Congressional Record, Volume 143 Issue 82 (Thursday, June 12, 1997)

[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

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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

``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.''.

____________________