[Congressional Record Volume 143, Number 148 (Wednesday, October 29, 1997)]
[Senate]
[Pages S11343-S11364]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. LIEBERMAN:
  S. 1329. A bill to prohibit the taking of certain lands by the United 
States in trust for economically self-sufficient Indian tribes for 
commercial and gaming purposes, and for other purposes; to the 
Committee on Indian Affairs.


               THE INDIAN TRUST LANDS REFORM ACT OF 1997

  Mr. LIEBERMAN. Mr. President, I rise today to introduce legislation 
aimed at returning some common sense to one aspect of the Federal 
Government's Indian lands policies. My bill, the Indian Trust Lands 
Reform Act of 1997, arises out of a problem Connecticut and other 
States have been struggling with for the last few years.
  The bill would amend the Indian Reorganization Act of 1934 to 
reinforce its original purpose: helping Indian tribes and individual 
Indians to hold on to or obtain land they need to survive economically 
and become self-sufficient. Congress passed the 1934 act after the 
landholdings of some tribes had dwindled down to acres. Tribes and 
their members were selling and losing land to foreclosures, tax 
arrearages, and the like. The 1934 act gave the Secretary of the 
Interior the authority needed to help tribes hold on to or acquire land 
on which they could earn a living and, further, to hold those lands in 
trust for them so they would not be sold or otherwise lost. Once the 
United States takes land into trust for a tribe through this process, 
the land becomes part of the tribe's sovereign property. This means 
that State and local governments no longer have jurisdiction over the 
land, and the land is removed from those governments' tax, zoning, and 
police powers.
  Economic conditions for some tribes have improved since 1934 through 
a variety of commercial, agricultural, and other enterprises, but many 
are still struggling. Few could be described as rich or even 
comfortable; far too many still live in poverty. The 1934 act should 
remain available to help those tribes who still need assistance from 
the Federal Government in attaining economic self-sufficiency.
  As our experience in Connecticut has shown, however, that act is now 
being used to achieve goals far removed from its original purpose. As a 
result of the Indian Gaming Regulatory Act of 1988, many tribes have 
established casinos and gambling operations, and, although gaming has 
not brought riches to many of those tribes, some have been very 
successful, particularly in my home State. One of the most successful 
gambling casinos in the country is located in eastern Connecticut and 
is owned and operated by the Mashantucket Pequot Tribe. The success of 
the tribe's Foxwoods Casino has been well chronicled. Established in 
1992, the casino has been open 24 hours a day, 7-days a week ever 
since. Whatever one thinks about the Indian Gaming Regulatory Act or 
gambling, either morally or as a vehicle for economic growth, the 
Mashantucket Pequots seized the opportunity presented to them by the 
Indian Gaming Act. They have developed an extraordinarily successful, 
well-run casino in record time. Annual casino revenues for the 500-
member tribe reportedly approach $1 billion. By any measure, the tribe 
has become very wealthy.
  Given the tribe's tremendous financial success, it is not at all 
surprising that it has decided to buy more land near its reservation in 
order to expand and diversify its businesses. According to press 
accounts, the tribe owns over 3,500 acres outside of the boundaries of 
its reservation, in addition to the approximately 1,320 acres that is 
held in trust on its behalf within the reservation. The tribe is now 
the largest private landowner in southeastern Connecticut. It already 
runs several hotels outside of its reservation's boundaries, and tribal 
leaders have at various times talked of building a massive theme park 
and golf courses on its off-reservation land.
  The tribe owns its land in fee simple and so is free to develop it 
like any other property owner might. But unlike other property owners--
who must develop their land in compliance with State and local zoning 
laws and who

[[Page S11344]]

must pay taxes on the land and on the businesses conducted on the 
land--the tribe has claimed it has the option, under the 1934 act, to 
ask the Department of the Interior to take that land in trust on the 
tribe's behalf, thereby removing the land from all State and local 
jurisdiction. This is an option because the Department of Interior 
interprets the 1934 act as being available, with limitations, to all 
federally recognized tribes, regardless of whether the tribe's 
situation bears any resemblance to the conditions that originally 
spurred Congress to enact the 1934 provisions.
  And, this is an option the Mashantucket Pequots have exercised. In 
1992, the Department of Interior granted the tribe's request to take 
into trust approximately 20 acres located outside the tribe's 
reservation boundaries in the neighboring towns of Ledyard and Preston. 
In January 1993, the tribe filed another application, this one to have 
an additional 248 off- reservation acres taken in trust. The affected 
towns of Ledyard, North Stonington, and Preston challenged that 
request. Nevertheless, the Department of Interior granted that request 
in May 1995, subject to certain conditions regarding the land's 
development--a decision the towns and the Connecticut attorney general 
are challenging in Federal court. In March 1993, the tribe applied to 
have 1,200 more off-reservation acres taken in trust. That request was 
sent back to the tribe because of legal deficiencies in the 
application, but reapplication by the tribe is expected, and past 
statements by tribal leaders suggest that more applications may be 
filed in the future.
  The effect of the tribe's and the Department of Interior's decisions 
involving off-reservation lands has been unsettling, to say the least, 
on the tribe's neighbors--the residents of the small towns that border 
the reservation. Once the United States takes land into trust on behalf 
of a tribe, as it has attempted to do here, boundaries change 
permanently. The land is no longer within the jurisdiction of the State 
or local governments. It is not subject to local zoning, land-use or 
environmental controls. Taxes cannot be collected on the land or on any 
business operated on the land. And State and local governments may 
exercise no police powers on the land unless invited by the tribe to do 
so.

  The plight of the towns surrounding the Mashantucket Pequot lands 
show that these problems are not just theoretical. Ledyard, North 
Stonington, and Preston are small communities whose combined population 
is about 25,000--less than half the number of visitors the Foxwoods 
Casino receives on a typical summer weekend. The towns have a combined 
annual tax revenue of approximately $25 million--less than half the 
amount of revenue the casino's slot machines generate in 1 month alone. 
Obviously, towns of this size cannot absorb a business of this size 
without there being any consequences. As a result of the Casino's 
success, the character of the towns has been permanently altered, and 
the costs of local government--from crime prevention to road 
maintenance to countless other things--have increased, all at the same 
time that the 1934 act has precluded the towns from exercising zoning 
and other controls and from collecting taxes to help defray the newly 
imposed costs.
  Given the financial resources of the tribe and the apparent 
willingness of the Department of Interior to take land into trust on 
their behalf regardless of any evidence that the tribe needs additional 
trust lands, many residents wonder where this will lead. I question the 
policy justification for the United States to change the boundaries of 
three Connecticut towns unilaterally so that an extraordinarily wealthy 
tribe--this one or any other --can expand its gaming or other business 
enterprises, free of taxes and local land-use controls, particularly 
when that tribe is perfectly capable of expanding its businesses on the 
thousands of trust and nontrust acres it presently owns. I question 
whether Congress--which enacted the 1934 act ``to provide for the 
acquisition, through purchase, of land for Indians, now landless, who 
are anxious to make a living on such land * * * '' and ``to meet the 
needs of landless Indians and of Indian individuals whose landholdings 
are insufficient for self-support'' (Senate Report No. 1080, 73d 
Congress, 2d Session 1-2 (1934))--intended in 1934 that the law would 
be used in this fashion.
  The authority for the Department of Interior to grant the tribe's 
request is now subject to review in the courts. The courts will have to 
decide whether the 1934 act even applies to this tribe and, if so, 
whether the Secretary acted properly. The courts will have to decide as 
well whether the 1983 Mashantucket Pequot Settlement Act independently 
prohibits trust acquisition by the tribe outside of reservation 
boundaries and whether the trust acquisition complied with applicable 
Federal environmental laws.
  To avoid future disputes and controversy, my bill would amend the 
Indian Reorganization Act to return to its original purpose. It would 
prohibit the Secretary of Interior from taking any lands located 
outside of the boundaries of an Indian reservation into trust on behalf 
of an economically self-sufficient Indian tribe, if those lands are to 
be used for gaming or any other commercial purpose. It directs the 
Secretary of Interior to determine, after providing opportunity for 
public comment, whether a tribe is economically self-sufficient and to 
develop regulations setting forth the criteria for making that 
determination generally. Among the criteria that the Secretary must 
include in those regulations to assess economic self-sufficiency are 
the income of the tribe, as allocated among members and compared to the 
per capita income of citizens of the United States, as well as the role 
that the lands at issue will play in the tribe's efforts to achieve 
economic self-sufficiency. May I note that I understand that some 
tribes do not have reservations in the traditional sense, and so the 
language of this bill will have to be adjusted in the future to address 
the situation of those tribes.
  In short, my bill is very narrow in scope, aimed solely at ensuring 
that the Department of Interior's awesome power to remove lands from 
State and local authority is used only in accordance with the original 
intent of the 1934 Act. The bill would not impose any restrictions on 
the Department's authority to take on-reservation land into trust. It 
would not affect the ability of the Secretary to assist tribes that 
genuinely need additional land--whether on or off their reservations--
in order to move toward or attain economic self-sufficiency. It would 
not even affect the ability of the Department of Interior to take into 
trust off-reservation land for wealthy tribes needing the land for non-
commercial purposes. The bill contains explicit exemptions for the 
establishment of initial reservations for Indian tribes, whether 
accomplished through recognition by the Department of Interior or by an 
act of Congress, and in circumstances where tribes once recognized by 
the Federal Government are restored to recognition. And, of course, it 
does not impact the ability of wealthy tribes to buy as much land as 
they want for whatever purpose they want it. The only thing my bill 
does do is to require tribes who are economically self-sufficient and 
who wish to engage in commercial activity outside of their 
reservation's boundaries to do so in compliance with the same local 
land-use and tax laws applied to every other land holder.
  Mr. President, many residents of Connecticut applaud the success that 
the Mashantucket Pequot Tribe has had with its Foxwoods Casino. The 
tribe employs thousands of Connecticut residents in an area of the 
State that was hard hit by a lingering recession and cuts in defense 
spending. The tribe's plans for economic development of the region, 
while not universally liked, have many in the area genuinely excited 
about future opportunities.
  I have discovered though that even among residents cheered by the 
tribe's success and supportive of its plans, there is a strong sense of 
unfairness about how the land in trust process is being used. They 
believe there is no reason why this tribe, or any other in a similar 
situation, needs to have the U.S. Government take additional, 
commercial land in trust on the tribe's behalf outside of its 
reservation boundaries. What is at stake here, after all, is not 
preserving a culture or achieving self-sufficiency, but expansion of an 
already successful business on lands that are owned by the tribe and 
developable by them, as they would be by any other

[[Page S11345]]

landowner. Extra help is simply not needed, and continuing to grant it 
is not fair and, in my view, ultimately counterproductive for all 
involved.
  It is time for Congress to make this common-sense clarification in 
the law. I urge my colleagues to join me in supporting this 
legislation, and ask unanimous consent that the text of the bill appear 
in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1329

       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 ``Indian Trust Lands Reform 
     Act of 1997''.

     SEC. 2. PROHIBITION AGAINST TAKING CERTAIN LANDS IN TRUST FOR 
                   AN INDIAN TRIBE.

       Section 5 of the Act of June 18, 1934 (commonly known as 
     the ``Indian Reorganization Act of 1934'') (48 Stat. 985; 25 
     U.S.C. 465) is amended--
       (1) by striking the section designation and inserting 
     immediately preceding the first undesignated paragraph the 
     following:

     ``SEC. 5. ACQUISITION OF LANDS.'';

       (2) in the first undesignated paragraph, by striking ``The 
     Secretary of the Interior'' and inserting the following:
       ``(a) In General.--Except as provided in subsection (b), 
     the Secretary of the Interior'';
       (3) in the undesignated paragraph following subsection (a), 
     as redesignated, by striking ``For the'' and inserting the 
     following:
       ``(d) Authorization of Appropriations.--For the'';
       (4) in the undesignated paragraph following subsection (d), 
     as redesignated, by striking ``The unexpended'' and inserting 
     the following:
       ``(e) Availability of Unexpended Balances.--The 
     unexpended'';
       (5) in the undesignated paragraph following subsection (e), 
     as redesignated, by striking ``Title to'' and inserting the 
     following:
       ``(f) Exemption From Taxation.--Title to''; and
       (6) by inserting after subsection (a) the following:
       ``(b) Prohibition.--
       ``(1) In general.--Except with respect to lands described 
     in subsection (c), the Secretary of the Interior may not 
     take, in the name of the United States in trust, for use for 
     any commercial purpose (including gaming, as that term is 
     used in the Indian Gaming Regulatory Act (25 U.S.C. 2701 et 
     seq.)) by an economically self-sufficient Indian tribe, any 
     land that is located outside of the reservation of that 
     Indian tribe as of the date of enactment of the Indian Trust 
     Lands Reform Act of 1997.
       ``(2) Determination of economic self-sufficiency.--
       ``(A) In general.--The Secretary of the Interior shall, 
     after providing notice and an opportunity for public comment, 
     determine whether an Indian tribe is economically self-
     sufficient for purposes of this subsection. The Secretary of 
     the Interior shall issue regulations pursuant to section 553 
     of title 5, United States Code, to prescribe the criteria 
     that shall be used to determine the economic self-sufficiency 
     of an Indian tribe under this subsection.
       ``(B) Criteria.--The criteria described in subparagraph (A) 
     shall include--
       ``(i) a comparison of the per capita allocation of the 
     gross annual income of an Indian tribe (including the income 
     of all tribal enterprises of the Indian tribe) among members 
     of the Indian tribe with the per capita annual income of 
     citizens of the United States; and
       ``(ii) the potential contribution of the lands at issue as 
     trust lands toward efforts of the Indian tribe involved to 
     achieve economic self-sufficiency.
       ``(c) Treatment of Certain Lands.--Subsection (b) shall not 
     apply--
       ``(1) with respect to any lands that are taken by the 
     Secretary of the Interior in the name of the United States in 
     trust, for the establishment of an initial reservation for an 
     Indian tribe under applicable Federal law, including the 
     establishment of an initial reservation by the Secretary of 
     the Interior in accordance with an applicable procedure of 
     acknowledgement of that Indian tribe, or as otherwise 
     prescribed by an Act of Congress; or
       ``(2) to any lands restored to an Indian tribe as the 
     result of the restoration of recognition of that Indian tribe 
     by the Federal Government.''.
                                 ______
                                 
      By Mr. McCAIN:
  S. 1331. A bill to amend title 49, United States Code, to enhance 
domestic aviation competition by providing for the auction of slots at 
slot-controlled airports, and for other purposes; to the Committee on 
Commerce, Science, and Transportation.


            the aviation competition enhancement act of 1997

  Mr. McCAIN. Mr. President, I am pleased to introduce the Aviation 
Competition Enhancement Act of 1997. This bill seeks, in a modest and 
rational fashion, to deregulate further our domestic aviation system, 
and to introduce additional competition in the airline industry for the 
benefit of travelers and communities.
  This legislation is intended to reduce barriers to airline 
competition, including those imposed by the government. Anticompetitive 
Federal restrictions in particular--restrictions such as slot controls 
and the perimeter rule at National Airport--are barriers to competition 
in a deregulated environment.
  The Department of Transportation [DOT], in a report released on 
October 22, 1997, reiterated its 1990 study on domestic competition, 
which demonstrated relatively high fares at network hubs dominated by 
one major carrier. In an April 1996 study, the DOT estimated that 
almost 40 percent of domestic passengers traveled in markets with low-
fare competition, saving consumers an estimated $6.3 billion annually 
in airline fares. As the Department states in its most recent report, 
``[i]ndeed, we concluded that virtually all of the domestic traffic 
growth and declines in average fares in recent years could be 
attributed to this growing form of competition.''
  The General Accounting Office [GAO] reported in October 1996 that 
barriers to market entry persist in the airline industry, and that 
access to airports continue to be impeded by, first, Federal limits on 
takeoff and landing slots at the major airports in Chicago, New York, 
and Washington; second, long-term exclusive-use gate leases; and third, 
perimeter rules prohibiting flights at airports that exceed a certain 
distance. In addition, according to GAO, several factors have limited 
entry at airports serving small- and medium-sized communities in the 
East and upper Midwest, including the dominance of routes to and from 
those airports by one or two established airlines. The GAO concluded 
that operating barriers such as slot controls at nearby hub airports, 
and incumbent airlines marketing strategies' have fortified those 
dominant positions.
  The National Commission to Ensure a Strong Competitive Airline 
Industry in 1993 recommended that the artificial limits imposed by 
slots either be removed or raised to the highest level consistent with 
safety. The Department of Transportation subsequently conducted a 
study, in which it found that eliminating slots would not affect safety 
and would result in increased competition. This bill, however, does not 
suggest that we eliminate slots.

  Mr. President, I would like to outline what the Aviation Competition 
Enhancement Act of 1997 does:
  Slot auction: The legislation mandates a slot allocation among new 
entrant and limited incumbent air carriers--air carriers that hold no 
more than 12 slots. The Secretary of Transportation is directed to 
create new slots where possible, and allocate unused slots.
  If it is not possible to create slots because of capacity and noise 
limitations, which are not affected by this bill, the Secretary must 
withdraw a limited number of slots--up to 10 percent initially, 5 
percent every 2 years following--that were grandfathered free-of-charge 
to the major air carriers in 1985 and that remain with those 
grandfathered carriers. The DOT cannot withdraw slots that are used to 
provide air service to under served markets. The withdrawn slots then 
will be auctioned among only the new entrant and limited incumbent air 
carriers.
  The process for obtaining slots would be as follows. A new entrant or 
limited incumbent air carrier would apply to the DOT for slots, 
proposing the markets to be served and the times requested. The DOT 
must approve the application if it determines that the carrier can 
operate the proposed service for at least 180 days, and that the 
service will improve the competitive environment. The DOT can return 
the request to the applicant for further information.
  While service to any city is eligible under this process, the DOT 
must prioritize applications that propose service between a high-
density airport, a slot-controlled airport--National, Kennedy, 
LaGuardia, and O'Hare, and a relatively small city.
  All slot auction proceeds would be deposited in the aviation trust 
fund. The legislation directs the DOT to institute action to ensure 
maximum slot usage, to tighten up the 80 percent use-

[[Page S11346]]

or-lose provisions, and to study the effect of the high-density rule on 
airline competition, and the impact of changes to the rule on safety.
  Complaints concerning predatory behavior: The legislation establishes 
a 90-day deadline for the DOT to respond to complaints of predatory 
behavior on the part of major air carriers.
  Exemptions to perimeter rule at National Airport: The bill mandates 
that the Secretary grant exemptions from the perimeter rule to an air 
carrier proposing to serve Washington National from points beyond the 
perimeter, if the carrier's proposal would, first, provide service with 
network benefits, and second, increase competition in multiple markets. 
The proposal stipulates that the Secretary should not approve 
applications that propose to trade under served markets within the 
perimeter for long-haul markets that are well served from the 
Washington region.

  The legislation would not affect the cap on the number of hourly 
operations at Washington National. The number of flights at National 
would not increase. Commercial aircraft operations at National Airport 
are limited to 37 takeoffs and landings per hour. This requirement 
stands independent of the perimeter rule. In addition, strict noise 
restrictions currently in place at National Airport would not be 
affected, nor would Federal Aviation Administration requirements 
ensuring that all aircraft flying into National, regardless of the time 
of day, meet the most stringent noise standards by the year 2000.
  All exemption operations would be limited to stage 3 aircraft. The 
legislation would require the DOT to certify periodically that noise, 
air traffic congestion, airport-related vehicular congestion, safety 
standards, and adequate air service to communities within the perimeter 
have not been degraded as a result of this exemption authority.
  The fact is that changes in the perimeter rule to allow some measure 
of flights outside the distance limit may very well reduce noise at 
National, as carriers replace older, short-hop aircraft with newer, 
longer range aircraft that are quieter. The next generation of long-
haul Boeing 737 aircraft, for instance, will offer increased range 
along with significantly less noise. In addition, a number of flight 
deck improvements represent safety features not found in the older 
aircraft.
  As a means of derailing efforts to reform the perimeter rule, some 
have impugned my motives, suggesting that my secret purpose is to 
convenience my own travel between Washington and Arizona. I find this 
charge wearisome and offensive. Even so, to allay these concerns, I 
have pledged not to take a nonstop flight from Washington National to 
Arizona should such an opportunity ever result from this legislation.
  This bill would result in more competition, with more convenient 
options and competitive air fares for travelers. It would not result in 
either increased noise or diminished safety. I believe that a service 
diversity and safety will be enhanced, as they always are in a 
competitive regime. The incumbent carriers should not be afraid of 
competition, or fear that their passengers will be taken away. This 
legislation would result in more competition and economical flights, 
which will allow more people to fly.
  Most of my colleagues know that I would prefer to get rid of the 
perimeter rule, as well as slot restrictions, in a manner consistent 
with safety. My efforts to do so over the past decade, however, have 
encountered extreme resistance. As a result, I have scaled back my 
original proposals significantly in an effort to address the concerns 
of airlines and others who will not let legislation of that magnitude 
pass. In turn, I ask that the protectors of the status quo recognize my 
legitimate concerns about competition, and fair access for all 
travelers to airports that make up a national aviation system, paid for 
by all taxpayers. I must say that all I have heard thus far from my 
opponents is that there is no problem.

  I do not assert that this bill represents a magical, painless 
solution. I do assert emphatically, however, that it is modest in 
nature, and that it is open to debate as the Congress moves forward on 
this and similar proposals. In the House of Representatives, Aviation 
Subcommittee Chairman Jimmy Duncan intends to introduce an aviation 
competition bill. Representative Duncan and I have worked together on a 
number of provisions, and will continue to do so as we proceed. I 
commend him for his effort and foresight. I can say the same for Senate 
Aviation Subcommittee Chairman Gorton, who has demonstrated exceptional 
interest and leadership in this area.
  In addition, I understand that several of my Commerce Committee 
colleagues, including Senators Hollings and Ford, are working on their 
own competition proposals. I believe that all of this activity is a 
clear indication that there is a problem with respect to domestic 
aviation competition. I look forward to working with my colleagues in a 
bipartisan fashion on a solution.
  Mr. GORTON. Mr. President, I would urge my colleagues to give their 
full attention and consideration to the Aviation Competition 
Enhancement Act of 1997 that Senator McCain has just introduced. I 
would also recognize Senator McCain for his tireless efforts to address 
barriers to competition in the airline industry, and to provide better 
air service for consumers. Senator McCain has devoted much time to 
consideration of this issue.
  Compettion is a hallmark of our Nation, and the benefits of 
competition are clear. Studies show time and again that competition 
improves products and services, and reduces costs to consumers. When 
possible, the Congress should do whatever is reasonable to enhance 
competition.
  Airline competition has proven beneficial. Since the airline industry 
was deregulated, fares have fallen, and service options have increased 
on average across all communities. The major carriers deserve credit 
for responding well to competitive challenges. In addition, many of the 
benefits of deregulation can be attributed to the entry of so called 
low-fair airlines into the marketplace. The low-fare airlines have 
increased competition, and have enabled more people to fly than ever 
before. Air traffic has grown as a result, and all predictions are that 
it will continue to grow steadily over the next several years..
  Although competition exists, there are also barriers to airline 
competition. The bill that Senator McCain has introduced today would 
loosen some of the anticompetitive Federal restrictions on the Nation's 
aviation system. These restrictions, such as slot controls and the 
perimeter rule at National Airport, inhibit competition. As a result, 
the benefits of deregulation have been limited in certain communities.
  I understand that changing the status quo by easing existing barriers 
is difficult. Airline businesses and services have evolved under these 
barriers. Airlines, airports, communities, and consumers have all grown 
accustomed to these barriers. This should not prevent us, however, from 
examining the adverse impacts of these barriers and exploring 
reasonable measures to remove them.
  I would also note that Senator McCain's bill would require the 
Department of Transportation to respond to complaints of predatory 
behavior on the part of major airlines within 90 days. There are 
numerous industry practices that warrant close scrutiny. Take for 
example computer reservation systems. Airline travelers usually buy 
tickets through travel agents, who almost always use a Computer 
Reservation System to determine what airline fares are available, and 
to make bookings. Each of the Computer Reservation Systems operating in 
the United States is entirely or predominately owned by one or more 
airlines or airline affiliates. This certainly gives these airlines and 
affiliates the ability to prejudice the competitive position of other 
airlines if not checked. Any airline that believes it is being 
subjected to predatory behavior deserves a timely response from the 
Department of Transportation.
  Again, I would urge my colleagues to take time from their busy 
schedules to consider Senator McCain's bill, and to provide their 
thoughts and insights on this important matter.
                                 ______
                                 
      By Mr. ENZI:
  S. 1332. A bill to amend title 28, United States Code, to recognize 
and protect State efforts to improve environmental mitigation and 
compliance

[[Page S11347]]

through the promotion of voluntary environmental audits, including 
limited protection from discovery and limited protection from 
penalties, and for other purposes; to the Committee on Environment and 
Public Works.


              the state environmental audit protection act

  Mr. ENZI. Mr. President, I rise today to introduce the State 
Environmental Audit Protection Act. It is a bill that would improve 
environmental quality across this Nation by enlisting the voluntary aid 
of people to seek out environmental problems and to correct violations 
using State environmental audit laws. This legislation would provide 
protection for those States that have fully debated the issue and after 
the debate, have chosen to enact aggressive and proactive environmental 
audit laws.
  First, I would like to explain briefly what an audit law is and how 
it works. State legislatures have chosen to enact many different kinds 
of audit laws with varying levels of incentives. It is important to 
note that audit laws are not all the same. This concept is apparently 
lost on those who try to mis-characterize every audit law in the most 
sinister and fearful terms. It is important that we recognize the 
difference.
  The purpose of audit laws are to provide incentives for regulated 
entities to search for and disclose environmental violations and to 
clean them up at their own expense. Entities cover all kinds of groups 
with operations that may have an effect on the environment, such as 
businesses, schools, hospitals, towns, and counties. The incentives can 
range from relief from penalties to protection of voluntarily gathered 
information. The incentives usually require full disclosure and due 
diligence in correcting violations. When there is protection of 
information, some States simply agree not to inspect based on 
disclosure of an audit, others go further by allowing that certain 
documents will not be used against the entity in enforcement actions.
  It is important to keep in mind when considering protection of 
documents that audits are conducted in good faith. By definition, any 
information that is compiled is voluntary and as such is above and 
beyond what is otherwise required by law. Following from that, any 
disclosures are a net gain above traditional enforcement.
  Consider for a moment, Mr. President, the decisions a small business 
faces with regard to its environmental performance. Many small 
businesses are already required to monitor and report certain emissions 
and audit protections do not cover those reports. But consider a 
business that is not on an inspection schedule and has no required 
emissions reporting. If that entity wants to review its performance 
under environmental laws, it would have to conduct a study. It would 
have to pay an auditor to come in and review its operations--that would 
be voluntary. Without audit protection, that business would take on a 
big risk--a risk big enough so that most small entities would never 
undertake a voluntary audit. The risk is that once they spend the money 
to review their activities, if they find a violation and report it, 
they face both fines and cleanup expenses. Furthermore, if they don't 
report it, they risk criminal activity by knowingly violating the law.
  Faced with the liabilities, without an audit law, most people would 
not voluntarily police themselves. The risks are too big. Folks choose 
instead to just take their chances and wait for the inspectors. After 
all, inspectors only visit 2 percent of all regulated entities anyway. 
Just 2 percent, Mr. President.
  How do we encourage the other 98 percent to really think about their 
environmental performance?
  Audit laws recognize good-faith efforts to improve environmental 
compliance. They encourage people to look for problems and know with 
assurance that they won't be penalized for their efforts.
  Today, Mr. President, 24 States have enacted some form of audit law; 
16 more have legislation pending. These laws have been on the books for 
several years in some States and I would point out--you don't see the 
examples of abuses that many claimed would occur during the State 
legislative debates.
  Wyoming is one of the States that has passed an audit law. I was the 
prime sponsor in that process during my time in the Wyoming State 
Senate. I studied examples and results from other States that had gone 
through the process. I worked closely with our State Department of 
Environmental Quality and with members of the regulated community. I 
worked with various resource and conservation groups in Wyoming and we 
crafted a bill that provides very reasonable incentives for people to 
review their operations and clean up the problems they find. We 
provided no criminal immunity or criminal privilege. We deferred to 
Federal laws wherever conflicts existed. There was a consensus. The 
bill made it out of committee unanimously and then passed the House and 
the Senate by more than a two-thirds majority.
  We had a vigorous debate in Wyoming. In the end, after all the public 
deliberation, we passed a reasonable bill. But it was a consensus of 
the legislators elected by the people of Wyoming. When I got to 
Washington, several States were meeting with the EPA. The EPA was using 
threats of overfiling and delayed approval of State enforcement 
programs. Overfiling means the EPA could use a document done at extra 
expense and exposure to a company in order to be sure there was no harm 
to the environment, only to find the EPA could use those documents as a 
road map for levying fines. The EPA wanted us to change the Wyoming 
law--in spite of repeated assertions from our own State attorney 
general that the law did not compromise our enforcement authority.
  Wyoming's scenario is not unique. Working with other States where 
this has happened has led me to offer this piece of legislation.
  The strange thing I find is that the EPA touts the value of audits. 
The concept has been trumpeted as part of their reinventing 
environmental regulation initiative and a final policy on audits was 
released in early 1996. Administrator Carol Browner called it, ``a 
policy that provides real incentives for industry and others to 
voluntarily identify and correct environmental violations.''
  President Clinton in his 1995 State of the Union Address, stressed 
the need for more common sense and fairness in our environmental 
regulations. He recognized the limitations of the command and control 
approach. He stated that ``Washington is not the source of all answers 
and that we should shift more decision-making authority from the 
Federal Government to States, tribes and local communities.''
  Apparently the EPA feels the States are not ready to handle audits. 
Apparently, Mr. President, State attorneys general are unable to verify 
with certainty that audit laws are reasonable. In its own astonishing 
way--and in seeming contradiction to its own objectives--the EPA 
remains opposed to State efforts to reinvent command and control 
through the use of audits.
  The problem with EPA's audit policy is that ordinary people do not 
want to use it. Big business will agree to negotiate with the EPA. They 
will enter into cooperative agreements and consent agreements because 
they have entire departments of environmental litigators.
  Small businesses don't have that. They don't trust the EPA. They see 
the EPA Office of Compliance Assistance trying to help them out, while 
Criminal Enforcement across the hall is concocting ways to put them in 
jail--and boy would those offices love to work together. The EPA has 
little accountability to folks at home. It is just too unpredictable. 
That is why people need statutory protection before they will take on 
the potential liability of audits.
  I would like to take a minute to explain my approach to the issue. 
The legislation I am introducing would provide a safe-harbor for State 
laws that fit within certain limits. It would not give any authority to 
any State unless they go through the full legislative process, 
including all of the local discussion and debate that entails. That is 
a critical part of this process and something we should recognize. The 
boundaries of the safe-harbor we create would describe what State laws 
may provide:
  Limited protection from discovery for audit information--but only 
information that is not required to be gathered. All legal reporting 
requirements

[[Page S11348]]

and permitting disclosures remain in effect and could not be covered by 
an audit privilege.
  A State audit law may provide limited protection from penalties if 
violations are promptly disclosed and cleaned up. Note, the protection 
will not cover criminal actions, and the law must preserve the ability 
of regulators to halt activities that pose imminent danger to public 
health.

  Third, if a State law falls within the safe-harbor, the EPA would be 
prohibited from withholding State enforcement authority or overfiling 
against individuals simply because of the State's audit law.
  Last, the bill would require an annual State performance report that 
will help measure the success of different laws, so we can see what 
works and what doesn't.
  I want to point out that this legislation will not dilute 
enforcement. There are safeguards to ensure that State audit laws 
always act to supplement--not to supplant--existing enforcement. It is 
important to note that. Audits are an affirmative tool. Used properly, 
they can only be used to improve environmental conditions above the 
status quo. They do not protect any entity from regular inspection or 
monitoring.
  The principle of audit incentives is simple and reasonable. It is no 
surprise to me that nearly half of our States have chosen to enact some 
form of audit legislation. It is a positive tool that helps people 
understand and comply with environmental laws. It gives people a chance 
to ask questions without being penalized. It gives them the chance to 
figure out what they are doing wrong and fix it--without adding steep 
penalties to the cost of compliance. This bill will put into law 
methods that have been tested and work.
  Mr. President, small business owners don't take time to read the 
layer after layer of byzantine regulations constructed by Washington 
lawyers. I know because my wife and I were small business owners for 26 
years. In a small business, the owner is the same one who counts the 
change, helps the customers and vacuums the floor.
  He or she has to stay in business, make payroll, and keep up with 
constantly evolving mandates from a never-ending supply of Federal 
attorneys. And while the small business owner has many jobs, these 
attorneys have only one job, to create and modify mandates and to 
investigate citizens. There are over 17,000 employees at the EPA and 
now, in spite of the rhetoric about reinventing regulations, they want 
funds for another 200 enforcement police.
  We don't need more police to improve environmental compliance--we 
need translators to interpret the regulations.
  But the fact is, the heavy-handed, command and control approach works 
well for the EPA--especially in Washington. Here I am beginning to see 
the process by which they protect and expand their regulatory 
supremacy. It is an artful combination of nebulous policies, and self-
defining authority. Taken from this perspective, the EPA clearly views 
any State audit laws as a direct assault on its unbridled jurisdiction 
and power.
  Shortly after promoting its own audit policy as a reinvention of 
regulation, the EPA was quick to remind that State audit laws ``would 
cause environmental programs delegated to states * * * to revert to 
national control at EPA.'' Since then, they have used their leverage to 
compel States to modify laws in accordance with the will of EPA 
guidelines.
  This absolute circumvention of the democratic process is astonishing 
to me. As a former State legislator, I think it is a tragedy that the 
EPA is denying States the chance to test reasonable and innovative 
solutions to a cleaner environment. Instead of promoting reinvention, 
the EPA is perpetuating an environmental race to mediocrity.
  Some of the people listening may wonder how Wyoming's audit law has 
fared. Well, Mr. President, I am proud to report that after repeated 
delays from the EPA on our title 5 clean air permits, and after threats 
to withdraw delegation of other programs--the EPA has finally decided 
that statutory changes may not be necessary in Wyoming's law, even 
though there remain problems to be worked out.
  At least, Mr. President, that's what they tell us today. They just 
might change their minds tomorrow. It is no wonder that Wyomingites are 
afraid to use our State audit law.
  I feel it is time we put this issue to rest by defining a ``safe-
harbor'' and giving State laws the certainty they need to be effective. 
I would encourage Members to take a look at this bill and to support 
it.
  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. 1332

       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 ``State Environmental Audit 
     Protection Act''.

     SEC. 2. FINDINGS

       Congress finds that--
       (1) consistent with the purpose of voluntary environmental 
     audits of enhancing United States environmental mitigation 
     efforts, it is in the interest of the United States to allow 
     and encourage States to enact and implement such incentive 
     programs as are consistent with the specific and respective 
     needs and situations of the States;
       (2) State environmental incentive laws should be allowed 
     and encouraged by the Federal government as a means of 
     enabling regulated entities to set minimum requirements in 
     environmental mitigation efforts by the entities;
       (3) a strong regulatory enforcement effort is necessary to 
     ensure compliance with Federal, State, and local laws that 
     protect the environment and public health;
       (4) the use of voluntary environmental audits, in 
     accordance with respective State laws, is intended to 
     supplement, not supplant, regulatory enforcement efforts to 
     improve the environmental compliance of regulated entities;
       (5) the protections offered by the amendments made by this 
     Act do not relieve regulated entities from the need to comply 
     with otherwise applicable requirements to disclose 
     information under Federal, State, or local environmental 
     laws; and
       (6)(A) law and regulatory policies provide ample precedent 
     for the constructive use of voluntary audits;
       (B) the final policy on the use of environmental audits (60 
     Fed. Reg. 66706) issued by the Administrator of the 
     Environmental Protection Agency--
       (i) provides incentives for conducting audits; and
       (ii) includes limited protection from discovery and 
     disclosure of audit information and discretionary relief from 
     an enforcement action for voluntary disclosure of violations;
       (C) Advisory Circular 120-56, issued by the Administrator 
     of the Federal Aviation Administration, commits to a policy 
     of cooperative problem-solving and use of self-evaluation 
     incentives as a means of enhancing aviation safety in the 
     commercial airline industry; and
       (D) the Equal Credit Opportunity Act (15 U.S.C. 1691 et 
     seq.) provides discovery protection for information developed 
     by creditors as a result of self-tests that are voluntarily 
     conducted to determine the level of compliance with that Act.

     SEC. 3. VOLUNTARY AUDIT PROTECTION.

       (a) In General.--Part VI of title 28, United States Code, 
     is amended by inserting after chapter 176 the following:

               ``CHAPTER 177--VOLUNTARY AUDIT PROTECTION

``Sec.
``3601. Recognition of State efforts to provide voluntary environmental 
              audit incentives.
``3602. Performance Report.
``3603. Definitions.

     ``Sec. 3601. Recognition of State efforts to provide 
       voluntary environmental audit incentives

       ``(a) Voluntary Environmental Audit Incentive Laws.--
       ``(1) Limited protection from discovery.--
       ``(A) In general.--Except as provided in subparagraph (C), 
     a State law may provide that a voluntary environmental audit 
     report, or a finding, opinion, or other communication related 
     to and constituting part of a voluntary environmental audit 
     report, shall not be--
       ``(i) subject to discovery or any other investigatory 
     procedure governed by Federal, State, or local law; or
       ``(ii) admissible as evidence in any Federal, State, or 
     local judicial action or administrative proceeding.
       ``(B) Testimony.--Except as provided in subparagraph (C), a 
     State law may provide that an entity, or an individual who 
     performs a voluntary environmental audit on behalf of the 
     entity, shall not be required to give testimony in any 
     Federal, State, or local judicial action or administrative 
     proceeding concerning the voluntary environmental audit.
       ``(C) Information not subject to protection.--The 
     protections described in subparagraphs (A) and (B) shall not 
     apply to any information that is otherwise required to be 
     disclosed under a Federal, State, or local law.

[[Page S11349]]

       ``(2) Limited protection for disclosure.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     a State law may provide that an entity that promptly 
     discloses information about noncompliance with a covered 
     Federal law, that is discovered as a result of a voluntary 
     environmental audit or through a compliance management 
     system, to an appropriate Federal, State, or local official 
     may be protected, in whole or in part, from an enforcement 
     action in a Federal, State, or local judicial or 
     administrative proceeding.
       ``(B) Disclosure not subject to protection.--A State law 
     described in subparagraph (A) shall not apply to 
     noncompliance with a covered Federal law that is--
       ``(i) not discovered voluntarily; or
       ``(ii) the result of a willful and knowing violation or 
     gross negligence by the entity disclosing the information.
       ``(b) Prohibited Federal Activities.--A Federal agency 
     shall not--
       ``(1) refuse to delegate enforcement authority under a 
     covered Federal law to a State or local agency or refuse to 
     approve or authorize a State or local program under a covered 
     Federal law because the State has in effect a voluntary 
     environmental audit incentive law;
       ``(2) make a permit, license, or other authorization, a 
     contract, or a consent decree or other settlement agreement 
     contingent on a person waiving any protection under a State 
     voluntary environmental audit incentive law; or
       ``(3) take any other action that has the effect of 
     requiring a State to rescind or limit any protection of a 
     State voluntary environmental audit incentive law.

     ``Sec. 3602. Performance report

       ``(a) In general.--Section 3601 shall not apply to a State 
     voluntary environmental audit incentive law unless the 
     appropriate State agency compiles and submits to appropriate 
     Federal agencies an annual report in accordance with this 
     section on the performance of the State voluntary 
     environmental audit incentive law during the previous 
     calendar year.
       ``(b) Provisions of Report.--The performance report shall 
     include--
       ``(1) the number of noncompliance disclosures that were 
     received by the State pursuant to the State voluntary 
     environmental audit incentive law, with an indication of the 
     noncompliance disclosures that were made by--
       ``(A) regulated entities that are normally inspected; and
       ``(B) regulated entities that are not on inspection 
     schedules;
       ``(2) the categories and sizes of regulated entities that 
     disclosed noncompliance problems pursuant to the State 
     voluntary environmental audit incentive law and a description 
     of the noncompliance problems that were disclosed;
       ``(3) the status of remediation undertaken by regulated 
     entities in the State to correct noncompliance problems that 
     were disclosed pursuant to the State voluntary environmental 
     audit incentive law; and
       ``(4) a certification from the State attorney general that 
     the State maintains the necessary regulatory authority to 
     carry out administration and enforcement of delegated 
     programs in light of the State voluntary environmental audit 
     incentive law.
       ``(c) Additional Information.--In addition to the 
     information required under subsection (b), the State agency 
     may include additional information in the annual performance 
     report that the State agency considers important to 
     demonstrate the performance of a State voluntary 
     environmental audit law.

     ``Sec. 3603. Definitions

       ``In this chapter:
       ``(1) Covered federal law.--
       ``(A) In general.--The term `covered Federal law' means--
       ``(i) the Federal Insecticide, Fungicide, and Rodenticide 
     Act (7 U.S.C. 136 et seq.);
       ``(ii) the Toxic Substances Control Act (15 U.S.C. 2601 et 
     seq.);
       ``(iii) the Federal Water Pollution Control Act (commonly 
     known as the `Clean Water Act') (33 U.S.C. 1251 et seq.);
       ``(iv) the Oil Pollution Act of 1990 (33 U.S.C. 2701 et 
     seq.);
       ``(v) the Safe Drinking Water Act (42 U.S.C. 300f et seq.);
       ``(vi) the Noise Control Act of 1972 (42 U.S.C. 4901 et 
     seq.);
       ``(vii) the Solid Waste Disposal Act (42 U.S.C. 6901 et 
     seq.);
       ``(viii) the Clean Air Act (42 U.S.C. 7401 et seq.);
       ``(ix) the Comprehensive Environmental Response, 
     Compensation, and Liability Act of 1980 (42 U.S.C. 9601 et 
     seq.);
       ``(x) the Emergency Planning and Community Right-To-Know 
     Act of 1986 (42 U.S.C. 11001 et seq.);
       ``(xi) the Pollution Prevention Act of 1990 (42 U.S.C. 
     13101 et seq.);
       ``(xii) the Endangered Species Act of 1973 (16 U.S.C. 1531 
     et seq.);
       ``(xiii) chapter 51 of title 49, United States Code;
       ``(xiv) section 13 or 16 of the Act entitled `An Act making 
     appropriations for the construction, repair, and preservation 
     of certain public works on rivers and harbors, and for other 
     purposes', approved March 3, 1899 (commonly known as the 
     `River and Harbor Act of 1899') (33 U.S.C. 407, 411);
       ``(xv) the Surface Mining Control and Reclamation Act of 
     1977 (30 U.S.C. 1201 et seq.); and
       ``(xvi) any other law enacted after the date of enactment 
     of this chapter that addresses subject matter similar to a 
     law listed in clauses (i) through (xv).
       ``(B) Inclusions.--The term `covered Federal law' 
     includes--
       ``(i) a regulation or other binding agency action issued 
     under a law referred to in subparagraph (A);
       ``(ii) the terms and conditions of a permit issued or other 
     administrative action taken under a law referred to in 
     subparagraph (A); and
       ``(iii) a State law that operates as a federally 
     enforceable law under a law referred to in subparagraph (A) 
     as a result of the delegation, approval, or authorization of 
     a State activity or program.
       ``(2) Enforcement action.--
       ``(A) In general.--The term `enforcement action' means a 
     civil or administrative action undertaken for the purpose of 
     imposing a penalty or any other punitive sanction, including 
     imposition of a restriction on providing to or receiving from 
     the United States or any State or political subdivision a 
     good, material, service, grant, license, permit, or other 
     approval or benefit.
       ``(B) Exclusion.--The term `enforcement action' does not 
     include an action solely for the purpose of seeking 
     injunctive relief to remedy a continuing adverse public 
     health or environmental effect of a violation.
       ``(4) Environmental compliance management system.--The term 
     `environmental compliance management system' means the 
     systematic effort of a person or government entity, 
     appropriate to the size and nature of the person or 
     government entity, to prevent, detect, and correct a 
     violation of a covered Federal law through--
       ``(A) a compliance policy, standard, or procedure that 
     identifies how an employee or agent shall meet the 
     requirements of the law;
       ``(B) assignment of overall responsibility for overseeing 
     compliance with policies, standards, and procedures, and 
     assignment of specific responsibility for ensuring compliance 
     at each facility or operation;
       ``(C) a mechanism for systematically ensuring that 
     compliance policies, standards, and procedures are being 
     carried out, including--
       ``(i) a monitoring or auditing system that is reasonably 
     designed to detect and correct a violation; and
       ``(ii) a means for an employee or agent to report a 
     violation of an environmental requirement without fear of 
     retaliation;
       ``(D) an effort to communicate effectively the standards 
     and procedures of the person or government entity to 
     employees and agents of the person or government entity;
       ``(E) an appropriate incentive to managers and employees of 
     the person or government entity to perform in accordance with 
     any compliance policy or procedure of the person or 
     government entity, including consistent enforcement through 
     an appropriate disciplinary mechanism; and
       ``(F) a procedure for--
       ``(i) the prompt and appropriate correction of any 
     violation of law; and
       ``(ii) making any necessary modifications to the standards 
     or procedures of the person or government entity to prevent 
     future violations of law.
       ``(5) Federal agency.--
       ``(A) In general.--The term `Federal agency' has the 
     meaning given the term `agency' in section 551 of title 5, 
     United States Code.
       ``(B) Inclusions.--The term `Federal agency' includes any 
     agency or instrumentality of an Indian Tribe with authority 
     to administer or enforce a covered Federal law.
       ``(6) Regulated entity.--
       ``(A) In general.--The term `regulated entity' means a 
     person regulated under a covered Federal law, including an 
     officer, agent, or employee of the person.
       ``(B) Exclusions.--The term `regulated entity' does not 
     include an entity owned or operated by a Federal or State 
     agency.
       ``(7) State agency.--The term `State agency' means an 
     agency or instrumentality of the executive branch of a State 
     or local government with the authority to administer or 
     enforce any covered Federal law, including an agency or 
     instrumentality of 2 or more States or local governments, 
     whether or not the localities are in different States.
       ``(8) Voluntary environmental audit.--The term `voluntary 
     environmental audit' means an assessment, audit, 
     investigation, or review that is--
       ``(A) initiated voluntarily by a regulated entity, 
     including an officer, agent, or employee of a regulated 
     entity, but not including a regulated entity owned or 
     operated by a State or Federal agency;
       ``(B) carried out by an employee of the person, or a 
     consultant employed by the person, for the purpose of 
     carrying out the assessment, evaluation, investigation, or 
     review; and
       ``(C) carried out in good faith for the purpose of 
     determining or improving compliance with, or liability under, 
     a covered Federal law, or to assess the effectiveness of an 
     environmental compliance management system.
       ``(9) Voluntary environmental audit report.--
       ``(A) In general.--The term `voluntary environmental audit 
     report' means a document prepared as a result of a voluntary 
     environmental audit.
       ``(B) Inclusions.--The term `voluntary environmental audit 
     report' includes--
       ``(i) a field note, draft, memorandum, drawing, photograph, 
     computer software, stored or electronically recorded 
     information, map, chart, graph, survey, analysis (including a

[[Page S11350]]

     laboratory result, instrument reading, or field analysis), 
     and other information pertaining to an observation, finding, 
     opinion, suggestion, or conclusion, if the information is 
     collected or developed for the primary purpose and in the 
     course of creating a voluntary environmental audit;
       ``(ii) a document prepared by an auditor or evaluator, 
     which may describe the scope of the evaluation, the 
     information learned, any conclusions or recommendations, and 
     any exhibits or appendices;
       ``(iii) an analysis of all or part of a voluntary 
     environmental audit or issues arising from the audit; and
       ``(iv) an implementation plan or tracking system that 
     addresses an action taken or to be taken by the owner or 
     operator of a facility as a result of a voluntary 
     environmental audit.''.
       (b) Conforming Amendment.--The table of chapters of part VI 
     of title 28, United States Code, is amended by inserting 
     after the item relating to chapter 176 the following:

``177. Voluntary Audit Protection...............................3601''.

     SEC. 4. ASSISTANCE FROM SMALL BUSINESS DEVELOPMENT CENTERS.

       Section 21(c)(3) of the Small Business Act (15 U.S.C. 
     648(c)(3)) is amended--
       (1) in subparagraph (Q), by striking ``and'' at the end;
       (2) in subparagraph (R), by striking the period at the end 
     and inserting ``; and''; and
       (3) by adding at the end the following:
       ``(S) assisting small businesses in complying with the 
     requirements necessary to receive protections provided by any 
     applicable State voluntary environmental audit incentive 
     law.''.
                                 ______
                                 
      By Mr. FRIST:
  S. 1333. A bill to amend the Land and Water Conservation Fund Act of 
1965 to allow national park units that cannot charge an entrance or 
admission fee to retain other fees and charges; to the Committee on 
Energy and Natural Resources.


     the land and water conservation fund act amendment act of 1997

  Mr. FRIST. Mr. President, I rise today to introduce a measure which 
will help preserve one of our greatest national treasures and maintain 
one of the most significant contributors to the economy of east 
Tennessee. The Great Smoky Mountains National Park is by far our 
Nation's most visited national park, both because of its striking 
beauty, wildlife, and recreational opportunities, and for the fact that 
it is within a day's drive of half of the population of the United 
States.
  I have often escaped to the Great Smoky Mountains National Park for 
hiking, camping, and enjoying the great outdoors with my three sons. I 
have witnessed the splendor of the turning leaves in the fall, and the 
glory and renewal that springtime brings to the Smokies. Spending time 
in the Smokies allows my family and millions of other families to 
reconnect with nature and to refocus on the fundamental strengths of 
what really holds us together as a family.
  While the Great Smoky Mountains National Park plays such a valuable 
role in the lives of so many American families, it is also a park that 
strains under the burdens of heavy use. Infrastructure and services 
struggle to meet demands which the larger and less-visited parks can 
more easily attain. To compound the problems associated with heavy use 
and popularity, the park is prohibited from collecting an entrance fee 
of any kind. It is the only national park with such a prohibition, thus 
limiting its access to valuable, internally generated resources which 
supplement the budgets of other parks. The result is that the Smokies 
has great difficulty in meeting the infrastructure and maintenance 
needs generated by its 9 million yearly visitors.
  In the 104th Congress we began a program which allowed individual 
parks to keep for their internal use up to 80 percent of the user fees 
collected above and beyond the level of fees collected in 1994. My bill 
will allow the park to retain 100 percent of that amount. While this 
change is modest, it is one way to begin to address the deficit in 
which the Smokies operates every year, and assist in sustaining the 
very attractions which serve to make it our most popular national park.
  In 1910, Teddy Roosevelt said, ``A nation behaves well if it treats 
its natural resources as assets which it must turn over to the next 
generation increased, and not impaired, in value.'' Roosevelt was the 
first proponent of what has clearly become a fundamental tenet of the 
preservation of the Great Smoky Mountains National Park. Mr. President, 
we owe it to the future generations of Americans to allow this 
invaluable national treasure to benefit from its own popularity and 
accessibility and to keep more of the revenues from its fees. We can 
thus help ensure that it will continue to offer the services and 
facilities so many millions of families enjoy and will help guard one 
of our Nation's most precious legacies.
                                 ______
                                 
      By Mr. BOND (for himself, Mr. Shelby, Mr. Warner, Mr. Reid, Mr. 
        Johnson, Mr. Hollings, Mr. Hutchinson, Mr. Mack, Mrs. Murray, 
        Mr. Ashcroft, Mr. Craig, Mr. Bumpers, Mr. Leahy, Ms. Collins, 
        Mr. Sessions, Mr. Allard, Mr. Baucus, and Mrs. Feinstein):
  S. 1334. A bill to amend title 10, United States Code, to establish a 
demonstration project to evaluate the feasibility of using the Federal 
Employees Health Benefits program to ensure the availablity of adequate 
health care for Medicare-eligible beneficiaries under the military 
health care system; to the Committee on Armed Services.


         FEHBP DEMONSTRATION FOR MILITARY RETIREES LEGISLATION

  Mr. BOND. Mr. President, I rise today to introduce a measure on 
behalf of myself, Mr. Shelby, Mr. Warner, Mr. Reid of Nevada, Mr. 
Johnson, Mr. Hollings, Mr. Hutchinson, Mr. Mack, Mrs. Murray, Mr. 
Ashcroft, Mr. Craig, Mr. Bumpers, Mr. Leahy, Mrs. Collins, Mr. 
Sessions, Mr. Allard, Mr. Baucus, and Mrs. Feinstein.
  This vital, bipartisan legislation would establish a demonstration 
project to evaluate the feasibility of using the Federal Employees 
Health Benefits Program [FEHBP] to ensure the availability of adequate 
health care for Medicare-eligible beneficiaries under the military 
health care system.
  Current trends, such as base closures, the downsizing of military 
treatment facilities, and the introduction of TRICARE, have all 
hindered access to health care services for military retirees aged 65 
and over. In theory, Medicare-eligible retirees can receive health care 
services at military treatment facilities on a space available basis; 
however, active duty and their dependents have priority.
  Therefore, in reality, space is rarely available--resulting in 
military retirees being locked out of the Department of Defense's [DOD] 
health care delivery system. And because of their considered secondary 
status, many retirees are forced to travel great distances to receive 
even the minimum of care.
  Further, when compared to what other Federal and private sector 
retirees receive in terms of health care options, it is easy to note 
that the current health care choices for military retirees are woefully 
inadequate and downright inexcusable.
  This measure will rectify the inequity of the current system and take 
the guesswork out of the financial viability of an FEHBP option for 
military retirees.
  Scheduled for no more than 3 years, the FEHBP pilot program would be 
tested at two different sites. One site will be within a military 
treatment facility catchment area and the other in a noncatchment area. 
Up to 50,000 Medicare-eligible military retirees will be able to 
participate in the demonstration, with each site capped at 25,000 
retirees.
  Mr. President, this legislation represents an active step toward 
honoring our Nation's obligation to those military retirees who 
faithfully and selflessly served our country in times of war and in 
times of peace. Furthermore, this measure will provide retirees more 
dependable, consistent, and affordable care while simultaneously 
applying equitable standards of health care for all Federal retirees.
  I look forward to working with my colleagues on this bipartisan piece 
of legislation.
  Mr. SHELBY. Mr. President, according to the latest statistics, 
Alabama is home to 47,011 military retirees. We have the eight largest 
population of retired service personnel in the Nation. Senator Bond 
highlighted the many changes in DOD's health care system that are 
limiting access to health care for military retirees aged 65 and above. 
I would like to briefly explain how these general trends are affecting 
the 47,011 military retirees in my State.
  The 1995 BRAC slated Fort McClellan for closure by 1999. When that 
base closes, Noble Army Hospital will be forced to close as well. The 
emergency room at Lyster Army Hospital at Fort

[[Page S11351]]

Rucker is being closed. At all of the military treatment facilities, 
space-available is becoming unavailable. In addition to these physical 
changes, TRICARE came on line in region 4, and Alabama now is 
experiencing excessive delays in receiving reimbursement payments and 
other well-known problems associated with TRICARE. Many private 
physicians who provided CAMPUS are leaving the DOD health care, which I 
believe is unacceptable and irresponsible.
  Despite extended service and sacrifice, retired service members are 
the only Federal employees who will lose their government-sponsored 
health insurance when they become eligible for Medicare. This bill 
takes a modest step forward to insuring that military retirees receive 
at least as much as Members of Congress or retired Federal employees. 
Military retirees have dedicated their lives to protecting our Nation; 
we owe it to them to pave the way for health care equity.
  I thank Senator Bond for his leadership in introducing this 
legislation. I urge my colleagues to cosponsor this bipartisan bill.
                                 ______
                                 
      Ms. SNOWE:
  S. 1335. A bill to amend title 5, United States Code, to ensure that 
coverage of bone mass measurements is provided under the health 
benefits program for Federal employees; to the Committee on 
Governmental Affairs.


                THE HEALTH BENEFITS STANDARDIZATION ACT

  Ms. SNOWE. Mr. President, I rise today to introduce legislation 
designated to standardize coverage for bone mass measurement for people 
at risk for osteoporosis under the Federal Employee Health Benefits 
Program. This legislation is similar to my bill which was enacted as 
part of the Balanced Budget Act to standardize coverage of bone mass 
measurement under Medicare. The bill I introduce today guarantees the 
same uniformity of coverage to Federal employees and retirees as 
Congress provided to Medicare beneficiaries only a few months ago.
  Osteoporosis is a major public health problem affecting 28 million 
Americans, who either have the disease or are at risk due to low bone 
mass; 80 percent of its victims are women. The disease causes 1.5 
million fractures annually at a cost of $13.8 billion--$38 million per 
day--in direct medical expenses. In their lifetime, one in two women 
and one in eight men over the age of 50 will fracture a bone due to 
osteoporosis. A woman's risk of a hip fracture is equal to her combined 
risk of contracting breast, uterine, and ovarian cancer.
  Osteoporosis is largely preventable and thousands of fractures could 
be avoided if low bone mass were detected early and treated. We now 
have drugs that promise to reduce fractures by 50 percent. However, 
identification of risk factors alone cannot predict how much bone a 
person has and how strong bone is. Experts estimate that without bone 
density tests, up to 40 percent of women with low bone mass could be 
missed.
  Unfortunately, Federal Employee Health Benefits Program [FEHBP] 
coverage of bone density tests is inconsistent. Instead of a 
comprehensive national coverage policy, FEHBP leaves it to each of the 
over 400 participating plans to decide who is eligible to receive a 
bone mass measurement and what constitutes medical necessity. A survey 
of the 19 top plans participating in FEHBP indicated that many plans 
have no specific rules to guide reimbursement and cover the tests on a 
case-by-case basis. Several plans refuse to provide consumers with 
information indicating when the plan covers the test and when it does 
not. Some plans cover the test only for people who already have 
osteoporosis.
  Mr. President, we owe the people who serve our Government more than 
that. That is why my legislation standardizes coverage for bone mass 
measurement under the FEHBP. I urge my colleagues to support this 
legislation, in order to help prevent the 1.5 million fractures caused 
annually by osteoporosis.
                                 ______
                                 
      By Mr. GRAHAM:
  S. 1336. A bill for the relief of Roy Desmond Moser; to the Committee 
on the Judiciary.
  S. 1337. A bill for the relief of John Andre Chalot; to the Committee 
on the Judiciary.


                       PRIVATE RELIEF LEGISLATION

  Mr. GRAHAM. Madam President, I ask unanimous consent that the text of 
the two bills be printed in the Record.
  There being no objection, the bills were ordered to be printed in the 
Record, as follows:

                                S. 1336

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

     SECTION 1. MODIFICATION OF EFFECTIVE DATE OF NATURALIZATION 
                   OF ROY DESMOND MOSER.

       Notwithstanding title III of the Immigration and 
     Nationality Act, any predecessor provisions to such title, or 
     any other provision of law relating to naturalization, for 
     purposes of determining the eligibility of Roy Desmond Moser 
     for relief under the Agreement Between the Government of the 
     United States and the Government of the Federal Republic of 
     Germany Concerning Final Benefits to Certain United States 
     Nationals Who Were Victims of National Socialist Measures of 
     Persecution, signed at Bonn on September 19, 1995, Roy 
     Desmond Moser is deemed to be a naturalized citizen of the 
     United States as of August 8, 1942.
                                  ____


                                S. 1337

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

     SECTION 1. MODIFICATION OF EFFECTIVE DATE OF NATURALIZATION 
                   OF JOHN ANDRE CHALOT.

       Notwithstanding title III of the Immigration and 
     Nationality Act, any predecessor provisions to such title, or 
     any other provision of law relating to naturalization, for 
     purposes of determining the eligibility of John Andre Chalot 
     for relief under the Agreement Between the Government of the 
     United States and the Government of the Federal Republic of 
     Germany Concerning Final Benefits to Certain United States 
     Nationals Who Were Victims of National Socialist Measures of 
     Persecution, signed at Bonn on September 19, 1995, John Andre 
     Chalot is deemed to be a naturalized citizen of the United 
     States as of September 3, 1943.
                                 ______
                                 
      By Mr. DURBIN:
  S. 1340. A bill entitled the ``Telephone Consumer Fraud Protection 
Act of 1997.''; to the Committee on the Judiciary.


          the telephone consumer fraud protection act of 1997

  Mr. DURBIN. Mr. President, I rise today to introduce the Telephone 
Consumer Fraud Criminal Penalties Act of 1997. This measure will 
finally allow us to strike back against ``slamming,'' the practice of 
changing a telephone customer's long-distance carrier without the 
customer's knowledge or consent.
  Slamming is the Federal Communications Commission's largest source of 
consumer complaints. In 1995 and 1996, more than one-third of the 
consumer complaints filed with the FCC's Common Carrier Bureau involved 
slamming. Last year 16,000 long-distance telephone consumers filed 
slamming complaints with the FCC. Since 1994, the number of slamming 
complaints has tripled. Yet, this is only the tip of the iceberg-- the 
Los Angeles Times reports that more than 1 million American telephone 
consumers have been slammed in the last 2 years.
  In my home State of Illinois slamming was the No. 1 source of 
consumer complaints to the attorney general's office in 1995, and the 
No. 2 source of complaints in 1996. Slamming is obviously a serious 
problem that must be stopped.
  Slamming is not merely an inconvenience or a nuisance. It is an act 
of fraud that costs long-distance telephone consumers millions of 
dollars a year and robs them of the right to contract. The Telephone 
Consumer Fraud Criminal Penalties Act will now ensure that slammers are 
held accountable for their fraudulent acts.
  My measure will help stamp out slamming in two ways:
  First, the Telephone Consumer Fraud Criminal Penalties Act creates 
criminal fines and jail time for repeat and willful slammers. Slamming 
takes choices away from consumers without their knowledge and distorts 
the long distance competitive market by rewarding companies that engage 
in fraud and misleading marketing practices. This measure's criminal 
penalties will guarantee that slammers can no longer act with impunity.
  Second, the Telephone Consumer Fraud Criminal Penalties Act charges 
the Attorney General with the duty of conducting a study on the 
fraudulent and criminal behavior of telecommunications carriers and 
their agents in the

[[Page S11352]]

solicitation, marketing, and assignment of telecommunication services. 
The Attorney General's study will examine the fraudulent methods by 
which a telecommunications consumer's local, long distance, and other 
telecommunications services are changed without the consumers knowledge 
or consent. Through this study, Congress will gain a better 
understanding of how slammers operate. With this knowledge we will be 
able to draft a well crafted, all encompassing law that will finally 
put a lid on slamming.
  Thank you, Mr. President, for the opportunity to introduce this 
important initiative. I hope my colleagues will join with me and 
support the Telephone Consumer Fraud Criminal Penalties Act in order to 
protect the rights of telephone consumers.
  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. 1340

       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 ``Telephone Consumer Fraud 
     Protection Act of 1997.''

     SEC. 2. CRIMINAL PENALTIES.

       Title 18 of the United States Code is amended in the 
     appropriate place to provide the following.
       (A) Persons.--Any person who submits to a subscriber a 
     request for a change in a provider of telephone exchange 
     service or telephone toll service in willful violation of the 
     procedures established in 47 CFR Sec. Sec. 64.1100 or 
     64.1150:
       (i) shall be fined not more than $1,000, imprisoned not 
     more than 30 days, or both for the first offense; and
       (ii) shall be fined not more than $10,000, imprisoned not 
     more than 9 months, or both, for any subsequent offense.
       (B) Telecommunications Carriers.--Any telecommunications 
     carrier who submits to a subscriber a request for a change in 
     a provider of telephone exchange service or telephone toll 
     service, or executes such a change, in willful violation of 
     47 CFR Sec. Sec. 64.1100 or 64.1150:
       (i) shall be fined not more than $50,000 for the first such 
     conviction; and
       (ii) shall be fined not more than $200,000 for any 
     subsequent conviction.

     SEC. 3. A STUDY BY THE ATTORNEY GENERAL.

       The Attorney General shall conduct a study and report to 
     Congress on the fraudulent and criminal behavior of 
     telecommunications carriers and their agents in the 
     solicitation, marketing, and assignment of wire services. The 
     Attorney General's study shall examine the fraudulent methods 
     by which a telecommunications consumer's local, long 
     distance, and other telecommunications services are changed 
     without her or his knowledge or consent. The Attorney 
     General's study shall also examine the negative impact and 
     costs that such fraudulent activity is having on consumers 
     and the marketplace.
                                 ______
                                 
      By Mr. DASCHLE (for himself and Mr. Johnson):
  S. 1341. A bill to provide for mitigation of terrestrial wildlife 
habitat lost as a result of the construction and operation of the Pick-
Sloan Missouri River Basin program in the State of South Dakota, and 
for other purposes; to the Committee on Environment and Public Works.


The Cheyenne River Sioux Tribe, Lower Brule Sioux Tribe, and the State 
  of South Dakota Terrestrial Wildlife Habitat Mitigation Act of 1997

  Mr. DASCHLE. Mr. President, on behalf of the South Dakota 
congressional delegation and Gov. Bill Janklow, I am today introducing 
the Cheyenne River Sioux Tribe, Lower Brule Sioux Tribe, and the State 
of South Dakota Terrestrial Wildlife Habitat Mitigation Act. This 
proposal, which is the culmination of more than 2 years of discussion 
with Governor Janklow and his staff, South Dakota tribal leaders, 
representatives of South Dakota sportsmen groups and affected citizens, 
lays out a plan for resolving some of the environmental and 
jurisdictional problems created by the construction of the main stem 
dams nearly 40 years ago.
  Land transfers and their attendant jurisdictional implications are 
serious issues with real world ramifications, and it has been the 
Governor's and my goal throughout this process to achieve consensus on 
how to proceed. The introduction of this legislation is one more step 
on the path to that consensus. I would like to take this opportunity to 
outline the bill, explain how we got to this point and suggest where we 
might go from here.
  More than a half century ago, Congress set in motion a series of 
events that resulted in an extraordinary loss of land and wildlife 
habitat by the State of South Dakota, tribes, and individual landowners 
along the Missouri River. This loss of land and the accompanying 
fractionation of jurisdiction has fueled extensive and costly 
litigation over the regulation of hunting and fishing along the river. 
Moreover, the Federal Government has never mitigated the impact of the 
dams on critical wildlife habitat, as it is required to do by the 1958 
Fish and Wildlife Coordination Act. The legislation I am introducing 
today is an attempt to settle those issues without further litigation, 
to provide a means to fairly compensate the State of South Dakota and 
the tribes for the loss of habitat, and to expand public hunting 
opportunities for sportsmen.
  This bill would not have been possible without the efforts of many 
South Dakotans. Governor Janklow and I have worked closely together for 
over 2 years to craft this compromise. Many tribal leaders in the State 
have provided constructive input throughout this process. In 
particular, I would like to acknowledge Chairman Michael Jandreau of 
the Lower Brule Sioux Tribe and Chairman Gregg Bourland of the Cheyenne 
River Sioux Tribe for their wise advice, friendship and guidance.
  Senator Johnson and Congressman  Thune have approached this often 
contentious project with open minds. It is significant that Senator 
Johnson is a cosponsor of this bill and that Representative Thune will 
introduce a companion measure in the House of Representatives.
  I would also like to thank John Cooper, the secretary of the South 
Dakota Game, Fish, and Parks Department, for the enormous amount of 
time he spent holding public meetings and diligently working with all 
interested parties to sketch out the broad contours of this compromise 
as well as to craft the small details. His patience and imagination 
have been critical to the successful development of this legislation.
  Finally, our draft proposal was discussed with representatives of the 
United Sportsmen and South Dakota Wildlife Federation. Both groups made 
constructive comments about the draft, and I appreciate their 
endorsement of the bill we are introducing today.
  The Cheyenne River Sioux Tribe, Lower Brule Sioux Tribe, and the 
State of South Dakota Terrestrial Wildlife Habitat Mitigation Act 
establishes trust funds to compensate the State and the tribes for the 
terrestrial wildlife habitat that was lost due to construction of the 
mainstem Missouri River dams. It transfers to the Interior Department 
to be held in trust for the tribes the lands that were acquired for the 
Pick-Sloan project and that remain above the exclusive flood pool. The 
tribes will be able to regulate hunting and fishing on those lands for 
all who wish to use them, as long as they accept the conditions of the 
bill, which include protecting the ability of the heirs and assignees 
of Indian and non-Indian ranchers who lost land to the construction of 
the dams to graze on those lands and reaching agreement with the State 
on rules governing fishing on the Missouri River within reservation 
boundaries. Unless otherwise agreed to by the tribes and the State, 
recreation areas currently operated by the corps within the boundaries 
of the Indian reservations will be transferred into trust for those 
tribes to manage, while recreation areas located outside of the 
boundaries of Indian reservations will be leased to the State.
  Since there is insufficient Federal project land in South Dakota on 
which to perform the necessary wildlife habitat mitigation, this 
legislation would authorize the tribes and the State to spend revenues 
from the trust funds on other projects related to wildlife conservation 
and public access to habitat throughout the State. The result should be 
expanded opportunity for South Dakota hunters.
  Through the trust funds, the tribes and State will have a steady 
source of funding with which to implement formal wildlife habitat 
mitigation plans.
  To supplement those plans, the tribes and State will be able to use 
revenues from the trust funds to implement plans developed in 
consultation with the U.S. Fish and Wildlife Service to lease private 
lands for the protection of

[[Page S11353]]

important habitat, including habitat for threatened and endangered 
species. Private landowners who participate in this program will be 
required to provide public access for sportsmen during hunting season. 
The South Dakota Game, Fish and Parks Department estimates that over 
200,000 acres of private land will be enrolled in this program, 
significantly expanding public hunting opportunities for sportsmen 
throughout the State.
  The tribes and the State will be able to use proceeds from the trust 
funds to operate the recreation areas.
  The tribes and the State will be able to use the funds to develop, 
maintain and protect wildlife habitat and recreation areas along the 
Missouri River.
  And, the tribes will be able to use revenues from the fund to protect 
native American cultural sites threatened by the operation of the Pick-
Sloan project.
  To understand the approach taken by this legislation, it is necessary 
to understand the events that were prologue to its development. In 
response to a series of major floods along the upper Missouri River in 
the early part of this century, Congress enacted the Flood Control Act 
of 1944, which called for implementation of a plan developed by General 
Pick of the U.S. Army Corps of Engineers and William Sloan of the 
Bureau of Reclamation, known as the Pick-Sloan plan, to establish a 
series of dams along the river. By authorizing the construction of 
these massive earthen dams, this law played a critical role in shaping 
the future development of the State and of the downstream States that 
benefited from meaningful flood control.
  By hosting these dams, South Dakota has provided valuable storage of 
water in the region, preventing flooding, and allowing development 
along the river in downstream States all the way to the Mississippi 
River. The sacrifices South Dakota made for this purpose, however, can 
be counted in the loss of roughly a quarter of a million acres of the 
most productive, unique, and irreplaceable cottonwood forests and river 
bottomland in the upper Great Plains.
  Land that once provided habitat and critical wintering cover for 
nearly 400 species of wildlife is now submerged. The remains of those 
cottonwood forests can be seen today from the banks of the mainstem 
reservoirs, their dead tops sticking out of the water reminding all of 
us what was once such an integral element of the upper Great Plains 
ecosystem. The effects of that loss also can be felt today. Last 
winter, South Dakota suffered through some of the most severe weather 
in recent memory. Wildlife throughout the State, unable to find 
sufficient cover, froze to death in vast numbers.
  At the time the Pick-Sloan project was being constructed, Congress 
passed the Fish and Wildlife Coordination Act of 1958. That law 
officially recognized the severe loss of wildlife habitat that could 
accompany the construction of water projects and, as a result, required 
the Federal construction agency--in this case the Corps of Engineers--
to consult with the U.S. Fish and Wildlife Service and the State 
wildlife agency for the purposes of determining the possible damage to 
wildlife resources and for the purposes of determining means and 
measures that should be adopted to prevent the loss of or damage to 
such wildlife resources, as well as to provide concurrently for the 
development and improvement of such resources. This requirement applied 
to any Federal project not yet 60 percent complete at the time of 
enactment. In South Dakota, this meant the Oahe and Big Bend dams. 
Despite the requirements of the 1958 Fish and Wildlife Coordination 
Act, the Federal Government has never adequately mitigated the loss of 
habitat that accompanied those projects.
  It may be impossible to completely recreate the unique habitat that 
once existed along the Missouri River. However, the Federal Government 
does bear the responsibility to the State and tribes of South Dakota to 
do whatever it can to mitigate that loss. Between 1960 and 1982, the 
corps developed seven major plans to mitigate the lost wildlife 
habitat. However, since each of those plans proposed the politically 
unpopular fee title acquisition of land and since the corps did not 
forward any of these plans to Congress for authorization, none was ever 
implemented.
  In 1982, the Corps of Engineers developed a new plan, known as the 
Post-Authorization Mitigation Report for Fish and Wildlife Mitigation, 
Lake Oahe and Sharpe, SD. This plan, which called for mitigating only a 
fraction of the habitat that was lost, was unique in that it did not 
rely on acquisition of land in fee title, but rather made existing 
project lands available for mitigation work. An unsteady history of 
implementation of the 1982 plan began in 1989. In 1990, funding was cut 
off and then eventually restored. The corps again terminated funding 
for the project in 1995, only to restore it in the face of delegation 
opposition.
  It has become clear that wildlife habitat mitigation for Lakes Oahe 
and Sharpe are not high priorities for the Corps of Engineers. While I 
recognize that this is attributable in some measure to the levels of 
funding provided that agency by Congress, that does not excuse the 
Federal Government of its responsibility to mitigate the lost habitat.
  Another important feature of the legislation being introduced today 
deals with the management of the Corps of Engineers' recreation areas 
in the State. In partial compensation for South Dakota's sacrifice of 
prime lands to the construction of the dams, Congress had intended that 
considerable irrigation development would occur along the Missouri 
River. While irrigation development has fallen far short of 
expectations, today roughly 5.1 million residents and nonresidents 
benefit by using the reservoirs for camping, fishing, boating, hunting, 
and general recreation.
  Despite the use that these reservoirs enjoy, there is serious concern 
over the corp's ability to continue to maintain its extensive network 
of recreation areas along the river. Adjusted for inflation, the corps' 
budget for this purpose has shrunk by 30 percent since 1993. Prospects 
for reversing this trend are poor, making the challenge of funding both 
wildlife habitat mitigation and recreation area maintenance more and 
more daunting in the future.
  That is why this legislation would transfer those recreation areas to 
the tribes and the State and why the trust funds would be used to 
provide a predictable source of funding to meet the needs of the 5.1 
million people who use those facilities.
  There is solid precedent for the establishment of dedicated trust 
funds to compensate the tribes and the State for losses suffered as a 
result of these projects. In 1992 Congress enacted the Standing Rock 
and Three Affiliated Tribes Infrastructure Compensation Act, 
establishing a trust fund to compensate the tribes for infrastructure 
losses suffered as a result of construction of the dams. That trust 
fund was capitalized with funding equal to 25 percent of the annual 
revenues to the Western Area Power Administration from sales of 
hydropower generated by the mainstem dams of the Missouri River. In 
1996, Congress unanimously passed the Crow Creek Infrastructure 
Compensation Act, establishing a similar fund, and I expect Congress to 
pass a similar bill for the Lower Brule Sioux Tribe in the near future.
  In short, Congress has recognized the appropriateness of linking 
legitimate compensation for losses resulting from the construction of 
the dams to the power revenues those dams generate. The legislation I 
am introducing today adopts that same principle.
  As I mentioned, the development of this legislation has involved 
extensive discussion and negotiation among many interested parties 
throughout the State. The bill has undergone five drafts over the 
course of nearly 10 months. A number of public meetings have been held 
to discuss the bill, and Governor Janklow and I have received, 
considered, and responded to, comments and suggestions from interested 
members of the public.
  The tribes expressed a strong desire to protect their jurisdiction 
over the hunting and fishing of tribal members. The legislation adopts 
a cooperative

[[Page S11354]]

State-tribal enforcement system based on a previous Memorandum of 
Agreement reached between the Lower Brule Sioux Tribe and the South 
Dakota Game, Fish, and Parks Department--a system that respects and 
protects tribal sovereignty. To transfer the land to trust status and 
to keep the land in trust, the tribes would implement an enforcement 
system whereby both the State and the tribes would be able to arrest 
violators of fish and game rules on the waters of the Missouri River 
within Indian reservation boundaries, with tribal members prosecuted in 
tribal or Federal court and non-Indians prosecuted in State or Federal 
court. This protects tribal jurisdiction over tribal members and should 
maximize the effectiveness of fish and game enforcement efforts along 
the river. Also, under the bill, participating tribes will be able to 
establish seasons and bag limits for hunting on the lands that will be 
transferred into trust and to enforce those rules against all those who 
will hunt on those lands--an opportunity they are denied currently.
  In response to concerns expressed by the tribes about the effect of 
the bill on treaty rights and water rights, language has been included 
in the bill stating that both treaty rights and water rights will be 
protected.
  A number of counties expressed concern that they would lose their 75-
percent share of revenues from leases the corps currently holds on the 
transferred lands. Under the bill, the Department of the Interior will 
be responsible for maintaining those leases. To ensure that the 
counties are not penalized by the transfer of the land to trust status 
the bill directs the Department of the Interior to pay the affected 
counties 100 percent of the revenues from leases on the lands.
  Sportsmen commented that the State should obtain new lands to 
mitigate the loss of wildlife habitat. The bill transfers the 20,000 
acre Bureau of Reclamation's Blunt Reservoir and Pierre Canal lands to 
the State for that purpose. Since the land will be transferred in fee 
title, the State will pay the county taxes on that land.
  Non-Indian ranchers and Indian allottees who lost land or whose 
ancestors lost land to the construction of the dams, urged that the 
bill clarify that heirs or assignees be granted the right to graze on 
the lands taken from them or their ancestors, that access easements be 
guaranteed, and that any tribe or agency requiring fencing be 
responsible for installing and maintaining it. This legislation 
safeguards that grazing opportunity.
  Those with easements and rights-of-way on land that would be 
transferred to the Interior Department, such as the electric utilities, 
asked that language be added to protect those easements and rights-of-
way. Broad language has been added to preserve existing easements on 
any lands transferred to the Interior Department to be held in trust 
for the tribes and on any recreation areas leased to the State.
  The Corps of Engineers needs to ensure that it retain its ability to 
operate the reservoirs. The bill protects its ability to do so.
  Despite these modifications, not every concern or comment could be 
addressed. Some South Dakota tribes that do not border the river have 
expressed frustration that they were not included in this legislation. 
It has been our intention from the beginning of this process to include 
all eligible tribes in this legislation. Since the 1958 Fish and 
Wildlife Coordination Act calls for the Federal Government to mitigate 
the loss of habitat that occurred due to construction of the Oahe and 
Big Bend dams, all the tribes that lost habitat due to the construction 
of those projects qualify for mitigation under Federal law and have 
been invited to participate in this bill.
  Two eligible tribes--the Standing Rock Sioux Tribe and the Crow Creek 
Sioux Tribe--have decided not to be part of this arrangement at this 
point. I respect their decisions, and they are not included in the 
legislation.
  In summary, Mr. President, the State of South Dakota, the Federal 
Government, the tribes, the wildlife and all who use these reservoirs 
for hunting, fishing, and recreation will benefit from this bill. It 
provides for a fair resolution to the environmental and jurisdictional 
problems created by the construction of the main stem dams nearly 40 
years ago.
  I am hopeful that the appropriate congressional committees will 
schedule action on this legislation as soon as possible so that further 
testimony can be heard and necessary refinements can be made. Our goal 
is to enact a bill that will allow meaningful wildlife habitat 
mitigation to begin, resolve the regulatory issues relating to hunting 
and fishing along the Missouri River, provide the public with well-
maintained recreation areas along the Missouri River and expand hunting 
opportunities long into the future.
  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. 1341

       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 ``Cheyenne River Sioux Tribe, 
     Lower Brule Sioux Tribe, and State of South Dakota 
     Terrestrial Wildlife Habitat Mitigation Act of 1997''.

     SEC. 2. FINDINGS; PURPOSES.

       (a) Findings.--Congress finds that--
       (1) under the Act of December 22, 1944 (commonly known as 
     the ``Flood Control Act of 1944'') (58 Stat. 887, chapter 
     665; 33 U.S.C. 701-1 et seq.), Congress approved the Pick-
     Sloan Missouri River Basin program--
       (A) to promote the general economic development of the 
     United States;
       (B) to provide for irrigation above Sioux City, Iowa;
       (C) to protect urban and rural areas from devastating 
     floods of the Missouri River; and
       (D) for other purposes;
       (2) the Big Bend and Oahe projects are major components of 
     the Pick-Sloan Missouri River Basin program that contribute 
     to the national economy by generating a substantial amount of 
     hydropower and impounding a substantial quantity of water to 
     provide flood control and other benefits for all States and 
     tribes in the Missouri River Basin;
       (3) to carry out the Pick-Sloan Missouri River Basin 
     program, the Secretary of the Army acquired approximately 
     500,000 acres of land from the State of South Dakota, 4 
     Indian tribes, and private individuals;
       (4) as of the date of enactment of this Act, of the acreage 
     referred to in paragraph (3), approximately 200,000 acres 
     remain at an elevation above that of the top of the exclusive 
     flood pool of the projects of the program;
       (5) of the approximately 200,000 acres of dry land referred 
     to in paragraph (4), approximately 80,000 acres are located 
     within the exterior boundaries of the Cheyenne River 
     Reservation, Crow Creek Reservation, Lower Brule Reservation, 
     and Standing Rock Reservation;
       (6) as a result of the inundation from the construction of 
     the Big Bend and Oahe projects, the State of South Dakota and 
     the 4 Indian reservations referred to in paragraph (5) lost 
     approximately 250,000 acres of fertile, wooded bottom land 
     along the Missouri River;
       (7) the lost acreage constituted some of the most 
     productive, unique, and irreplaceable acres of wildlife 
     habitat in the State of South Dakota, including habitat for 
     game and nongame species (including species that are listed 
     as endangered or threatened species under Federal or State 
     law);
       (8) the Federal Government has never applied the Fish and 
     Wildlife Coordination Act (16 U.S.C. 661 et seq.) in such a 
     manner as to adequately mitigate the loss of habitat in the 
     State of South Dakota and on affected Indian reservations 
     within the State;
       (9) an insufficient quantity of Federal land within the 
     boundaries of projects of the Pick-Sloan Missouri River Basin 
     program is available in the State of South Dakota to provide 
     adequate mitigation of the loss of habitat;
       (10) because of complicated land ownership patterns along 
     the Missouri River, there have been many jurisdictional 
     disputes over the control of the land along the river, 
     including disputes concerning--
       (A) the jurisdiction of tribal or State courts over hunting 
     and fishing activities--
       (i) on land of the Pick-Sloan Missouri River Basin program 
     projects located within an Indian reservation; or
       (ii) on the Missouri River;
       (B) the establishment and enforcement of hunting and 
     fishing seasons and limits; and
       (C) hunting and fishing license requirements;
       (11) the jurisdictional disputes referred to in paragraph 
     (10)--
       (A) have been, and continue to be, adjudicated in Federal 
     courts; and
       (B) have resulted in great costs to the Federal Government, 
     the State of South Dakota, and the Indian tribes;
       (12) as of the date of enactment of this Act, policies of 
     the Army Corps of Engineers encourage the leasing of public 
     recreation facilities to, and the management of certain land 
     by, State and local sponsors, if feasible;
       (13) the State of South Dakota has demonstrated its ability 
     to manage public recreation areas and wildlife resources 
     along the Missouri River;
       (14) the Indian tribes have demonstrated an ability to 
     manage wildlife resources on land located within the 
     respective reservations of those Indian tribes;

[[Page S11355]]

       (15) the transfer of administrative jurisdiction over 
     certain land acquired for the purposes of the Pick-Sloan 
     Missouri River Basin program from the Secretary of the Army 
     to the Secretary of the Interior is in the best interest of 
     the United States, the State of South Dakota, and the Indian 
     tribes; and
       (16) the Federal Government has a trust relationship and a 
     fiduciary responsibility to Indian tribes.
       (b) Purposes.--The purposes of this Act are--
       (1) to mitigate the loss of terrestrial wildlife habitat 
     that occurred as a result of construction projects carried 
     out under the Pick-Sloan Missouri River Basin program;
       (2) to settle longstanding jurisdictional disputes over 
     land and water within the Pick-Sloan Missouri River Basin 
     program projects;
       (3) to protect, and provide public access to, the remaining 
     wildlife habitat in the State of South Dakota; and
       (4) to transfer to the Department of the Interior to be 
     held in trust for the Indian tribes of South Dakota land 
     acquired for the Pick-Sloan Missouri River Basin program 
     within existing exterior reservation boundaries, without 
     altering any boundary of a reservation of an Indian tribe 
     established by a treaty with the United States.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Indian tribe.--The term ``Indian tribe'' means--
       (A) the Cheyenne River Sioux Tribe; and
       (B) the Lower Brule Sioux Tribe.
       (2) Member.--The term ``member'' means an individual who is 
     an enrolled member of an Indian tribe.
       (3) Non-indian.--The term ``non-Indian'' means an 
     individual who is not an enrolled member of an Indian tribe.
       (4) Secretary of the army.--The term ``Secretary of the 
     Army'' means the Secretary of the Army, acting through the 
     Chief of Engineers.
       (5) Terrestrial wildlife habitat.--The term ``terrestrial 
     wildlife habitat'' means a habitat for a wildlife species 
     (including game and nongame species) that existed or exists 
     on an upland habitat (including a prairie grassland, 
     woodland, bottom land forest, scrub, or shrub) or an emergent 
     wetland habitat.

     SEC. 4. LEASE OF CORPS OF ENGINEERS RECREATION LAND TO THE 
                   STATE OF SOUTH DAKOTA.

       (a) In General.--At the request of the State of South 
     Dakota, the Secretary of the Army shall lease to the State of 
     South Dakota the land described in subsection (b) for a term 
     not less than 50 years, with an option for renewal.
       (b) Land Leased.--The land described in this subsection is 
     any other land within the projects of the Pick-Sloan Missouri 
     River Basin program in the State of South Dakota that--
       (1) is located outside the external boundaries of a 
     reservation of an Indian tribe; and
       (2) the Secretary of the Army determines at the time of the 
     transfer is designated as a recreation area in the current 
     Project Master Plans.
       (c) Lease Conditions.--The Secretary of the Army shall 
     lease the land described in subsection (b) to the State of 
     South Dakota on the following conditions:
       (1) Responsibility for damage.--The Secretary of the Army 
     shall not be responsible for any damage to the land leased 
     under this section caused by sloughing, erosion, or other 
     changes to the land caused by the operation of any project of 
     the Pick-Sloan Missouri River Basin program.
       (2) Flowage easement.--The Secretary of the Army shall 
     retain a flowage easement on the land leased under this 
     section, and the lease shall not interrupt the ability of the 
     Army Corps of Engineers to operate the projects in accordance 
     with the Act of December 22, 1944 (58 Stat. 887, chapter 665; 
     33 U.S.C. 701-1 et seq.).
       (3) Management of recreation areas.--To the extent 
     consistent with other Federal law, the Secretary of the Army 
     shall not unreasonably impede or restrict the ability of the 
     State of South Dakota to freely manage the recreation areas 
     included in the lease.
       (4) Agreement by the state.--The State of South Dakota 
     shall agree--
       (A) to carry out the duties of the State under this Act, 
     including, managing, operating, and maintaining the 
     recreation areas leased to the State under this Act;
       (B) to take such action as may be necessary to ensure that 
     the hunting and fishing rights and privileges of Indian 
     tribes described in section 5 are recognized and enforced; 
     and
       (C) not to assess a fee for sport or recreation hunting or 
     fishing on the Missouri River by a member within the 
     boundaries of an Indian reservation.
       (5) Easements, rights-of-way, leases, and cost-sharing 
     agreements.--The State of South Dakota shall maintain all 
     existing easements, rights-of-way, leases, and cost-sharing 
     agreements that are in effect as of the date of execution of 
     a lease under this section.
       (6) Compliance with federal laws.--The State of South 
     Dakota shall ensure that the leased land described in 
     subsection (b) are used in accordance with--
       (A) the Endangered Species Act of 1973 (16 U.S.C. 1531 et 
     seq.);
       (B) the Migratory Bird Treaty Act (16 U.S.C. 703 et seq.);
       (C) the Act entitled ``An Act for the protection of the 
     bald eagle'', approved June 8, 1940 (16 U.S.C. 668 et seq.);
       (D) the Native American Graves Protection and Repatriation 
     Act (25 U.S.C. 3001 et seq.); and
       (E) the National Historic Preservation Act (16 U.S.C. 470 
     et seq.).
       (d) Management Transition.--The Secretary of the Army shall 
     continue to fund and implement, until such time as funds are 
     available for use from the South Dakota Wildlife Habitat 
     Mitigation Trust Fund under section 7(d)(3)(A)(i), the 
     terrestrial wildlife habitat mitigation plans under section 
     6(a).

     SEC. 5. TRANSFER OF ARMY CORPS OF ENGINEERS LAND FOR INDIAN 
                   TRIBES.

       (a) In General.--
       (1) Transfer.--The Secretary of the Army shall transfer to 
     the Secretary of the Interior the land described in 
     subsection (b).
       (2) Trust.--The Secretary of the Interior shall hold in 
     trust for each Indian tribe the land transferred under this 
     section that are located within the external boundaries of 
     the reservation of the Indian tribe.
       (b) Land Transferred.--The land described in this 
     subsection is land that--
       (1) is located above the top of the exclusive flood pool of 
     the projects of the Pick-Sloan Missouri River Basin program;
       (2) was acquired by the Secretary of the Army for the 
     implementation of the Pick-Sloan Missouri River Basin 
     program; and
       (3) is located within the external boundaries of a 
     reservation of an Indian tribe.
       (c) Map.--The Secretary of the Army, in cooperation with 
     the governing bodies of the Indian tribes, shall prepare a 
     map of the land transferred under this section. The map shall 
     be on file in the appropriate offices of the Secretary of the 
     Army.
       (d) Transfer Conditions.--The land described in subsection 
     (b) that was acquired for the Pick-Sloan Missouri River Basin 
     program shall be transferred to, and held in trust by, the 
     Secretary of the Interior on the following conditions:
       (1) Responsibility for damage.--The Secretary of the Army 
     shall not be responsible for any damage to the land 
     transferred under this section caused by sloughing, erosion, 
     or other changes to the land caused by the operation of any 
     project of the Pick-Sloan Missouri River Basin program 
     (except as otherwise provided by Federal law).
       (2) Flowage easement.--The Secretary of the Army shall 
     retain a flowage easement on the land transferred under this 
     section and the transfer shall not interrupt the ability of 
     the Army Corps of Engineers to operate the projects in 
     accordance with the Act of December 22, 1944 (58 Stat. 887, 
     chapter 665; 33 U.S.C. 701-1 et seq.).
       (3) Access by original owners.--An original owner of land 
     (including an heir or assignee) shall be allowed access to 
     the land in accordance with subsection (e) for the purposes 
     described in that subsection.
       (4) Access by the state.--Each Indian tribe agrees to 
     provide free and unencumbered access to the State of South 
     Dakota, for purposes of fish and wildlife management, to each 
     reservoir of the Missouri River that is located on or 
     adjacent to the reservation of the Indian tribe.
       (5) Management by indian tribes.--Each Indian tribe agrees, 
     with respect to land held in trust for the Indian tribe, to 
     manage, operate, and maintain any recreation area transferred 
     to the Indian tribe under this section.
       (6) Regulation of hunting, fishing, and recreation within 
     exterior reservation boundaries.--
       (A) Applicability.--The conditions described in this 
     paragraph shall apply--
       (i) to the extent not inconsistent with other law;
       (ii) except as otherwise provided in this section; and
       (iii) with respect to--

       (I) the water of the Missouri River within the exterior 
     boundaries of a reservation of an Indian tribe; and
       (II) land and water within the exterior boundaries of a 
     reservation of an Indian tribe that is above the water's edge 
     of the Missouri River, which land and water consists of 
     allotted land and tribal trust land.

       (B) License requirements.--
       (i) In general.--Each Indian tribe shall allow any non-
     Indian to purchase a license from the Indian tribe to hunt on 
     allotted land and trust land of the Indian tribe without 
     being required to purchase a hunting license from the State 
     of South Dakota.
       (ii) Allotted land.--Hunting and fishing on allotted land 
     shall require the permission of the allottee or a designated 
     agent of the allottee.
       (iii) Migratory waterfowl.--A non-Indian shall not hunt 
     migratory waterfowl on trust land unless the non-Indian is in 
     possession of a Federal migratory-bird hunting and 
     conservation stamp (known as a ``Duck Stamp'') issued under 
     the Act of March 16, 1934 (48 Stat. 451, chapter 71; 16 
     U.S.C. 718 et seq.).
       (iv) State game licenses.--Each Indian tribe shall honor 
     big game and small game licenses issued by the State of South 
     Dakota on non-Indian private deeded land and public land and 
     water within the exterior boundaries of the reservation of 
     the Indian tribe described in subparagraph (A)(iii) (referred 
     to in this paragraph as the ``reservation boundaries'') 
     without requiring a State licensee to purchase a hunting 
     license or permit from the Indian tribe.
       (v) Non-indian land.--A non-Indian landowner who resides 
     within the reservation boundaries of an Indian tribe may hunt 
     on

[[Page S11356]]

     the non-Indian's land without securing a license from the 
     Indian tribe.
       (vi) Deeded land.--Hunting on non-Indian and member private 
     deeded land within the reservation boundaries of an Indian 
     tribe shall be contingent on obtaining permission from the 
     owner or lessee.
       (vii) Members.--A member of an Indian tribe may hunt and 
     fish on allotted or tribal trust land within the reservation 
     boundaries of the Indian tribe with only a license from the 
     Indian tribe, if such a license is required.
       (C) Establishment of wildlife management rules.--
       (i) Rules for members.--Each Indian tribe shall establish 
     such regulations, seasons, and bag limits for hunting or 
     fishing by a member on allotted land and trust land of the 
     Indian tribe as the wildlife management agency of the Indian 
     tribe determines appropriate.
       (ii) Rules for non-indians.--Each Indian tribe shall 
     establish such regulations, seasons, and bag limits for 
     hunting or fishing by non-Indians on allotted land and trust 
     land of the Indian tribe as the wildlife management agency of 
     the Indian tribe determines appropriate.
       (iii) Fishing rules.--Each Indian tribe shall adopt and 
     enforce rules that affect fishing on the water of the 
     Missouri River within the reservation boundaries of the 
     Indian tribe that are agreed to by the State and affected 
     tribe.
       (D) Prohibitions.--
       (i) In general.--Each Indian tribe shall--

       (I) prohibit the use of gill or trammel nets and snagging 
     of fish, other than when used in a fishery management effort 
     by a certified tribal or State game, fish, and parks officer 
     or employee;
       (II) require the use of nontoxic shot in the hunting of 
     migratory waterfowl; and
       (III) prohibit the sale, trade, or barter of fish or 
     terrestrial wildlife or other such practices that are 
     detrimental to game and fish resources.

       (ii) Enforcement.--Each Indian tribe and the State of South 
     Dakota shall actively enforce the prohibitions described in 
     clause (i) against members and non-Indians without 
     discrimination.
       (E) Enforcement of rules.--
       (i) Execution of cross-deputization agreements.--

       (I) In general.--Each Indian tribe shall enter into a 
     cross-deputization agreement with the State of South Dakota 
     under which tribal officers, on certification by the Law 
     Enforcement Training and Standards Commission or after 
     receiving equivalent Federal training, are granted the 
     credentials of a State of South Dakota Deputy Conservation 
     officer effective only within the reservation boundaries of 
     the Indian tribe.
       (II) Provision of tribal enforcement credentials.--Each 
     Indian tribe shall provide tribal enforcement credentials to 
     State of South Dakota Conservation officers on proof to the 
     tribe that the officers are certified as conservation 
     officers under Federal, tribal, or State law, effective only 
     within the reservation boundaries of the Indian tribe.

       (ii) Arrests.--

       (I) Coordination.--Any arrest made under the authority of a 
     cross-deputization agreement shall be coordinated through the 
     officer of the government that has prosecutorial jurisdiction 
     for the arrest.
       (II) Availability to testify.--The officer who arrests or 
     causes the arrest of a person under the authority of a cross-
     deputization agreement shall be reasonably available to 
     testify in the appropriate tribal, Federal, or State court.

       (F) Prosecution.--
       (i) Allotted land and tribal trust land.--

       (I) Non-indians.--A non-Indian violator of a regulation 
     that affects a hunting, fishing, or recreational activity on 
     the allotted land or tribal trust land of an Indian tribe 
     shall be prosecuted in Federal court or a court of the Indian 
     tribe, whichever is appropriate.
       (II) Members.--A member violator of a regulation that 
     affects a hunting, fishing, or recreational activity on the 
     allotted land or tribal trust land of an Indian tribe shall 
     be prosecuted in a court of the Indian tribe.

       (ii) Missouri river.--

       (I) Non-indians.--A non-Indian violator of a regulation 
     that affects a hunting, fishing, or recreational activity on 
     the water of the Missouri River shall be prosecuted in a 
     Federal or State court, whichever is appropriate.
       (II) Members.--A member violator of a regulation that 
     affects a hunting, fishing, or recreational activity on the 
     water of the Missouri River within the reservation boundaries 
     of an Indian tribe shall be prosecuted in the court of the 
     Indian tribe.

       (G) Penalties.--The penalties for violations of regulations 
     that affect a hunting, fishing, or recreational activity on 
     the water of the Missouri River shall be identical for 
     members and non-Indians.
       (7) Other indian tribe requirements.--Each Indian tribe 
     shall agree to meet the requirements applicable to the Indian 
     tribe under this Act.
       (8) Boating safety; temporary landings.--Each Indian tribe 
     shall grant any person who operates a vessel the right of 
     access, without charge, to land under the jurisdiction of the 
     Indian tribe located along the shore of the Missouri River or 
     the reservoirs of the Pick-Sloan Missouri River Basin program 
     projects for the purposes of--
       (A) ensuring safety under adverse weather conditions 
     (including storms and high winds);
       (B) otherwise making a landing that--
       (i) is for a purpose other than hunting, fishing, or 
     removing objects, including Indian cultural or archaeological 
     materials;
       (ii) is of a duration of not more than 24 hours; and
       (iii) is consistent with the protection of natural 
     resources and the environment.
       (C) carrying out any subsequent co-management agreement 
     that may be negotiated between the State of South Dakota and 
     the Indian tribe relating to hunting, fishing, or 
     recreational use; and
       (D) making an unarmed retrieval of waterfowl (as determined 
     under the law of the State of South Dakota).
       (9) Easements, rights-of-way, leases, and cost-sharing 
     agreements.--
       (A) Maintenance.--The Secretary of the Interior shall 
     maintain all existing easements, rights-of-way, leases, and 
     cost-sharing agreements that are in effect as of the date of 
     the transfer.
       (B) Payments to county.--The Secretary of the Interior 
     shall pay the affected county 100 percent of the receipts 
     from the easements, rights-of-way, leases, and cost-sharing 
     agreements described in subparagraph (A).
       (e) Access by Original Owners.--
       (1) In general.--An original owner of land transferred 
     under this section (including an Indian allottee), and any 
     other person who has been assigned or has inherited land from 
     an original landowner (or Indian allottee), who maintains 
     base property in the vicinity of the land, shall be 
     guaranteed access to and a right to lease, for agricultural 
     purposes (including grazing), the land acquired from the 
     original owner by the Secretary of the Army for the Pick-
     Sloan Missouri River Basin program.
       (2) Easements and rights-of-way.--An Indian tribe shall 
     honor past easements and rights-of-way and provide reasonable 
     future easements and rights-of-way to ensure access for use 
     of the land.
       (3) Fencing.--Any agency or Indian tribe that requires the 
     land to be fenced shall be responsible for building and 
     maintaining the fencing required.
       (4) Fees.--An Indian tribe that leases land to an original 
     owner or other person described in paragraph (1) may charge a 
     grazing fee at a rate that does not exceed the rate charged 
     by the Indian tribe for grazing on comparable land within the 
     external boundaries of the reservation of the Indian tribe.
       (5) Eligibility to lease land for agricultural purposes.--
     Not later than 1 year after the date of enactment of this 
     Act, the Secretary of the Interior shall determine which 
     original owners, heirs, and assignees (including Indian 
     allottees) meet the eligibility criteria to lease land for 
     agricultural purposes under this section.

     SEC. 6. TERRESTRIAL WILDLIFE HABITAT MITIGATION.

       (a) Terrestrial Wildlife Habitat Mitigation Plans.--
       (1) In general.--In accordance with this subsection and 
     with the assistance of the Secretary of the Army and the 
     Secretary of the Interior, the State of South Dakota and each 
     Indian tribe shall, as a condition of the receipt of funds 
     under this Act, develop a plan for the mitigation of 
     terrestrial wildlife habitat loss that occurred as a result 
     of flooding related to projects carried out as part of the 
     Pick-Sloan Missouri River Basin program.
       (2) Funding for carrying out plans.--
       (A) State.--The Secretary of the Treasury shall make 
     available to the State of South Dakota funds from the South 
     Dakota Wildlife Habitat Mitigation Trust Fund established by 
     section 7, to be used to carry out the plan.
       (B) Indian tribes.--The Secretary of the Interior shall 
     make available to each Indian tribe funds from the Native 
     American Wildlife Habitat Mitigation Trust Fund established 
     by section 8, to be used to carry out the plan.
       (b) Programs for the Purchase of Wildlife Habitat Leases.--
       (1) In general.--The State of South Dakota may use payments 
     received under section 7(d)(3)(A)(ii), and each Indian tribe 
     may use payments received under section 8(d)(3)(A)(ii), to 
     develop or expand a program for the purchase of wildlife 
     habitat leases that meets the requirements of this 
     subsection.
       (2) Development of plan.--
       (A) In general.--If the State of South Dakota, or an Indian 
     tribe, conducts a program in accordance with this subsection, 
     the State of South Dakota, or the Indian tribe, in 
     consultation with the United States Fish and Wildlife Service 
     and with opportunity for public comment, shall develop a plan 
     to lease land for the protection and development of wildlife 
     habitat, including habitat for threatened and endangered 
     species associated with the Missouri River ecosystem.
       (B) Use for program.--The plan shall be used by the State 
     of South Dakota, or the Indian tribe, in carrying out the 
     program developed under paragraph (1).
       (3) Conditions of leases.--Each lease covered under a 
     program under paragraph (1) shall specify that the owner of 
     the property that is subject to the lease shall provide--
       (A) public access for sportsmen during hunting seasons; and
       (B) other outdoor uses covered under the lease, as 
     negotiated by the landowner and the State of South Dakota or 
     Indian tribe.
       (4) Use of assistance.--

[[Page S11357]]

       (A) State of south dakota.--If the State of South Dakota 
     conducts a program in accordance with this subsection, the 
     State may use payments received under section 7(d)(3)(A)(ii) 
     to--
       (i) acquire easements, rights-of-way, or leases for 
     management of wildlife habitat, including habitat for 
     threatened and endangered species, and public access to 
     wildlife on private land in the State of South Dakota;
       (ii) create public access to Federal or State land through 
     the purchase of easements or rights-of-way that traverse 
     private property; or
       (iii) lease land for the creation or restoration of a 
     wetland on tribal or private land in the State of South 
     Dakota.
       (B) Indian tribes.--If an Indian tribe conducts a program 
     in accordance with this subsection, the Indian tribe may use 
     payments received under section 7(d)(3)(A)(ii) for the 
     purposes described in subparagraph (A).
       (c) Deauthorization of Blunt Reservoir Project.--
       (1) In general.--The Blunt Reservoir and Pierre Canal 
     features of the Oahe Unit, administered by the Bureau of 
     Reclamation in the State of South Dakota, are not authorized 
     after the date of enactment of this Act.
       (2) Transfer of land.--Land associated with the Blunt 
     Reservoir and Pierre Canal features of the Oahe Unit that is 
     administered by the Bureau of Reclamation is transferred in 
     fee title to the State of South Dakota to be used for the 
     purpose of terrestrial wildlife habitat mitigation.

     SEC. 7. SOUTH DAKOTA WILDLIFE HABITAT MITIGATION TRUST FUND.

       (a) Establishment.--There is established in the Treasury of 
     the United States a fund to be known as the ``South Dakota 
     Wildlife Habitat Mitigation Trust Fund'' (referred to in this 
     section as the ``Fund'').
       (b) Funding.--For the fiscal year following the fiscal year 
     during which the aggregate of the amounts deposited in the 
     Lower Brule Sioux Tribe Infrastructure Development Trust Fund 
     is equal to the amount specified in section 4(b) of the Lower 
     Brule Sioux Tribe Infrastructure Development Trust Fund Act 
     of 1997, and for each fiscal year thereafter until such time 
     as the aggregate of the amounts deposited in the Fund under 
     this subsection, is equal to $108,000,000, the Secretary of 
     the Treasury shall deposit in the Fund an amount equal to 15 
     percent of the receipts from the deposits in the Treasury of 
     the United States for the preceding fiscal year from the 
     power program of the Pick-Sloan Missouri River Basin program, 
     administered by the Western Area Power Administration.
       (c) Investments.--The Secretary of the Treasury shall 
     invest the amounts deposited under subsection (b) only in 
     interest-bearing obligations of the United States or in 
     obligations guaranteed as to both principal and interest by 
     the United States.
       (d) Payments.--
       (1) In general.--All amounts credited as interest under 
     subsection (c) shall be available, without fiscal year 
     limitation, to the State of South Dakota for use in 
     accordance with paragraph (3).
       (2) Withdrawal and transfer of funds.--The Secretary of the 
     Treasury shall withdraw amounts credited as interest under 
     paragraph (1) and transfer the amounts to the State of South 
     Dakota for use in accordance with paragraph (3). The 
     Secretary of the Treasury may not withdraw the amounts for 
     any other purpose.
       (3) Use of transferred funds.--
       (A) In general.--Subject to subparagraphs (B) and (C), the 
     State of South Dakota shall use the amounts transferred under 
     paragraph (2) only to carry out the following activities:
       (i) The implementation and administration of a terrestrial 
     wildlife habitat mitigation plan under section 6(a).
       (ii) The purchase and administration of wildlife habitat 
     leases under section 6(b) and other activities described in 
     that section.
       (iii) The management, operation, administration, 
     maintenance, and development, in accordance with this Act, of 
     all recreation areas that are leased to the State of South 
     Dakota by the Army Corps of Engineers.
       (iv) The development and maintenance of public access to, 
     and protection of, wildlife habitat and recreation areas 
     along the Missouri River.
       (B) Allocation for plan.--The State of South Dakota shall 
     use the amounts transferred under paragraph (2) to fully 
     implement the terrestrial wildlife habitat mitigation plan of 
     the State under section 6(a).
       (C) Prohibition.--The amounts transferred under paragraph 
     (2) shall not be used for the purchase of land in fee title.
       (e) Transfers and Withdrawals.--Except as provided in 
     subsection (d), the Secretary of the Treasury may not 
     transfer or withdraw any amount deposited under subsection 
     (b).
       (f) Administrative Expenses.--There are authorized to be 
     appropriated to the Secretary of the Treasury such sums as 
     are necessary to pay the administrative expenses of the Fund.

     SEC. 8. NATIVE AMERICAN WILDLIFE HABITAT MITIGATION TRUST 
                   FUND.

       (a) Establishment.--There is established in the Treasury of 
     the United States a fund to be known as the ``Native American 
     Wildlife Habitat Mitigation Trust Fund'' (referred to in this 
     section as the ``Fund'').
       (b) Funding.--For the fiscal year following the fiscal year 
     during which the aggregate of the amounts deposited in the 
     Lower Brule Sioux Tribe Infrastructure Development Trust Fund 
     is equal to the amount specified in section 4(b) of the Lower 
     Brule Sioux Tribe Infrastructure Development Trust Fund Act 
     of 1997, and for each fiscal year thereafter until such time 
     as the aggregate of the amounts deposited in the Fund under 
     this subsection, is equal to $47,400,000, the Secretary of 
     the Treasury shall deposit in the Fund an amount equal to 10 
     percent of the receipts from the deposits in the Treasury of 
     the United States for the preceding fiscal year from the 
     power program of the Pick-Sloan Missouri River Basin program, 
     administered by the Western Area Power Administration.
       (c) Investments.--The Secretary of the Treasury shall 
     invest the amounts deposited under subsection (b) only in 
     interest-bearing obligations of the United States or in 
     obligations guaranteed as to both principal and interest by 
     the United States.
       (d) Payments.--
       (1) In general.--All amounts credited as interest under 
     subsection (c) shall be available, without fiscal year 
     limitation, to the Secretary of the Interior for use in 
     accordance with paragraphs (3) and (4).
       (2) Withdrawal and transfer of funds.--At the request of 
     the Secretary of the Interior, the Secretary of the Treasury 
     shall withdraw amounts credited as interest under paragraph 
     (1) and transfer the amounts to the Secretary of the Interior 
     for use in accordance with paragraphs (3) and (4). The 
     Secretary of the Treasury may not withdraw the amounts for 
     any other purpose.
       (3) Use of transferred funds.--
       (A) In general.--Subject to subparagraphs (B) and (C) and 
     paragraph (4), the Secretary of the Interior shall use the 
     amounts transferred under paragraph (2) only for the purpose 
     of making payments to Indian tribes to carry out the 
     following activities:
       (i) The implementation and administration of a terrestrial 
     wildlife habitat mitigation plan under section 6(a), which 
     payment shall be made at such time as the Secretary of the 
     Army approves a terrestrial wildlife habitat mitigation plan 
     developed by the Indian tribe under that section.
       (ii) The purchase and administration of wildlife habitat 
     leases under section 6(b) and other activities described in 
     that section.
       (iii) The management, operation, administration, 
     maintenance, and development, in accordance with this Act, of 
     recreation areas held in trust for the Indian tribes.
       (iv) The development and maintenance of public access to, 
     and protection of, wildlife habitat and recreation areas 
     along the Missouri River.
       (v) The preservation of Native American cultural sites 
     located on the transferred land.
       (B) Allocation for plan.--Each Indian tribe shall use the 
     amounts transferred under paragraph (2) and paid to the 
     Indian tribe to fully implement the terrestrial wildlife 
     habitat mitigation plan of the Indian tribe under section 
     6(a).
       (C) Prohibition.--The amounts transferred under paragraph 
     (2) and paid to an Indian tribe shall not be used for the 
     purchase of land in fee title.
       (4) Pro rata share of payments.--In making payments from 
     the interest generated under the Fund, the Secretary of the 
     Interior shall ensure that the total amount of payments 
     received by the Indian tribes under paragraph (3) is 
     distributed as follows:
       (A) 79 percent shall be available to the Cheyenne River 
     Sioux Tribe.
       (B) 21 percent shall be available to the Lower Brule Sioux 
     Tribe.
       (e) Transfers and Withdrawals.--Except as provided in 
     subsection (d), the Secretary of the Treasury may not 
     transfer or withdraw any amount deposited under subsection 
     (b).
       (f) Administrative Expenses.--There are authorized to be 
     appropriated to the Secretary of the Treasury such sums as 
     are necessary to pay the administrative expenses of the Fund.

     SEC. 9. AUTHORIZATION OF ADMINISTRATIVE COSTS OF THE ARMY 
                   CORPS OF ENGINEERS.

       There are authorized to be appropriated to the Secretary of 
     the Army such sums as are necessary--
       (1) to pay administrative expenses incurred in carrying out 
     this Act; and
       (2) to fund the implementation of terrestrial wildlife 
     habitat mitigation plans under section 6(a) until such time 
     as funds are available for use under sections 7(d)(3)(A)(i) 
     and 8(d)(3)(A)(i).

     SEC. 10. RULE OF CONSTRUCTION; PROHIBITION.

       (a) Statutory Construction.--Nothing in this Act diminishes 
     or affects--
       (1) any water right of an Indian tribe;
       (2) any other right of an Indian tribe, except as 
     specifically provided in another provision of this Act;
       (3) any valid, existing treaty right that is in effect on 
     the date of enactment of this Act;
       (4) the external boundaries of any reservation of an Indian 
     tribe;
       (5) any authority of the State of South Dakota that relates 
     to the protection, regulation, or management of fish and 
     terrestrial wildlife resources, except as specifically 
     provided in another provision of this Act;
       (6) any authority or responsibility of the Secretary of the 
     Army or the Secretary of the Interior under a law in 
     existence on the date of enactment of this Act, including--
       (A) the Endangered Species Act of 1973 (16 U.S.C. 1531 et 
     seq.);
       (B) the Migratory Bird Treaty Act (16 U.S.C. 703 et seq.);

[[Page S11358]]

       (C) the Act entitled ``An Act for the protection of the 
     bald eagle'', approved June 8, 1940 (16 U.S.C. 668 et seq.);
       (D) the Native American Graves Protection and Repatriation 
     Act (25 U.S.C. 3001 et seq.); and
       (E) the National Historic Preservation Act (16 U.S.C. 470 
     et seq.); or
       (7) the ability of an Indian tribe to use the trust land 
     transferred to the Indian tribe under this Act in a manner 
     that is consistent with the use of other Indian trust land, 
     except as otherwise specifically provided in this Act.
       (b) Power Rates.--No payment made under this Act shall 
     affect any power rate under the Pick-Sloan Missouri River 
     Basin program.

     SEC. 11. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated to the Department 
     of the Interior such sums as are necessary to carry out this 
     Act.
                                 ______
                                 
      By Mr. MURKOWSKI (for himself and Mr. Thomas):
  S. 1342. A bill to amend title XVIII of the Social Security Act to 
increase access to quality health care in frontier communities by 
allowing health clinics and health centers greater Medicare flexibility 
and reimbursement; to the Committee on Finance.


       THE MEDICARE FRONTIER HEALTH CLINIC AND CENTER ACT OF 1997

  Mr. MURKOWSKI. Mr. President, I rise today to introduce the Medicare 
Frontier Health Clinic and Center Act of 1997. I am pleased that the 
junior Senator from Wyoming, Senator Thomas is cosponsoring this bill.
  Our bill clarifies the intent of Congress to allow health clinics to 
participate in the new Medicare Rural Hospital Flexibility Program.
  Mr. President, great advances in health care have occurred during the 
past decades, however, some communities in remote areas continue to 
struggle to provide primary care services. These communities face 
unparalleled geographic, climatic and economic barriers to quality 
health care. They simply do not have the resources, surface 
transportation nor the demand to provide full service inpatient and 
outpatient care--yet the community might be located hours from an acute 
care hospital in an urban center.
  The Medicare Rural Hospital Flexibility Program in the Balanced 
Budget Act of 1997 addresses part of this dilemma. It exempts many 
rural hospitals from burdensome Medicare regulations designed for large 
urban hospitals and does not straight jacket them under the prospective 
payment system. This limited-service model has already helped to reduce 
unnecessary overhead and prevent cost shifting in eight States.
  The Medicare Rural Hospital Flexibility Act means that extremely 
rural communities will finally be able to provide more complete health 
care to the elderly. However, Mr. President, this important Medicare 
provision needs legislative clarification. The Medicare Rural Hospital 
Flexibility Program addresses part of the dilemma faced by communities 
located in remote areas, but misses a piece of the health care puzzle 
for our frontier communities--health clinics.
  Frontier communities face conditions even more extreme than rural 
communities. For example, the communities on the Fox Islands in Alaska 
are 400 miles from the nearest limited-service hospital and 650 miles 
from the nearest major, acute care hospital. There are no hospitals or 
even limited-service hospitals on the Fox Islands--just health clinics.
  This legislation will enable clinics in frontier communities such as 
the Fox Islands to participate in the program. A frontier area is 
defined in the bill as borough with six or fewer people per square 
mile. Additionally, to ensure this extension goes to frontier 
communities who are truly in need, participating clinics must be 
located in health professional shortage areas, and be more than a 50-
mile drive from another facility.
  Mr. President, the Medicare Frontier Health Clinic and Center Act of 
1997 is the answer for ensuring health care for our elderly who live in 
extremely rural and frontier areas. Demonstrations conducted by the 
Health Care Financing Administration have already proven the cost 
effectiveness of limited-service facilities.
  I would also point out that yesterday, the National Rural Health 
Association [NRHA], in a letter to Nancy-Ann Min DeParle, the nominee 
to be Administrator of the Health Care Financing Administration, 
endorsed the concept of allowing rural clinics to participate in this 
program.
  I urge my colleagues to consider the health care needs of frontier 
communities and adopt this bill.
                                 ______
                                 
      By Mr. LAUTENBERG:
  S. 1343. A bill to amend the Internal Revenue Code of 1986 to 
increase the excise tax rate on tobacco products and deposit the 
resulting revenues into a Public Health and Education Resource Trust 
Fund, and for other purposes; to the Committee on Finance.


          the public health and education resource act [phaer]

  Mr. LAUTENBERG. Mr. President, last spring, various State attorneys 
general announced that they had reached a global agreement to settle 
ongoing State lawsuits against the tobacco industry in exchange for 
certain concessions by the industry aimed at reducing teen smoking. 
This truly historic agreement followed a persistent effort by President 
Clinton to empower the Food and Drug Administration to regulate 
nicotine and develop strategies to stop the addiction of our children 
to this deadly drug. President Clinton is the first President in our 
Nation's history to take on the tobacco industry on behalf of the 
American people and he deserves enormous credit for his bold and 
relentless leadership on this issue.
  Since the announcement of the global tobacco settlement, President 
Clinton, his health advisers, former FDA Commissioner David Kessler, 
former Surgeon General C. Everett Koop, our leading public health 
groups, and many of us in the Congress have reviewed the proposed 
settlement. While the attorneys general pushed the industry as hard as 
they could, they had to make significant compromises along the way to 
keep the industry at the bargaining table. An examination of their deal 
with the industry reflects the limits under which they were operating 
and shows that the settlement is flawed in many respects.
  The Congress, Mr. President, is in an entirely different position 
vis-a-vis the tobacco industry. The Congress has no need to make the 
kinds of concessions to the industry that the attorneys general did. 
The Congress does not need permission from the industry to take steps 
to reduce teen smoking and put an end to hundreds of thousands of 
preventable deaths each year. We don't have to settle. Our job is to 
develop legislation in the public interest and promote the public 
health.
  Mr. President, virtually no one in the Congress today supports the 
settlement proposed by the industry and the attorneys general. The 
settlement is dead. It is gone with Joe Camel. After extensive review, 
President Clinton recommended to the Congress that we enact 
comprehensive tobacco control legislation, and focus on the public 
health--not the tobacco industry's interests.
  Mr. President, I share President Clinton's deep reservation about the 
settlement as a framework for this legislation. Instead, I would like 
to propose an alternative framework for my colleagues and others in the 
public health community to consider. I hope it will influence our 
deliberations next year, and contribute to the enactment of effective 
and comprehensive tobacco legislation. Mr. President, this approach is 
not premised on the notion of a deal with the industry. Instead, it 
attempts to build on the extremely thoughtful and knowledgeable work of 
Drs. Kessler and Koop, and many other public health experts and 
economists, who have studied these questions for a long time. It is a 
public health measure, pure and simple.
  Mr. President, today Representative Jim Hansen and I are introducing 
the Public Health and Education Resource Act--or the PHAER Act. The 
PHAER Act is, in some ways simple and straightforward. It goes right at 
the problem. It would raise the excise tax on tobacco by $1.50, 
consistent with the President's recommendation on pricing. It 
specifically targets the revenues raised to public health, with an 
emphasis on reducing youth smoking rates. This bipartisan, bicameral 
proposal is intended to serve as the blueprint for accomplishing the 
public health goals that the President and public health leaders have 
outlined.

  Mr. President, the overarching goal of the public health community is 
to

[[Page S11359]]

decrease the rate of tobacco addiction in children. I believe the PHAER 
Act is the simplest and most direct way to accomplish that goal. Every 
health expert concludes that the single most effective way to reduce 
youth consumption of cigarettes is to increase the price. According to 
the Congressional Research Service, a $1.50 increase in the price of 
cigarettes will result in a 45-percent reduction in youth smoking 
rates. The President has made this a prerequisite to any tobacco 
legislation.
  So, Mr. President, the question before Congress is how to accomplish 
this price increase and serve our public health interests. The tobacco 
settlement would raise prices by funneling money through the tobacco 
companies to accomplish a price increase. This approach relies on the 
industry to raise the price--which is a Catch-22. If the industry does 
raise the price by a $1.50, then there is no guarantee that all of 
these revenues will go toward the public health. In fact, health 
experts and the Federal Trade Commission have concluded that under the 
proposed settlement, the companies would make a substantial profit from 
such a price increase--as less than half of the $1.50 would actually go 
toward settlement payments.
  On the other hand, the companies might not ever raise their prices to 
a point that actually makes a real dent in teen smoking. They could 
choose to simply raise it high enough to cover their settlement costs--
estimated at 62 cents per pack.
  Neither of these outcomes are positive for America's health. That is 
why the only fair way to accomplish these goals is through the PHAER 
Act I am introducing today.
  Mr. President, we know that an increase in excise taxes is the single 
most effective step we can take to reduce teen smoking, and through 
PHAER we can ensure that every penny of the price increase is targeted 
to programs that will further reduce illegal youth tobacco consumption 
and promote other critical public health priorities. This is the most 
effective and reliable mechanism to guarantee that prices go up and 
that revenues are targeted to the proper programs.
  Mr. President, this is not a partisan issue. Senators from both sides 
of the aisle have stated that the excise tax is the most efficient and 
effective way to reduce teen smoking and decrease the cost of tobacco 
illness in our country. This is one of the few taxes that people 
actually support increasing. It is one of the few taxes that can be 
directly linked to positive policy goals. Now, all we need is the will 
to act.
  Mr. President, we propose a revenue pipeline to the public health 
rather than relying on the Rubik's cube payment scheme offered by the 
industry. Under my bill, excise tax increases will turn teenagers away 
from cigarettes and the proceeds of the increase will go directly to 
benefit America's health. These funds are targeted to public health and 
educational programs to further reduce teen tobacco addiction.

  Our PHAER tobacco excise tax increase will be phased in over 3 years. 
Each year the fee will increase by 50 cents until it reaches $1.50. 
Once at $1.50, the PHAER fee will be indexed for inflation to guarantee 
that its price-deterrent effect continues to be strong enough to 
maintain the reduction in teen tobacco use.
  Mr. President, many have stated that a price increase alone will not 
sustain a long term decrease in youth tobacco addiction, and they are 
right. That is why the revenues from the PHAER fee will be targeted to 
public health programs, with an emphasis on those that will directly 
decrease the number of kids who begin to smoke every day.
  Three-quarters of PHAER funds will be disbursed at the State and 
local level for health and education programs that bring home to young 
people the deadly consequences of smoking. These funds will be 
distributed to the States with the supervision and assistance by the 
Secretary of Health and Human Services. We should set out national 
goals for reducing teen smoking, and insist on accountability, but we 
should also give States the flexibility to develop the best programs 
for their people.
  Mr. President, each State will be able to design teen smoking 
cessation programs that are most effective for its particular 
circumstance. An average of $15 billion per year will be available for 
these States programs. Eligible uses include smoking cessation programs 
and services, school and community-based tobacco education and 
prevention programs, counteradvertising campaigns, expansion of the 
children's health insurance program created in the budget act, and 
other public health purposes.
  Mr. President, it is critical that smoking cessation and addiction 
treatment programs be put into place, and the PHAER Program will do 
that. I hear a great deal of talk about adult choice. Well, most adults 
who smoke are not really choosing to smoke--they are addicted. It is 
not merely a habit--it is an addiction as powerful as the addiction to 
cocaine. And as the price of cigarettes goes up, we should put a system 
in place that will help bring addicted smokers off nicotine. Cessation 
and treatment programs should be available to all Americans, regardless 
of their income.
  Mr. President, these programs will be coordinated at the State level 
and the States will have flexibility to design their own programs. The 
States vary widely in the patterns of tobacco use. Some States have 
youth cigarette consumption rates reaching catastrophic levels; other 
States have a more pressing problem with chewing--or smokeless--
tobacco.
  Mr. President, the remaining 25 percent of PHAER funds--an average of 
$5 billion per year--will be available at the Federal level to expand 
critical research at the National Institutes of Health and the Centers 
for Disease Control. They will also be used to adequately fund tobacco 
control programs at the Food and Drug Administration and to assure that 
tobacco farmers, factory workers, and their communities will not suffer 
economic devastation as we move to reduce smoking. The PHAER Act would 
also contribute to tobacco prevention programs at the Veterans' 
Administration, the Drug Czar's office, and across the world through 
assistance to international programs. PHAER would also fund Medicare 
prevention programs and premium and cost-sharing assistance for low-
income Medicare beneficiaries.

  Mr. President, all of these goals--and many more--can be 
accomplished, and we do not need to ask the tobacco industry's 
permission to do it. We just need to raise the tobacco excise tax and 
use the revenues to promote clear public health objectives.
  Mr. President, the reason we can accomplish these goals is that the 
PHAER fund will raise $494 billion over 25 years--an average of nearly 
$20 billion per year. This estimate is based on the tobacco consumption 
curve developed by the Joint Committee on Taxation. It is a realistic 
calculation of the revenues that will flow from this excise tax boost, 
even given anticipated reductions in tobacco consumption.
  Mr. President, this revenue projection of $494 billion over 25 years 
is much more reliable than the $368.5 billion figure projected by the 
tobacco industry and State attorneys general as a result of their 
proposed settlement. Those numbers are full of holes and deceptions. 
The Federal Trade Commission recently found that the much-publicized 
$368.5 billion figure so widely associated with the proposed tobacco 
settlement failed to take into account the effect of reduced 
consumption of tobacco on the industry's payment obligations under the 
terms of the settlement. A more realistic estimate would peg the 
proceeds of the proposed tobacco settlement closer to $250 billion over 
25 years.
  Mr. President, when you look at real numbers, it is clear that the 
PHAER Act will provide States with considerably more funds than the 
proposal by the tobacco industry and the attorneys general.
  Finally, Mr. President, our bill includes a series of sense-of-the-
Senate provisions. We include them in the bill to reflect our 
recognition that comprehensive tobacco legislation should include a 
broader range of measures than the revenue proposals in PHAER. These 
provisions state that any final legislation should include: stiff 
penalties to serve as an incentive for the industry to stop targeting 
kids, full authority for the Food and Drug Administration to regulate 
tobacco, disclosure of documents, restrictions on secondhand smoke, 
ingredient and constituent disclosure and a ban on the use of Federal 
Government resources

[[Page S11360]]

to weaken nondiscriminatory public health laws abroad.
  Already this year, several key pieces of tobacco legislation have 
been introduced that should be part of congressional action next year 
on tobacco. I have introduced the Tobacco Disclosure and Warning Act, 
dealing with ingredient labeling, the Smoke-Free Environment Act, which 
would restrict secondhand smoke, and the Worldwide Tobacco Disclosure 
Act, which would set out our international trade policy on tobacco. I 
have also cosponsored Senator Durbin's legislation, the No Tobacco for 
Kids Act, which would set up real penalties to stop the industry from 
targeting kids.
  In addition, along with Minnesota State Attorney General Humphrey and 
others, I have called for a full disclosure of hidden documents from 
the industry, including those that have been fraudulently concealed 
under the cloak of the attorney-client privilege. I have asked relevant 
committee chairmen to subpoena documents being held by Minnesota courts 
because Congress must have the unfiltered truth before we legislate on 
such a critical issue.

  Hopefully, Mr. President, the State of Minnesota will do what the 
Congress of the United States has so far failed to do. Minnesota--which 
did not sign on to the supposedly ``global'' tobacco settlement--is 
expected to go to trial in January. That case should bring significant 
information to light--information on tobacco and health that will be 
critical to crafting appropriate legislation in Congress.
  Mr. President, opponents of strengthening the proposed tobacco 
settlement assert the industry will ``walk away'' if any legislation is 
too favorable to the public health. Last time I checked the 
Constitution of the United States, only duly elected U.S. Senators 
could vote in this Chamber, and only Members, staff, and former Members 
could have access to the floor. As far as I'm concerned, the tobacco 
industry can walk anywhere it wants to--but not onto this floor to cast 
votes for or lobby against this legislation.
  Mr. President, all of us were elected to serve the people of our 
individual States and the Nation as a whole. There are few things that 
I could do for the people of New Jersey--especially the young people 
and their parents--that are more critical than preventing children from 
inhaling a deadly and addicting toxin into their body.
  Mr. President, I urge my colleagues to cosponsor the PHAER 
legislation. It is not time to strike a deal with Big Tobacco, but 
rather it is time to make a healthy future real for America's kids.
  Mr. President, I ask unanimous consent that letters I have received 
from public health groups supporting the approach taken in this 
legislation be entered into the Record. This includes a letter from the 
ENACT Coalition, which is signed by the American Medical Association, 
the American Cancer Society, the American Heart Association, American 
Academy of Pediatrics, American College of Preventive Medicine, 
National Association of County and City Health Officials, Partnership 
for Prevention, and the Campaign for Tobacco-Free Kids. In addition, I 
am inserting letters from the American Lung Association and the 
National Association of Counties, which also indicated support for the 
introduction of the PHAER legislation.
  I also ask unanimous consent to insert the bill, a fact sheet, and a 
chart reflecting how many more lives would be saved under the PHAER Act 
as opposed to the tobacco industry's proposed settlement into the 
Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1343

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Public 
     Health and Education Resource (PHAER) Act''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.

       TITLE I--IMPOSITION OF INCREASED TAXES ON TOBACCO PRODUCTS

Sec. 101. Increase in excise tax rate on tobacco products in addition 
              to such increase contained in the Balanced Budget Act of 
              1997.
Sec. 102. Tax treatment for certain tobacco-related expenses.

                       TITLE II--PHAER TRUST FUND

Sec. 201. Public Health and Education Resource Trust Fund.

     TITLE III--FEDERAL STANDARDS WITH RESPECT TO TOBACCO PRODUCTS

Sec. 301. Federal standards with respect to tobacco products.

                     TITLE IV--SENSE OF THE SENATE

Sec. 401. Sense of the Senate regarding comprehensive tobacco 
              legislation.
       TITLE I--IMPOSITION OF INCREASED TAXES ON TOBACCO PRODUCTS

     SEC. 101. INCREASE IN EXCISE TAX RATE ON TOBACCO PRODUCTS IN 
                   ADDITION TO SUCH INCREASE CONTAINED IN THE 
                   BALANCED BUDGET ACT OF 1997.

       (a) Cigarettes.--Subsection (b) of section 5701 of the 
     Internal Revenue Code of 1986 is amended--
       (1) by striking ``$12 per thousand ($10 per thousand on 
     cigarettes removed during 1991 or 1992);'' in paragraph (1) 
     and inserting ``the applicable rate per thousand determined 
     in accordance with the following table:

``In the case of cigarettes removed during:     The applicable rate is:
  1998.......................................................$12.00....

  1999.......................................................$37.00....

  2000.......................................................$67.00....

  2001.......................................................$92.00....

  2002.....................................................$94.50.;....

     and
       (2) by striking paragraph (2) and inserting the following:
       ``(2) Large cigarettes.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     on cigarettes, weighing more than 3 pounds per thousand, the 
     applicable rate per thousand determined in accordance with 
     the following table:

``In the case of cigarettes removed during:     The applicable rate is:
  1998.......................................................$25.20....

  1999.......................................................$77.70....

  2000......................................................$140.70....

  2001......................................................$193.20....

  2002.....................................................$198.45.....

       ``(B) Exception.--On cigarettes more than 6\1/2\ inches in 
     length, at the rate prescribed for cigarettes weighing not 
     more than 3 pounds per thousand, counting each 2\3/4\ inches, 
     or fraction thereof, of the length of each as one 
     cigarette.''
       (b) Cigars.--Subsection (a) of section 5701 of such Code is 
     amended--
       (1) by striking ``$1.125 cents per thousand (93.75 cents 
     per thousand on cigars removed during 1991 or 1992),'' in 
     paragraph (1) and inserting ``the applicable rate per 
     thousand determined in accordance with the following table:


``In the case of cigars removed    The applicable rate is:
 during:
  1998...........................  $1.125 cents
  1999...........................  $3.4687 cents
  2000...........................  $6.2822 cents
  2001...........................  $8.6264 cents
  2002...........................  $8.8588 cents.'';
 


     and
       (2) by striking paragraph (2) and inserting the following:
       ``(2) Large cigars.--On cigars, weighing more than 3 pounds 
     per thousand, the applicable percentage of the price for 
     which sold but not more that the applicable rate per thousand 
     determined in accordance with the following table:


In the case of cigars removed     The applicable      The applicable
 during:.                          percentage is:.     rate is:
   1998.........................      12.750%.......      $30.00
   1999.........................      39.312%.......      $92.50
   2000.........................      71.189%.......     $167.50
   2001.........................      97.753%.......     $230.00
   2002.........................     100.407%.......     $236.25.''
 


       (c) Cigarette Papers.--Subsection (c) of section 5701 of 
     such Code is amended to read as follows:
       ``(c) Cigarette Papers.--
       ``(1) In general.--Except as provided in paragraph (2), on 
     each book or set of cigarette papers containing more than 25 
     papers, manufactured in or imported into the United States, 
     there shall be imposed a tax of the applicable rate for each 
     50 papers or fractional part thereof as determined in 
     accordance with the following table:


[[Page S11361]]



``In the case of cigarette papers
 removed during:                   The applicable rate is:
    1998.........................  0.75 cent
    1999.........................  2.31 cents
    2000.........................  4.18 cents
    2001.........................  5.74 cents
    2002.........................  5.91 cents.
 

       ``(2) Exception.--If cigarette papers measure more than 
     6\1/2\ inches in length, such cigarette papers shall be 
     taxable at the rate prescribed, counting each 2\3/4\ inches, 
     or fraction thereof, of the length of each as one cigarette 
     paper.''
       (d) Cigarette Tubes.--Subsection (d) of section 5701 of 
     such Code is amended to read as follows:
       ``(d) Cigarette Tubes.--
       ``(1) In general.--Except as provided in paragraph (2), on 
     cigarette tubes, manufactured in or imported into the United 
     States, there shall be imposed a tax of the applicable rate 
     for each 50 tubes or fractional part thereof as determined in 
     accordance with the following table:

``In the case of cigarette tubes   The applicable rate is:
 removed during:
    1998.........................  1.50 cents
    1999.........................  4.62 cents
    2000.........................  8.39 cents
    2001.........................  11.53 cents
    2002.........................  11.82 cents.
 

       ``(2) Exception.--If cigarette tubes measure more than 6\1/
     2\ inches in length, such cigarette tubes shall be taxable at 
     the rate prescribed, counting each 2\3/4\ inches, or fraction 
     thereof, of the length of each as one cigarette tube.''
       (e) Smokeless Tobacco.--Paragraphs (1) and (2) of 
     subsection (e) of section 5701 of such Code are is amended to 
     read as follows:
       ``(1) Snuff.--On snuff, the applicable rate per pound 
     determined in accordance with the following table (and a 
     proportionate tax at the like rate on all fractional parts of 
     a pound):

``In the case of snuff removed     The applicable rate is:
 during:
    1998.........................  36 cents
    1999.........................  $1.11
    2000.........................  $2.01
    2001.........................  $2.76
    2002.........................  $2.835 cents.
 

       ``(2) Chewing tobacco.--On chewing tobacco, the applicable 
     rate per pound determined in accordance with the following 
     table (and a proportionate tax at the like rate on all 
     fractional parts of a pound):

``In the case of chewing tobacco   The applicable rate is:
 removed during:
    1998.........................  12 cents
    1999.........................  37 cents
    2000.........................  67 cents
    2001.........................  92 cents
    2002.........................  94.5 cents.''
 

       (f) Pipe Tobacco.--Subsection (f) of section 5701 of such 
     Code is amended to read as follows:
       ``(f) Pipe Tobacco.--On pipe tobacco, manufactured in or 
     imported into the United States, there shall be imposed a tax 
     of the applicable rate per pound determined in accordance 
     with the following table (and a proportionate tax at the like 
     rate on all fractional parts of a pound):


``In the case of pipe tobacco      The applicable rate is:
 removed during:
  1998...........................  67.5 cents
  1999...........................  $2.0812 cents
  2000...........................  $3.7705 cents
  2001...........................  $5.1774 cents
  2002...........................  $5.3157 cents.''
 


       (g) Imposition of Excise Tax on Manufacture or Importation 
     of Roll-Your-Own Tobacco.--
       (1) In general.--Section 5701 of such Code (relating to 
     rate of tax) is amended by redesignating subsection (g) as 
     subsection (h) and by inserting after subsection (f) the 
     following new subsection:
       ``(g) Roll-Your-Own Tobacco.--On roll-your-own tobacco, 
     manufactured in or imported into the United States, there 
     shall be imposed a tax of the applicable rate per pound 
     determined in accordance with the following table (and a 
     proportionate tax at the like rate on all fractional parts of 
     a pound):


``In the case of roll-your-own     The applicable rate is:
 tobacco removed during:
  1998...........................  67.5 cents
  1999...........................  $2.0812 cents
  2000...........................  $3.7705 cents
  2001...........................  $5.1774 cents
  2002...........................  $5.3157 cents.''
 

       (2) Roll-your-own tobacco.--Section 5702 of such Code 
     (relating to definitions) is amended by adding at the end the 
     following new subsection:
       ``(p) Roll-Your-Own Tobacco.--The term `roll-your-own 
     tobacco' means any tobacco which, because of its appearance, 
     type, packaging, or labeling, is suitable for use and likely 
     to be offered to, or purchased by, consumers as tobacco for 
     making cigarettes.''
       (3) Technical amendments.--
       (A) Subsection (c) of section 5702 of such Code is amended 
     by striking ``and pipe tobacco'' and inserting ``pipe 
     tobacco, and roll-your-own tobacco''.
       (B) Subsection (d) of section 5702 of such Code is 
     amended--
       (i) in the material preceding paragraph (1), by striking 
     ``or pipe tobacco'' and inserting ``pipe tobacco, or roll-
     your-own tobacco'', and
       (ii) by striking paragraph (1) and inserting the following 
     new paragraph:
       ``(1) a person who produces cigars, cigarettes, smokeless 
     tobacco, pipe tobacco, or roll-your-own tobacco solely for 
     the person's own personal consumption or use, and''.
       (C) The chapter heading for chapter 52 of such Code is 
     amended to read as follows:

    ``CHAPTER 52--TOBACCO PRODUCTS AND CIGARETTE PAPERS AND TUBES''.

       (D) The table of chapters for subtitle E of such Code is 
     amended by striking the item relating to chapter 52 and 
     inserting the following new item:

``Chapter 52. Tobacco products and cigarette papers and tubes.''

       (h) Inflation Adjustment of Rates and Floor Stocks Taxes.--
     Section 5701 of such Code, as amended by subsection (g), is 
     amended by redesignating subsection (h) as subsection (j) and 
     by inserting after subsection (g) the following:
       ``(h) Inflation adjustment.--In the case of a calendar year 
     after 2002, the dollar amount contained in the table in each 
     of the preceding subsections (and the percentage contained in 
     the table contained in subsection (b)(2)) applicable to the 
     preceding calendar year (after the application of this 
     subsection) shall be increased by an amount equal to--
       ``(1) such dollar amount (or percentage), multiplied by
       ``(2) the greatest of--
       ``(A) the cost-of-living adjustment determined under 
     section 1(f)(3) for such calendar year by substituting `the 
     second preceding calendar year' for `calendar year 1992' in 
     subparagraph (B) thereof,
       ``(B) the medical consumer price index for such calendar 
     year determined in the same manner as the adjustment 
     described in subparagraph (A), or
       ``(C) 3 percent.
       ``(j) Floor Stocks Taxes.--
       ``(1) Imposition of tax.--On tobacco products and cigarette 
     papers and tubes manufactured in or imported into the United 
     States which are removed before any tax increase date, and 
     held on such date for sale by any person, there is hereby 
     imposed a tax in an amount equal to the excess of--
       ``(A) the tax which would be imposed under any preceding 
     subsection of this section on the article if the article had 
     been removed on such date, over
       ``(B) the prior tax (if any) imposed under such subsection 
     on such article.
       ``(2) Liability for tax and method of payment.--
       ``(A) Liability for tax.--A person holding cigarettes on 
     any tax increase date, to which any tax imposed by paragraph 
     (1) applies shall be liable for such tax.
       ``(B) Method of payment.--The tax imposed by paragraph (1) 
     shall be paid in such manner as the Secretary shall prescribe 
     by regulations.
       ``(C) Time for payment.--The tax imposed by paragraph (1) 
     shall be paid on or before April 1 following any tax increase 
     date.
       ``(3) Articles in foreign trade zones.--Notwithstanding the 
     Act of June 18, 1934 (48 Stat. 998, 19 U.S.C. 81a) and any 
     other provision of law, any article which is located in a 
     foreign trade zone on any tax increase date, shall be subject 
     to the tax imposed by paragraph (1) if--
       ``(A) internal revenue taxes have been determined, or 
     customs duties liquidated, with respect to such article 
     before such date pursuant to a request made under the 1st 
     proviso of section 3(a) of such Act, or
       ``(B) such article is held on such date under the 
     supervision of a customs officer pursuant to the 2d proviso 
     of such section 3(a).
       ``(4) Tax increase date.--The term ``tax increase date'' 
     means January 1.
       ``(5) Controlled groups.--Rules similar to the rules of 
     section 5061(e)(3) shall apply for purposes of this 
     subsection.
       ``(6) Other laws applicable.--All provisions of law, 
     including penalties, applicable with respect to the taxes 
     imposed by the preceding subsections of this section shall, 
     insofar as applicable and not inconsistent with the 
     provisions of this subsection, apply to the floor stocks 
     taxes imposed by paragraph (1), to the same extent as if such 
     taxes were imposed by such subsections. The Secretary may 
     treat any person who bore the ultimate burden of the tax 
     imposed by paragraph (1) as the person to whom a credit or 
     refund under such provisions may be allowed or made.''
       (i) Modifications of Certain Tobacco Tax Provisions.--

[[Page S11362]]

       (1) Exemption for exported tobacco products and cigarette 
     papers and tubes to apply only to articles marked for 
     export.--
       (A) Subsection (b) of section 5704 of such Code is amended 
     by adding at the end the following new sentence: ``Tobacco 
     products and cigarette papers and tubes may not be 
     transferred or removed under this subsection unless such 
     products or papers and tubes bear such marks, labels, or 
     notices as the Secretary shall by regulations prescribe.''
       (B) Section 5761 of such Code is amended by redesignating 
     subsections (c) and (d) as subsections (d) and (e), 
     respectively, and by inserting after subsection (b) the 
     following new subsection:
       ``(c) Sale of Tobacco Products and Cigarette Papers and 
     Tubes for Export.--Except as provided in subsections (b) and 
     (d) of section 5704--
       ``(1) every person who sells, relands, or receives within 
     the jurisdiction of the United States any tobacco products or 
     cigarette papers or tubes which have been labeled or shipped 
     for exportation under this chapter,
       ``(2) every person who sells or receives such relanded 
     tobacco products or cigarette papers or tubes, and
       ``(3) every person who aids or abets in such selling, 
     relanding, or receiving,

     shall, in addition to the tax and any other penalty provided 
     in this title, be liable for a penalty equal to the greater 
     of $1,000 or 5 times the amount of the tax imposed by this 
     chapter. All tobacco products and cigarette papers and tubes 
     relanded within the jurisdiction of the United States, and 
     all vessels, vehicles, and aircraft used in such relanding or 
     in removing such products, papers, and tubes from the place 
     where relanded, shall be forfeited to the United States.''
       (C) Subsection (a) of section 5761 of such Code is amended 
     by striking ``subsection (b)'' and inserting ``subsection (b) 
     or (c)''.
       (D) Subsection (d) of section 5761 of such Code, as 
     redesignated by subparagraph (B), is amended by striking 
     ``The penalty imposed by subsection (b)'' and inserting ``The 
     penalties imposed by subsections (b) and (c)''.
       (E)(i) Subpart F of chapter 52 of such Code is amended by 
     adding at the end the following new section:

     ``SEC. 5754. RESTRICTION ON IMPORTATION OF PREVIOUSLY 
                   EXPORTED TOBACCO PRODUCTS.

       ``(a) In General.--Tobacco products and cigarette papers 
     and tubes previously exported from the United States may be 
     imported or brought into the United States only as provided 
     in section 5704(d). For purposes of this section, section 
     5704(d), section 5761, and such other provisions as the 
     Secretary may specify by regulations, references to 
     exportation shall be treated as including a reference to 
     shipment to the Commonwealth of Puerto Rico.
       ``(b) Cross Reference.--

  ``For penalty for the sale of tobacco products and cigarette papers 
and tubes in the United States which are labeled for export, see 
section 5761(c).''

       (ii) The table of sections for subpart F of chapter 52 of 
     such Code is amended by adding at the end the following new 
     item:

``Sec. 5754. Restriction on importation of previously exported tobacco 
              products.''

       (2) Importers required to be qualified.--
       (A) Sections 5712, 5713(a), 5721, 5722, 5762(a)(1), and 
     5763 (b) and (c) of such Code are each amended by inserting 
     ``or importer'' after ``manufacturer''.
       (B) The heading of subsection (b) of section 5763 of such 
     Code is amended by inserting ``Qualified Importers,'' after 
     ``Manufacturers,''.
       (C) The heading for subchapter B of chapter 52 of such Code 
     is amended by inserting ``and Importers'' after 
     ``Manufacturers''.
       (D) The item relating to subchapter B in the table of 
     subchapters for chapter 52 of such Code is amended by 
     inserting ``and importers'' after ``manufacturers''.
       (3) Books of 25 or fewer cigarette papers subject to tax.--
     Subsection (c) of section 5701 of such Code is amended by 
     striking ``On each book or set of cigarette papers containing 
     more than 25 papers,'' and inserting ``On cigarette 
     papers,''.
       (4) Storage of tobacco products.--Subsection (k) of section 
     5702 of such Code is amended by inserting ``under section 
     5704'' after ``internal revenue bond''.
       (5) Authority to prescribe minimum manufacturing activity 
     requirements.--Section 5712 of such Code is amended by 
     striking ``or'' at the end of paragraph (1), by redesignating 
     paragraph (2) as paragraph (3), and by inserting after 
     paragraph (1) the following new paragraph:
       ``(2) the activity proposed to be carried out at such 
     premises does not meet such minimum capacity or activity 
     requirements as the Secretary may prescribe, or''.
       (j) Repeal of Duplicative Provisions.--Section 9302 (other 
     than subsection (i)(2)) of the Balanced Budget Act of 1997 is 
     repealed.
       (k) Effective Date.--The amendments and repeal made by this 
     section shall apply to articles removed (as defined in 
     section 5702(k) of the Internal Revenue Code of 1986, as 
     amended by this section) after December 31, 1997.

     SEC. 102. TAX TREATMENT FOR CERTAIN TOBACCO-RELATED EXPENSES.

       (a) In General.--Section 275(a) of the Internal Revenue 
     Code of 1986 (relating to certain taxes) is amended by 
     inserting after paragraph (6) the following:
       ``(7) Taxes imposed by chapter 52, but only in an amount 
     determined at rates in excess of the rates of such taxes 
     effective in 1998.''
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     1998.
                       TITLE II--PHAER TRUST FUND

     SEC. 201. PUBLIC HEALTH AND EDUCATION RESOURCE TRUST FUND.

       (a) In General.--Subchapter A of chapter 98 of the Internal 
     Revenue Code of 1986 (relating to trust fund code) is amended 
     by adding at the end the following new section:

     ``SEC. 9512. PUBLIC HEALTH AND EDUCATION RESOURCE TRUST FUND.

       ``(a) Creation of Trust Fund.--There is established in the 
     Treasury of the United States a trust fund to be known as the 
     `Public Health and Education Resource Trust Fund' (hereafter 
     referred to in this section as the `PHAER Trust Fund'), 
     consisting of such amounts as may be appropriated or 
     transferred to the Trust Fund as provided in this section or 
     section 9602(b).
       ``(b) Transfers to Trust Fund.--There is hereby 
     appropriated to the Trust Fund an amount equivalent to the 
     net increase in revenues received in the Treasury 
     attributable to the amendments made by section 2 of the 
     Public Health and Education Resource (PHAER) Act as estimated 
     by the Secretary.
       ``(c) Obligations From Trust Fund.--
       ``(1) State programs.--
       ``(A) In general.--An applicable percentage of 75 percent 
     of the amounts available in the Trust Fund in a fiscal year 
     shall be distributed by the Secretary of Health and Human 
     Services to each State meeting the requirements of 
     subparagraphs (C) and (D) to be used by such State and by 
     local government entities within such State in such fiscal 
     year and the succeeding fiscal year in the following manner:
       ``(i) Not less than 10 nor more than 30 percent of such 
     amounts to State and local school and community-based tobacco 
     education, prevention, and treatment programs.
       ``(ii) Not less than 10 nor more than 30 percent of such 
     amounts to State and local smoking cessation programs and 
     services, including pharmacological therapies.
       ``(iii) Not less than 10 nor more than 30 percent of such 
     amounts to State and local counter advertising programs.
       ``(iv) Not less than 10 nor more than 25 percent of such 
     amounts to the State Children's Health Insurance Program 
     under title XXI of the Social Security Act (42 U.S.C. 1397aa 
     et seq.) to be in addition to the amount appropriated under 
     section 2104 of such Act.
       ``(v) Not less than 5 nor more than 10 percent of such 
     amounts to--

       ``(I) the Special Supplemental Food Program for Women, 
     Infants, and Children under section 17 of the Child Nutrition 
     Act of 1966 (42 U.S.C. 1786) to be in addition to the amount 
     appropriated under such section, or
       ``(II) the Maternal and Child Health Services Block Grant 
     program under title V of the Social Security Act (42 U.S.C. 
     701 et seq.) to be in addition to the amount appropriated 
     under such title, or
       ``(III) a combination of both programs as determined by the 
     State.

       ``(vi) Not less than 1 nor more than 3 percent of such 
     amounts to the American Stop Smoking Intervention Study for 
     Cancer Prevention (ASSIST) program for such State or other 
     State or local community-based tobacco control programs.
       ``(vii) Not more than 5 percent of such amounts to a State 
     general health care block grant program.
       ``(B) Allocation rules.--For purposes of subparagraph (A), 
     the applicable percentage for any State is determined in 
     accordance with the following table:

State                                             Applicable Percentage
    Alabama................................................1.270390....

    Alaska.................................................0.241356....

    Arizona................................................1.163883....

    Arkansas...............................................0.751011....

    California.............................................8.805641....

    Colorado...............................................1.054018....

    Connecticut............................................1.596937....

    Delaware...............................................0.227018....

    District of Columbia...................................0.534487....

    Florida................................................3.590667....

    Georgia................................................2.007112....

    Hawaii.................................................0.642527....

    Idaho..................................................0.257835....

    Illinois...............................................4.272898....

    Indiana................................................1.714594....

    Iowa...................................................0.758686....

    Kansas.................................................0.762230....

    Kentucky...............................................1.875439....

    Louisiana..............................................1.916886....

    Maine..................................................0.870740....

    Maryland...............................................2.051849....

    Massachusetts..........................................3.700447....

    Michigan...............................................4.431824....

    Minnesota..............................................2.474364....

    Mississippi............................................0.851450....

    Missouri...............................................1.659116....

    Montana................................................0.335974....

    Nebraska...............................................0.445356....

    Nevada.................................................0.307294....

    New Hampshire..........................................0.552048....

    New Jersey.............................................3.494187....

    New Mexico.............................................0.465816....

    New York...............................................4.529380....

    North Carolina.........................................2.097625....

    North Dakota...........................................0.250758....

    Ohio...................................................4.690156....

    Oklahoma...............................................0.841972....

    Oregon.................................................1.092920....

    Pennsylvania...........................................5.233270....

    Rhode Island...........................................0.821727....

    South Carolina.........................................0.883628....

    South Dakota...........................................0.234849....

    Tennessee..............................................2.479873....

[[Page S11363]]

    Texas..................................................4.451382....

    Utah...................................................0.330016....

    Vermont................................................0.370244....

    Virginia...............................................1.373860....

    Washington.............................................1.794612....

    West Virginia..........................................1.003660....

    Wisconsin..............................................2.098696....

    Wyoming................................................0.122405....

    American Samoa.........................................0.008681....

    N. Mariana Islands.....................................0.001519....

    Guam...................................................0.006506....

    U.S. Virgin Islands....................................0.004804....

    Puerto Rico............................................0.193175....

       ``(C) State plans for certain allocations.--Each State, 
     working in collaboration with local government entities, 
     shall submit a plan to the Secretary of Health and Human 
     Services for approval for an allocation under the programs 
     described in subparagraph (A), specifying the percentage 
     share for each program. Each State plan shall provide for an 
     equitable allocation of funds to local government entities, 
     specifically in relation to local government tobacco-related 
     health care needs and anti-tobacco education, prevention, and 
     control activities. If a State fails to provide any component 
     of a State plan with respect to any program allocation or if 
     the Secretary of Health and Human Services disapproves any 
     such component, the Secretary may make the allocation for 
     such program to 1 or more local government or private 
     entities located in such State pursuant to plans submitted by 
     such entities and approved by the Secretary.
       ``(D) Prohibition of supplantation of state funds.--Each 
     State shall demonstrate to the satisfaction of the Secretary 
     of Health and Human Services that an allocation to a State 
     under a program described in subparagraph (A) in any fiscal 
     year shall be used to supplement, not supplant, existing 
     funding for such program.
       ``(2) Federal programs.--
       ``(A) In general.--Twenty-five percent of the amounts 
     available in the Trust Fund in a fiscal year shall be 
     distributed in the following manner:
       ``(i) 10 percent of such amounts to the Office of the 
     Commissioner of Food and Drug Administration to be allocated 
     at the Commissioner's discretion to conduct tobacco control 
     activities.
       ``(ii) 25 percent of such amounts to the Office of the 
     Secretary of Agriculture to be allocated at the Secretary's 
     discretion to protect the financial well-being of tobacco 
     farmers, their families, and their communities.
       ``(iii) 20 percent of such amounts to be allocated at the 
     discretion of the Secretary of Health and Human Services to--

       ``(I) the Office of the Director of the National Institutes 
     of Health to be allocated at the Director's discretion to 
     conduct disease research, and
       ``(II) the Office of the Director of the Centers for 
     Disease Control and Prevention to be allocated at the 
     Director's discretion to decrease smoking.

       ``(iv) 20 percent of such amounts to the Office of the 
     Secretary of Health and Human Services to be allocated at the 
     Secretary's discretion--

       ``(I) to conduct prevention programs resulting from the 
     study under section 4108 of the Balanced Budget Act of 1997, 
     and
       ``(II) to increase the Federal payment for the coverage of 
     qualified medicare beneficiaries under section 
     1902(a)(10)(E)(i) of the Social Security Act (42 U.S.C. 
     1396a(a)(10)(E)(i)) and specified low-income medicare 
     beneficiaries under section 1902(a)(10)(E)(iii) of such Act 
     (42 U.S.C. 1396a(a)(10)(E)(iii)).

       ``(v) 20 percent of such amounts to fund a national counter 
     advertising program.
       ``(vi) 2 percent of such amounts to the Office of the 
     Administrator of the Agency for International Development to 
     be allocated at the Administrator's discretion to strengthen 
     international efforts to control tobacco.
       ``(vii) 2 percent of such amounts to the Office of the 
     Director of the Office of National Drug Control Policy to be 
     allocated at the Director's discretion to conduct tobacco 
     education and prevention programs.
       ``(viii) 1 percent of such amounts to the Office of the 
     Secretary of Veterans Affairs to be allocated at the 
     Secretary's discretion to conduct tobacco education, 
     intervention, and outreach programs.
       ``(B) Grants and contracts fully funded in first year.--
     With respect to any grant or contract funded by amounts 
     distributed under paragraph (1), the full amount of the total 
     obligation of such grant or contract shall be funded in the 
     first year of such grant or contract, and shall remain 
     available until expended.''
       (b) Conforming Amendment.--The table of sections for such 
     subchapter A is amended by adding at the end the following 
     new item:

``Sec. 9512. Public Health and Education Resource Trust Fund.''
     TITLE III--FEDERAL STANDARDS WITH RESPECT TO TOBACCO PRODUCTS

     SEC. 301. FEDERAL STANDARDS WITH RESPECT TO TOBACCO PRODUCTS.

       (a) Cigarettes.--Subsection (b) of section 5 of the Federal 
     Cigarette Labeling And Advertising Act (15 U.S.C. 1334(b)) is 
     repealed.
       (b) Smokeless Tobacco.--Subsection (b) of section 7 of the 
     Comprehensive Smokeless Tobacco Health Education Act of 1986 
     (15 U.S.C. 4406(b)) is repealed.
                     TITLE IV--SENSE OF THE SENATE

     SEC. 401. SENSE OF THE SENATE REGARDING COMPREHENSIVE TOBACCO 
                   LEGISLATION.

       It is the sense of the Senate that any final comprehensive 
     tobacco legislation funded by the PHAER Trust Fund under 
     section 9512 of the Internal Revenue Code of 1986, as added 
     by section 201 of this Act, must include, at the very least, 
     the following additional elements:
       (1) Stiff penalties that give the tobacco industry the 
     strongest possible incentive to stop targeting children.
       (2) Full authority for the Food and Drug Administration to 
     regulate tobacco like any other drug or device with 
     sufficient flexibility to meet changing circumstances.
       (3) Codification of the Food and Drug Administration's 
     initiative to prevent teen smoking and the imposition of 
     stronger restrictions on youth access and advertising 
     consistent with the United States Constitution.
       (4) Broad disclosure of tobacco industry documents, 
     including documents that have been hidden under false claims 
     of the attorney-client privilege.
       (5) Efforts to ensure that the tobacco industry stops 
     marketing and promoting tobacco to children, including 
     comprehensive corporate compliance programs.
       (6) Elimination of secondhand tobacco smoke in public and 
     private buildings in which 10 or more people regularly enter.
       (7) Disclosure of the ingredients and constituents of all 
     tobacco products to the public and the imposition of more 
     prominent health warning labels on packaging to send a strong 
     and clear message to children about the dangers of tobacco 
     use.
       (8) A prohibition on the use of Federal Government 
     resources to weaken nondiscriminatory public health laws or 
     promote tobacco sales abroad.
                                  ____


          The Public Health and Education Resource [PHAER] Act

       PHAER would raise the price of cigarettes to a level that 
     would decrease youth smoking by half.
       PHAER would place a $1.50 Public Health and Education 
     Resource (PHAER) per-pack fee on cigarettes and a comparable 
     fee on other tobacco products.
       The PHAER fee would be phased in by 50-cent increments over 
     three years.
       In the fourth year, the PHAER fee would be indexed for 
     inflation to ensure that youth smoking does not rise again 
     due to inflationary effects. This index will be based on the 
     CPI, the Medical CPI or an increase of 3%, whichever is 
     greater.
       The PHAER fee will raise approximately $494 billion over 25 
     years (using the tobacco consumption projections of the Joint 
     Committee on Taxation), an average of almost $20 billion per 
     year. Of these funds:
       75% (an average of $15 billion per year) will be 
     distributed at the State level for: Smoking cessation 
     programs and services; school and community-based tobacco 
     education and prevention programs; State-level counter-
     advertising campaigns; ASSIST and similar community-based 
     tobacco control programs; expansion of the Children's Health 
     Insurance Program created in the 1977 Budget Reconciliation 
     Act; early childhood development programs through the 
     Maternal Child Health Block Grant and WIC; and other 
     appropriate public health uses.
       25% (an average of $5 billion per year) will be distributed 
     at the Federal level for: Research and prevention programs at 
     NIH and CDC; FDA jurisdiction over tobacco products; USDA 
     programs to assist tobacco farmers, their families and their 
     communities; a national counter-advertising campaign; 
     Medicare prevention programs and premium and cost-sharing 
     assistance for low-income Medicare beneficiaries; 
     International Programs to decrease worldwide tobacco-related 
     illness; the Drug Czar to conduct tobacco education and 
     prevention programs; and the VA to conduct tobacco education, 
     intervention and outreach programs.
                                  ____

                                         Effective National Action


                                           To Control Tobacco,

                                 Washington, DC, October 28, 1997.
     Hon. Frank R. Lautenberg,
     U.S. Senate.
     Hon. James V. Hansen,
     House of Representatives.
       Dear Senator and Congressman: On behalf of our millions of 
     public health officials and professionals, health care 
     providers and volunteer members of ENACT, the coalition for 
     Effective National Action To Control Tobacco, we applaud the 
     introduction of the Public Health and Education Resource 
     (PHAER) Act.
       We particularly want to thank you for your leadership in 
     reaffirming what the members of the coalition have said in 
     the ENACT consensus statement regarding increases in the cost 
     of tobacco products. Experts in the area of tobacco control 
     agree that significant increases in the cost per pack deter 
     children and others from taking up the use of tobacco. The 
     ENACT coalition believes strongly that such an increase in 
     the federal excise tax is essential.
       In addition to providing for a $1.50 excise tax per pack, 
     indexed to inflation, and the nondeductibility of those new 
     taxes, you have addressed many essential public health 
     programs. Adequate funding of these programs is integral to 
     comprehensive, sustainable, effective, well-funded tobacco 
     control legislation. We look forward to working with you and 
     the supporters of your legislation to get action on tobacco 
     now.
           Signed,

[[Page S11364]]

     American Academy of Pediatrics.
     American Cancer Society.
     American College of Preventive Medicine.
     American Heart Association.
     American Medical Association.
     Campaign for Tobacco Free Kids.
     National Association of County and City Health Officials.
     Partnership for Prevention.
                                  ____



                                    American Lung Association,

                                 Washington, DC, October 23, 1997.
     Hon. Frank Lautenberg,
     U.S. Senate,
     Washington, DC.
       Dear Senator Lautenberg: The American Lung Association 
     commends you on the introduction of the Public Health and 
     Education Resource Act (PHAER). As you know, the American 
     Lung Association has pursued a significant price increase in 
     the federal cigarette excise tax for many years.
       Tobacco use is the nation's leading preventable cause of 
     death and disability. Each year an estimated 419,000 people 
     die from diseases directly caused from smoking. Three 
     thousand children start smoking each day in this country. One 
     thousand of them will eventually die from a smoking-related 
     disease. Smoking costs this nation at least $97.2 billion 
     annually. Of that total cost, $22 billion is paid by the 
     Federal government. Over the next 20 years, Medicare alone 
     will spend an estimated $800 billion to care for people with 
     smoking related illnesses.
       Reducing tobacco consumption among our nation's youth has 
     long been a goal of the American Lung Association. The bulk 
     of academic research indicates that a sharp and sudden 
     increase in the price of tobacco products has the effect of 
     lowering smoking rates among teens. Raising the price per 
     pack by at least $1.50 or more would help achieve that 
     desired outcome.
       The American Lung Association applauds your continued 
     efforts and leadership in reducing tobacco consumption, 
     especially among our youth, and we look forward to working 
     with you as this tobacco-related legislation progresses 
     through Congress.
           Sincerely,
                                                     Fran DuMelle,
     Deputy Managing Director.
                                  ____



                             National Association of Counties,

                                 Washington, DC, October 23, 1997.
     Hon. Frank R. Lautenberg,
     U.S. Senate, Hart Senate Office Building, Washington, DC
       Dear Senator Lautenberg: The National Association of 
     Counties (NACo) is pleased to support your bill, the Public 
     Health and Education Resource (PHAER) Act. The legislation is 
     a strong step forward for public health activities related to 
     tobacco and helps focus the congressional debate on 
     legislative language rather than broad concepts.
       We particularly support your recognition of the role of 
     counties and other local governments in the provision of 
     health services. Counties, in collaboration with states, will 
     be key to the success of the public health programs outlined 
     in the PHAER trust fund, including tobacco education and 
     prevention, smoking cessation, and counter advertising. NACo 
     appreciates your work to ensure a local government role in 
     the planning and implementation of the trust fund's health 
     activities.
       Thank you again for your leadership on this issue. Dan Katz 
     of your staff has been very responsive to our concerns. NACo 
     looks forward to working with you and your staff as tobacco 
     legislation moves forward.
           Very Truly Yours,

                                                Randy Johnson,

                                                  President, NACo,
     Hennepin County Commissioner.
                                  ____


      PHAER: REDUCTION IN YOUTH SMOKING AND INCREASE IN LIVES SAVED
------------------------------------------------------------------------
                                   Youth                     Additional
                                  smoking        Youth      lives saved
                                 reduction      smoking     under $1.50-
            State                  under       reduction    per-pack tax
                                Industry/AG  under $1.50-  vs. Industry/
                                settlement   per-pack tax  AG settlement
                                 (percent)     (percent)        \1\
------------------------------------\1\-----------\1\-------------------
Alabama......................          25.1          60.6        29,666
Alaska.......................          19.6          47.3         4,996
Arizona......................          18.9          45.6        26,359
Arkansas.....................          23.1          55.9        16,351
California...................          20.9          50.6       137,480
Colorado.....................          24.1          58.2        29,680
Connecticut..................          20.0          48.5        15,962
Delaware.....................          24.3          58.9         5,725
D.C..........................          18.2          44.0         1,272
Florida......................          22.9          55.3        96,439
Georgia......................          26.3          63.7        48,981
Hawaii.......................          17.2          41.7         5,051
Idaho........................          22.8          55.0         7,875
Illinois.....................          21.0          50.9        77,720
Indiana......................          26.8          64.9        53,553
Iowa.........................          22.1          53.6        16,846
Kansas.......................          24.5          59.2        17,103
Kentucky.....................          28.7          69.4        35,762
Louisiana....................          25.1          60.6        37,716
Maine........................          22.0          53.3         9,757
Maryland.....................          21.9          53.0        26,659
Massachusetts................          17.1          41.3        25,617
Michigan.....................          17.9          43.3        58,614
Minnesota....................          19.3          46.7        26,554
Mississippi..................          24.8          59.9        17,165
Missouri.....................          25.7          62.1        43,386
Montana......................          25.4          61.4         5,416
Nebraska.....................          22.6          54.7        11,396
Nevada.......................          21.0          50.9         9,434
New Hampshire................          23.6          57.2         7,979
New Jersey...................          21.5          51.9        41,304
New Mexico...................          23.8          57.5        11,262
New York.....................          18.8          45.4       100,545
North Carolina...............          27.5          66.6        64,751
North Dakota.................          21.6          52.2         3,758
Ohio.........................          25.1          60.6       101,429
Oklahoma.....................          24.3          58.9        22,047
Oregon.......................          21.1          51.1        18,402
Pennsylvania.................          23.6          57.2        92,073
Rhode Island.................          19.3          46.7         6,433
South Carolina...............          27.2          65.8        25,691
South Dakota.................          23.0          55.6         4,774
Tennessee....................          26.0          62.9        38,859
Texas........................          22.0          53.3       115,888
Utah.........................          22.5          54.4        11,127
Vermont......................          20.7          50.1         3,633
Virginia.....................          26.2          63.3        50,287
Washington...................          15.8          38.2        24,163
West Virginia................          26.0          62.9        14,219
Wisconsin....................          20.8          50.4        34,603
Wyoming......................          25.5          61.7         3,671
                              ------------------------------------------
      Total..................           n/a           n/a     1,695,433
------------------------------------------------------------------------
\1\ Source: American Cancer Society, October 1997.



                          ____________________