation of the trust's interest in such 
     qualified health care property, the Secretary may grant 1 or 
     more extensions of the grace period for such qualified health 
     care property.

     Any such extension shall not extend the grace period beyond 
     the date which is 6 years after the date such trust acquired 
     such qualified health care property.
       ``(C) Income from independent contractors.--For purposes of 
     applying paragraph (4)(C) with respect to qualified health 
     care property which is foreclosure property, income derived 
     or received by the trust from an independent contractor shall 
     be disregarded to the extent such income is attributable to--
       ``(i) leases existing on the date the real estate 
     investment trust acquired the qualified health care property, 
     or
       ``(ii) leases extended or entered into after the trust 
     acquired such property from lessees pursuant to terms set 
     forth in such existing leases or on terms under which the 
     trust receives a substantially similar or lesser benefit in 
     comparison to the previous lease for such property.
       ``(D) Qualified health care property.--The term `qualified 
     health care property' means any real property (including 
     interests therein), and any personal property incident to 
     such real property, which--
       ``(i) is a health care facility, or
       ``(ii) is necessary or incidental to the use of a health 
     care facility.

     For purposes of the preceding sentence, the term `health care 
     facility' means a hospital, nursing facility, assisted living 
     facility, or other licensed health care facility which 
     extends medical or nursing or ancillary services to patients 
     and which, immediately before the termination, expiration, 
     default, or breach of the lease of or mortgage secured by 
     such facility, was operated by a provider of such services 
     which was eligible for participation in the Medicare program 
     under title XVIII of the Social Security Act with respect to 
     such facility.''

     SEC. 304. PAYMENTS UNDER HEDGING INSTRUMENTS.

       Section 856(c)(6)(G) (relating to treatment of certain 
     interest rate agreements) is amended to read as follows:
       ``(G) Treatment of certain hedging instruments.--Except to 
     the extent provided by regulations, any--
       ``(i) payment to a real estate investment trust under an 
     interest rate swap or cap agreement, option, futures 
     contract, forward rate agreement, or any similar financial 
     instrument, entered into by the trust in a transaction to 
     reduce the interest rate risks with respect to any 
     indebtedness incurred or to be incurred by the trust to 
     acquire or carry real estate assets, and
       ``(ii) gain from the sale or other disposition of any 
     instrument described in clause (i),

     shall be treated as income qualifying under paragraph (2).''

     SEC. 305. EXCESS NONCASH INCOME.

       Section 857(e)(2) (relating to determination of amount of 
     excess noncash income) is amended--
       (1) by striking subparagraph (B),
       (2) by striking the period at the end of subparagraph (C) 
     and inserting a comma,
       (3) by redesignating subparagraph (C) (as amended by 
     paragraph (2)) as subparagraph (B), and
       (4) by adding at the end the following new subparagraphs:
       ``(C) the amount (if any) by which--
       ``(i) the amounts includible in gross income with respect 
     to instruments to which section 860E(a) or 1272 applies, 
     exceed
       ``(ii) the amount of money and the fair market value of 
     other property received during the taxable year under such 
     instruments, and
       ``(D) amounts includible in income by reason of 
     cancellation of indebtedness.''

     SEC. 306. PROHIBITED TRANSACTION SAFE HARBOR.

       (a) In General.--Clause (iii) of section 857(b)(6)(C) 
     (relating to certain sales not to constitute prohibited 
     transactions) is amended by striking ``(other than 
     foreclosure property)'' each place it appears and inserting 
     ``(other than exempt property)''.
       (b) Exempt Property.--Subparagraph (D) of section 857(b)(6) 
     is amended by adding at the end the following new clause:
       ``(viii) The term `exempt property' means--

       ``(I) foreclosure property, and
       ``(II) property which, while held by the real estate 
     investment trust, was compulsorily or involuntarily converted 
     (within the meaning of section 1033).''

     SEC. 307. SHARED APPRECIATION MORTGAGES.

       (a) Bankruptcy Safe Harbor.--Section 856(j) (relating to 
     treatment of shared appreciation mortgages) is amended by 
     redesignating paragraph (4) as paragraph (5) and by inserting 
     after paragraph (3) the following new paragraph:

[[Page S5614]]

       ``(4) Coordination with 4-year holding period.--
       ``(A) In general.--For purposes of section 857(b)(6)(C), if 
     a real estate investment trust is treated as having sold 
     secured property under paragraph (3)(A), the trust shall be 
     treated as having held such property for at least 4 years 
     if--
       ``(i) the secured property is sold or otherwise disposed of 
     pursuant to a case under title 11 of the United States Code,
       ``(ii) the seller is under the jurisdiction of the court in 
     such case, and
       ``(iii) the disposition is required by the court or is 
     pursuant to a plan approved by the court.
       ``(B) Exception.--Subparagraph (A) shall not apply if--
       ``(i) the secured property was acquired by the trust with 
     the intent to evict or foreclose, or
       ``(ii) the trust knew or had reason to know that default on 
     the obligation described in paragraph (5)(A) would occur.''
       (b) Clarification of Definition of Shared Appreciation 
     Provision.--Clause (ii) of section 856(j)(5)(A) is amended by 
     striking ``gain'' each place it appears and inserting ``gain 
     or appreciation in value''.

     SEC. 308. WHOLLY OWNED SUBSIDIARIES.

       Section 856(i)(2) (defining qualified REIT subsidiary) is 
     amended by striking ``at all times during the period such 
     corporation was in existence''.
                        TITLE IV--EFFECTIVE DATE

     SEC. 401. EFFECTIVE DATE.

       The amendments made by this Act shall apply to taxable 
     years beginning after the date of the enactment of this Act.
                                  ____


                          Reit Tax Provisions

       The tax provisions in the Real Estate Investment Trust 
     Simplification Act (``REITSA'') fall within three broad 
     categories.
       1. Traps For The Unwary. First, current law disqualifies a 
     REIT that satisfies all required ownership tests but does not 
     follow certain administrative details relating to shareholder 
     demand letters. REITSA would replace the potential 
     disqualification with a reporting penalty imposed on a REIT's 
     failure to follow IRS notification rules.
       Second, REITSA would create a de minimis exception to 
     current law so that a REIT's rental income would not be 
     disqualified if it performs nominal, although impermissible, 
     services for a tenant.
       Third, REITSA would correct a technical ``glitch'' in which 
     stock ownership attribution may occur between unrelated 
     partners. The current constructive ownership rule results in 
     certain rents received by a REIT not qualifying for the REIT 
     income tests.
       2. Mutual Fund Conformity. First, current law taxes a REIT 
     that retains capital gains, and imposes a second level of the 
     tax on the REIT shareholders when later they receive the 
     capital gain distribution. REITSA would mirror the 
     corresponding mutual fund rules governing taxation of 
     retained capital gains by passing through a credit to 
     shareholders for capital gains taxes paid at the corporate 
     level.
       Second, REITSA would conform a REIT's 95% annual 
     distribution requirement to a mutual fund's 90% requirement.
       3. Other Simplification Measures. First, REITSA would make 
     a technical change to how a REIT computes its earnings & 
     profits (``E&P''). Since 1986, a REIT must distribute all 
     pre-REIT earnings and profits within its first REIT taxable 
     year or lose its REIT status. However, if a REIT has 
     unexpected year-end earnings, the normal ordering rules 
     governing E&P distributions create a substantial risk that a 
     new REIT may fail to distribute all of its pre-REIT E&P, 
     notwithstanding its good faith efforts to comply with the 
     distribution requirement. REITSA would correct the ordering 
     rules for accumulated E&P distributions to make it easier for 
     a new REIT to comply with the distribution requirement.
       Second, REITSA would simplify the administration of the 
     REIT foreclosure property rules by: (a) extending the time 
     period for the foreclosure election from 2 to 3 years; (b) 
     coordinating the foreclosure property independent contractor 
     rule with the primary independent contractor rule for REITs; 
     and (3) creating a more practical definition of independent 
     contractor for certain health care properties.
       Third, REITSA would update the current REIT hedging rule to 
     include income from all hedges of REIT liabilities.
       Fourth, REITSA would extend an exception to the current 95% 
     distribution rule to include other forms of phantom income, 
     e.g., income from the discharge of indebtedness.
       Fifth, REITSA would correct a problem in the wording of 
     Congress' past liberalization of the safe harbor from the 
     100% excise tax on prohibited transactions, i.e., sales of 
     property in the ordinary course of business. The proposal 
     would not count as a dealer sale property that is 
     involuntarily converted.
       Sixth, REITSA would create a safe harbor to the shared 
     appreciation mortgage (``SAM'') rules that would not penalize 
     a REIT lender for the borrower's bankruptcy. The proposal 
     also would clarify that SAMs could be based on appreciation 
     in value as well as gain.
       Last, REITSA would codify an IRS ruling position by 
     allowing a REIT to use a wholly-owned subsidiary to hold 
     property even if the subsidiary previously had been owned by 
     a non-REIT.
                                 ______
                                 
      By Mr. DODD:
  S. 899. A bill to amend the Solid Waste Disposal Act to provide for 
flow control of municipal solid waste; to the Committee on Environment 
and Public Works.


                 THE MUNICIPAL SOLID WASTE DISPOSAL ACT

  Mr. DODD. Mr. President, today, I am introducing the Solid Waste 
Disposal Act of 1997. It seeks to correct the May 1994 Supreme Court 
Decision in the matter of Carbone versus Town of Clarkstown which has 
had a devastating impact on Connecticut and States around the country. 
This bill is very similar to the proposal that overwhelmingly passed 
the Senate in the last Congress by a vote of 94 to 6. It protects 
communities and taxpayers that have invested hundreds of millions of 
dollars to build economical and environmentally clean solid waste 
facilities --only to see those dollars now potentially lost because of 
the Carbone decision. Carbone held that towns and cities cannot control 
the flow of solid waste to facilities it has built or operated.
  In this bill, flow control authority, would remain with those 
communities that were operating or constructing disposal facilities or 
had contracted for such disposal prior to the Carbone decision. There 
is no prospective flow control; in fact, the authority would cease 30 
years after enactment of the legislation.
  Approximately 35 States were adversely affected by the Carbone 
decision, which invalidated local flow control authority an issue that 
is vital to the fiscal soundness and public safety of States and 
localities. The Justices left it to Congress to reinstate flow control, 
and it is my belief that if Congress does not enact this legislation, 
States will continue to suffer environmentally and financially.
  State and local governments and State-created entities have a vested 
interest in how solid waste produced within their borders is 
transported and disposed of. Flow control is the backbone of 
Connecticut's integrated waste management plan. My State and many 
others had the foresight to plan ahead--to move away from landfills 
toward a more environmentally and economically sound system of 
recycling and waste-to-energy facilities. And it had been working.
  Localities made significant capital investments to construct 
expensive waste disposal facilities. In Connecticut, they incurred 
almost $750 million in debt. More than 80 percent of municipalities in 
Connecticut have contracts with the State's six waste-to-energy 
facilities.
  By 1991, the recycling rate had increased to 23 percent, but has 
remained flat since 1994. In 1989, there were 50 landfills, and today, 
there are only three, a sign of Connecticut's progress in devising a 
better way to dispose of its solid waste.
  Revenues from the facilities, used to pay off the bonds, were to be 
ensured by flow control authority. Without the ability to direct waste 
to appropriate facilities, these revenue bonds are in jeopardy. 
Municipalities entered into put or pay contracts--wherein they agree to 
dispose of a set amount of waste at a designated facility or pay a 
penalty. Now, after Carbone they are forced to pay for the shortfall 
created by trash moving to cheaper, less environmentally friendly 
disposal areas. Facilities in Connecticut are reporting tonnage 
reductions of more than 20 percent. That translates into hundreds of 
thousands of dollars in lost revenue from reduced energy production and 
tipping fees--what the waste haulers pay to dump the trash.
  At a time when Congress is working to ease the tax burden on working 
families, the Carbone case will cause taxes to increase for a great 
many Connecticut residents if towns are unable to meet their trash 
quotas. Citizens would be forced to pay twice --first, to have their 
waste transported, and again to cover the put-or-pay requirement.
  This legislation strikes an appropriate balance between the interests 
of communities who must dispose of their solid waste and the interests 
of the haulers paid to move it. I am confident that if we pass this 
flow control legislation, Connecticut municipalities, and localities 
around the Nation will be able to administer their solid waste 
management systems in environmentally sound and fiscally responsible 
manners.

[[Page S5615]]

  I understand Senator Chafee is currently working to craft legislation 
on this subject. I look forward to working with him and my other 
colleagues to resolve this complex problem facing our States and 
localities. Furthermore, I hope my colleagues will join me in 
supporting this bill.
  Mr. President, I ask unanimous consent that additional material be 
printed in the Record.

                                 S. 899

       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 ``Municipal Solid Waste 
     Disposal Act of 1997''.

     SEC. 2. STATE AND LOCAL GOVERNMENT CONTROL OF MOVEMENT OF 
                   MUNICIPAL SOLID WASTE AND RECYCLABLE MATERIAL.

       (a) In General.--Subtitle D of the Solid Waste Disposal Act 
     (42 U.S.C. 6941 et seq.) is amended by adding at the end the 
     following:

     ``SEC. 4011. STATE AND LOCAL GOVERNMENT CONTROL OF MOVEMENT 
                   OF MUNICIPAL SOLID WASTE AND RECYCLABLE 
                   MATERIAL.

       ``(a) Definitions.--In this section:
       ``(1) Designate.--The term `designate', in reference to the 
     action of a State, political subdivision, or public service 
     authority in designating a waste management facility, means 
     to authorize, require, or contractually commit that all or 
     any portion of the municipal solid waste or recyclable 
     material that is generated within the boundaries of the 
     State, political subdivision, or public service authority be 
     delivered to waste management facilities or facilities for 
     recyclable material or a public service authority identified 
     by the State, political subdivision, or public service 
     authority.
       ``(2) Flow control authority.--The term `flow control 
     authority' means the authority to control the movement of 
     municipal solid waste or voluntarily relinquished recyclable 
     material and direct municipal solid waste or voluntarily 
     relinquished recyclable material to a designated waste 
     management facility or facility for recyclable material.
       ``(3) Legally binding provision of the state or political 
     subdivision.--For purposes of the authority conferred by 
     subsections (b) and (c), the term `legally binding provision 
     of the State or political subdivision' includes a put or pay 
     agreement that designates waste to a waste management 
     facility that was in operation on or before December 31, 
     1988, and that requires an aggregate tonnage to be delivered 
     to the facility during each operating year by the political 
     subdivisions that have entered put or pay agreements 
     designating that waste management facility. The entering into 
     of a put or pay agreement shall be considered to be a 
     designation (as defined in subsection (a)(1)) for purposes of 
     this title.
       ``(4) Municipal solid waste.--
       ``(A) In general.--The term `municipal solid waste' means 
     solid waste generated by the general public or from a 
     residential, commercial, institutional, or industrial source, 
     consisting of paper, wood, yard waste, plastics, leather, 
     rubber, and other combustible material and noncombustible 
     material such as metal and glass, including residue remaining 
     after recyclable material has been separated from waste 
     destined for disposal, and including waste material removed 
     from a septic tank, septage pit, or cesspool (other than from 
     portable toilets).
       ``(B) Exclusions.--The term `municipal solid waste' does 
     not include--
       ``(i) waste identified or listed as a hazardous waste under 
     section 3001 or waste regulated under the Toxic Substances 
     Control Act (15 U.S.C. 2601 et seq.);
       ``(ii) waste, including contaminated soil and debris, 
     resulting from a response action taken under section 104 or 
     106 of the Comprehensive Environmental Response, 
     Compensation, and Liability Act of 1980 (42 U.S.C. 9604, 
     9606) or any corrective action taken under this Act;
       ``(iii) medical waste listed in section 11002;
       ``(iv) industrial waste generated by manufacturing or 
     industrial processes, including waste generated during scrap 
     processing and scrap recycling;
       ``(v) recyclable material; or
       ``(vi) sludge.
       ``(5) Political subdivision.--The term `political 
     subdivision' means a political subdivision of a State.
       ``(6) Public service authority.--The term `public service 
     authority' means--
       ``(A) an authority or authorities created pursuant to State 
     legislation to provide individually or in combination solid 
     waste management services to political subdivisions;
       ``(B) other body created pursuant to State law; or
       ``(C) an authority that was issued a certificate of 
     incorporation by a State corporation commission established 
     by a State constitution.
       ``(7) Put or pay agreement.--The term `put or pay 
     agreement' means an agreement that obligates or otherwise 
     requires a State, political subdivision, or public service 
     authority to--
       ``(A) deliver a minimum quantity of municipal solid waste 
     to a waste management facility; and
       ``(B) pay for that minimum quantity of municipal solid 
     waste even if the stated minimum quantity of municipal solid 
     waste is not delivered within a required period of time.
       ``(8) Recyclable material.--The term `recyclable material' 
     means material that has been separated from waste otherwise 
     destined for disposal (at the source of the waste or at a 
     processing facility) or has been managed separately from 
     waste destined for disposal, for the purpose of recycling, 
     reclamation, composting of organic material such as food and 
     yard waste, or reuse (other than for the purpose of 
     incineration).
       ``(9) Waste management facility.--The term `waste 
     management facility' means a facility that collects, 
     separates, stores, transports, transfers, treats, processes, 
     combusts, or disposes of municipal solid waste.
       ``(b) Authority.--
       ``(1) In general.--Each State, political subdivision, or 
     public service authority may exercise flow control authority 
     for municipal solid waste and for recyclable material 
     voluntarily relinquished by the owner or generator of the 
     material that is generated within its jurisdiction by 
     directing the municipal solid waste or recyclable material to 
     a waste management facility or public service authority or 
     facility for recyclable material, if the flow control 
     authority--
       ``(A)(i) had been exercised before May 15, 1994, and was 
     being implemented on May 15, 1994, pursuant to a law 
     (including an ordinance or regulation) or other legally 
     binding provision of the State or political subdivision; or
       ``(ii) had been exercised before May 15, 1994, without 
     regard to whether implementation of such a law (including an 
     ordinance or regulation) or other legally binding provision 
     of the State or political subdivision was prevented by an 
     injunction, temporary restraining order, or other court 
     action, or was suspended by the voluntary decision of the 
     State or political subdivision because of the pendency of a 
     court action; or
       ``(B) has been implemented by designating before May 15, 
     1994, the particular waste management facilities or public 
     service authority to which the municipal solid waste or 
     recyclable material is to be delivered, which facilities were 
     in operation as of May 15, 1994, or were in operation before 
     May 15, 1994, and were temporarily inoperative on May 15, 
     1994.
       ``(2) Limitation.--The authority of this section extends 
     only to the specific classes or categories of municipal solid 
     waste to which flow control authority requiring a movement to 
     a waste management facility was applied on or before May 15, 
     1994 (or, in the case of a State, political subdivision, or 
     public service authority that qualifies under subsection (c), 
     to the specific classes or categories of municipal solid 
     waste for which the State, political subdivision, or public 
     service authority before May 15, 1994, had committed to the 
     designation of a waste management facility).
       ``(3) Lack of clear identification.--With regard to 
     facilities granted flow control authority under subsection 
     (c), if the specific classes or categories of municipal solid 
     waste are not clearly identified, the authority of this 
     section shall apply only to municipal solid waste generated 
     by households.
       ``(4) Effective period of authority.--With respect to each 
     designated waste management facility, the authority of this 
     section shall be effective during the period ending on the 
     later of--
       ``(A) the end of the remaining life of a contract between 
     the State, political subdivision, or public service authority 
     and any other person regarding the movement or delivery of 
     municipal solid waste or voluntarily relinquished recyclable 
     material to a designated facility (as in effect May 15, 
     1994);
       ``(B) completion of the schedule for payment of the capital 
     costs of the facility concerned (as in effect May 15, 1994 
     (without regard to whether the capital costs are subsequently 
     refinanced to provide a reduced interest rate with no change 
     in amount or maturity); or
       ``(C) the end of the remaining useful life of the facility 
     (as in existence on the date of enactment of this section), 
     as that remaining life may be extended by--
       ``(i) retrofitting of equipment or the making of other 
     significant modifications to meet applicable environmental 
     requirements or safety requirements;
       ``(ii) routine repair or scheduled replacement of equipment 
     or components that does not add to the capacity of a waste 
     management facility; or
       ``(iii) expansion of the facility on land that is--

       ``(I) legally or equitably owned, or under option to 
     purchase or lease, by the owner or operator of the facility; 
     and
       ``(II) covered by the permit for the facility (as in effect 
     May 15, 1994).

       ``(5) Additional authority.--
       ``(A) Application of paragraph.--This paragraph applies to 
     a State or political subdivision that, on or before January 
     1, 1984--
       ``(i) adopted a regulation under State law that required 
     the transportation to, and management or disposal at, waste 
     management facilities in the State, of--

       ``(I) all solid waste from residential, commercial, 
     institutional, or industrial sources (as defined under State 
     law); and
       ``(II) recyclable material voluntarily relinquished by the 
     owner or generator of the recyclable material; and

       ``(ii) as of January 1, 1984, had implemented the 
     regulation in the case of every political subdivision of the 
     State.

[[Page S5616]]

       ``(B) Authority.--Notwithstanding anything to the contrary 
     in this section (including subsection (m)), a State or 
     political subdivision described in subparagraph (A) may 
     continue to exercise flow control authority (including 
     designation of waste management facilities in the State that 
     meet the requirements of subsection (c)) for all classes and 
     categories of solid waste that were subject to flow control 
     on January 1, 1984.
       ``(6) Flow control ordinance.--
       ``(A) In general.--Notwithstanding anything to the contrary 
     in this section, but subject to subsection (m), during the 
     effective period described in paragraph (4), a political 
     subdivision that adopted a flow control ordinance in November 
     1991, and designated facilities to receive municipal solid 
     waste before April 1, 1992, may exercise flow control 
     authority until the end of the remaining life of all 
     contracts between the political subdivision and any other 
     person regarding the movement or delivery of municipal solid 
     waste or voluntarily relinquished recyclable material to a 
     designated facility (as in effect May 15, 1994).
       ``(B) Limitation.--The authority under subparagraph (A) 
     applies only with respect to the specific classes or 
     categories of municipal solid waste to which flow control 
     authority was actually applied on or before May 15, 1994.
       ``(c) Commitment to Construction.--
       ``(1) In general.--Notwithstanding subparagraphs (A) and 
     (B) of subsection (b)(1), a political subdivision may 
     exercise flow control authority under subsection (b), if--
       ``(A)(i) the law (including an ordinance or regulation) or 
     other legally binding provision specifically provides for 
     flow control authority for municipal solid waste generated 
     within the boundaries of the political subdivision; and
       ``(ii) the authority was exercised before May 15, 1995, and 
     was being implemented on May 15, 1994; or
       ``(B) before May 15, 1994, the political subdivision 
     committed to the designation of the particular waste 
     management facilities or public service authority to which 
     municipal solid waste is to be transported or at which 
     municipal solid waste is to be disposed of under that law 
     (including an ordinance or regulation), plan, or legally 
     binding provision.
       ``(2) Factors demonstrating commitment.--A commitment to 
     the designation of waste management facilities or public 
     service authority is demonstrated by 1 or more of the 
     following factors:
       ``(A) Construction permits.--All permits required for the 
     substantial construction of the facility were obtained before 
     May 15, 1994.
       ``(B) Contracts.--All contracts for the substantial 
     construction of the facility were in effect before May 15, 
     1994.
       ``(C) Revenue bonds.--Before May 15, 1994, revenue bonds 
     were presented for sale to specifically provide revenue for 
     the construction of the facility (without regard to whether 
     the revenue bonds are subsequently refinanced to provide a 
     reduced interest rate with no change in amount or maturity).
       ``(D) Construction and operating permits.--The State or 
     political subdivision submitted to the appropriate regulatory 
     agency or agencies, on or before May 15, 1994, substantially 
     complete permit applications for the construction and 
     operation of the facility.
       ``(d) Formation of Solid Waste Management District To 
     Purchase and Operate Existing Facility.--Notwithstanding 
     subparagraphs (A) and (B) of subsection (b)(1), a solid waste 
     management district that was formed by a number of political 
     subdivisions for the purpose of purchasing and operating a 
     facility owned by 1 of the political subdivisions may 
     exercise flow control authority under subsection (b) if--
       ``(1) the facility was fully licensed and in operation 
     before May 15, 1994;
       ``(2) before April 1, 1994, substantial negotiations and 
     preparation of documents for the formation of the district 
     and purchase of the facility were completed;
       ``(3) before May 15, 1994, at least 80 percent of the 
     political subdivisions that were to participate in the solid 
     waste management district had adopted an ordinance committing 
     the political subdivisions to the participation, and the 
     remaining political subdivisions adopted such an ordinance 
     within 2 months after that date; and
       ``(4) the financing was completed (without regard to 
     whether the revenue bonds are subsequently refinanced to 
     provide a reduced interest rate with no change in amount or 
     maturity), the acquisition was made, and the facility was 
     placed under operation by the solid waste management district 
     on or before September 21, 1994.
       ``(e) Facility Constructed and Operated.--During the 
     effective period described in subsection (b)(4), a political 
     subdivision may exercise flow control authority for municipal 
     solid waste and for recyclable material voluntarily 
     relinquished by the owner or generator of the material that 
     is generated within the jurisdiction of the political 
     subdivision if--
       ``(1) before May 15, 1994, the political subdivision--
       ``(A) contracted with a public service authority or with 
     its operator, to deliver or cause to be delivered to the 
     public service authority substantially all of the disposable 
     municipal solid waste that is generated or collected by or is 
     within or under the control of the political subdivision, for 
     the purpose of supporting revenue bonds issued by and in the 
     name of the public service authority or on its behalf by a 
     State entity for waste management facilities; or
       ``(B) entered into contracts with a public service 
     authority or its operator to deliver or cause to be delivered 
     to the public service authority substantially all of the 
     disposable municipal solid waste that is generated or 
     collected by or within the control of the political 
     subdivision, which imposed flow control pursuant to a law 
     (including an ordinance or regulation) or other legally 
     binding provision, if revenue bonds were issued in the name 
     of the public service authority for waste management 
     facilities and outstanding (without regard to whether the 
     revenue bonds are subsequently refinanced to provide a 
     reduced interest rate with no change in amount or maturity); 
     and
       ``(2) before May 15, 1994, the public service authority--
       ``(A) issued the revenue bonds or had revenue bonds issued 
     on its behalf by a State entity for the construction of 
     municipal solid waste facilities to which the municipal solid 
     waste of the political subdivision is transferred or disposed 
     (without regard to whether the revenue bonds are subsequently 
     refinanced to provide a reduced interest rate with no change 
     in amount or maturity); and
       ``(B) commenced operation of the facilities.
       ``(f) State-Mandated Disposal Services.--During the 
     effective period described in subsection (b)(4), a political 
     subdivision may exercise flow control authority for municipal 
     solid waste and for recyclable material voluntarily 
     relinquished by the owner or generator of the material that 
     is generated within the jurisdiction of the political 
     subdivision if, before May 15, 1994, the political 
     subdivision--
       ``(1) was responsible under State law for providing for the 
     operation of solid waste facilities to serve the disposal 
     needs of all incorporated and unincorporated areas of the 
     county;
       ``(2) is required to initiate a recyclable material 
     recycling program in order to meet a municipal solid waste 
     reduction goal of at least 30 percent;
       ``(3) has been authorized by State statute to exercise flow 
     control authority and had implemented the authority through 
     the adoption or execution of a law (including an ordinance or 
     regulation), contract, or other legally binding provision; 
     and
       ``(4) had incurred, or caused a public service authority to 
     incur, significant financial expenditures to comply with 
     State law and to repay outstanding bonds that were issued 
     specifically for the construction of solid waste management 
     facilities to which the waste of the political subdivision is 
     to be delivered.
       ``(g) State Solid Waste District Authority.--A solid waste 
     district or a political subdivision may exercise flow control 
     authority for municipal solid waste and for recyclable 
     material voluntarily relinquished by the owner or generator 
     of the material that is generated within the jurisdiction of 
     the political subdivision if--
       ``(1) the solid waste district or a political subdivision 
     within the solid waste district--
       ``(A) is currently required to initiate a recyclable 
     material recycling program in order to meet a municipal solid 
     waste reduction goal of at least 30 percent by the year 2005; 
     and
       ``(B) uses revenues generated by the exercise of flow 
     control authority strictly to implement programs to manage 
     municipal solid waste, other than development of 
     incineration; and
       ``(2) before May 15, 1994, the solid waste district or 
     political subdivision or municipality--
       ``(A) was responsible under State law for the management 
     and regulation of the storage, collection, processing, and 
     disposal of solid waste within its jurisdiction;
       ``(B) was authorized by State statute (enacted before 
     January 1, 1992) to exercise flow control authority, and 
     subsequently adopted or sought to exercise the authority 
     through a law (including an ordinance or regulation), 
     regulatory proceeding, contract, franchise, or other legally 
     binding provision; and
       ``(C) was required by State statute (enacted before January 
     1, 1992) to develop and implement a solid waste management 
     plan consistent with the State solid waste management plan, 
     and the solid waste management plan of the solid waste 
     district or political subdivision or municipality was 
     approved by the appropriate State agency before September 15, 
     1994.
       ``(h) State-authorized Services and Local Plan Adoption.--A 
     political subdivision may exercise flow control authority for 
     municipal solid waste and for recyclable material voluntarily 
     relinquished by the owner or generator of the material that 
     is generated within the jurisdiction of the political 
     subdivision if, before May 15, 1994, the political 
     subdivision--
       ``(1) had been authorized by a State statute that 
     specifically named the political subdivision to exercise flow 
     control authority and had implemented the authority through a 
     law (including an ordinance or regulation), contract, or 
     other legally binding provision;
       ``(2) had adopted a local solid waste management plan 
     pursuant to State statute and was required by State statute 
     to adopt the plan in order to submit a complete permit 
     application to construct a new solid waste management 
     facility proposed in the plan;
       ``(3) had presented for sale a revenue or general 
     obligation bond to provide for the site selection, 
     permitting, or acquisition for construction of new facilities 
     identified and

[[Page S5617]]

     proposed in the local solid waste management plan of the 
     political subdivision (without regard to whether the revenue 
     or general obligation bond is subsequently refinanced to 
     provide a reduced interest rate with no change in amount or 
     maturity);
       ``(4) includes a municipality or municipalities required by 
     State law to adopt a local law (including an ordinance) to 
     require that solid waste that has been left for collection 
     shall be separated into recyclable, reusable, or other 
     components for which economic markets exist; and
       ``(5) is in a State that has aggressively pursued closure 
     of substandard municipal landfills, both by regulatory action 
     and under statute designed to protect deep flow recharge 
     areas in counties in which potable water supplies are derived 
     from sole source aquifers.
       ``(i) Retained Authority.--
       ``(1) Request.--On the request of a generator of municipal 
     solid waste affected by this section, a State or political 
     subdivision may authorize the diversion of all or a portion 
     of the solid waste generated by the generator making the 
     request to an alternative solid waste treatment or disposal 
     facility, if the purpose of the request is to provide a 
     higher level of protection for human health and the 
     environment or reduce potential future liability of the 
     generator under Federal or State law for the management of 
     the municipal solid waste, unless the State or political 
     subdivision determines that the facility to which the 
     municipal solid waste is proposed to be diverted does not 
     provide a higher level of protection for human health and the 
     environment or does not reduce the potential future liability 
     of the generator under Federal or State law for the 
     management of the municipal solid waste.
       ``(2) Contents.--A request under paragraph (1) shall 
     include information on the environmental suitability of the 
     proposed alternative treatment or disposal facility and 
     method, compared to that of the designated facility and 
     method.
       ``(j) Limitations on Revenue.--A State or political 
     subdivision may exercise flow control authority under 
     subsection (b), (c), (d), or (e) only if the State or 
     political subdivision certifies that the use of any of its 
     revenues derived from the exercise of the authority will be 
     used for solid waste management services or related landfill 
     reclamation.
       ``(k) Reasonable Regulation of Commerce.--A law, ordinance, 
     regulation, or other legally binding provision or official 
     act or political subdivision, as described in subsection (b), 
     (c), (d), or (e), that implements flow control authority in 
     compliance with this section shall be considered to be a 
     reasonable regulation of commerce retroactive to its date of 
     enactment or effective date and shall not be considered to be 
     an undue burden on or otherwise considered as impairing, 
     restraining, or discriminating against interstate commerce.
       ``(l) Effect on Existing Laws and Contracts.--
       ``(1) Environmental laws.--Nothing in this section has any 
     effect on any other law relating to the protection of human 
     health and the environment or the management of municipal 
     solid waste or recyclable material.
       ``(2) State law.--Nothing in this section authorizes a 
     political subdivision to exercise the flow control authority 
     granted by this section in a manner that is inconsistent with 
     State law.
       ``(3) Ownership of recyclable material.--Nothing in this 
     section--
       ``(A) authorizes a State or political subdivision to 
     require a generator or owner of recyclable material to 
     transfer recyclable material to the State or political 
     subdivision; or
       ``(B) prohibits a generator or owner of recyclable material 
     from selling, purchasing, accepting, conveying, or 
     transporting recyclable material for the purpose of 
     transformation or remanufacture into usable or marketable 
     material, unless the generator or owner voluntarily made the 
     recyclable material available to the State or political 
     subdivision and relinquished any right to, or ownership of, 
     the recyclable material.
       ``(m) Termination of Authority; Repeal.--
       ``(1) Termination of authority.--Notwithstanding any other 
     provision of this title, authority to control the flow of 
     municipal solid waste or recyclable material by directing 
     municipal solid waste or recyclable material to a waste 
     management facility shall terminate on the date that is 30 
     years after the date of enactment of this Act.
       ``(2) Repeal.--This section and the item relating to this 
     section in the table of contents for subtitle D of the Solid 
     Waste Disposal Act are repealed effective as of the date that 
     is 30 years after the date of enactment of this Act.
       ``(n) Section Not Applicable To Listed Facilities.--
     Notwithstanding any other provision of this title, the 
     authority to exercise flow control shall not apply to a 
     facility that--
       ``(1) on the date of enactment of this Act, is listed on 
     the National Priorities List under the Comprehensive 
     Environmental, Response, Compensation and Liability Act (42 
     U.S.C. 9601 et seq.); or
       ``(2) as of May 15, 1994, was the subject of a pending 
     proposal by the Administrator of the Environmental Protection 
     Agency to be listed on the National Priorities List.''.
       (b) Table of Contents Amendment.--The table of contents for 
     subtitle D in section 1001 of the Solid Waste Disposal Act 
     (42 U.S.C. prec. 6901) is amended by adding after the item 
     relating to section 4010 the following:

``Sec. 4011. State and local government control of movement of 
              municipal solid waste and recyclable material.''.
                                  ____


               [From the New London News, June 11, 1997]

 Stonington Is Sued by Trash Firm--Company Seeks To Block Town Garbage 
                               Collection

                            [By Joe Wojtas]

       Stonington.--One of the town's largest commercial garbage 
     haulers has sued the town in an effort to stop it from taking 
     over trash collection next month.
       A hearing will be held June 17 in New London Superior Court 
     on a request by USA Waste Inc. of Franklin and U.W.S. of 
     Rhode Island Inc., a landfill company, for an injunction that 
     would stop the town from implementing its takeover plan on 
     July 1.
       USA Waste attorney Thomas J. Donahue Jr., who had warned 
     the town it would be sued if the plan was implemented, had no 
     comment about the suit Tuesday.
       USA Waste has reported having 175 commercial customers and 
     numerous residential customers in town. Donahue was not able 
     to say what the value of USA Waste's current contracts are. 
     The plan would void those contracts on July 1.
       First Selectmen Donald Maranell said the suit was expected.
       ``The town has spent a lot of effort researching court 
     cases, state statues and the needs of our residents,'' he 
     said. ``Our ordinance is clearly lawful and in the best 
     interests of the health, safety and welfare of the residents 
     of the Town of Stonington. It is the town's opinion we will 
     prevail.''
       Surprisingly, USA Waste was one of the firms that submitted 
     bids to pick up trash for the town and is one of two firms 
     with which the town is negotiating. Maranell said that if USA 
     Waste agrees to terms, it would have to drop any action 
     against the town. A decision is expected in a few days.


                       Residents vote for change

       Residents voted in April to have the town take over all 
     garbage collection to ensure it would be delivered to the 
     Preston incinerator. Town officials said the town would face 
     a $500,000 deficit in the 1997-98 budget if plan was not 
     implemented.
       The town said the plan was needed because haulers with 
     contracts to pick up garbage from businesses in town began 
     taking the trash to landfills with lower tipping fees than 
     Preston, such as the U.W.S. site in Warwick.
       Town officials charged that haulers were making huge 
     profits because their contracts with businesses were based on 
     the higher Preston fee. They said taxpayers should not have 
     to pay for the deficit so haulers could continue making big 
     profits.
       Because the town's contract with Preston requires a certain 
     amount of garbage each year, he shortfall in business garbage 
     meant taxpayers had to pay for the deficit. A court had rules 
     that towns could not force private haulers to take trash to 
     Preston.
       Town officials said they could solve the problem by taking 
     over trash collection in town and hiring their own 
     contractor, which would be required to bring all garbage to 
     Preston.
       They said a court decision from Babylon, Long Island, 
     allowed that town to implement a similar plan. The 
     Connecticut Resource Recovery Authority has agreed to pay all 
     the town's legal bills because it is looking for a solution 
     to the same problems in other towns.
       Private haulers have argued it is unfair for the town to 
     take over garbage collection when the haulers have valid 
     contracts with the businesses.
       The suit states the ordinance and regulations passed by the 
     town deprive USA Waste and U.W.S. of their interstate 
     commerce rights, prevent USA Waste from hauling and 
     collecting garbage and deprive U.W.S. of receiving waste from 
     Stonington.
       The suit states the town is exceeding its authority and 
     violating state law and the U.S. Constitution. It also points 
     out that the town ``devised a scheme'' to illegally steer 
     garbage to Preston even though it knew about court decisions 
     preventing such action.
       In addition to an injunction, the suit asks a judge to rule 
     that the ordinance and regulations are illegal and 
     unconstitutional.
                                 ______
                                 
      By Mr. FEINGOLD (for himself and Mr. DeWine):
  S. 900. A bill to provide for sentencing enhancements and amendments 
to the Federal Sentencing Guidelines for offenses relating to the abuse 
and exploitation of children, and for other purposes; to the Committee 
on the Judiciary.


       the child exploitation sentencing enhancement act of 1997

  Mr. FEINGOLD. Mr. President, I rise today to introduce the Child 
Exploitation Sentencing Enhancement Act of 1997. I am pleased to be 
joined in this effort by my friend and colleague from the Senate 
Committee on the Judiciary, Senator DeWine. The legislation we are 
introducing today will increase the criminal penalties for individuals 
who use computers and the Internet to commit crimes of sexual abuse and 
exploitation against children.

[[Page S5618]]

  Just as the miraculous advances in computer technology have opened 
new worlds to many of us, some have chosen to exploit these 
technologies to advance criminal activity. Most troubling are those who 
use computers and the Internet to sexually exploit and abuse children. 
According to the National Center for Missing and Exploited Children, 
which supports this legislation, criminals are increasingly using 
computer telecommunications technology as a means to assist in the 
sexual victimization of young children.
  Mr. President, there can be no doubt that the Internet and advancing 
computer technologies provide each of us with many new and promising 
means of communication. However, when these technologies are used to 
further the criminal sexual exploitation and abuse of children, it is 
essential, in my view, that this conduct be punished more severely. FBI 
Director Louis Freeh recently testified before the Senate 
Appropriations Subcommittee for Commerce, Justice and State and 
highlighted this problem;

       The same marvelous advances in computer and 
     telecommunications technology that allow our children to 
     reach out to new sources of knowledge and cultural 
     experiences are also leaving them unwittingly vulnerable to 
     exploitation and harm by pedophiles and other sexual 
     predators in ways never before possible.

  Mr. President, advances in technology should not be the shield from 
behind which pedophiles and sexual molesters target and prey upon our 
children.
  In responding to this problem, the Feingold-DeWine legislation 
directs the U.S. Sentencing Commission to increase criminal penalties 
for people who intentionally use a computer to entice children into 
illicit sexual conduct. The bill also directs that sentences be 
increased for those criminals who seek out children on the Internet and 
misrepresent their true identity in a knowing effort to gain the trust 
of the child they intend to sexually victimize.
  The provisions in this bill are directed squarely at those molesters 
and sexual predators who go on-line and hang out in computer chat rooms 
targeting unknowing young victims. One distinct and unfortunate 
advantage of the Internet for criminals is that they are able to reach 
a much wider audience of potential victims than they would if physical 
contact were required to initiate their criminal activity. Another 
troubling aspect of this situation is that criminals are provided with 
near fool-proof anonymity while cruising the Internet looking for 
victims. In some cases, victims are enticed or lured to meet with the 
sexual molester. The ability for the criminal to misrepresent their 
true identity and thus gain the confidence of the victim is a 
significant aspect of these crimes. Director Freeh also noted this 
problem recently:

       Pedophiles often seek out young children by either 
     participating in or monitoring activities in chat rooms that 
     are provided by commercial on-line services for teenagers and 
     preteens to converse with each other. These chat rooms also 
     provide pedophiles an anonymous means of establishing 
     relationships with children. Using a chat room, a child can 
     converse for hours with unknown individuals, often without 
     the knowledge or approval of their parents. There is no easy 
     way for the child to know if the person he or she is talking 
     with is, in fact, another 14-year-old, or is a 40-year-old 
     sexual predator masquerading as a peer.

  Clearly, Mr. President, a child molester who stalks children on the 
information superhighway derives benefits that are simply not present 
if direct physical contact is required to target and recruit the 
victim. Director Freeh's testimony also noted that sexual criminals 
also target young victims by posing as children looking for pen pals or 
by posting notices on computer bulletin boards in order to facilitate 
and develop relationships which can in turn provide a victim for the 
predator's illegal sexual activity.
  In addition to increasing sentences for criminal activity involving 
this type of conduct, the legislation expands the pattern of activity 
sentencing enhancement to a wider range of sexual abuse and 
exploitation crimes. In doing so, those criminals who have shown an 
ongoing pattern of sexually exploiting minors will be held accountable 
for their conduct through longer prison sentences. In doing so, the 
criminal is incapacitated for a longer period of time thus reducing the 
potential that they will be set free to victimize again. This 
sentencing enhancement will now be applicable in cases of sexual abuse, 
sexual exploitation, and the coercion and enticement of minors for an 
illegal sexual activity. Additionally, this legislation targets repeat 
offenders by increasing penalties for repeat offenses and by increasing 
maximum penalties available under the Federal criminal code. Finally, 
the legislation authorizes funding to be used to appoint guardian ad 
litem for children who are the victims of, or witnesses to, crimes 
involving abuse or exploitation.
  Mr. President, there can be no doubt that our children are our most 
precious resource. I am the father of teenage children and I, like any 
parent, worry about the health and safety of my children. I encourage 
my children to utilize the Internet and to gain the benefits of these 
amazing new technologies--technologies which simply did not exist a few 
years ago or when I was growing up. During my tenure in this body I 
have been a strong believer in the potential of the Internet and 
sincerely hope that as we move toward the next century that potential 
will be realized. However, in doing so, I am mindful of the dangers 
that always exist when individuals--criminals--exploit a new technology 
to further their illicit criminal activity. The legislation being 
introduced today speaks directly to the small percentage of individuals 
who intentionally misuse the Internet to sexually prey upon children. 
The adoption of this legislation will send a loud and clear message 
that the Congress of the United States will not tolerate the sexual 
exploitation of our young people and that the information superhighway 
will not become a haven for pedophiles and sexual predators.
  I ask unanimous consent that a copy of the legislation be printed in 
the Record as well as a copy of a letter from the National Center for 
Missing and Exploited Children in support of the bill.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                 S. 900

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Child Exploitation 
     Sentencing Enhancement Act of 1997''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) the sexual exploitation of children, including the 
     sexual abuse of minors, and illegal sexual activity with 
     minors, poses a significant threat to the health, safety, and 
     well-being of children in the United States;
       (2) there is a compelling governmental interest in 
     preserving the health and safety of children, and the 
     prevention and elimination of the sexual abuse and 
     exploitation of children serves that interest;
       (3) if computers are used to facilitate the sexual abuse or 
     exploitation of children--
       (A) by facilitating the contact, persuasion, inducement, 
     enticement, or coercion of a child in order to exploit or 
     engage in illegal sexual activity with that child, the risk 
     of harm is magnified and more dangerous to children because--
       (i) the use of a computer allows the sexual offender to 
     target and reach a wider range of potential victims than 
     would otherwise be possible if direct physical presence and 
     contact with the child was necessary to initiate and 
     facilitate the crime; and
       (ii) the use of a computer allows the sexual offender to 
     avoid more readily detection by law enforcement officials, as 
     law enforcement officials may lack the resources or training 
     necessary to identify, pursue, and apprehend those 
     individuals who target children for sexual exploitation 
     through the use of computers; and
       (B) the use of a computer allows a sexual offender to avoid 
     revealing, or to knowingly conceal from a potential victim, 
     the actual identity of the offender (including the offender's 
     sex, age, and name) and therefore allows the offender to gain 
     more readily the confidence of an unsuspecting child;
       (4) there is a compelling governmental interest in 
     prohibiting repeated and continuing patterns of child sexual 
     exploitation through extended incarceration for offenders who 
     use computers to facilitate the sexual exploitation of a 
     child or to sexually exploit a child;
       (5) individuals who engage in a repeated and continuing 
     pattern of sexual abuse or exploitation of children over a 
     period of time are particularly harmful to children;
       (6) it is important to pay special attention to the 
     identification of those offenders who show the greatest risk 
     of continuing victimizing of children, so that the offenders 
     may be incapacitated through extended incarceration;

[[Page S5619]]

       (7) consistently, experts in the field of criminal justice 
     find that criminal history, especially a history of sexual 
     offenses, is the most important and accurate predictor of 
     whether an individual might commit a sexual offense in the 
     future;
       (8)(A) the report issued by the United States Sentencing 
     Commission in 1996 entitled ``Sex Offenses Against Children: 
     Findings and Recommendations Regarding Federal Penalties'' 
     contains a review of the cases of all Federal offenders 
     sentenced for offenses of pornography and transportation of 
     minors for illegal sexual activity and criminal sexual abuse;
       (B) in the report, the United States Sentencing Commission 
     found that--
       (i) in approximately 20 percent of the cases reviewed by 
     the United States Sentencing Commission, the defendant had a 
     prior sex-related conviction;
       (ii) 64 percent of the defendants convicted under sexual 
     abuse guidelines who had prior convictions for sexual 
     offenses had committed sexual crimes against children; and
       (iii) for all categories of sexual abuse, the probability 
     that a child was the prior victim of such a defendant was 
     high (ranging from a 50 to 70 percent probability);
       (9) incapacitation through extended incarceration will 
     prevent those offenders who engage in a repeated and 
     continuing pattern of sexual exploitation of children from 
     continuing to commit the heinous sexual offenses against 
     children; and
       (10) the prevention and elimination of the sexual 
     exploitation of children provides a compelling governmental 
     interest in prohibiting repeated and continuing patterns of 
     child sexual exploitation through extended incarceration.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Child; children.--The term ``child'' or ``children'' 
     means a minor or minors of an age specified in the applicable 
     provision of title 18, United States Code, that is subject to 
     review under this Act.
       (2) Minor.--The term ``minor'' means any individual who has 
     not attained the age of 18, except that, with respect to 
     references to section 2243 of title 18, United States Code, 
     the term means an individual described in subsection (a) of 
     that section.

     SEC. 4. INCREASED PENALTIES FOR USE OF A COMPUTER IN THE 
                   SEXUAL ABUSE OR EXPLOITATION OF A CHILD.

       Pursuant to the authority granted to the United States 
     Sentencing Commission under section 994(p) of title 28, 
     United States Code, the United States Sentencing Commission 
     shall--
       (1) review the Federal Sentencing Guidelines on aggravated 
     sexual abuse under section 2241 of title 18, United States 
     Code, sexual abuse under section 2242 of title 18, United 
     States Code, sexual abuse of a minor or ward under section 
     2243 of title 18, United States Code, coercion and enticement 
     of a juvenile under section 2422(b) of title 18, United 
     States Code, and transportation of minors under section 2423 
     of title 18, United States Code; and
       (2) upon completion of the review under paragraph (1), 
     promulgate amendments to the Federal Sentencing Guidelines to 
     increase penalties if the defendant used a computer with the 
     intent to persuade, induce, entice, or coerce a child of an 
     age specified in the applicable provision referred to in 
     paragraph (1) to engage in any prohibited sexual activity.

     SEC. 5. INCREASED PENALTIES FOR KNOWING MISREPRESENTATION IN 
                   THE SEXUAL ABUSE OR EXPLOITATION OF A CHILD.

       Pursuant to the authority granted to the United States 
     Sentencing Commission under section 994(p) of title 28, 
     United States Code, the United States Sentencing Commission 
     shall--
       (1) review the Federal Sentencing Guidelines on aggravated 
     sexual abuse under section 2241 of title 18, United States 
     Code, sexual abuse under section 2242 of title 18, United 
     States Code, sexual abuse of a minor or ward under section 
     2243 of title 18, United States Code, coercion and enticement 
     of a juvenile under section 2422(b) of title 18, United 
     States Code, and transportation of minors under section 2423 
     of title 18, United States Code; and
       (2) upon completion of the review under paragraph (1), 
     promulgate amendments to the Federal Sentencing Guidelines to 
     increase penalties if the defendant knowingly misrepresented 
     the actual identity of the defendant with the intent to 
     persuade, induce, entice, or coerce a child of an age 
     specified in the applicable provision referred to in 
     paragraph (1) to engage in a prohibited sexual activity.

     SEC. 6. INCREASED PENALTIES FOR PATTERN OF ACTIVITY OF SEXUAL 
                   EXPLOITATION OF CHILDREN.

       Pursuant to the authority granted to the United States 
     Sentencing Commission under section 994(p) of title 28, 
     United States Code, the United States Sentencing Commission 
     shall--
       (1) review the Federal Sentencing Guidelines on criminal 
     sexual abuse, the production of sexually explicit material, 
     the possession of materials depicting a child engaging in 
     sexually explicit conduct, coercion and enticement of minors, 
     and the transportation of minors; and
       (2) upon completion of the review under paragraph (1), 
     promulgate amendments to the Federal Sentencing Guidelines to 
     increase penalties applicable to the offenses referred to in 
     paragraph (1) in any case in which the defendant engaged in a 
     pattern of activity involving the sexual abuse or 
     exploitation of a minor.

     SEC. 7. REPEAT OFFENDERS; INCREASED MAXIMUM PENALTIES FOR 
                   TRANSPORTATION FOR ILLEGAL SEXUAL ACTIVITY AND 
                   RELATED CRIMES.

       (a) Repeat Offenders.--
       (1) Chapter 117.--
       (A) In general.--Chapter 117 of title 18, United States 
     Code, is amended by adding at the end the following:

     ``Sec. 2425. Repeat offenders

       ``(a) In General.--Any person described in this subsection 
     shall be subject to the punishment under subsection (b). A 
     person described in this subsection is a person who violates 
     a provision of this chapter, after one or more prior 
     convictions--
       ``(1) for an offense punishable under this chapter or 
     chapter 109A or 110; or
       ``(2) under any applicable law of a State relating to 
     conduct punishable under this chapter or chapter 109A or 110.
       ``(b) Punishment.--A violation of a provision of this 
     chapter by a person described in subsection (a) is punishable 
     by a term of imprisonment of a period not to exceed twice the 
     period that would otherwise apply under this chapter.''.
       (B) Conforming amendment.--The chapter analysis for chapter 
     117 of title 18, United States Code, is amended by adding at 
     the end the following:

``2425. Repeat offenders.''.

       (2) Chapter 109a.--Section 2247 of title 18, United States 
     Code, is amended to read as follows:

     ``Sec. 2247. Repeat offenders

       ``(a) In General.--Any person described in this subsection 
     shall be subject to the punishment under subsection (b). A 
     person described in this subsection is a person who violates 
     a provision of this chapter, after one or more prior 
     convictions--
       ``(1) for an offense punishable under this chapter or 
     chapter 110 or 117; or
       ``(2) under any applicable law of a State relating to 
     conduct punishable under this chapter, or chapter 110 or 117.
       ``(b) Punishment.--A violation of a provision of this 
     chapter by a person described in subsection (a) is punishable 
     by a term of imprisonment of a period not to exceed twice the 
     period that would otherwise apply under this chapter.''.
       (b) Increased Maximum Penalties for Transportation for 
     Illegal Sexual Activity and Related Crimes.--
       (1) Transportation generally.--Section 2421 of title 18, 
     United States Code, is amended by striking ``five'' and 
     inserting ``10''.
       (2) Coercion and enticement of minors.--Section 2422 of 
     title 18, United States Code, is amended--
       (A) in subsection (a), by striking ``five'' and inserting 
     ``10''; and
       (B) in subsection (b), by striking ``10'' and inserting 
     ``15''.
       (3) Transportation of minors.--Section 2423 of title 18, 
     United States Code, is amended--
       (A) in subsection (a), by striking ``ten'' and inserting 
     ``15''; and
       (B) in subsection (b), by striking ``10'' and inserting 
     ``15''.
       (c) Amendment of Sentencing Guidelines.--Pursuant to the 
     authority granted to the United States Sentencing Commission 
     under section 994(p) of title 28, United States Code, the 
     United States Sentencing Commission shall--
       (1) review the Federal Sentencing Guidelines relating to 
     chapter 117 of title 18, United States Code; and
       (2) upon completion of the review under paragraph (1), 
     promulgate such amendments to the Federal Sentencing 
     Guidelines as are necessary to provide for the amendments 
     made by this section.

     SEC. 8. CLARIFICATION OF DEFINITION OF DISTRIBUTION OF 
                   PORNOGRAPHY.

       Pursuant to the authority granted to the United States 
     Sentencing Commission under section 994(p) of title 28, 
     United States Code, the United States Sentencing Commission 
     shall--
       (1) review the Federal Sentencing Guidelines relating to 
     the distribution of pornography covered under chapter 110 of 
     title 18, United States Code, relating to the sexual 
     exploitation and other abuse of children; and
       (2) upon completion of the review under paragraph (1), 
     promulgate such amendments to the Federal Sentencing 
     Guidelines as are necessary to clarify that the term 
     ``distribution of pornography'' applies to the distribution 
     of pornography--
       (A) for monetary remuneration; or
       (B) for a nonpecuniary interest.

     SEC. 9. DIRECTIVE TO THE UNITED STATES SENTENCING COMMISSION.

       In carrying out this Act, the United States Sentencing 
     Commission shall--
       (1) with respect to any action relating to the Federal 
     Sentencing Guidelines subject to this Act, ensure reasonable 
     consistency with other guidelines of the Federal Sentencing 
     Guidelines; and
       (2) with respect to an offense subject to the Federal 
     Sentencing Guidelines, avoid duplicative punishment under the 
     guidelines for substantially the same offense.

     SEC. 10. AUTHORIZATION FOR GUARDIANS AD LITEM.

       (a) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Department of Justice, for the 
     purpose specified in subsection (b), such sums as may

[[Page S5620]]

     be necessary for each of fiscal years 1998 through 2001.
       (b) Purpose.--The purpose specified in this subsection is 
     the procurement, in accordance with section 3509(h) of title 
     18, United States Code, of the services of individuals with 
     sufficient professional training, experience, and familiarity 
     with the criminal justice system, social service programs, 
     and child abuse issues to serve as guardians ad litem for 
     children who are the victims of, or witnesses to, a crime 
     involving abuse or exploitation.

     SEC. 11. APPLICABILITY.

       This Act and the amendments made by this Act shall apply to 
     any action that commences on or after the date of enactment 
     of this Act.
                                  ____

                                               National Center for


                               Missing and Exploited Children,

                                       Arlington, VA, May 2, 1997.
     Hon. Russell D. Feingold,
     Senate Judiciary Committee, Subcommittee on the Constitution, 
         Federalism and Property Rights, Washington, DC.
       Dear Senator Feingold: I am writing on behalf of the 
     National Center for Missing and Exploited Children to 
     formally express our support for your leadership in 
     addressing child sexual exploitation using the Internet. The 
     legislation you have proposed will go far to strengthen 
     penalties for offenders and provide justice for child 
     victims.
       This bill will strengthen federal penalties for those 
     individuals who prey sexually on children and will assure 
     that the enhanced penalties will apply across the board, so 
     offenders don't slip through the cracks of the system and 
     serve one short sentence after another. This piece of 
     legislation will also accomplish the important goal of 
     providing authorization for the appropriation of federal 
     funds to the guardian ad litem program. This program permits 
     judges to appoint court guardians to a child victim or 
     witness, to insure that the child's interests and concerns 
     are considered. Unfortunately, the program is rarely 
     utilized, due solely to a lack of funding. This bill would 
     work towards changing that, and providing victimized children 
     with an ally in the courtroom. The components of this 
     legislation are well-researched, comprehensive, and narrowly 
     focused to achieve its specific and laudable aims.
       The National Center for Missing and Exploited Children 
     spearheads nationwide efforts to locate and recover missing 
     children, and raise public awareness about ways to prevent 
     child abduction, molestation and sexual exploitation. As you 
     continue your work in support of children and others 
     victimized by criminal offenders, please do not hesitate to 
     contact us if we can be of assistance in any way.
       Again, we strongly commend your efforts, and urge other 
     members of the U.S. Senate and Senate Judiciary Committee to 
     join you. Thank you again for your dedication to the 
     interests of America's criminal victims, and feel free to 
     contact me in the future.
           Sincerely,
                                                      Ernie Allen,
                                                    President/CEO.
                                 ______
                                 
      By Mr. KEMPTHORNE:
  S. 901. A bill to provide Federal tax incentives to owners of 
environmentally sensitive lands to enter into conservation easements 
for the protection of habitat; to amend the Internal Revenue Code of 
1986 to allow a deduction from the gross estate of a decedent in an 
amount equal to the value of real property subject to an endangered 
species conservation agreement; and for other purposes; to the 
Committee on Finance.


     THE ENDANGERED SPECIES CONSERVATION TAX INCENTIVES ACT OF 1997

  Mr. KEMPTHORNE. Mr. President, I am introducing today legislation 
which is intended to provide tax incentives for private property owners 
who wish to participate in the conservation of land for the 
preservation of endangered, threatened and other species.
  For too long the Federal Government has used its enforcement 
procedures and its regulatory authority to dictate conservation in aid 
of endangered and threatened species. This method has failed to produce 
the kind of results we want. The Endangered Species Act as currently 
written is almost all stick and no carrot. I would like to begin to 
change that today.
  For 18 months I have worked on a bill to reauthorize the Endangered 
Species Act. Currently, I am in negotiations with the Democrats and the 
Administration on a bill that will provide a variety of incentives to 
property owners to preserve habitat through conservation agreements and 
plans, prelisting agreements and other preservation tools.
  I also have a number of ideas on how to provide tax incentives to 
private property owners to preserve habitat. Because of the opportunity 
presented by the budget reconciliation bill, I have suggested to the 
Finance Committee three of the many options I will later propose in a 
companion bill to the ESA reauthorization. Those three options are 
included in the legislation that we are introducing today.
  Let me emphasize that inclusion of these new tax incentives will 
truly benefit both species and people. I've met with many property 
owners who have said, ``we would be happy to step forward and preserve 
habitat for species and we would grant a conservation easement if there 
was an incentive.'' Well with adoption of the ideas included in this 
bill there will be.
  I have had critics that have said that we should not provide these 
kinds of incentives to private property owners because we'll have too 
many people coming forward and saying, ``I have an endangered species 
on my land.'' What is wrong with that? To my mind, that would be a 
welcome reversal from the current prevailing attitude that some have 
about the presence of an endangered species on their property. Right 
now you have a situation that some land owners believe that if they do 
have an endangered species, or if it is suggested that they might, 
they're just as likely to try to remove the habitat to avoid a problem 
down the road. We need to change that attitude if we're going to 
recover endangered species.
  We are currently at the crossroads of two systems. One where you have 
government overregulation that tells people what they can and cannot do 
on their land, and the other a system that encourages property owners 
to step forward and do something good for species because it's good for 
you too.
  We can depend on our property owners to do what's right and what's 
good for species. I know that our farmers and ranchers know how to be 
innovative and creative. They know how to help species. And they know 
how to manage land.
  The right system is one where we encourage active involvement of 
landowners through incentives. Certainly, I know that if I were an 
endangered species, I would much rather have a friendly and willing 
landlord--one that viewed me as an asset--than a reluctant one who 
viewed me as a threat and a liability because of some bureaucrats and 
regulations handed down from Washington, DC.
  That's what this legislation will do. It's going to make the people 
active partners.
  Later, when I introduce bipartisan legislation to reauthorize the 
Endangered Species Act I will also introduce a companion bill with 
additional new ideas to promote conservation through incentives. But as 
you know Mr. President, the key to legislating is idea and opportunity. 
We should take advantage of the opportunities presented by the budget 
reconciliation bill to help both private property owners and our 
endangered and threatened species. We can do both.
                                 ______
                                 
      By Mrs. BOXER:
  S. 902. A bill to require physicians to provide certain men with 
information concerning prostate specific antigen tests and to provide 
for programs of research on prostate cancer; to the Committee on Labor 
and Human Resources.


               the prostate testing full information act

  Mrs. BOXER. Mr. President, today, I introduce the Prostate Testing 
Full Information Act. In a series of town meetings in my State of 
California, I brought together the top prostate cancer experts in the 
State, the head of the urology branch at the National Cancer Institute, 
and prostate cancer survivors to discuss what can be done to aid in the 
fight against this disease.
  The statistics on prostate cancer are alarming. Based on current U.S. 
rates, about 19 of every 100 men born today will be diagnosed with 
prostate cancer during their lifetime, while approximately 4 of every 
100 men will die from the disease. Between 1973 and 1993, the rate of 
new cases of prostate cancer rose by 173 percent. During 1997, 
approximately 370,000 new cases will be diagnosed and more than 40,000 
men will die of prostate cancer.
  This bill will require physicians, at the time they perform a 
prostate examination on men over the age of 50, to inform the patient 
of the availability of the prostate specific antigen [PSA] test and 
other appropriate diagnostic procedures.
  In addition, the bill increases prostate cancer research funding at 
the National Institutes of Health and the Agency for Health Care Policy 
and Research.
  I urge my colleagues to join me in cosponsoring this important 
legislation.

[[Page S5621]]

  I ask unanimous consent that the text of the legislation be included 
in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 902

       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 ``Prostate Testing Full 
     Information Act''.

     SEC. 2. REQUIREMENT RELATING TO CERTAIN PHYSICIANS.

       (a) Requirement.--If a covered physician, during a physical 
     examination, examines the prostate gland of a patient, the 
     physician shall provide information to the patient concerning 
     the availability of appropriate diagnostic procedures, 
     including the prostate antigen test, if any of the following 
     conditions are present:
       (1) The patient is over 50 years of age.
       (2) The patient manifests clinical symptomatology.
       (3) The patient is at an increased risk of prostate cancer.
       (4) The provision of the information to the patient is 
     medically necessary, in the opinion of the physician.
       (b) Enforcement.--The Secretary of Health and Human 
     Services shall promulgate regulations that--
       (1) require the reporting of covered physicians that 
     violate subsection (a) to the Secretary; and
       (2) provide for the application of sanctions to enforce the 
     provisions of subsection (a).
       (c) Definition.--In this section, the term ``covered 
     physician'' means a physician as defined in section 1861(r) 
     of the Social Security Act (42 U.S.C. 1395x(r)) who has 
     received any Federal payment or assistance under any program 
     under--
       (1) the Public Health Service Act (42 U.S.C. 201 et seq.); 
     or
       (2) the Social Security Act (42 U.S.C. 301 et seq.).

     SEC. 3. AMENDMENTS TO 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 (as 
     added by section 603(a) of the Newborns' and Mothers' Health 
     Protection Act of 1996 and amended by section 702(a) of the 
     Mental Health Parity Act of 1996) is amended by adding at the 
     end the following:

     ``SEC. 713. REQUIREMENT RELATING TO PROSTATE SPECIFIC ANTIGEN 
                   TEST.

       ``(a) Requirement.--If a physician, during a physical 
     examination, examines the prostate gland of a patient, the 
     physician shall provide information to the patient concerning 
     the availability of appropriate diagnostic procedures, 
     including the prostate antigen test, if any of the following 
     conditions are present:
       ``(1) The patient is over 50 years of age.
       ``(2) The patient manifests clinical symptomatology.
       ``(3) The patient is at an increased risk of prostate 
     cancer, as determined pursuant to regulations promulgated by 
     the Secretary of Health and Human Services.
       ``(4) The provision of the information to the patient is 
     medically necessary, in the opinion of the physician.
       ``(b) Prohibition on Limitation.--The provision of 
     information in accordance with subsection (a) may not be 
     prohibited under the terms of--
       ``(1) any written contract or written agreement between the 
     physician and any group health plan, any health insurance 
     issuer providing health insurance coverage in connection with 
     a group health plan, or any related party with respect to a 
     group health plan; or
       ``(2) any written statement from the plan, issuer, or 
     related party to the physician.
       ``(c) Rule of Construction.--Nothing in this section shall 
     be construed as requiring a group health plan or a health 
     insurance issuer providing health insurance coverage in 
     connection with a group health plan to provide coverage for 
     prostate specific antigen tests.
       ``(d) Definition.--In this section, the term `physician' 
     has the meaning given such term in section 1861(r) of the 
     Social Security Act (42 U.S.C. 1395x(r)).''.
       (b) Clerical Amendment.--The table of contents in section 1 
     of such Act, as amended by section 603 of the Newborns' and 
     Mothers' Health Protection Act of 1996 and section 702 of the 
     Mental Health Parity Act of 1996, is amended by inserting 
     after the item relating to section 712 the following new 
     item:

``Sec. 713. Requirement relating to prostate specific antigen test.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply with respect to plan years beginning on or after 
     January 1, 1998.

     SEC. 4. AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT RELATING 
                   TO THE GROUP MARKET.

       (a) In General.--Subpart 2 of part A of title XXVII of the 
     Public Health Service Act (as added by section 604(a) of the 
     Newborns' and Mothers' Health Protection Act of 1996 and 
     amended by section 703(a) of the Mental Health Parity Act of 
     1996) is amended by adding at the end the following new 
     section:

     ``SEC. 2706. REQUIREMENT RELATING TO PROSTATE SPECIFIC 
                   ANTIGEN TEST.

       ``(a) Requirement.--If a physician, during a physical 
     examination, examines the prostate gland of a patient, the 
     physician shall provide information to the patient concerning 
     the availability of appropriate diagnostic procedures, 
     including the prostate antigen test, if any of the following 
     conditions are present:
       ``(1) The patient is over 50 years of age.
       ``(2) The patient manifests clinical symptomatology.
       ``(3) The patient is at an increased risk of prostate 
     cancer, as determined pursuant to regulations promulgated by 
     the Secretary of Health and Human Services.
       ``(4) The provision of the information to the patient is 
     medically necessary, in the opinion of the physician.
       ``(b) Prohibition on Limitation.--The provision of 
     information in accordance with subsection (a) may not be 
     prohibited under the terms of--
       ``(1) any written contract or written agreement between the 
     physician and any group health plan, any health insurance 
     issuer providing health insurance coverage in connection with 
     a group health plan, or any related party with respect to a 
     group health plan; or
       ``(2) any written statement from the plan, issuer, or 
     related party to the physician.
       ``(c) Rule of Construction.--Nothing in this section shall 
     be construed as requiring a group health plan or a health 
     insurance issuer providing health insurance coverage in 
     connection with a group health plan to provide coverage for 
     prostate specific antigen tests.
       ``(d) Definition.--In this section, the term `physician' 
     has the meaning given such term in section 1861(r) of the 
     Social Security Act (42 U.S.C. 1395x(r)).''.
       (b) Effective Date.--The amendments made by this section 
     shall apply with respect to group health plans for plan years 
     beginning on or after January 1, 1998.

     SEC. 5. AMENDMENT TO THE PUBLIC HEALTH SERVICE ACT RELATING 
                   TO THE INDIVIDUAL MARKET.

       (a) In General.--Subpart 3 of part B of title XXVII of the 
     Public Health Service Act (as added by section 605(a) of the 
     Newborn's and Mother's Health Protection Act of 1996) is 
     amended by adding at the end the following new section:

     ``SEC. 2752. REQUIREMENT RELATING TO PROSTATE SPECIFIC 
                   ANTIGEN TEST.

       ``The provisions of section 2706 shall apply to health 
     insurance coverage offered by a health insurance issuer in 
     the individual market in the same manner as they apply to 
     health insurance coverage offered by a health insurance 
     issuer in connection with a group health plan in the small or 
     large group market.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply with respect to health insurance coverage 
     offered, sold, issued, renewed, in effect, or operated in the 
     individual market on or after January 1, 1998.

     SEC. 6. RESEARCH AND EDUCATION REGARDING PROSTATE CANCER; 
                   CERTAIN PROGRAMS OF THE PUBLIC HEALTH SERVICE.

       (a) National Institutes of Health.--Section 417B(c) of the 
     Public Health Service Act (42 U.S.C. 286a-8(c)) is amended in 
     the first sentence by striking ``$72,000,000'' and all that 
     follows and inserting the following: ``$90,250,000 for fiscal 
     year 1998, $108,500,000 for fiscal year 1999, $126,500,000 
     for fiscal year 2000, and $145,000,000 for fiscal year 
     2001.''.
       (b) Agency for Health Care Policy and Research.--Section 
     902 of the Public Health Service Act (42 U.S.C. 299a) is 
     amended by adding at the end the following:
       ``(f) Activities Regarding Prostate Cancer.--The 
     Administrator shall, with respect to prostate cancer--
       ``(1) conduct and support research on the outcomes, 
     effectiveness, and appropriateness of health services and 
     procedures; and
       ``(2) in carrying out section 912(a), provide for the 
     development, periodic review, and updating of clinically 
     relevant guidelines, standards of quality, performance 
     measures, and medical review criteria.''.

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