[Congressional Record Volume 143, Number 155 (Friday, November 7, 1997)]
[Senate]
[Pages S11964-S12022]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Mr. HELMS (for himself, Mr. Glenn, Mr. DeWine, and Mr.
Faircloth):
S. 1397. A bill to establish a commission to assist in commemoration
of the centennial of powered flight and the achievements of the Wright
brothers; to the Committee on Governmental Affairs.
the centennial of flight commemorative act
Mr. HELMS. Madam President, I have a bill, S. 1397, at the desk. Now,
Senators DeWine, Faircloth, Glenn, and I are introducing this
legislation, and we are naming it the Centennial of Flight
Commemorative Act. As I indicated, the bill number is S. 1397.
This significant legislation will establish a commission to assist
the numerous events that will lead up to and include the celebration of
the 100th anniversary of powered flight, a feat in all the history
books, accomplished in my State of North Carolina by the geniuses, two
brothers, Orville and Wilbur Wright, Ohio brothers who were born and
raised in Dayton where they operated a bicycle shop.
I don't know whether you have been to Kitty Hawk, particularly in the
middle of December, but it is not a comfortable place to be. Wilbur and
Orville came to the Outer Banks of North Carolina to conduct their
experiments. The first powered flight occurred at Kitty Hawk, NC, on
December 17, 1903. In fact, the Wright brothers engaged in four flights
that day, and with their effort they changed the concept of travel
forever.
About noon on that cold and windy December day, at Kitty Hawk, NC,
the aviation age, the air age, began.
So, Madam President, the Wright brothers were indisputably the first
pioneers of powered flight, and they became national heroes,
justifiably etched in history.
As for our bill, S. 1397, the able Senator from Ohio, Mr. DeWine, and
the able Senator from Ohio, Mr. Glenn, did excellent work in drafting
this legislation.
Senator Glenn, I am obliged to mention, and I am glad to do so, is a
man of history himself in terms of powered flight. He was the first
American, as all of us know, to orbit the Earth. When he walks up and
down the corridors, I see mamas and daddies pointing to him saying,
``That's Senator Glenn.'' Senator Glenn and six other pioneers, the
Mercury astronauts, got America's space program off the ground.
Madam President, S. 1397--let me say the title again so it will
register--the Centennial of Flight Commemorative Act--proposes the
establishment of a commission of 21 individuals to plan for and assist
in events leading up to and including the commemoration of the 100th
anniversary of the Wright brothers' flights at Kitty Hawk. The
commission will be composed of the Secretary of the Interior, the
Director of the National Air and Space Museum, the Secretary of
Defense, the Secretary of Transportation, the NASA Administrator, and
each of these officials can name a designee. Then there will be two
representatives each from the States of North Carolina and Ohio and 12
other private citizens.
Of these 12 private citizens, the President of the United States will
appoint two from a list recommended by the Senate majority leader in
consultation with the Senate minority leader, and two from a list
recommended by the Speaker of the House in consultation with the House
minority leader. The remaining eight will be chosen based on
qualifications and/or experience in the fields of history, aerospace,
science, industry, or other professions that will enhance the work of
the commission.
The commission will represent the United States and take a leadership
role with other nations in recognizing the achievement of the Wright
brothers and the importance of aviation history.
The commission's activities will be closely coordinated with the
First Flight Centennial Commission and the First Flight Centennial
Foundation of North Carolina and the 2003 Committee of the State of
Ohio. The commission is allowed to retain an executive director and
staff that may be required in order to carry out its functions.
S. 1397 authorizes appropriations of $250,000 for each of the fiscal
years 1998 to 2004 to fund the work of the commission.
Additionally, the commission may accept monetary contributions and
other in kind contributions, volunteer
[[Page S11965]]
services and the like. In order to further defray the expenses of the
commission, the legislation gives it exclusive right to names, logos,
emblems, seals, and marks, which may be licensed on which proceeds from
royalties will be used to offset the operating costs of the commission.
S. 1397 requires that annual audits of the commission be conducted by
the Inspector General of the General Services Administration to ensure
its financial integrity.
The commission shall be terminated no later than 60 days after the
submission of the final audit report.
Senators may ask why establish a Federal commission to commemorate
this event? The Wright brothers' triumph at Kitty Hawk on that bone-
chilling day of December 17, 1903 has to rank as one of mankind's
greatest achievement. The world has not been the same since.
As the development of the airplane progressed so did its uses in
warfare and civilian aviation. Its development spawned generations of
aviation trailblazers. Names like Eddie Rickenbacker, Billy Mitchell,
Charles Lindbergh, Jimmy Doolittle, Chuck Yeager, and the Mercury,
Gemini, Apollo, and space shuttle astronauts became household words.
What is even more astonishing is that 66 years later, Neil Armstrong
of Ohio became the first man to set foot on the moon. That would not
have been possible without the Wright brothers.
Because of the Wright brothers you can get on a jet aircraft at
Dulles Airport and be in London in six or seven hours, far less if you
are flying the Concorde. You can fly from New York to Tokyo in 14
hours. On the Concorde, you can travel from New York to London in 3
hours and 50 minutes.
We are seeing daily developments in aviation, faster planes, new
space technologies, all because of the genius of Wilbur and Orville
Wright.
I hope the Senate will swiftly approve this legislation.
Mr. DeWINE. Madam President, I thank the Chair, and I thank my
distinguished colleague from North Carolina.
I am delighted to join him, as well as Senator Faircloth and Senator
Glenn, in introducing a bill to create the Centennial of Flight
Commission.
In the year 2003, the United States and, indeed, the world will
celebrate a truly breathtaking anniversary. That date will mark exactly
100 years of the adventure of human flight. For those of us who are
from the State of Ohio, it is an especially important anniversary as
Senator Helms has so ably described--first and foremost because the
Wright brothers, the very first pioneers of powered flight, were from
Dayton, OH. It was in Dayton, OH, that they grew up. It was in Dayton,
OH, that they had a print shop. It was in Dayton, OH, that they had the
bicycle shop that was referred to a moment ago by Senator Helms.
It was at Huffman Prairie, in Montgomery County, actually what is now
enclosed in Wright Patterson Air Force Base, technically in Greene
County, that the Wright brothers learned to fly. So, those of us from
Ohio are very proud of the Wright brothers, as this whole country is.
We are also proud in Ohio that ever since the time of the Wright
brothers, Ohio has continued to build a proud aviation history. From
the Wright brothers to World War I flying ace David Ingalls, to John
Glenn who just walked on to the floor of the Senate, the first man, the
first American to orbit the Earth, to Neil Armstrong, the first man to
walk on the Moon, to the incredible research being done right now at
NASA Lewis Research Center in Cleveland, OH, has continually been a
part of the great epic of aviation.
This is, indeed, cause for celebration, and that is what this bill is
all about. It would create a commission to coordinate the centennial of
flight celebration in the year 2003. The commission will be composed of
21 members: the Secretaries of the Interior, Transportation, and
Defense; the Director of the National Air and Space Museum; the
Administrator of NASA; two people from North Carolina; the president
and chairman of the First Flight Centennial Commission; and two people
from the State of Ohio, the Governor and the chairman of the 2003
Committee, and 12 additional Presidential appointees.
Madam President, this commission will help the United States take a
leadership role in planning international celebrations of the
centennial of flight, promoting participation and sponsorship by the
aerospace industry, the commercial aviation industry, educational
institutions, and State and local governments.
The commission is going to distribute a calendar, a register of
national and international programs and projects concerning the flight
centennial.
What I hope most of all is that these celebrations will recognize
that the history of flight is not just the story about machines or
about the triumph of technology. It is rather a story about people. It
is a story of how human creativity overcame one of the most fundamental
barriers that humans ever faced.
For hundreds of thousands of years, human beings could not fly, but
in this century, thanks to the freedom and spirit of creativity in this
country, the human race broke the bonds of Earth. So, from Dayton to
Kitty Hawk and beyond the limits of our solar system, this is a story
to truly celebrate.
Madam President, I see my distinguished senior Senator from the State
of Ohio, the honorable John Glenn, is on the floor. I yield to Senator
Glenn.
The PRESIDING OFFICER. The Senator from Ohio is recognized.
Mr. GLENN. Thank you, Madam President. I thank my distinguished
colleague.
I rise as a cosponsor of this legislation to establish a national
Commission on the Centennial of Flight. We have been very proud through
the years to have worked with the people of Dayton, OH, in an effort to
recognize the very exceptional contribution of the two brothers who ran
the bicycle shop and dreamed of flight. They watched the birds and
dreamed of flight, not knowing whether it would ever be possible.
In 1992, it was my privilege to sponsor the legislation that
established the Dayton Aviation Heritage National Historical Park which
commemorates the extraordinary lives of Wilbur Wright, Orville Wright,
and Paul Lawrence Dunbar, a black man, a poet, one of the finest poets,
who was a close friend of the Wright brothers.
That park and the memorial in North Carolina recall that on December
17, 1903, Orville Wright flew 120 feet in 12 seconds. Can we imagine
that, 120 feet in 12 seconds? But it was under power. It was the
airplane that is over in the Smithsonian now. It was under powered
flight with an engine and propeller. It was the first sustained flight
in a power-driven, heavier-than-air machine.
There were three other flights that day. We don't often hear about
those. There were three other flights that day, and Wilbur Wright set a
new world record flying on one of those flights 352 feet in 59 seconds.
It was more than the length of a football field.
Very little attention was paid at that time. People were very
doubtful. Octave Chanute reported the achievement in Popular Science
Monthly in March 1904. But the first--I think this is very
interesting--the first eyewitness report about those flights appeared
in a publication called Gleanings in Bee Culture, and that was in
January 1905. That was the first real eyewitness report of Orville and
Wilbur Wright's flights.
The work had begun in 1899 with a serious study of everything the
Wrights could find on aeronautics. In 1900, to test their glider, they
selected Kitty Hawk on the word of the weather bureau because of the
steadiness of the winds and direction of the winds at that time. The
test glider in 1900 and 1901 failed to achieve the lifting power that
they thought they needed and anticipated.
They went back to Dayton and built a 6-foot wind tunnel to conduct
experiments with over 200 different wing models. They developed the
first reliable tables on the effects of air pressure on curved
surfaces, the principles that we use today and that you see on every
airplane, whether it is a general aviation small light airplane or a
giant 747 or whether it is the Concorde flying at supersonic speed
across the Atlantic Ocean.
They developed these 200 different wing models and experimented with
them. They developed the first reliable tables on the effects of air
pressure on curved surfaces.
[[Page S11966]]
In 1902, they conducted over almost 1,000 tests with a more promising
glider. In 1903, the Wright brothers had completed the construction of
a larger plane powered by their own lightweight gas-powered engine.
Arriving in Kitty Hawk in September, storms and mechanical
difficulties delayed trials until December. On the 17th, four men and a
boy witnessed the very first flight, and a memorable photograph,
fortunately, was captured. Four men and a boy witnessed that first
flight.
Back home in Dayton in 1904 and 1905, the Wright brothers continued
testing their invention at Huffman Prairie, which is the area adjacent
to what is today Wright Patterson Air Force Base where they first
achieved maneuverable flight.
In 1908, Wilbur and Orville signed a contract with the War Department
for the first military airplane. In September, Orville circled the
parade ground at an altitude of 120 feet just across the Potomac River
from us today, over at Fort Meyer in Virginia.
When most people these days think of the Wright brothers, we tend to
think of them as having lived a long, long time ago. We tend to think
of the Wright brothers as being part of ancient history. We also think
of their airplane, the Wright Flyer III, as being an incredibly
primitive machine, at least by today's standards. And it was a
primitive machine. There were no fancy guidance systems or high-tech
controls.
By swiveling their hips from one side to the other, Orville and
Wilbur could steer the airplane. To this day, when young people come
in, when school groups come to Washington and visit my office and they
say they are going over to the Air and Space Museum, I always tell them
to get up on the gallery level and look down on the Wright brothers'
airplane and see how they controlled flight, because the person flying
lay on the lower wing and had a wooden yoke around his hips. That
wooden yoke slid back and forth and there was a wire that went to the
trailing edge of the upper wing, and they would slide in the direction
they wanted to go, slide their hips over, pull that wire and literally
warp the trailing edge of the wing down and made more lift on the wing
on that side and the airplane would turn in the direction their hips
were slid toward.
I am glad they developed later on in aviation a better means of
control. We can imagine a 747 pilot today making an approach swiveling
his hips back and forth. But that was the way the Wright brothers
controlled those very early flights.
The first flight at Kitty Hawk and Huffman Prairie seemed so far
removed from what we did later on, from my own experience in orbital
flight in 1962, or from the first lunar landing, or from living aboard
the orbiting space station for weeks on end, as Shannon Lucid did. She
was up there for 188 days. She will be honored at the Smithsonian this
evening, as a matter of fact. Yet, all this occurred within a lifetime.
I know we kid Senator Thurmond around here quite a lot about his age,
but Senator Thurmond was born December 5, 1902. The Wright brothers did
not fly until a year later, on December 7, 1903. So we have in this
body right now a man whose lifetime spans all of manned flight, powered
flight, from that first day at Kitty Hawk into space. Strom Thurmond
has witnessed the complete history of flight. And we marvel at just how
far we have come in an incredibly short period of time. We have
literally gone from the Wright brothers to the Moon and beyond in a
single lifetime.
That is amazing. In that sense, I think it is fair to say that
Orville and Wilbur Wright were our first astronauts, really, because
they were the first who really did rise off the Earth's surface in a
sustained way and make flight that then advanced to higher and higher
altitudes until we are above the Earth's atmosphere now with different
kinds of machines; though I think in some ways we could say that they
were the first two who, as the poem goes, ``slipped the surly bonds of
Earth''--slipped the surly bonds of Earth and ventured into the air
under the power of a motor.
Everything since then has just been going higher and going faster. I
also think it is fair to say the Wright brothers personified something
that is behind every single leap or advancement in science or human
knowledge since the beginning of time. The one characteristic they
had--we could lump it all together and say that is something that is in
the heart of all human progress--is curiosity and an innate curiosity
about how we can do things differently or whether we can explore and
find new shores or whether we can do experiments and do research in new
areas.
Whether you look at the voyage of Christopher Columbus, who brought
Europeans to the shore of North America, whether you look at the
experiments of Alexander Fleming--you know what Alexander Fleming was
curious about? It was plain old green mold on bread. He did not know
why the patterns formed around the mold the way they did. The green
mold, it was a particular pattern. He was curious about that.
You know what that led to? His curiosity led to the discovery of
penicillin and the development of modern antibiotics. That curiosity
about green mold on bread has led to increased life expectancy of
people all around this Earth. We have gone up in life expectancy more
in the last 100 years than in the previous 2,000 years, I read in a
magazine just a short time ago. So the discovery of penicillin and
Alexander Fleming's curiosity about green bread mold that led to that,
has really revolutionized this Earth.
Or we go ahead with the unexpected circumstance in a small electronic
switching device that led to the development of the first transistor
and ultimately to today's incredibly sophisticated computer systems.
It is clear to me that curiosity isn't what killed the cat. It is
also the goose that laid the golden egg for all of humankind. That is
going to be true in the future as well as the past. In field after
field, in discipline after discipline, in industry after industry, it
is curiosity, that insatiable, relentlessly questioning spirit that
keeps asking ``why'' that has moved our species ahead.
The irony, of course, is any time someone or a group such as the
Wright brothers, or a group of people undertake an exploration or
undertake to demonstrate a new idea, whether in a laboratory, a
spaceship, a bicycle shop or on a production line, there are many who
question the wisdom of it all. Those naysayers who wanted to know when
their bike would be fixed with the Wright brothers believed that if we
were to fly God would have given us feathers, they said.
So there was a joke about the Wright brothers at that time. ``If God
wanted us to fly, why don't we have feathers?" Well, they fortunately
laughed along with everybody else, but at the same time went ahead with
their work. They were not deterred. But if there is one thing we know
for sure about research or any kind of exploration of the unknown, it
is that it is impossible to know what we will see at the end or what it
may lead to.
I believe that today, as perhaps never before, we cannot afford to
lose that kind of curiosity and questing spirit that the Wright
brothers had. With it, we can continue to learn new things, first, for
this Nation, putting them to practical application, staying ahead of
global competition. That has been the story of this country's
advancement. Without it, we will quickly become yesterday's leader,
yesterday's leader, not tomorrow's leader but yesterday's leader,
hopelessly trying to hold back the hands of the clock and to hold on to
a past glory that can never be just retained or recaptured.
So the spirit of the Wright brothers is needed as much today as
before their very first flight. That is why today I am pleased to join
with my colleagues--my colleague from Ohio, my colleagues from North
Carolina--in introducing this legislation to establish a national
commission to assist in the commemoration of the centennial of powered
flight that will occur in 2003 and the achievements of the Wright
brothers. Those who worked to build our national parks and memorials to
the Wright brothers in Ohio and North Carolina where flight was born
and first achieved will now work together to recall and remember the
spirit of flight to be commemorated as we approach the centennial of
flight in 2003.
The spirit represented by the Wright brothers was captured in their
own day by their good friend, Paul Lawrence
[[Page S11967]]
Dunbar, who captured in the prophetic verse which he penned the
triumphs that are remembered at the Dayton Aviation Heritage National
Historical Park. One of his notations was:
What dreams we have
and how they fly
like rosy clouds
across the sky;
of wealth, of fame
of sure success . . .
That is certainly what curiosity has brought us and what the Wright
brothers brought us.
Think of all that has occurred since that first flight at Kitty Hawk
in 1903. Think of aviation today and all it entails and the giant
industry. It has revised all the world's transportation, has revised
our military, our security. All of that stemmed from that first flight
in 1903.
So we are happy to put in this legislation today. We hope that it is
supported by all here, not just those from Ohio and North Carolina,
because what started there in 1903 is something that affects everyone.
It affects every State and every nation around the globe, even these
days. And we look forward to this commission doing a great job in
assisting in the commemoration of the centennial of powered flight and
the achievements of the Wright brothers.
Mr. FAIRCLOTH. Mr. President, today I am pleased to be an original
cosponsor of legislation being introduced by Senator Helms--the two
Senators from Ohio--that would establish a National Commission to
oversee the 100th anniversary of the first flight.
Mr. President, on a cold, windy December morning in 1903, in the
Outer Banks of North Carolina, the Wright brothers changed the history
of the world. Orville Wright flew for just 12 seconds--but it was the
first manned flight.
Today, many people take for granted what was accomplished by the
Wright brothers that day, but at the time it was a historic
achievement. Man had been thinking of flight for thousand of years--and
yet the Wright brothers, here in the United States, were the first to
do it.
The development of flight grew rapidly. A little over a decade later,
airplanes were used in the battles of World War I. Two decades after
the 12-second first flight--Charles Lindbergh flew over the Atlantic.
And of course, in 1962, in just a half century after the first 12-
second flight, our distinguished colleague John Glenn was the first man
to fly around the world in space. Seven years after that, we landed a
man on the Moon.
It is hard to believe that all of this has taken place in the span of
less than 100 years.
This is why the centennial anniversary of first flight is so
significant to us, the sponsors of this legislation.
The Commission will coordinate the plans for the celebration. The
Wright brothers were from Ohio, of course, where they ran a bicycle
shop. The State of North Carolina's license plates bear the slogan
``First in Flight''--so we are especially proud of this achievement in
my State. To these two States, the celebration is important.
But much more than that, I think the anniversary should be used to
inspire students to learn more about the history of flight. Hopefully,
it will remind people that this is a great nation inventors--and that
American ingenuity has made us the greatest country in the history of
the world. Finally, it should remind our citizens that America is a
land of opportunity and freedom--where anyone's imagination can change
the world. This is an entrepreneurial spirit that we must keep alive.
I want to thank Senator Helms and Senators Glenn and DeWine for
joining together today to introduce this legislation. I hope that the
Senate will take it up soon.
______
By Mr. THOMAS (for himself, Mr. Kerrey, Mr. Enzi, and Mr. Hagel):
S. 1398. A bill to extend certain contracts between the Bureau of
Reclamation and irrigation water contractors in Wyoming and Nebraska
that receive water from Glendo Reservoir; to the Committee on Energy
and Natural Resources.
THE IRRIGATION PROJECT CONTRACT EXTENSION ACT OF 1997
Mr. THOMAS. Mr. President, I rise today to introduce the Irrigation
Project Contract Extension Act of 1997. I am pleased to be joined in
this endeavor by Senators Enzi, Kerrey, and Hagel.
This legislation would extend, for a period of 3 years, certain water
contracts between the Bureau of Reclamation and irrigators in Wyoming
and Nebraska that receive water from Glendo Reservoir. All contracts
are subject to renewal on December 31, 1998. Extending these contracts
is considered a major Federal action and, therefore, subject to review
of the National Environmental Policy Act [NEPA] and the Endangered
Species Act [ESA]. Without a short-term continuation agreement, the
irrigators would be responsible for the costs of the analysis and other
environmental documentation.
Currently, the States of Wyoming, Nebraska, and Colorado--and the
Department of the Interior--are in the process of implementing a
comprehensive ``Cooperative Agreement for Platte River Research and
Other Efforts relating to Endangered Species Habitats along the Central
Platte River, Nebraska.'' The term of this initiative is for 3 years,
with an allowable 6-month extension. Upon completion of the cooperative
agreement, efforts to enact the Platte River Recovery Implementation
Program can begin. This basin wide, three-State plan will help to
recover the endangered whooping crane, piping plover, and least stern,
and improve critical habitats in the Central Platte River Basin.
I believe it is important for Congress to act on this measure and
extend these contracts for 3 years, or until the cooperative agreement
is completed. In that time, the needed NEPA and ESA reviews will be
fulfilled--clearing the way for the program to be initiated. It is
important to remember that the program cannot be implemented until the
environmental studies are completed and the parties have agreed to the
results.
Mr. President, this bill does not avoid environmental evaluation. It
merely provides some relief to the water users, while allowing the NEPA
and ESA documentation to take place through the cooperative agreement
process. It is my understanding that once this agreement has expired,
and if the Department of the Interior and the three States decide not
to pursue the program, the contract renewal process would proceed as a
separate Federal action at that time.
This is good and fair legislation. It will benefit the environment
and the water users. I look forward to working with my colleagues in
the Senate and House to secure its passage.
______
By Mr. BOND:
S. 1399. A bill to authorize the Secretary of the Army to carry out a
project to protect and enhance fish and wildlife habitat of the
Missouri River and the middle Mississippi River; to the Committee on
Environment and Public Works.
THE FISH AND WILDLIFE HABITAT ACT OF 1997
Mr. BOND. Mr. President, I am pleased to introduce legislation to
enhance, preserve and protect habitat for fish and wildlife on the
Missouri and Mississippi Rivers. This new 5-year $50 million
authorization is a win-win approach that will implement and expand the
use of new and innovative measures developed by the Corps of Engineers
to improve habitat conservation without impacting adversely private
property and other water-related needs of the rivers including
navigation, flood control and water supply.
As I have always maintained, fish and wildlife conservation and
commercial activity are not mutually exclusive. Indeed, we cannot
afford to abandon either river commerce or the species that live in and
on the river. This new approach is a win for man, for nature and for
the river.
This legislation is supported by Missouri Farm Bureau, MARC2000,
American Rivers, the Missouri Soybean Association, the Missouri
Corngrowers Association, and Farmland Industries. While these groups
have not always agreed on river policy, that should not preclude us
from seeking common ground and working together to address the
questions of resource management and I am delighted that we can all
come together in support of this commonsense approach.
Without specific authorization and only scarce dollars, the St. Louis
Corps of Engineers has been developing and
[[Page S11968]]
testing ways in which navigation structures used to guide the river and
maintain the channel may be modified to meet environmental as well as
navigation goals. These innovations have proven successful earning wide
acclaim including a Presidential Design Award and Federal Design
Achievement Award.
This legislation seeks to put these successful innovations to work on
the Missouri River and expand their use on the middle Mississippi by
providing a specific authorization and a dedicated and substantial
source of funds. In other words, we are giving the corps the tools they
need to put their ideas to work to improve the rivers to benefit fish
and wildlife.
The legislation authorizes $10 million per year to protect, create
and enhance side channels, island habitat, sand bars, and other
riverine habitat. For example, by notching rock dikes that run
perpendicular to the shoreline, sandbars develop between the dikes
which has been provided nesting habitat for the endangered least tern
and valuable spawning ground for the endangered pallid sturgeon. The
Missouri Department of Conservation has run tests validating an
increase in diversity and numbers of microinvertebrates surrounding the
notched dikes.
Chevron dikes have been developed to improve river habitat and to
create beneficial uses of dredge material. These structures are placed
in the shallow side of the river channel pointing upstream which
improves the river channel while serving as small islands. These
islands encourage the development of all four primary river ecosystem
habitats and additionally, various micro-organisms cling to the
underwater rock structures, providing a food source for fish.
Changing the gradation of rock revetments, used to stabilize eroding
riverbanks, has proved to provide greater bank stability and precluded
the need to remove bank vegetation so that, for the first time, trees
and rock revetment could coexist providing greater habitat diversity.
The draft legislation authorizes $10 million per year over 5 years to
develop and implement a plan including the following activities:
Modification and improvement of navigation training structures to
protect and enhance fish and wildlife habitat; creation of side
channels to protect and enhance fish and wildlife habitat; restoration
and creation of island fish and wildlife habitat; creation of riverine
fish and wildlife habitat; establishment of criteria to prioritize
based on cost-effectiveness and likelihood of success; and physical and
biological monitoring for evaluating the success of the project.
The draft provides that the project be coordinated with other related
Federal and State activities and that there be public participation in
the development and implementation of the project. It requires a 25-
percent non-Federal cost share and limits the Federal cost of any
single project to $5 million. Finally, the draft legislation confers no
new regulatory authority and requires compliance with the National
Environmental Policy Act.
The legislation is designed to work between the banks of the river
and forbids expressly any adverse impacts on private lands and water-
related activities including flood control, navigation, and water
supply. Additionally, it is designed to compliment other existing
programs such as the Missouri River Mitigation project and the
Environmental Management Program on the Mississippi River.
I intend to work with the administration and with other Senators and
interested groups to build the broad support necessary to enact this
legislation in an omnibus Water Resources Development Act the Senate is
expected to consider in 1998.
Mr. President, the problems experienced in the Midwest and elsewhere
with railroad bottlenecks highlight the need for diverse transportation
options. As the fall harvest proceeds, there are reports of grain being
piled on the ground in neighboring Kansas and Nebraska. Notwithstanding
that I must continue working on behalf of Missouri to preserve river
navigation as a transportation option, our joint efforts to pursue this
new legislation is a strong indicator that we may be experiencing an
episode of domestic detente on river policy between groups that have
pursued differing approaches in the past. This legislation offers a
significant boost for our need to make the various river uses
compatible and an important step toward unifying the river's
stakeholders behind a realistic approach for the future.
I thank and congratulate the various groups who have come together
behind this legislation and look forward to enacting this consensus
legislation.
______
By Mr. BUMPERS (for himself and Mr. Gorton):
S. 1401. A bill to provide for the transition to competition around
electric energy suppliers for the benefit and protection of consumers,
and for other purposes; to the Committee on Energy and Natural
Resources.
the transition to electric competition act of 1997
Mr. BUMPERS. Mr. President, I rise to day to introduce the Transition
to Electric Competition Act of 1997 along with my colleague from the
State of Washington, Senator Gorton. This bill provides for the
transition toward deregulation and competition in the electric utility
industry.
While few people find a discussion of the electric utility industry
and the many laws and regulations governing the industry exciting, the
fact is that electricity is an extremely important commodity which
affects everyone on a daily basis. Any event that increases or reduces
electric rates can impact: First, the lives of the poor and those on
fixed incomes that depend on electricity to heat their homes in the
winter and cool them in the summer; second, the price of goods we buy
every day; as well as third, the competitiveness of our factories. In
addition, decisions made by electric generators often have a direct
effect on our environment as well as our energy security.
It is not at all inconsequential that the electric utility industry,
which has remained relatively static for the last 60 years, is
undergoing a fundamental change. Instead of the traditional vertically
integrated local utility, which generates power at its own plants,
transmits that power over its own lines and sells that power to all
consumers in a particular area, consumers in some States are starting
to be bombarded with all sorts of offers from companies competing to
become their power supplier, and other entrepreneurs will be seeking to
buy large blocks of power to serve certain kinds of consumers.
Naturally, these changes are bound to create considerable apprehension
among both utilities and consumers.
Mr. President, in January I introduced S. 237, the Electric Consumers
Protection Act, because I believed that retail electric competition was
inevitable and Federal legislation was necessary to ensure that certain
consumers were not disadvantaged in the process. Several States were
proceeding to introduce competition in their jurisdictions and a number
of others were examining the matter. Since that time I have become even
more convinced that competition is on the horizon. Eleven States have
now enacted legislation or issued regulations requiring retail
competition by a time certain. Almost every other State currently has
the matter under review.
Some argue that there is no need for the Federal Government to
intervene; that the States are doing just fine on their own and they
should decide when and how to proceed with retail electric competition.
Mr. President, I couldn't disagree more.
A State-by-State approach will likely produce a lot of unintended
consequences which will limit the benefits associated with retail
competition and could disadvantage certain consumers. Electric
generation markets are becoming increasingly regional and even multi-
regional. What happens in one State can have direct and indirect
impacts on consumers and utilities located in another State. Utilities
operating in more than one State can be subjected to conflicting
regulatory regimes which could impact the way they operate their
systems and the electric rates paid by consumers.
This phenomenon is best illustrated by the multistate utility holding
companies registered under the Public Utility Holding Company [PUHCA].
I have had a lot of experience with registered holding companies
because two of them serve my home State of Arkansas. These holding
companies generally plan for and operate generating facilities on a
system-wide basis for the benefit of customers in the entire region
[[Page S11969]]
served by the company. If restructuring proceeds on a State-by-State
basis, these holding companies would find themselves subjected to
different requirements which could negatively impact consumers.
A State-by-State approach to retail competition also present problems
where utilities operate entirely within a single State. It would make
no sense for a utility in a State that does not require retail
competition, to be able to sell power at retail in an adjoining State
that requires retail competition, while a utility subjected to retail
competition is unable to mitigate its losses by competing for customers
in the adjoining State. Such a result both increases stranded costs and
distorts the generation marketplace.
Moreover, the States can't adequately address issues associated with
the use of transmission lines that provide for the transportation
across a number of States or the ability of a utility with significant
market power to dominate electricity generation in an entire region.
Clearly these are issues that need to be resolved at the Federal level.
When I introduced S. 237 there weren't many calling for Federal
action. However, interested observers are increasingly coming to the
conclusion that Federal electric restructuring legislation is not only
helpful, but is necessary. Even some of the States are calling on the
Federal Government to act.
The legislation we are introducing today is an updated version of S.
237. The bill includes the following provisions: All consumers would
have the right to choose their power supplier by January 1, 2002.
States could choose an earlier date for their residents if they wish.
Utilities would be able to recover their legitimate, prudent and
verifiable costs that they would have been able to recover from
ratepayers if retail competition had not been implemented. Consumers
located in States that currently have low cost electricity would be
protected from rate increases by ensuring that utilities can't use
their existing assets to sell power in more lucrative markets to the
disadvantage of their existing customers. All utilities selling retail
power would be required to generate a portion of that power using
renewable resources. All of the interstate transmission facilities
throughout the country would be managed by independent system operators
to ensure that electricity flows in an efficient manner and that
markets are competitive. FERC would be given greater authority to
protect against the use of market power by utilities to inhibit
competition. Both the Public Utility Holding Company Act [PUHCA] and
the Public Utility Regulatory Policies Act [PURPA] would be repealed in
conjunction with the implementation of retail electric competition.
In addition, Mr. President, the legislation attempts to address some
of the issues that relate to the impact of retail electric competition
on two Federal entities--the Bonneville Power Administration [BPA] and
the Tennessee Valley Authority [TVA]. Senator Gorton is especially
knowledgeable about the special problems facing BPA and I expect that
he will work closely with the other Members of the Senate from the
Pacific Northwest in developing a consensus approach.
With regard to TVA, our bill attempts to develop an approach that
will enable retail competition to be smoothly introduced in the
Tennessee Valley and will help TVA pay off its tremendous debt. The
bill also requires the TVA board to prepare a study examining whether
TVA should be privatized. I know that some observers may be concerned
that this could be a first step toward the privatization of the Federal
Power Marketing Administration [PMA's]. Mr. President, there is no
connection whatsoever between TVA and the PMA's. The PMA's market power
generated at hydroelectric facilities located at Federal dams. These
dams perform a variety of public services and cannot be privatized.
TVA, on the other hand, generates the bulk of its power from coal and
nuclear plants that serve no public purposes. In addition, the Federal
PMA's pay for themselves through power sales. TVA, on the other hand,
has an enormous level of privately held debt which it must find a way
to pay off, since the Federal Government is not responsible for it.
Mr. President, I am especially pleased that Senator Gorton has
decided to join with me in the effort to enact comprehensive electric
restructuring legislation. He has a reputation as a very bright and
thoughtful Member of this body and is a distinguished member of the
Energy and Natural Resources Committee, which has jurisdiction over the
matter. I know that he shares my desire to move this legislation
through Congress quickly next year.
Senator Murkowski, the chairman of the Senate Energy Committee,
recently indicated that he expects the committee to mark up electric
restructuring legislation next year. Both Senator Gorton and I want to
work with him and the other members of the committee in moving forward.
I look forward to undertaking this important task.
Mr. President, I want to say how honored I am to have one of our most
distinguished Senators, Senator Gorton of Washington, as my chief
cosponsor on this bill.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
Mr. President, I ask unanimous consent that a section-by-section
analysis of the Transition to Electric Competition Act of 1997 be
printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
S. 1401
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.
(a) Short title. This Act may be cited as the ``Transition
to Electric Competition Act of 1997''.
(b) Table of Contents.--The table of contents is as
follows:
Sec. 1. Short title and table of contents.
Sec. 2. Findings.
Sec. 3. Definitions.
Sec. 4. Severability.
Sec. 5. Enforcement.
TITLE I--RETAIL COMPETITION
Sec. 101. Mandatory retail access.
Sec. 102. Aggregation.
Sec. 103. Prior implementation.
Sec. 104. State regulation.
Sec. 105. Retail stranded cost recovery.
Sec. 106. Wholesale stranded cost recovery.
Sec. 107. Lost retail benefits.
Sec. 108. Universal service.
Sec. 109. Public benefits.
Sec. 110. Renewable energy.
Sec. 111. Determination of local distribution facilities.
Sec. 112. Transmission.
Sec. 113. Competitive generation markets.
Sec. 114. Nuclear decommissioning costs.
Sec. 115. Right to know.
Sec. 116. Exemption of Alaska and Hawaii.
TITLE II--PUBLIC UTILITY HOLDING COMPANIES
Sec. 201. Repeal of the Public Utility Holding Company Act of 1935.
Sec. 202. Exemptions.
Sec. 203. Federal access to books and records.
Sec. 204. State access to books and records.
Sec. 205. Affiliate transactions.
Sec. 206. Clarification of regulatory authority.
Sec. 207. Effect on other regulation.
Sec. 208. Enforcement.
Sec. 209. Savings provision.
Sec. 210. Implementation.
Sec. 211. Resources.
TITLE III--PUBLIC UTILITY REGULATORY POLICIES ACT
Sec. 301. Definition.
Sec. 302. Facilities.
Sec. 303. Contracts.
Sec. 304. Savings clause.
Sec. 305. Effective date.
TITLE IV--ENVIRONMENTAL PROTECTION
Sec. 401. Study.
TITLE V--BONNEVILLE POWER ADMINISTRATION
Sec. 501. Findings and purposes.
Sec. 502. Columbia River fish and wildlife coordination and governance.
Sec. 503. Pacific Northwest federal transmission access.
Sec. 504. Transition cost mechanism.
Sec. 505. Independent system operator participation.
Sec. 506. Financial obligations.
Sec. 507. Prohibition on retail sales.
Sec. 508. Clarification of Commission authority.
Sec. 509. Repealed statute.
TITLE VI--TENNESSEE VALLEY AUTHORITY
Sec. 601. Competition in service territory.
Sec. 602. Ability to sell electric energy.
Sec. 603. Termination of contracts.
Sec. 604. Rates for electric energy.
Sec. 605. Privatization study.
SEC. 2. FINDINGS.
The Congress finds that:
(a) Congress has the authority to enact laws, under the
Commerce Clause of the
[[Page S11970]]
United States Constitution, regarding the wholesale and
retail generation, transmission, distribution, and sale of
electric energy in interstate commerce.
(b) Several States have taken steps to require competition
among retail electric supplies and a large number of other
States are expected to act.
(c) It has been the policy of Congress and the Commission
to promote competition among wholesale electric suppliers.
(d) It is in the public interest that the transition
towards competition in electric service ensures that all
consumers receive reliable and competitively-priced electric
service.
(e) Electric utility companies that prudently incurred
costs pursuant to a regulatory structure that required them
to provide electricity to consumers should not be penalized
during the transition to competition.
(f) Consumers will not benefit from the introduction of
competition among electric energy suppliers if certain
suppliers have undue market power.
(g) It is important to encourage conservation and the use
of renewable resources to reduce reliance on fossil fuels,
promote domestic energy security and protect the environment.
(h) Competition among electric energy suppliers should not
degrade reliability nor cause consumers to lose electric
service.
SEC. 3. DEFINITIONS.
For purposes of this Act:
(a) The term ``affiliate'' of a specific company means any
company 5 percent or more of whose outstanding voting
securities are owned, controlled, or held with power to vote,
directly or indirectly, by such specific company.
(b) The term ``aggregator'' means any person that purchases
or acquires retail electric energy on behalf of two or more
consumers.
(c) The term ``ancillary services'' shall have the same
meaning assigned to it by the Commission.
(d) The term ``associate company'' of a company means any
company in the same holding company system with such company.
(e) The term ``Commission'' means the Federal Energy
Regulatory Commission.
(f) The term ``company'' means a corporation, joint stock
company, partnership, association, business trust, organized
group of persons, whether incorporated or not, or a receiver
or receivers, trustee or trustees of any of the foregoing.
(g) The term ``corporation'' means any corporation, joint-
stock company, partnership, association, rural electric
cooperative, municipal utility, business trust, organized
group of persons, whether incorporated or not, or a receiver
or receivers, trustee or trustees of any of the foregoing.
(h) The term ``electric utility company'' means any company
that owns or operates facilities used for the generation,
transmission or distribution of electric energy for sale.
(i) The term ``gas utility company'' means any company that
owns or operates facilities used for distribution at retail
(other than the distribution only in enclosed portable
containers) of natural or manufactured gas for heat, light or
power.
(j) The term ``holding company system'' means a holding
company together with its subsidiary companies.
(k) The term ``large hydroelectric facility'' means a
facility which has a power production capacity which,
together with any other facilities located at the same site,
is greater than 80 megawatts.
(l) The term ``local distribution facilities'' means
facilities used to provide retail electric energy for
ultimate consumption.
(m) The term ``lost retail benefits'' means the increased
cost of retail electric energy in a retail electric energy
provider's service territory resulting from the sale
subsequent to the implementation of retail electric
competition, outside such service territory, of electric
energy generated at facilities the cost of which were
included in the retail rate base of the retail electric
energy provider prior to the implementation of retail
electric competition.
(n) The term ``mitigation'' means any widely accepted
business practice used by an electric utility company to
dispose of or reduce uneconomic assets or costs.
(o) The term ``municipal utility'' means a city, county,
irrigation district, drainage district, or other political
subdivision or agency of a State competent under the laws
thereof to carry on the business of a retail electric energy
provider and/or a retail electric energy supplier.
(p) The term ``person'' means an individual or corporation.
(q) The term ``public utility company'' means an electric
utility company or gas utility company but does not mean a
qualifying facility as defined in the Public Utility
Regulatory Policies Act, or an exempt wholesale generator or
a foreign utility company defined in the Energy Policy Act of
1992.
(r) The term ``public utility holding company'' means (A)
any company that directly or indirectly owns, controls, or
holds with power to vote, 10 percent or more of the
outstanding voting securities of a public utility company or
of a holding company of any public utility company; and (B)
any person, determined by the Securities and Exchange
Commission, after notice and opportunity for hearing, to
exercise directly or indirectly (either alone or pursuant to
an arrangement or understanding with one or more persons)
such a controlling influence over the management or policies
of any public utility or holding company as to make it
necessary or appropriate for the protection of consumers with
respect to rates that such person be subject to the
obligations, duties, and liabilities imposed in this title
upon holding companies.
(s) The term ``renewable energy'' means electricity
generated from solar, wind, waste, including municipal solid
waste, biomass, hydroelectric or geothermal resources.
(t) The term ``Renewable Energy Credit'' means a tradable
certificate of proof that one unit (as determined by the
Commission) of renewable energy was generated by any person.
(u) The term ``retail electric competition'' means the
ability of each consumer in a particular State to purchase
retail electric energy from any person seeking to sell
electric energy to such consumer.
(v) The term ``retail electric energy'' means electric
energy and ancillary services sold for ultimate consumption.
(w) The term ``retail electric energy provider'' means any
person who distributes retail electric energy to consumers
regardless of whether the consumers purchase such energy from
the provider or an alternative supplier. A retail electric
energy provider may also be a retail electric energy
supplier.
(x) The term ``retail electric energy supplier'' means any
person which sells retail electric energy to consumers.
(y) The term ``retail stranded costs'' means all
legitimate, prudent, verifiable and non-mitigatable costs
incurred by an electric utility company in all of its
generation assets which would have been recoverable in retail
rates but for the implementation of retail electric
competition, less the total market value of these assets
after retail electric competition is implemented. Binding
power purchase contracts and regulatory assets, the costs of
which would have been recovered but for the implementation of
retail electric competition, shall be considered generation
assets for purposes of this subsection.
(z) The term ``rural electric cooperative'' means a
corporation that is currently paying off a loan for the
purposes of providing electric service from the Administrator
of the Rural Electrification Administration or the Rural
Utilities Service under the Rural Electrification Act of
1936.
(aa) The term ``State'' means any State or the District of
Columbia.
(bb) The term ``State regulatory authority'' means the
regulatory body of a State or municipality having sole
jurisdiction to regulate rates and charges for the
distribution of electric energy to consumers within the State
or municipality.
(cc) The term ``subsidiary company'' of a holding company
means--
(1) any company 10 percent or more of the outstanding
voting securities of which are directly or indirectly owned,
controlled, or held with power to vote, by such holding
company; and
(2) any person the management or policies of which the
Securities and Exchange Commission, after notice and
opportunity for hearing, determines to be subject to a
controlling influence, directly or indirectly, by such
holding company (either alone or pursuant to an arrangement
or understanding with one or more other persons) so as to
make it necessary for the protection of consumers that such
person be subject to the obligations, duties, and liabilities
imposed upon subsidiary companies of public utility holding
companies.
(dd) The term ``transmission system'' means all facilities,
including federally-owned facilities, transmitting
electricity in interstate commerce in a particular region,
including all facilities transmitting electricity in the
State of Texas and those providing international
interconnections, but does not include local distribution
facilities as determined by the Commission.
(ee) The term ``wholesale electric energy'' means electric
energy and ancillary services sold for resale.
(ff) The term ``wholesale electric energy supplier'' means
any person which sells wholesale electric energy.
(gg) The term ``wholesale stranded costs'' shall have the
same meaning as in the Commission's Order No. 888.
(hh) The term ``voting security'' means any security
presently entitling the owner or holder thereof to vote in
the direction or management of the affairs of a company.
SEC. 4. SEVERABILITY.
If any provision of this Act, or the application of such
provision to any person or circumstance, shall be held
invalid, the remainder of the Act, and the application of
such provision to persons or circumstances other than those
as to which it is held invalid, shall not be affected
thereby.
SEC. 5. ENFORCEMENT.
(a) Violation of the Act.--If any individual or corporation
or any other retail electric energy supplier or provider
fails to comply with the requirements of this Act, any
aggrieved person may bring an action against such entity to
enforce the requirements of this Act in the appropriate
Federal district court.
(b) State or Commission Action.--Notwithstanding any other
provision of law, any person seeking redress from an action
taken by a State regulatory authority, the Commission or a
regulatory board pursuant to this Act shall bring such action
in the appropriate circuit of the United States Court of
Appeals.
[[Page S11971]]
TITLE I--ELECTRIC COMPETITION
SEC. 101. MANDATORY RETAIL ACCESS.
(a) Customer Choice.--Beginning on January 1, 2002, each
consumer shall have the right to purchase retail electric
energy from any person offering to sell retail electric
energy to such consumer, subject to any limitations imposed
pursuant to section 104(a) of this Act.
(b) Local Distribution and Retail Transmission
Facilities.--Beginning on January 1, 2002, all persons
seeking to sell retail electric energy shall have reasonable
and nondiscriminatory access, on an unbundled basis, to the
local distribution and retail transmission facilities of all
retail electric energy providers and all ancillary
services.
SEC. 102. AGGREGATION.
Subject to any limitations imposed pursuant to section
104(a) of this Act, a group of consumers or any person acting
on behalf of such group may purchase or acquire retail
electric energy for the members of the group if they are
located in a State or States where there is retail electric
competition.
SEC. 103. PRIOR IMPLEMENTATION.
(a) State Action.--Nothing in the Federal Power Act (16
U.S.C. 824 et seq.) shall be deemed to prohibit a State or
State regulatory authority, if authorized under State law,
from requiring retail electric energy providers selling
retail electric energy to consumers in such State to provide
reasonable and nondiscriminatory access, on an unbundled
basis, to its local distribution facilities and all ancillary
services to any retail electric energy supplier prior to
January 1, 2002.
(b) Grandfather.--Legislation enacted by a State or a
regulation issued by a State regulatory authority which has
the effect of providing all consumers in such State the
opportunity to purchase retail electric energy from any
retail electric energy supplier by January 1, 2002 and
provides electric utility companies with the opportunity to
recover their retail stranded costs as defined by this Act
(unless there is an agreement between a State or State
regulatory authority and a retail electric energy provider
which provides for a different level of recovery), shall be
deemed to be in compliance with the requirements of sections
101 and 105 of this Act.
(c) Reciprocity.--A State or State regulatory authority
that provides for retail electric competition may preclude
any retail electric energy provider selling retail electric
energy to consumers in another State and their affiliates
from selling retail electric energy to consumers in the State
with retail electric competition if the retail electric
energy provider does not provide reasonable and
nondiscriminatory access, on an unbundled basis, to its local
distribution facilities to any retail electric energy
supplier.
SEC. 104. STATE REGULATION.
(a) State Requirements.--A State or a State regulatory
authority may impose requirements on persons seeking to sell
retail electric energy to consumers in that State which are
intended to promote the public interest, including
requirements related to generation reliability and the
provision of information to consumers and other retail
electric energy suppliers. Any such requirements must be
applied on a nondiscriminatory basis and may not be used to
exclude any class of potential suppliers, such as retail
electric energy providers, from the opportunity to sell
retail electric energy.
(b) Maintenance of State Authority.--Nothing in this Act is
intended to prohibit a State from enacting laws or imposing
regulations related to retail electric energy service that
are consistent with the requirements of this Act.
(c) Continued State Authority Over Distribution.--A State
or State regulatory authority may continue to regulate local
distribution service currently subject to State regulation,
including billing and metering in any manner consistent with
this Act.
SEC. 105. RETAIL STRANDED COST RECOVERY.
(a) Application for Determination.--Except as provided in
subsection (b), an electric utility company subject to the
ratemaking jurisdiction of a State regulatory authority prior
to the date of enactment of this Act may submit an
application to the State regulatory authority seeking a
determination of its total stranded costs in that State if:
(1) the State regulatory authority has issued a regulation
or the State has enacted legislation requiring retail
electric competition which does not provide for the full
recovery of retail stranded costs; or
(2) the electric utility company's retail distribution
customers have access to retail competition as a result of
the requirements of Section 101 of this Act.
(3) If a State regulatory authority fails to determine the
electric utility company's retail stranded costs within 18
months after the date upon which the company applied for a
determination of its stranded costs, the Commission shall
determine the company's retail stranded costs.
(b) Nonregulated Utilities.--A municipal or rural electric
cooperative that seeks to recover its retail stranded costs
may determine its total retail stranded costs.
(c) Right of Recovery.--(1) An electric utility company,
municipal utility or retail electric cooperative shall be
entitled to full recovery of its retail stranded costs, as
determined pursuant to subsection (a) or (b), over a
reasonable period of time through a non-bypassable Stranded
Cost Recovery Charge imposed on its customers.
(2) A rural electric cooperative which sells wholesale
electric energy to rural electric cooperative retail electric
energy providers or a joint action agency which sells
wholesale electric energy to municipal retail electric energy
providers may recover wholesale stranded costs from such
rural electric cooperative or municipal retail electric
energy providers. Such cost recovery shall be deemed a retail
stranded cost of the rural electric cooperative or municipal
retail energy provider.
(d) Prohibition on Cost-Shifting.--(1) No class of
consumers in a State shall be assessed a Stranded Cost
Recovery Charge that a State regulatory authority or the
Commission, whichever is applicable, determines is in excess
of the class' proportional responsibility for the retail
electric energy provider's costs that existed prior to the
implementation of retail electric competition in such State.
(2) Customers of a retail electric energy provider that
serves consumers in more than one State or that is affiliated
with another retail electric energy provider shall only be
responsible for stranded costs associated with retail
electric competition in the State or area in which such
customers are located.
(e) Prior Prudence Determinations.--Nothing in this Act is
intended to affect or modify or permit the modification of a
final determination made by the Commission or a State
regulatory authority or an agreement entered into by the
Commission or a State regulatory authority with regard to the
prudence of any costs associated with a particular generating
facility or contract.
SEC. 106. WHOLESALE STRANDED COST RECOVERY.
(a) Commission Regulation.--The Commission shall have sole
jurisdiction to determine and provide for the recovery of
wholesale stranded costs associated with wholesale electric
competition with regard to public utilities subject to the
jurisdiction of the Commission pursuant to the Federal Power
Act.
(b) Regional Generating Facilities.--
(1) The consent of Congress is given for the creation of a
regional board if--
(A) each State regulatory authority regulating an affiliate
of a public utility holding company with affiliate retail
electric energy providers serving customers in more than one
state elects to join such a board;
(B) an affiliate of the public utility holding company owns
and/or operates a generating facility and sells power from
that facility to two or more affiliates of the same holding
company and did not sell retail electric energy prior to
January 30, 1997 (hereinafter referred to as the ``wholesale
generating company''); and
(C) the public utility holding company notifies each State
regulatory authority which regulates a retail electric energy
provider affiliated with the holding company that it intends
to seek recovery of the wholesale stranded costs associated
with the generating facility or facilities (described in
subsection (b)(1)(B)) owned by the wholesale generating
company affiliated with such holding company.
(2) The regional board shall be formed if each State
regulatory authority elects to create the board within six
months after receiving the notification described in
subsection (b)(1)(C). If such elections are not made within
the requisite time period, the Commission shall assume the
responsibilities of the board as described in this section.
(3) The regional board shall have 18 months after the date
it is formed to determine, on a unanimous basis, the
wholesale stranded costs associated with the generating
facility which is the subject of the proceeding and to
allocate such costs among the retail electric energy provider
affiliates of the public utility holding company on a just
and reasonable and nondiscriminatory basis.
(4) If the regional board fails to make either or both
determinations, as described in subsection (b)(3) in the
requisite time period, the Commission shall make the
determination or determinations that have yet to be made.
(5) After its level of wholesale stranded costs is
determined pursuant to this subsection, the wholesale
generating company affiliate of the holding company shall be
entitled to fully recover its stranded costs, over a
reasonable period of time, from the retail electric energy
provider affiliates to which it sells electric energy
pursuant to the procedures established by this subsection.
(6) A retail electric energy provider's wholesale stranded
cost payment obligations pursuant to this subsection shall be
deemed retail stranded costs for the purposes of section 105
of this Act.
SEC. 107. LOST RETAIL BENEFITS.
A State may require a retail electric energy provider to
compensate its retail customers for lost retail benefits if,
after retail competition is implemented, the market value of
all of the provider's generating assets in the rate base
prior to the implementation of retail electric competition is
greater than the total costs of these assets that would have
been recoverable in retail rates but for the implementation
of retail electric competition. No retail electric energy
provider shall be required to compensate its customers in an
amount that exceeds the increased market value of its
generating assets resulting from the implementation of retail
electric competition.
SEC. 108. UNIVERSAL SERVICE
(a) State Universal Service Programs.--A State may
establish a Universal Service
[[Page S11972]]
Program that ensures that all consumers have access to
purchase retail electric energy from at least one retail
electric energy supplier at a just and reasonable rate.
(b) Service Obligation.--(1) After January 1, 2002, each
retail electric energy provider located in a State that has
not yet established a Universal Service Program described in
subsection (a) shall be obligated to sell retail electric
energy to, or purchase retail electric energy on behalf of,
any of its customers in a particular geographic area in which
a State regulatory authority or the Commission, if the State
regulatory authority fails to make a determination pursuant
to a request by an affected person, determines that there is
not effective retail electric competition in such area and
the consumer has not affirmatively chosen a retail electric
energy supplier.
(2) The retail electric energy provider performing the
service described in subsection (b)(1) is entitled to a just
and reasonable rate from the consumer receiving such service.
(c) Universal Service Fund.--A State or a State regulatory
authority, if authorized by the State, may impose a
nonbypassable Universal Service Charge on all customers of
every retail electric energy provider in such State to fund
all or part of the costs of a Universal Service Program,
including the partial or full payment of the charges a
provider may recover pursuant to subsection (b)(2).
SEC. 109. PUBLIC BENEFITS.
Nothing in this Act shall prohibit a State or State
regulatory authority from assessing charges on retail
consumers of energy to fund public benefits programs such as
those designed to aid low-income energy consumers, promote
energy research and development or achieve energy efficiency
and conservation.
SEC. 110. RENEWABLE ENERGY.
(a) Minimum Renewable Requirement.--Beginning on January 1,
2004 and each year thereafter, every retail electric energy
supplier shall submit to the Commission Renewable Energy
Credits in an amount equal to the required annual percentage
of the total retail electric energy sold by such supplier in
the preceding calendar year.
(b) State Renewable Energy Programs.--Nothing in this
section shall be construed to prohibit any State or any State
regulatory authority from requiring additional renewable
energy generation in that State under any program adopted by
the State.
(c) Required Annual Percentage.--Beginning in calendar year
2003, the required annual percentage for each retail electric
energy supplier shall be 5 percent. Thereafter, the required
annual percentage for each such supplier shall be 9 percent
beginning in calendar year 2008 and 12 percent beginning in
calendar year 2013.
(d) Submission of Credits.--A retail electric energy
supplier may satisfy the requirements of subsection (a)
through the submission of--
(1) Renewable Energy Credits issued by the Commission under
this section for renewable energy sold by such supplier in
such calendar year.
(2) Renewable Energy Credits issued by the Commission under
this section to any other retail electric energy supplier for
renewable energy sold in such calendar year by such other
supplier and acquired by such retail electric energy
supplier.
(3) Any combination of the foregoing.
A Renewable Energy Credit that is submitted to the Commission
for any year may not be used for any other purposes
thereafter.
(e) Issuance of Renewable Energy Credits.--
(1) The Commission shall establish by rule after notice and
opportunity for hearing but not later than one year after the
date of enactment of this Act, a National Renewable Energy
Trading Program to issue Renewable Energy Credits to retail
electric suppliers. Renewable Energy Credits shall be
identified by type of generation and the State in which the
facility is located. Under such program, the Commission shall
issue--
(A) one-half of one Renewable Energy Credit to any retail
electric energy supplier who sells one unit of renewable
energy generated at a large hydroelectric facility;
(B) one Renewable Energy Credit to any retail electric
energy supplier who sells one unit of renewable energy
generated at a facility, other than a large hydroelectric
facility, built prior to the date of enactment of this Act;
and
(C) two Renewable Energy Credits to any retail electric
supplier who sells one unit of renewable energy generated at
a facility, other than a large hydroelectric facility, built
on or after the date of enactment of this Act.
(2) The Commission shall impose and collect a fee on
recipients of Renewable Energy Credits in an amount equal to
the administrative costs of issuing, recording, monitoring
the sale or exchange, and tracking such Credits.
(f) Sale or Exchange.--Renewable Energy Credits may be sold
or exchanged by the person issued or the person who acquires
the Credit. A Renewable Energy Credit for any year that is
not used to satisfy the minimum renewable sales requirement
of this section for that year may not be carried forward for
use in another year. The Commission shall promulgate
regulations to provide for the issuance, recording,
monitoring the sale or exchange, and tracking of such
Credits. The Commission shall maintain records of all sales
and exchanges of Credits. No such sale or exchange shall be
valid unless recorded by the Commission.
(g) Use of Proceeds by BPA.--The Administrator of the
Bonneville Power Administration shall use the proceeds from
the sale of any Renewable Energy Credit issued to the
Bonneville Power Administration under this section for its
retail electric energy sales to repay the Administration's
outstanding debt to the United States Treasury and
bondholders of securities backed by the Bonneville Power
Administration.
(h) Rules and Regulations.--The Commission shall promulgate
such rules and regulations as may be necessary to carry out
this section, including such rules and regulations requiring
the submission of such information as may be necessary to
verify the annual electric generation and renewable energy
generation which is supplied by any person applying for
Renewable Energy Credits under this section or to verify and
audit the validity of Renewable Energy Credits submitted by
any person to the Commission.
(i) Annual Reports.--The Commission shall gather available
data and measure compliance with the requirements of this
section and the success of the National Renewable Energy
Trading Program established under this section. On an annual
basis not later than May 31 of each year, the Commission
shall publish a report for the previous year that includes
compliance data, National Renewable Energy Trading Program
results, and steps taken to improve the Program results.
(j) Sunset.--The requirements of this section shall cease
to apply on December 31, 2019.
SEC. 111. DETERMINATION OF LOCAL DISTRIBUTION FACILITIES.
(a) Application by State Regulatory Authority.--A State
regulatory authority may apply to the Commission for a
determination whether a particular facility used for the
transportation of electric energy located in such State is a
local distribution facility subject to the jurisdiction of
that State regulatory authority or is a transmission facility
subject to the jurisdiction of the Commission.
(b) Commission Findings.--If an application is submitted
pursuant to subsection (a) the Commission shall make a
determination giving the maximum practicable deference to the
position taken by the State regulatory authority, in
accordance with the following factors associated with the
facility:
(1) function and purpose;
(2) size;
(3) location;
(4) voltage level and other technical characteristics;
(5) historic, current and planned usage patterns;
(6) interconnection and coordination with other facilities;
and
(7) any other factor the Commission deems relevant.
SEC. 112. TRANSMISSION.
(a) Transmission Regions.--Within two years after the date
of enactment of this Act, the Commission shall establish the
broadest feasible transmission regions and designate an
Independent System Operator to manage and operate the
transmission system in each region beginning on January 1,
2002. In establishing transmission regions and designating
Independent System Operators the Commission shall give
deference to Independent System Operators approved by the
Commission prior to the date of enactment of this Act, if it
would be consistent with the requirements of this section.
(b) Independent System Operators.--A person designated as
an Independent System Operator shall not be subject to the
control of--
(1) any person owning any transmission facilities located
in the region in which the Independent System Operator will
operate; or
(2) any retail electric energy supplier selling retail
electric energy to consumers in the region in which the
Independent System Operator will operate.
(c) Transmission Regulation.--
(1) The Commission shall continue to have authority over
the transmission of electric energy in interstate commerce by
the Independent System Operator within the transmission
region designated by the Commission.
(2) The Commission shall have authority over the
transmission of electric energy in interstate commerce
between two or more transmission regions designated by the
Commission.
(3) Sections 212(f) and 212(j) of the Federal Power Act (16
U.S.C. 824k(f) and 824k(j)) are repealed effective January 1,
2002.
(4) Section 212(g) of the Federal Power Act (16 U.S.C.
824k(g)) is amended by adding ``prior to January 1, 2002''
immediately following ``utilities''.
(5) Section 212(h) of the Federal Power Act (16 U.S.C.
824k(h))--
(A) shall not apply after the date of enactment of this Act
where a retail electric energy supplier is seeking access to
a transmission facility for the purpose of selling retail
electric energy to a consumer located in a State that has
authorized retail electric competition prior to January 1,
2002; or
(B) is repealed effective January 1, 2002.
(f) Rules.--On or before January 1, 2001, the Commission
shall issue binding rules governing oversight of the
Independent System Operators and designed to promote
transmission reliability and efficiency and competition among
retail and wholesale electric energy suppliers, including
rules related to transmission rates that inhibit competition
and efficiency.
[[Page S11973]]
SEC. 113. COMPETITIVE GENERATION MARKETS.
(a) Mergers.--
(1) Section 203(a) of the Federal Power Act (16 U.S.C.
824b(a)) is amended by adding ``including the promotion of
competitive wholesale and retail electric generation
markets,'' immediately following ``public interest''.
(2) Section 203 of the Federal Power Act (16 U.S.C. 824b)
is further amended by adding at the end the following:
``(c) Acquisition of Natural Gas Utility Company.--No
public utility shall acquire the facilities or securities of
a natural gas utility company unless the Commission finds
that such acquisition is in the public interest.
``(d) Definition.--For purposes of this section, the term
``natural gas utility company'' means any company that owns
or operates facilities used for the transportation at
wholesale, or the distribution at retail (other than the
distribution only in enclosed portable containers) of natural
or manufactured gas for heat, light, or power.''.
(b) Market Power.--The Commission may take such actions as
it determines are necessary, including the following:
(1) ordering the physical connection of generating or
transmission facilities,
(2) ordering a transmitting utility (as defined in section
3(23) of the Federal Power Act (16 U.S.C. 796(23)) to provide
transmission services (including any enlargement of
transmission capacity (consistent with applicable state law)
necessary to provide such services), or
(3) requiring the divestiture of generating or transmission
facilities,
in order to prohibit any retail or wholesale electric energy
supplier or retail electric energy provider or any affiliate
thereof, from using its ownership or control of resources to
maintain a situation inconsistent with effective competition
among retail and wholesale electric suppliers.
SEC. 114. NUCLEAR DECOMMISSIONING COSTS.
To ensure safety with regard to the public health and safe
decommissioning of nuclear generating units, any retail and
wholesale electric energy supplier owning nuclear generating
units prior to the date of enactment of this Act shall
recover all reasonable costs (as determined by the Commission
and relevant State regulatory authorities) associated with
Federal and State requirements for the decommissioning of
such nuclear generating units pursuant to a non-bypassable
charge imposed on all consumers located in the service
territories purchasing power, or that had purchased power,
from such nuclear generating units. In overseeing the non-
bypassable charge, a State regulatory authority may take
into account the greater cost responsibility of those
consumers which continue to purchase power generated at a
nuclear unit.
SEC. 115. RIGHT TO KNOW.
Beginning on January 1, 2002, the Commission shall ensure
that each retail electric energy supplier discloses to the
public information on the types of fuel used to generate the
electricity sold by the supplier, including the percentage of
the electric energy sold by the supplier that is generated by
each fuel type.
SEC. 116. EXEMPTION OF ALASKA AND HAWAII.
This title shall not apply to any person located in Alaska
or Hawaii with regard to any activity or transaction
occurring in Alaska or Hawaii.
TITLE II--PUBLIC UTILITY HOLDING COMPANIES
SEC. 201. REPEAL OF THE PUBLIC UTILITY HOLDING COMPANY ACT OF
1935.
The Public Utility Holding Company Act of 1935, as amended,
15 U.S.C. 79 et seq., is hereby repealed, effective one year
from the date of enactment of this Act.
SEC. 202. EXEMPTIONS.
(a) Federal and State Agencies.--No provision of this title
shall apply to: (1) the United States, (2) a State or any
political subdivision of a State, (3) any foreign
governmental authority not operating in the United States,
(4) any agency, authority, or instrumentality of any of the
foregoing, or (5) any officer, agent, or employee of any of
the foregoing acting as such in the course of his official
duty.
(b) Unnecessary Provisions.--The Commission, by rule or
order, may conditionally or unconditionally exempt any person
or transaction, or any class or classes of persons or
transactions, from any provision or provisions of this title
or of any rule or regulation thereunder, if the Commission
finds that regulation of such person or transaction is not
relevant to the rates of a public utility company. The
Commission shall not grant such an exemption, except with
regard to section 204 of this Act, unless all affected State
regulatory authorities consent.
(c) Retail Competition.--The provisions of this title shall
not apply to a holding company and every associate company of
such holding company if the Commission certifies that the
retail customers of every public utility subsidiary of such
holding company have access to retail electric competition
and each State regulatory authority regulating the retail
electric energy provider subsidiaries of the holding company
certify that they will have sufficient access to the holding
company's books and records relevant to their regulatory
responsibilities.
SEC. 203. FEDERAL ACCESS TO BOOKS AND RECORDS.
(a) Provision of Books and Records.--Every holding company
and associate company thereof shall maintain, and make
available to the Commission, such books, records, accounts,
and other documents as the Commission deems relevant to costs
incurred by a public utility company that is an associate
company of such holding company and necessary or appropriate
for the protection of consumers with respect to rates.
(b) Examination of Books and Records.--The Commission may
examine the books and records of any company in a holding
company system, or any affiliate thereof, as the Commission
deems relevant to costs incurred by a public utility company
within such holding company system and necessary or
appropriate for the protection of consumers with respect to
rates.
(c) Protected Information.--No member, officer, or employee
of the Commission shall divulge any fact or information that
may come to his knowledge during the course of examination of
books, accounts, or other information as hereinbefore
provided, except insofar as he may be directed by the
Commission or by a court.
SEC. 204. STATE ACCESS TO BOOKS AND RECORDS.
(a) Provision of Books and Records.--Every holding company
and associate company thereof, shall maintain, and make
available to each State regulatory authority regulating the
rates of any public utility subsidiary of such holding
company, such books, records, accounts, and other documents
as the State regulatory authority deems relevant to costs
incurred by a public utility company that is an associate
company of such holding company and necessary or
appropriate for the protection of consumers with respect
to rates.
(b) Protected Information.--No member, officer, or employee
of a State regulatory authority shall divulge any fact or
information that may come to his knowledge during the course
of examination of books, accounts, or other information as
hereinbefore provided, except insofar as he may be directed
by the State regulatory authority or a court.
SEC. 205. AFFILIATE TRANSACTIONS.
(a) Interaffiliate Transactions.--Both the Commission, with
regard to wholesale rates, and State regulatory authorities,
with regard to retail rates, shall have the authority to
determine whether a public utility company may recover in
rates any costs of goods and services acquired by such public
utility company from an associate company after the date of
enactment regardless of when the contract for the acquisition
of such goods and services was entered into.
(b) Associate Companies.--Both the Commission, with regard
to wholesale rates, and State regulatory authorities, with
regard to retail rates, shall have the authority to determine
whether a public utility company may recover in rates any
costs associated with an activity performed by an associate
company.
(c) Interaffiliate Power Transactions.--
(1) Each State regulatory authority shall have the
authority to examine the prudence of a wholesale electric
power purchase made by a public utility, which is not an
associate company of a public utility holding company,
providing retail electric service subject to regulation by
the State regulatory authority.
(2) Each State regulatory authority shall have the
authority to examine the prudence of a wholesale electric
power purchase made by a public utility, which is an
associate company of a public utility holding company,
providing retail electric service subject to regulation by
the State regulatory authority, provided that the costs
related to such purchase have not been allocated among two or
more associated companies of such public utility holding
company, by the Commission prior to the date of enactment and
there is no subsequent reallocation after the date of
enactment.
SEC. 206. CLARIFICATION OF REGULATORY AUTHORITY.
No public utility which is an associate company of a
holding company may recover in rates from wholesale or retail
customers any costs (other than wholesale or retail stranded
costs) not associated with the provision of electric service
to such customers, including those direct and indirect costs
related to investments not associated with the provision of
electric service to those customers, unless the Commission,
with regard to wholesale rates, or a State regulatory
authority, with regard to retail rates, explicitly consents.
SEC. 207. EFFECT ON OTHER REGULATION.
Nothing in this Act shall preclude a State regulatory
authority from exercising its jurisdiction under otherwise
application law to protect utility consumers.
SEC. 208. ENFORCEMENT.
The Commission shall have the same powers as set forth in
sections 306 through 317 of the Federal Power Act (16 U.S.C.
825d-825p) to enforce the provisions of this title.
SEC. 209. SAVINGS PROVISION.
Nothing in this title prohibits a person from engaging in
activities in which it is legally engaged or authorized to
engage on the date of enactment of this title provided that
it continues to comply with the terms of any authorization,
whether by rule or by order.
SEC. 210. IMPLEMENTATION.
The Commission shall promulgate regulations necessary or
appropriate to implement this title not later than six months
after the date of enactment of this Act.
SEC. 211. RESOURCES.
All books and records that relate primarily to the function
hereby vested in the Commission shall be transferred from the
Securities
[[Page S11974]]
and Exchange Commission to the Commission.
TITLE III--PUBLIC UTILITY REGULATORY POLICIES ACT
SEC. 301. DEFINITION.
For purposes of this title, the term ``facility'' means a
facility for the generation of electric energy or an addition
to or expansion of the generating capacity of such a
facility.
SEC. 302. FACILITIES.
Section 210 of the Public Utility Regulatory Policies Act
of 1978 (16 U.S.C. 824a-3) shall not apply to any facility
which begins commercial operation after the effective date of
this title, except a facility for which a power purchase
contract entered into under such section was in effect on
such effective date.
SEC. 303. CONTRACTS.
After the effective date of this title or after the date on
which retail electric competition, as defined in title I of
this Act, is implemented in all of its service territories,
whichever is earlier, no public utility company shall be
required to enter into a new contract or obligation to
purchase or sell electric energy pursuant to section 210 of
the Public Utility Regulatory Policies Act of 1978.
SEC. 304. SAVINGS CLAUSE.
Notwithstanding sections 302 and 303, nothing in this title
shall be construed:
(a) as granting authority to the Commission, a State
regulatory authority, electric utility company, or electric
consumer, to reopen, force, the renegotiation of, or
interfere with the enforcement of power purchase contracts or
arrangements in effect on the effective date of this Act
between a qualifying small power producer and any electric
utility or electric consumer, or any qualifying cogenerator
and any electric utility or electric consumer.
(b) To affect the rights and remedies of any party with
respect to such a power purchase contract or arrangement, or
any requirement in effect on the effective date of this Act
to purchase or to sell electric energy from or to a
qualifying small power production facility or qualifying
cogeneration facility.
SEC. 305. EFFECTIVE DATE.
This title shall take effect on January 1, 2002.
TITLE IV--ENVIRONMENTAL PROTECTION
SEC. 401. STUDY.
The Environmental Protection Agency, in consultation with
other relevant Federal agencies, shall prepare and submit a
report to Congress by January 1, 2000, which examines the
implications of differences in applicable air pollution
emissions standards for wholesale and retail electric
generation competition and for public health and the
environment. The report shall recommend changes to Federal
law, if any are necessary, to protect public health and the
environment.
TITLE V--BONNEVILLE POWER ADMINISTRATION
SEC. 501. FINDINGS AND PURPOSES.
(a) FINDINGS.--The Congress finds that:
(1) The multi-purpose Federal Columbia River Power System's
Federal and non-Federal dams have provided immeasurable
benefits to the Pacific Northwest by providing flood control,
renewable hydroelectric power, irrigation, navigation, and
recreation;
(2) The dams provide the Northwest with a continuing source
of clean and renewable power but, along with over-fishing and
other natural and human impacts on the ecosystem, have
adversely affected the Columbia Basin's fish and wildlife;
(3) Enactment of the Energy Policy Act of 1992 established
competition for the wholesale supply of electricity, and
market forces have driven the cost of power down nationally,
the Northwest included, and has allowed utilities and large
users to buy power at rates below those offered by the
Bonneville Power Administration;
(4) Realizing the new economic forces impacting
electricity, the four Northwest State Governors undertook a
year-long review in 1996 of the regional electricity
system and made recommendations for the future of the
system;
(5) Among these recommendations is the separation of the
transmission and power marketing functions of the Bonneville
Power Administration, with Commission oversight of access to
Bonneville's transmission system, and undertaking this
separation in a way that does not impair Bonneville's ability
to meet its obligations to the U.S. Treasury, fish and
wildlife programs, and bondholders of the Washington Public
Power Supply System;
(6) There are ongoing efforts by Bonneville to reduce its
costs and require accountability of its funds, including
those of its funds used for salmon recovery; and
(7) There is a need to provide a regional process involving
the Federal Government, state governments, tribal
governments, utilities and other users of the water of the
Columbia and Snake River System, to balance the multiple
objectives of the river system.
(b) Purposes.--The purposes of this title are:
(1) To establish authority in a consolidated regional
governing body that will balance the multiple uses of the
Columbia and Snake river system, for hydroelectric
production, for irrigation, for recreation, for the
protection and enhancement of fish and wildlife populations,
and for flood control, with that body to be responsible and
accountable for spending funds for these purposes;
(2) To facilitate the maintenance of an open transmission
system in the Northwest based on Commission rules and to
ensure its reliability; and
(3) To assure that the Bonneville Power Administration
retains the ability to meet its unique financial obligations
to the U.S. Treasury, to fish and wildlife projects, to the
bondholders of the Washington Public Power Supply System, and
to remain a competitive wholesale supplier of electricity.
SEC. 502. COLUMBIA RIVER FISH AND WILDLIFE COORDINATION AND
GOVERNANCE.
This section is reserved.
SEC. 503. PACIFIC NORTHWEST FEDERAL TRANSMISSION ACCESS.
The Commission's rules on nondiscriminatory open access to
transmission services provided by public utilities, including
its rules on standards of conduct, shall also apply to
transmission services provided by the Bonneville Power
Administration, except as otherwise provided by the
Commission by rule if it is in the public interest, or except
as necessitated by the requirements of section 504 or 506 of
this Act. Except as provided in sections 504 and 508 of this
Act, rates for transmission imposed by the Administrator
shall continue to be established and reviewed and approved in
accordance with the provisions of otherwise applicable
Federal laws.
SEC. 504. TRANSITION COST MECHANISM.
If the Bonneville Power Administration proposes a charge to
recover its transition costs resulting from this Act, the
Energy Policy Act, or the Commission's Order No. 888, a
transition cost recovery mechanism shall be developed and
adopted by the Commission within 180 days of the filing of
the proposal with the Commission.
SEC. 505. INDEPENDENT SYSTEM OPERATOR PARTICIPATION.
Notwithstanding any other provision of law, the
Administrator of the Bonneville Power Administration may
participate in a regulated Independent System Operator
subject to the jurisdiction of the Commission pursuant to
section 112 of this Act.
SEC. 506. FINANCIAL OBLIGATIONS.
Sections 503, 504 and 505 of this Act shall be interpreted
and implemented in a manner that does not adversely affect
the security of the Bonneville Power Administration's
Washington Public Power Supply System net-billing and other
third-party financing arrangements.
SEC. 507. PROHIBITION ON RETAIL SALES.
Except as provided in section 5(d) of the Northwest Power
Act (16 U.S.C. 839c(d)), the Administrator shall not market,
sell or dispose of electric power to any end use or retail
customers that did not have a contract for the purchase of
electric power with the Administrator for services to
specific facilities as of October 1, 1997.
SEC. 508. CLARIFICATION OF COMMISSION AUTHORITY.
Section 7(a)(2) of the Pacific Northwest Electric Power
Planning and Conservation Act (16 U.S.C. 839e(a)(2)) is
amended--
(1) by deleting the word ``costs,'' in paragraph (B);
(2) by striking the period at the end of paragraph (C) and
inserting in lieu thereof ``, and''; and
(3) by adding at the end thereof the following new
paragraph:
``(D) insofar as transmission rates are concerned, the
rates do not discriminate between transmission users or
classes of users in a manner that has the effect of
unreasonably denying transmission access under section 503 of
this Act.''
SEC. 509. REPEALED STATUTE.
Section 6 of the Federal Columbia River Transmission System
Act (16 U.S.C. 838d) is hereby repealed.
TITLE VI--TENNESSEE VALLEY AUTHORITY
SEC. 601. COMPETITION IN SERVICE TERRITORY.
Notwithstanding any other provision of law, beginning on
January 1, 2002, all retail and wholesale electric energy
suppliers shall have the right to sell retail and wholesale
electric energy to persons that currently purchase retail or
wholesale electric energy either directly from the Tennessee
Valley Authority or persons purchasing electric energy from
the Tennessee Valley Authority.
SEC. 602. ABILITY TO SELL ELECTRIC ENERGY.
(a) TVA.--Notwithstanding any other provision of law, the
Tennessee Valley Authority may sell wholesale electric energy
to any person, subject to any restrictions imposed pursuant
to Section 104(a) of this Act, beginning on January 1, 2002.
(b) Power Customers.--Notwithstanding any other provision
of law, persons that currently purchase wholesale electric
energy from the Tennessee Valley Authority may sell wholesale
and retail electric energy to any persons subject to any
restrictions imposed pursuant to section 104(a) of this Act,
beginning on January 1, 2002.
SEC. 603. TERMINATION OF CONTRACTS.
(a) Notice.--Beginning on January 1, 2001, the Tennessee
Valley Authority shall allow any person that has executed a
contract to purchase retail or wholesale electric energy from
it to terminate such contract upon one year's notice.
(b) Stranded Costs.--Each person holding a contract that is
terminated pursuant to subsection (a) shall be responsible
for retail or wholesale stranded costs as determined by the
Commission.
[[Page S11975]]
SEC. 604. RATES FOR ELECTRIC ENERGY.
(a) Establishment.--Notwithstanding any other provision of
law, the Board of Directors of the Tennessee Valley Authority
shall establish, and periodically review and revise, rates
for the sale and disposition of wholesale and retail electric
energy and for the transmission of electric energy by the
Tennessee Valley Authority. Such rates shall be established
and, as appropriate, revised to recover, in accordance with
sound business principles, the costs associated with the
generation, acquisition, conservation, transmission, and
distribution of electric energy, including the payment of
principal and interest on the Authority's bonds over a
reasonable period.
(b) Commission Review.--Rates established under this
section shall become effective only upon confirmation and
approval by the Commission, upon a finding by the Commission
that such rates are sufficient to ensure repayment of the
Authority's bonds over a reasonable number of years after
first meeting the Authority's legitimate, prudent, and
verifiable costs.
SEC. 605. PRIVATIZATION STUDY.
(a) Requirement for Preparation of Study.--The Board of
Directors the Tennessee Valley Authority shall prepare a
study for selling its electric power program (excluding dams
and appurtenant works and structures) to private investors
and, not later than two years after the date of enactment of
this Act, shall submit such plan to the Congress.
(b) Contents of Study.--The study shall consider the
following--
(1) both the sale of the authority's electric power program
as a whole and the sale of some or all of its component
parts;
(2) alternative means of selling the Authority's electric
power program or its component parts, including a public
stock offering, a private placement of stock, or the sale of
assets; and
(3) the effect of any sale on--
(A) electric rates and competition in the regional
electricity market,
(B) the operation of the Authority's nonpower programs, and
(C) the repayment of the Authority's debt.
(c) Additional Elements.--The study shall also include--
(1) An estimate of the amount of revenue that the United
States Treasury would receive under each of the alternatives
considered;
(2) the Board's analysis of the feasibility of each of the
alternatives considered and its recommendation either for
retaining the Authority's power program under federal
ownership or the preferred alternative for selling it to
private investors; and
(3) the Board's recommendation of whether the Authority's
dams should--
(A) be transferred to the Department of the Army Corps of
Engineers and responsibility for marketing electric energy
produced by such dams assigned to the Southeastern Power
Marketing Administration, or
(B) continue to be controlled by, and the electric energy
they produce continue to be marketed by the Tennessee Valley
Authority.
(d) Further Action.--The Board of Directors shall take no
action to implement the sale of the Authority's power program
without further legislation authorizing such action.
____
Transition to Electric Competition Act of 1997--Section-by-Section
Analysis
title i--electric competition
Section 101--Mandatory Retail Access
All consumers (including current customers of investor-
owned municipal and rural cooperative electric utilities)
have the right to purchase retail electric energy beginning
on January 1, 2002.
All retail electric energy suppliers (entities selling
retail electric energy) have access to local distribution
facilities and all ancillary services beginning on January 1,
2002.
Section 102--Aggregation
A group of consumers or any entity acting on behalf of such
group is authorized to aggregate to purchase retail electric
energy for the members of the group if they live in a State
where retail electric competition exists.
Section 103--Prior Implementation
Nothing in the Federal Power Act shall prohibit States from
requiring retail electric competition prior to January 1,
2002.
A State requiring retail electric competition prior to
January 1, 2002 and providing utilities with the opportunity
to recover stranded costs is exempt from the Act's
requirements related to retail competition and stranded
costs.
A State may impose reciprocity requirements if it has
provided for retail competition to prevent utilities that
aren't subject to retail competition from selling power to
retail customers in its state.
Section 104--State Regulation
States may impose requirements on retail electric energy
suppliers to protect the public interest.
No class of potential retail electric energy suppliers can
be excluded from selling retail electric energy.
States may continue to regulate local distribution and
retail transmission service provided by retail electric
energy providers.
Section 105--Retail Stranded Cost Recovery
An investor-owned utility providing retail electric service
prior to the date of enactment which is seeking recovery of
its stranded costs must request the State regulatory
authority to determine the amount of its stranded costs
associated with the implementation of retail electric
competition.
If a State regulatory authority fails to determine the
amount of stranded costs within 18 months of the request,
FERC will determine the amount.
A municipal electric utility or a rural electric
cooperative may determine the amount of its stranded costs.
A utility is entitled to recover its stranded costs from
its customers pursuant to a nonbypassable Stranded Cost
Recovery Charge.
A rural electric cooperative or municipal joint action
agency that sells wholesale power to rural electric
cooperative or municipal distribution companies may recover
its stranded costs from the distribution companies.
No class of customers (such as a utility's residential
customers) can be required to pay a Stranded Cost Recovery
Charge in excess of its proportional responsibility for
utility costs prior to the implementation of retail electric
competition.
Customers served by utility companies operating in more
than one state either directly or through an affiliate are
only responsible for stranded costs arising from retail
electric competition in the state they reside.
For purposes of determining stranded cost amounts, prior
prudence determinations are binding.
Section 106--Wholesale Stranded Cost Recovery
FERC has sole jurisdiction to determine and provide for the
recovery of the wholesale stranded costs associated with
utilities subject to the Federal Power Act.
All of the states regulating utility subsidiaries of a
multistate utility holding company may form a regional board
to calculate the stranded costs of a wholesale electric
supplier subsidiary of the holding company that does not sell
any retail electric energy and to allocate such costs among
the utility subsidiaries of the holding company.
If the regional board is not formed or if the members of
the regional board fail to produce a consensus on either
determination required of the board, FERC shall perform the
board's responsibilities.
Once the wholesale subsidiary's stranded costs have been
determined, the subsidiary is entitled to recover such costs
from its affiliated utility companies in the manner allocated
by the board or FERC and the utility companies are entitled
to recover such costs from its customers.
Section 107--Lost Retail Benefits
A state may require a retail electric energy provider to
compensate its customers for any increase in power costs
resulting from the implementation of retail electric
competition if the market value of the provider's generating
assets increase and the provider sells power elsewhere due to
the implementation of retail electric competition.
Section 108--Universal Service
A state may establish a Universal Service Program to ensure
that all consumers have access to electric service at a just
and reasonable rate.
If a state has not established a Universal Service Program
prior to January 1, 2002, each retail electric energy
provider located in that state is obligated to sell power to
or purchase power on behalf of consumers that do not have
sufficient access to competing retail electric energy
suppliers.
The retail electric energy provider is entitled to just and
reasonable compensation for the service performed.
States may impose a nonbypassable Universal Service Charge
to help pay for the retail electric energy provider's
compensation.
Section 109--Public Benefits
States may impose charges on retail electric energy
consumers to fund public benefit programs (i.e. low-income
and energy efficiency).
Section 110--Renewable Energy
Beginning of 2003, all retail electric energy suppliers are
required to either (1) sell at least a minimum amount of
renewable energy as part of the total amount of energy it
sells or (2) purchase credits from retail electric energy
suppliers that sell renewable energy in excess of the minimum
requirements.
\1/2\ of one Renewable Energy Credit will be provided to
retail electric energy suppliers selling power generated from
a large hydroelectric facility (more than 80 MW). One
Renewable Energy Credit will be provided to retail electric
energy suppliers selling power generated at all other
renewable electric facilities built prior to the date of
enactment. Two Renewable Energy Credits will be provided to
retail electric energy suppliers selling power generated at
all other renewable electric facilities built subsequent to
the date of enactment.
Retail electric energy suppliers are required to have
Credits worth 5% of its generation beginning in 2003, 9% of
its generation beginning in 2008 and 12% of its generation
beginning in 2013.
The Bonneville Power Administration must use proceeds from
the sale of Credits issued to it to repay the
Administration's outstanding debt to the U.S. Treasury and
the Washington Public Power supply System Bondholders.
Section 111--Determination of Local Distribution Facilities
A State regulatory authority may apply with FERC for a
determination of whether a
[[Page S11976]]
particular facility constitutes a local distribution
facility.
FERC will give the position of the State regulatory
authority maximum practicable deference.
Section 112--Transmission
Within two years of the date of enactment FERC must
establish transmission regions and designate an Independent
System Operator (ISO) to manage and operate all of the
transmission facilities in each region beginning on January
1, 2002.
The ISO can't be affiliated with any person owning
transmission facilities in the region or any retail electric
energy supplier selling retail electric energy in the region.
FERC is required to issue rules by January 1, 2001
applicable to its oversight of the ISO's to promote
transmission reliability and efficiency and competition among
retail and wholesale electric energy suppliers.
The Federal Power Act prohibition on FERC requiring
transmission access for the purposes of retail wheeling is
repealed on January 1, 2002 or at an earlier date for a
particular retail wheeling request in a State that retail
electric competition prior to January 1, 2002.
Section 113--Competitive Generation Markets
FERC's authority over utility mergers pursuant to the
Federal Power Act is extended to electric utility mergers
with natural gas utility companies.
FERC review of mergers must take into account the impact of
a merger on competitive wholesale and retail electric
generation markets.
FERC has authority to take actions necessary to prohibit
retail electric energy suppliers and providers from using
their control of resources to inhibit retail and wholesale
electric competition.
Sectioin 114--Nuclear Decommissioning Costs
Utilities owning nuclear power plants prior to the date of
enactment are entitled to recover costs to fund
decommissioning of the plants from their customers pursuant
to a non-bypassable charge.
Section 115--Right to Know
Each retail electric energy supplier must publicly disclose
information on the types of fuel used to generate the
electricity sold by the supplier.
Section 116--Exemption of Alaska and Hawaii
Title I does not apply to any transaction occurring in
Alaska or Hawaii.
title ii--public utility holding companies
Section 201--Repeal of PUHCA
PUHCA is repealed one year from the date of enactment of
the Act.
Section 202--Exemption
Title II does not apply to federal or state agencies or
foreign governmental authorities not operating in the U.S.
FERC may exempt anyone from any of the requirements of the
Title if the Commission finds the particular regulation not
relevant to public utility company rates and the affected
States consent.
The provisions of the Title don't apply to a particular
holding company when retail electric competition exists in
the service territory of each utility subsidiary of the
holding company.
Section 203--Federal Access to Books and Records
Each holding company and associate company of the holding
company must make its books and records available to FERC.
Section 204--State Access to Books and Records
Each holding company and associate company of the holding
company must make its books and records available to each
State regulatory authority regulating a utility subsidiary of
the holding company.
Section 205--Affiliate Transactions
FERC, with regard to wholesale rates and States, with
regard to retail rates, have the authority to determine
whether a public utility affiliate of a holding company may
recover its costs associated with a non-power transaction
with an affiliated company if such costs arose after the date
of enactment.
State regulatory authorities have the authority to review
the prudence of a utility's wholesale power purchases form
nonaffiliated sellers.
State regulatory authorities have the authority to review
the prudence of a utility's wholesale power purchase from an
affiliated seller in the same holding company system unless
FERC has allocated the costs of the purchase among two or
more utility subsidiaries of the holding company prior to the
date of enactment and there is no subsequent reallocation.
Section 206--Clarification of Regulatory Authority
FERC, with regard to wholesale rates, and State regulatory
authorities, with regard to retail rates, must explicitly
consent, before a utility affiliate of a utility holding
company can recover costs in rates that are not directly
related to the provision of electric service to its
customers.
Section 207--Effect on Other Regulation
State regulatory authorities can exercise their
jurisdiction under otherwise applicable law to protect
utility consumers.
Section 208--Enforcement
FERC has the same enforcement authority under this Title as
it does under the Federal Power Act.
Section 209--Savings Provision
A person engaging in an activity it was legally entitled to
engage in on the date of enactment may continue to be
entitled to engage in the activity.
Section 210--Implementation
FERC must promulgate regulations to implement the Title
within 6 months of the date of enactment.
Section 211--Resources
The SEC must transfer its books and records related to
holding company regulation to the FERC.
Title iii--public utility regulatory policies act
Section 301--Definition
Section 302--Facilities
Section 210 of PURPA doesn't apply to facilities beginning
commercial operation after the effective date of this Title
unless the power purchase contract related to the facility
was in effect on the effective date.
Section 303--Contracts
Public utilities are no longer required to enter into new
purchase contracts under Section 210 of PURPA once there is
retail electric competition in their service territories.
Section 304--Savings Clause
This Title does not affect existing power purchase
contracts under PURPA.
Section 305--Effective Date
The effective date of this Title is January 1, 2002.
title iv--environmental protection
Section 401--Study
EPA must submit a study to Congress by January 1, 2002,
which examines the implications of wholesale and retail
electric competition on the emission of pollutants and
recommends changes to law, if any are necessary to protect
public health and the environment.
title v--bonneville power administration
Section 501--Findings and Purposes
Section 502--Columbia River Fish and Wildlife Coordination
and Governance
This section is reserved for future versions of the bill.
Section 503--Pacific Northwest Federal Transmission Access
BPA is subject to FERC's open access transmission
requirements unless FERC determines it is not in the public
interest or it would prevent BPA from paying its debt.
Section 504--Transition Cost Mechanism
FERC is required to develop a transition cost recovery
mechanism for BPA if BPA makes a proposal.
Section 505--Independent System Operator Participation
BPA is not prohibited from participating in an Independent
System Operator.
Section 506--Financial Obligations
The use of BPA's transmission facilities for competitive
generation transmission shall not adversely affect BPA's
ability to pay its debt.
Section 507--Prohibition on Retail Sales
BPA is prohibited from selling retail electric energy to
customers that did not have a contract with BPA as of October
1, 1997.
Section 508--Clarification of Commission Authority
Pacific Northwest transmission rates can't be used to
unreasonably deny transmission access.
Section 509--Repealed Statute
Section 6 of the Federal Columbia River Transmission System
is repealed.
Title VI--Tennessee Valley Authority
Section 601--Competition in Service Territory
Beginning on January 1, 2002, TVA's retail and wholesale
customers are permitted to purchase power from other sellers.
Section 602--Ability to Sell Electric Energy
Beginning on January 1, 2002, TVA may sell wholesale
electric energy outside of its current service territory.
Section 603--Termination of Contracts
Any person that currently holds a wholesale or retail
contract with TVA may cancel the contract with one year
notice beginning on January 1, 2001.
Section 604--Rates for Electric Energy
TVA's Board of Directors will establish the rates for the
sale and transmission of electric energy by TVA.
The rates must be sufficient to recover TVA's costs,
including the payment of principal and interest on its bonds
over a reasonable period.
FERC must review and approve the Board's rates if they are
sufficient to ensure the repayment of TVA's legitimate,
prudent and verifiable costs over a reasonable period of time
and ensure the recovery of TVA's stranded retail and
wholesale costs.
Section 605--Privatization Plan
TVA's Board of Directors must prepare a plan within two
years of the date of enactment for selling its electric power
program to private investors.
No action on the sale of TVA may occur without subsequent
congressional actions.
Mr. GORTON. Mr. President, the Senator from Arkansas has eloquently
and adequately described the bill which we are introducing jointly
today. He is a leader in this field, and introduced the bill on this
subject early this year. He and I, and the occupant of the Chair, have
had the opportunity to go
[[Page S11977]]
through seven workshops on electric power marketing restructuring.
During the course of this time, the Senator from Arkansas and I found
that we thought very similarly in this field, and we are here together
on the floor today to introduce a bill that modifies somewhat, but not
in its general philosophy, the proposal that he introduced almost a
year ago.
The goal that we set in this bill is to provide for competition for
choice, and ultimately for lower prices for electric power consumers
from the largest industry to the individual homeowner all across the 50
States of the United States. We set a deadline for that competition to
exist on the 1st of January of the year 2002. We encourage States,
several of which have already acted, to provide for their own free and
open competition by allowing States that have met the general
requirements of this bill before 2002 to do it in their own way--in the
way in which their legislatures have decided or may have decided.
We cover, as the Senator from Arkansas pointed out, the legitimate
stranded costs of utilities that have been required to build
facilities, some of which may not be completely competitive in an
entirely free and open market. We set up a system of independent system
operators so that the entire transmission system of the United States
will be free and open on equal terms to all potential competitors.
We encourage the increased use of renewable energy sources by
requiring certain minimums increasing in three steps throughout the
course of the next 15 years or so but providing credit for those who
already have renewable resources--hydropower, solar power, and the
other forms of renewable resources which exist at the present time and
may exist in the future, and allow the sale of credit from those who
already meet or exceed the renewable requirements of the bill--credits
that they can sell to others.
Senator Bumpers has been a true leader in this field, and I am
honored and delighted to now join with him in what I believe is the
first bipartisan approach to this subject, a bipartisan approach which
is going to be absolutely essential to any success.
At the same time that he has been working with his constituents
across the country, I have been listening to my own, and my privately
owned and public utility districts, those that produce electricity and
those that do not, and the wide range of other existing utilities or
potential competitors in the Northwest.
I represent a State that already has very low power charges. We want
to be a part of this process, not so that we can slow down the benefits
to others--the entire American economy must and will benefit from this
bill--but so that my constituents and consumers will benefit as well
from the advent of competition. I am convinced that the outline of this
bill does just exactly that.
We must deal with the peculiar challenges of the largest power
marketing authority, the Bonneville Power Administration. We do so in a
way that reflects the regional review sponsored by the four Governors
of the four Pacific Northwest States during the course of last year. We
also call in general terms for a more effective and broad-based
management of the Columbia River State System, reflecting all of the
multitude of uses of water in that system, and calling for a far more
effective use of the billions of dollars that we are spending on salmon
recovery.
So I believe for my own region that we can provide lower power costs,
greater competition, better salmon recovery, and a more rational
management of the Columbia-Snake River System.
I believe for the people of the United States as a whole that we can
provide for lower power costs, a greater use of renewable energy, more
competition, and a better America.
For those reasons, I am delighted to have been a part at this point
of a joint operation with my friend from Arkansas.
Mr. BUMPERS addressed the Chair.
The PRESIDING OFFICER. The Senator from Arkansas.
Mr. BUMPERS. Mr. President, I thank my distinguished colleague from
Washington State for his eloquent remarks. I just wanted to say how
honored I am to have him join me on this bill, and reiterate one other
thing because Senator Gorton and I want to be totally honest to the
people of this country as we go forward with this bill.
I think one thing that I must say is that, in my opinion, this $220
billion industry can cope with this bill--not only cope with it, but
that industry, business, and the consumers of this country will all
benefit from this, and the Nation will benefit because it is a global
economy where we are competing so strenuously with the other nations of
the world.
Electricity is such a big part of our producing industry, and the
less they pay the more competitive we become. That ought to be a real
incentive for the people of this body to look very seriously at this
bill.
______
By Mr. MURKOWSKI:
S. 1402. A bill to amend the Social Security Act to establish a
community health aide program for Alaskan communities that do not
qualify for the Community Health Aide Program for Alaska operated
through the Indian Health Service; to the Committee on Finance.
the alaskan community health aide program expansion act of 1997
Mr. MURKOWSKI. Mr. President, I am pleased to rise to introduce
legislation relative to the benefits of community health aides. This
particular legislation would be titled the Alaskan Community Health
Aide Program Expansion Act of 1997. The purpose of the act would be to
provide a link to health care for rural communities, primarily in my
State.
The Alaskan Community Health Aide Program Expansion Act would enable
the health aides to have access to rural, non-Native communities
throughout Alaska. The act will authorize training and continuing
education of Alaskans as community health aides to small communities
that do not currently qualify for the Indian Health Services' Community
Health Aide Program.
Mr. President, some 50 years ago, this unique system of community
health aides was formed in my State. In the early 1940's, due to an
extreme outbreak of tuberculosis across Alaska, volunteers were
selected by local communities and trained as community health aides.
These communities, of course, suffered from distance, extreme
isolation. They were often located hundreds of miles from the nearest
physician. And the community health aides, through radio contact to a
distant hospital in the region, became the eyes, the ears and hands of
a physician and administered life-saving medications to remote patients
throughout the State.
Today, through the Indian Health Services, the aides reside in 176
Alaskan-Native communities, small isolated communities throughout our
State--which if you spread Alaska across the United States, in a
proportional map it would run from Canada to Mexico, from California to
Florida. So we are talking about a big piece of real estate, Mr.
President.
These aides, today, through telecommunications capability with
physicians in Anchorage, Fairbanks, and other urban areas, provide
health care, provide disease prevention throughout our State. The
health aides are broadly acknowledged as the backbone of rural health
delivery for Alaska's Native people.
However, Mr. President, there is a large void in Alaska's Community
Health Aide Program. Approximately 50 of our local Alaskan communities
do not have community health aides because the people who live there
are non-Native, and thus they do not qualify for the service under
current law.
In these 50, 51 communities, there is no physician, there is no other
health care provider of any kind. Instead, these communities are served
by public health care nurses who come and go on an itinerant basis. In
other words, Mr. President, health care access in these communities is
infrequent at best.
Often these non-Native communities are characterized by geographic
isolation and cultural isolation, especially in areas such as the
Russian communities of Nikolaevsk, Vosnesenda, Katchmaksel, and
Rassdonla.
Most of these communities are completely unconnected by roads. Access
is only available by airplane, boat, and sometimes snowmachine or
dogsled. The needs of these communities is a daunting task.
[[Page S11978]]
The Community Health Aide Program Expansion Act would remedy this
dilemma. For the first time in the history of our State, all
communities and villages will have the opportunity to have health care
available within a village. This legislation will enable the trained
health aide to live within a community, teach basic disease prevention
and health promotion, in other words, the basic skills for good health.
Mr. President, this legislation will enable affordable and consistent
access to health care to all Alaskan communities.
I ask my colleagues to join in support of this legislation.
I ask unanimous consent that the text of this legislation be printed
in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 1402
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 ``Alaskan Community Health
Aide Program Expansion Act of 1997''.
SEC. 2. FINDINGS.
Congress finds the following:
(1) Numerous communities in Alaska have no physicians or
health care providers of any kind.
(2) While those communities are served by Alaskan public
health nurses on an itinerant basis, Alaskan law prohibits
those nurses from treating patients for individual health
concerns.
(3) Physical and cultural isolation is so severe in those
communities that private health care providers often opt not
to serve those communities.
(4) Not enough Native Alaskans reside in such communities
to warrant placement of a community health aide pursuant to
the Community Health Aide Program for Alaska operated through
the Indian Health Service.
SEC. 3. EXPANSION OF THE COMMUNITY HEALTH AIDE PROGRAM FOR
ALASKA.
Part A of title XI of the Social Security Act (42 U.S.C.
1301-1320b-16), as amended by section 4321(c) of the Balanced
Budget Act of 1997 (42 U.S.C. 1320b-16), is amended by adding
at the end the following:
``alaskan community health aide program
``Sec. 1147. Not later than October 1, 1998, the Secretary
shall establish an Alaskan Community Health Aide Program (in
this section referred to as the `Program') under which the
Secretary shall--
``(1) provide for the training of Alaskans as community
health aides or community health practitioners;
``(2) use such aides or practitioners in the provision of
health care, health promotion, and disease prevention
services to Alaskans living in communities that do not
qualify for the Community Health Aide Program for Alaska
operated through the Indian Health Service and established
under section 119 of the Indian Health Care Improvement Act
(25 U.S.C. 1616l);
``(3) provide for the establishment of teleconferencing
capacity in health clinics located in or near such
communities for use by community health aides or community
health practitioners;
``(4) using trainers accredited under the Program, provide
a high standard of training to community health aides and
community health practitioners to ensure that such aides and
practitioners provide quality health care, health promotion,
and disease prevention services to the Alaskan communities
served by the Program;
``(5) develop a curriculum for the training of such aides
and practitioners that--
``(A) combines education in the theory of health care with
supervised practical experience in the provision of health
care; and
``(B) provides instruction and practical experience in the
provision of acute care, emergency care, health promotion,
disease prevention, and the efficient and effective
management of clinic pharmacies, supplies, equipment, and
facilities;
``(6) establish and maintain a Community Health Aide
Certification Board to certify as community health aides or
community health practitioners individuals who have
successfully completed the training described in paragraphs
(4) and (5), or can demonstrate equivalent experience;
``(7) develop and maintain a system which identifies the
needs of community health aides and community health
practitioners for continuing education in the provision of
health care, including the areas described in paragraph
(5)(B), and develop programs that meet the needs for such
continuing education;
``(8) develop and maintain a system that provides close
supervision of community health aides and community health
practitioners; and
``(9) develop a system under which the work of community
health aides and community health practitioners is reviewed
and evaluated to ensure the provision of quality health care,
health promotion, and disease prevention services in
accordance with this section.''.
______
By Mr. MURKOWSKI:
S. 1403. A bill to amend the National Historic Preservation Act for
purposes of establishing a national historic lighthouse preservation
program; to the Committee on Energy and Natural Resources.
the national historic lighthouse preservation act of 1997
Mr. MURKOWSKI. Mr. President, I rise today to introduce legislation
to establish the historic lighthouse preservation bill. This
legislation would amend the National Historic Preservation Act to
establish a historic lighthouse preservation program within the
Department of the Interior.
The legislation would direct the Secretary of the Interior and the
Administrator of General Services to establish a process for conveying
historic lighthouses which are around our coastal areas and Great Lakes
when these lighthouses have been deemed to be in excess of Federal
needs of the agency owning and operating the lighthouse.
For entities eligible to receive a historic lighthouse, it would be
for the uses of educational, park, recreation, cultural, and historic
preservation. And the agencies that would be included would be Federal
or State agencies, local governments, nonprofit corporations,
educational agencies, and community development organizations, and so
forth.
There is no question that the historic lighthouses would be conveyed
in a nonfee structure to selected entities which would have the
obligation to maintain these historic structures and maintain their
integrity.
The historic lighthouses would revert back to the United States if a
property ceases to be used for education, park, recreation, cultural or
historic preservation purposes, or failed to be maintained in
compliance with the National Historic Preservation Act.
Mr. President, as I said, I rise today to introduce legislation that
will establish a national historic light station program.
Lighthouses are among the most romantic reminders of our country's
maritime heritage. Marking dangerous headlands, shoals, bars, and
reefs, these structures played a vital role in indicating navigable
waters and supporting this Nation's maritime transportation and
commerce. These lighthouses served the needs of the early mariners who
navigated by visual sightings on landmarks, coastal lights, and the
heavens. Hundreds of lighthouses have been built along our sea coasts
and on the Great Lakes, creating the world's most complex aids to
navigation system. No other national lighthouse system compares with
that of the United States in size and diversity of architectural and
engineering types.
My legislation pays tribute to this legacy and establishes a process
which will ensure the protection and maintenance of these historic
lighthouses so that future generations of Americans will be able to
appreciate these treasured landmarks.
The legislation authorizes the Secretary of the Department of the
Interior, through the National Park Service, to establish a historic
lighthouse preservation program. The Secretary is charged with
collecting and sharing information on historic lighthouses; conducting
educational programs to inform the public about the contribution to
society of historic lighthouses; and maintaining an inventory of
historic lighthouses.
A historic light station is defined as a lighthouse, and surrounding
property, at least 50 years old, which has been evaluated for inclusion
on the National Register of Historic Places, and included in the
Secretary's listing of historic light stations.
Most important, the Secretary, in conjunction with the Administrator
of General Services, is to establish a process for identifying, and
selecting among eligible entities to which a historic lighthouse could
be conveyed. Eligible entities will include Federal agencies, State
agencies, local communities, nonprofit corporations, and educational
and community development organizations financially able to maintain a
historic lighthouse, including conformance with the National Historic
Preservation Act. When a historic lighthouse has been deemed excess to
the needs of the Federal agency which manages the lighthouse, the
General Services Administration will convey it, for free, to a selected
entity for education, park, recreation, cultural, and historic
preservation purposes.
[[Page S11979]]
My legislation also recognizes the value of lighthouse friends
groups. Often, these groups have spent significant time and resources
on preserving the character of historic lighthouses only to have this
work go to waste when the lighthouse is transferred out of Federal
ownership. Under current General Services Administration regulations,
these friends groups are last on the priority list to receive a surplus
light station in spite of their efforts to protect it. My bill gives
priority consideration to public entities who submit applications in
which the public entity partners with a nonprofit friends group.
Everyone agrees that the historic character of these lighthouses
needs to be maintained. But the cost of maintaining these historic
structures is becoming increasingly high for Federal agencies in these
times of tight budgetary constraints. These lighthouses were built in
an age when they had to be manned continuously. Today's advanced
technology makes it possible to build automated aids to navigation that
do not require around-the-clock manning. This technology has made many
of these historic lighthouses expensive anachronisms which Federal
agencies must maintain even if they no longer use them as navigational
aids.
My legislation ensures that the historic character of these
lighthouses are maintained when the lighthouses are no longer needed by
the Federal Government. When the historic lighthouse is conveyed out of
Federal ownership, the entity which receives the lighthouse must
maintain it in accordance with historic preservation laws and
standards. A lighthouse would revert to the United States, at the
option of the General Services Administration, if the lighthouse is not
being used or maintained as required by the law.
In the event no government agency or nonprofit organization is
approved to receive a historic lighthouse, it would be offered for sale
by the General Services Administration. The proceeds from these sales
would be transferred to the National Maritime Heritage Grant Program
within the National Park Service. Congress established the National
Maritime Heritage Grant Program in 1994 to provide grants for maritime
heritage preservation and education projects. Unfortunately, funding
for this program has been nonexistent so the proceeds from any historic
lighthouse sales would help ensure the program's viability.
It is my intent to ensure that coastal towns, where a historic
lighthouse is an integral part of the community, would receive a
historic lighthouse when it is no longer needed by the Federal
Government. These historic lighthouses could be used by the community
as a local park, a community center, or a tourist bureau. It also would
ensure that historic lighthouse friends groups or lighthouse
preservation societies, which have voluntarily helped to maintain the
historic character of the lighthouse, could receive an excess
lighthouse.
Mr. President, I know firsthand the importance and allure of these
historic lighthouses. When I was in the Coast Guard, I helped maintain
lighthouses and other navigational aids. These lights were critical to
safe maritime traffic and I took my responsibilities seriously knowing
that lives were dependent on it.
By preserving historic lighthouses, we preserve a symbol of that era
in American history when maritime traffic was the lifeblood of the
Nation, tying isolated coastal towns through trade to distant ports
around the world. Hundreds of historic lighthouses are owned by the
Federal Government and many of these are difficult and expensive to
maintain. This legislation provides a process to ensure that these
historic lighthouses are maintained and publicly accessible.
I urge all my colleagues to support this legislation, and I ask
unanimous consent that the text of the legislation be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 1403
Be it enacted by the Senate and the House of
Representatives of the United States of America in Congress
assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the `National Historic Lighthouse
Preservation Act of 1997.'
SEC. 2. PRESERVATION OF HISTORIC LIGHT STATIONS.
Title III of the National Historic Preservation Act (16
U.S.C. 470w-470w-6) is amended by adding at the end the
following new section:
``Sec. 308. Historic Lighthouse Preservation
``(a) In General.--In order to provide a national historic
light station program, the Secretary shall--
``(1) collect and disseminate information concerning
historic light stations, including historic lighthouses and
associated structures;
``(2) foster educational programs relating to the history,
practice, and contribution to society of historic light
stations;
``(3) sponsor or conduct research and study into the
history of light stations;
``(4) maintain a listing of historic light stations; and
``(5) assess the effectiveness regarding the conveyance of
historic light stations.
``(b) Conveyance of Historic Light Stations.--
``(1) Within one year of enactment, the Secretary and the
Administrator of General Services (hereinafter Administrator)
shall establish a process for identifying, and selecting, an
eligible entity to which a historic light station could be
conveyed for education, park, recreation, cultural and
historic preservation purposes.
``(2) The Secretary shall review all applicants for the
conveyance of a historic light station, when the historic
light station has been identified as excess to the needs of
the agency with administrative jurisdiction over the historic
light station, and forward to the Administrator a single
approved application for the conveyance of the historic light
station. When selecting an eligible entity, the Secretary may
consult with the State Historic Preservation Officer of the
state in which the historic light station is located. A
priority of consideration shall be afforded public entities
that submit applications in which the public entity enters
into a partnership with a nonprofit organization whose
primary mission is historic light station preservation.
``(3) The Administrator shall convey, by quit claim deed,
without consideration, all right, title, and interest of the
United States in and to the historic light station, together
with any related real property, subject to the conditions set
forth in subsection (c) upon the Secretary's selection of an
eligible entity. The conveyance of a historic light station
under this section shall not be subject to the provisions of
42 U.S.C. 11301 et seq.
``(c) Terms of Conveyance.--
``(1) The conveyance of a historic light station shall be
made subject to any conditions as the Administrator considers
necessary to ensure that--
``(A) the lights, antennas, sound signal, electronic
navigation equipment, and associated light station equipment
located on the property conveyed, which are active aids to
navigation, shall continue to be operated and maintained by
the United States for as long as needed for this purpose;
``(B) the eligible entity to which the historic light
station is conveyed under this section shall not interfere or
allow interference in any manner with aids to navigation
without the express written permission of the head of the
agency responsible for maintaining the aids to navigation;
``(C) there is reserved to the United States the right to
relocate, replace, or add any aid to navigation or make any
changes to the property conveyed under this section as may be
necessary for navigation purposes;
``(D) the eligible entity to which the historic light
station is conveyed under this section shall maintain the
property in accordance with the National Historic
Preservation Act of 1966, 16 U.S.C. 470-470x, the Secretary's
Historic Preservation Standards, and other applicable laws;
and
``(E) the United States shall have the right, at any time,
to enter property conveyed under this section without notice
for purposes of maintaining and inspecting aids to navigation
and ensuring compliance with paragraph (C), to the extent
that it is not possible to provide advance notice.
``(2) The Secretary, the Administrator, and any eligible
entity to which a historic light station is conveyed under
this section, shall not be required to maintain any active
aids to navigation associated with a historic light station.
``(3) In addition to any term or condition established
pursuant to this subsection, the conveyance of a historic
light station shall include a condition that the property
in its existing condition, at the option of the
Administrator, revert to the United States if--
``(A) the property or any part of the property ceases to be
available for education, park, recreation, cultural, and
historic preservation purposes for the general public at
reasonable times and under reasonable conditions which shall
be set forth in the eligible entity's application;
``(B) the property or any part of the property ceases to be
maintained in a manner that ensures its present or future use
as an aid to navigation or compliance with the National
Historic Preservation Act. 16 U.S.C. 470-470x, the
Secretary's Historic Preservation Standards, and other
applicable laws; or
``(C) at least 30 days before the reversion, the
Administrator provides written notice to the owner that the
property is needed for national security purposes.
``(d) Description of Property.--The legal description of
any historic light station, and any real property and
improvements associated therewith, conveyed under this
section
[[Page S11980]]
shall be determined by the Administrator. The Administrator
may retain all right, title, and interest of the United
States in and to any historical artifact, including any lens
or lantern, that is associated with the historical light
station whether located at the light station or elsewhere.
``(e) Responsibilities of Conveyees.--Each eligible entity
to which a historic light station is conveyed under this
section shall use and maintain the light station in
accordance with this section, and have such terms and
conditions recorded with the deed of title to the light
station and any real property conveyed therewith.
``(f) Definitions.--For purposes of this section:
``(1) Historic Light Station.--The term `historic light
station' includes the light tower, lighthouse, keepers
dwelling, garages, storage sheds, support structures, piers,
walkways, and underlying land; provided that the light tower
or lighthouse shall be--
``(A) at least 50 years old;
``(B) evaluated for inclusion in the National Register of
Historic Places; and
``(C) included on the Secretary's listing of historic light
stations.
``(2) Eligible Entity.--The term `eligible entity' shall
mean any department or agency of the Federal government, any
department or agency of the state in which the historic light
station is located, the local government of the community in
which the historic light station is located, nonprofit
corporation, educational agency, or community development
organization that--
``(A) has agreed to comply with the conditions set forth in
subsection (c) and to have those conditions recorded in the
conveyance documents to the light station and any real
property and improvements that may be conveyed therewith;
``(B) is financially able to maintain the light station
(and any real property and improvements conveyed therewith)
in accordance with the conditions set forth in subsection
(c); and
``(C) can indemnity the Federal government to cover any
loss in connection with the light station and any real
property and improvements that may be conveyed therewith, or
any expenses incurred due to reversion.
SEC. 3. SALE OF SURPLUS LIGHT STATIONS.
Title III of the National Historic Preservation Act (16
U.S.C. 470w-470w-6) is amended by adding at the end the
following new section:
``Sec. 309. Historic Light Station Sales
``In the event no applicants are approved for the
conveyance of a historic light station pursuant to section
308, the historic light station shall be offered for sale.
Terms of such sales shall be developed by the Administrator
of General Services. Conveyance documents shall include all
necessary convenants to protect the historical integrity of
the site. Net sale proceeds shall be transferred to the
National Maritime Heritage Grant Program, established by the
National Maritime Heritage Act of 1994, Public Law 103-451,
within the Department of the Interior.
SEC. 4. TRANSFER OF HISTORIC LIGHT STATIONS TO FEDERAL
AGENCIES.
Title III of the National Historic Preservation Act of
1966, 16 U.S.C. 470-470x, is amended by adding at the end the
following new section:
``Sec. 310. Transfer of Historic Light Stations to Federal
Agencies
``After the date of enactment, any department or agency of
the Federal government, to which a historic light station is
conveyed, shall maintain the historic light station in
accordance with the National Historic Preservation Act of
1966, 16 U.S.C. 470-470x, the Secretary's Historic
Preservation Standards, and other applicable laws.
SEC. 5. FUNDING.
There are hereby authorized to be appropriated to the
Secretary of the Interior such sums as may be necessary to
carry out this Act.
______
By Mr. BROWNBACK (for himself, Mr. Moynihan, Mr. Thompson, and
Mr. Kerrey):
S. 1404. A bill to establish a Federal Commission on Statistical
Policy to study the reorganization of the Federal statistical system,
to provide uniform safeguards for the confidentiality of information
acquired for exclusively statistical purposes, and to improve the
efficiency of Federal statistical programs and the quality of Federal
statistics by permitting limited sharing of records among designated
agencies for statistical purposes under strong safeguards; to the
Committee on Governmental Affairs.
the federal statistical system act of 1997
Mr. MOYNIHAN. Mr. President, I join my distinguished colleagues,
Senator Sam Brownback of Kansas, Senator Fred Thompson of Tennessee,
and Senator Bob Kerrey of Nebraska, in introducing legislation to
establish a commission to study the Federal statistical system.
Congressman Stephen Horn of California and Congresswoman Carolyn
Maloney of New York plan on introducing identical legislation in the
House of Representatives. This legislation is similar to bills I
introduced in September 1996, and again at the beginning of this
Congress.
The commission to study the Federal statistical system would consist
of 15 Presidential and congressional appointees with expertise in
fields such as actuarial science, finance, and economics. Its members
would conduct a thorough review of the U.S. statistical system, and
issue a report including recommendations on whether statistical
agencies should be consolidated.
Of course, we have an example of a consolidated statistical agency
just across the northern border. Statistics Canada, the most
centralized statistical agency among OECD countries, was established in
November, 1918 as a reaction to a familiar problem. At that time, the
Canadian Minister of Industry was trying to obtain an estimate of the
manpower resources that Canada could commit to the war effort. And he
got widely different estimates from statistical agencies scattered
throughout the government. Consolidation seemed the way to solve this
problem, and so it happened--as it can in a parliamentary government--
rather quickly, just as World War I ended.
Last spring, a member of my staff met in Ottawa with the Assistant
Chief Statistician of Statistics Canada. He reported that Statistics
Canada is doing quite well. Decisions about the allocation of resources
among statistical functions are made at the highest levels of
government because the Chief Statistician of Statistics Canada holds a
position equivalent to Deputy Cabinet Minister. He communicates
directly with Deputy Ministers in other Cabinet Departments. In
contrast, in the United States, statistical agencies are buried several
levels below the Cabinet Secretaries, so it is difficult for the heads
of these statistical agencies to bring issues to the attention of high-
ranking administration officials and Congress.
Statistics are part of our constitutional arrangement, which provides
for a decennial census that, among other purposes, is the basis for
apportionment of membership in the House of Representatives. I quote
from article I, section I:
. . . enumeration shall be made within three Years after
the first meeting of the Congress of the United States, and
within ever subsequent Term of ten Years, in such Manner as
they shall by Law direct.
But, while the Constitution directed that there be a census, there
was, initially, no Census Bureau. The earliest censuses were conducted
by U.S. Marshals. Later on, statistical bureaus in State governments
collected the data, with a Superintendent of the Census overseeing from
Washington. It was not until 1902 that a permanent Bureau of the Census
was created by the Congress, housed initially in the Interior
Department. In 1903 the Bureau was transferred to the newly established
Department of Commerce and Labor.
The Statistics of Income Division of the Internal Revenue Service,
which was originally an independent body, began collecting data in
1866. It too was transferred to the new Department of Commerce and
Labor in 1903, but then was put in the Treasury Department in 1913
following ratification of the 16th amendment, which gave Congress the
power to impose an income tax.
A Bureau of Labor, created in 1884, was also initially in the
Interior Department. The first Commissioner, appointed in 1885, was
Col. Carroll D. Wright, a distinguished Civil War veteran of the New
Hampshire Volunteers. A self-trained social scientist, Colonel Wright
pioneered techniques for collecting and analyzing survey data on
income, prices, and wages. He had previously served as chief of the
Massachusetts Bureau of Statistics, a post he held for 15 years, and in
that capacity had supervised the 1880 Federal Census in Massachusetts.
In 1888, the Bureau of Labor became an independent agency. In 1903,
it was once again made a bureau, joining other statistical agencies in
the Department of Commerce and Labor. When a new Department of Labor
was formed in 1913, giving labor an independent voice--as labor was
removed from the Department of Commerce and Labor--what we now know as
the Bureau of Labor Statistics was transferred the newly created
Department of Labor.
And so it went. Statistical agencies sprung up as needed. And they
moved back and forth as new executive departments were formed. Today,
some 89
[[Page S11981]]
different organizations in the Federal Government comprise parts of our
national statistical infrastructure. Eleven of these organizations have
as their primary function the generation of data. These 11
organizations are:
------------------------------------------------------------------------
Date
Agency Department established
------------------------------------------------------------------------
National Agricultural Statistical Agriculture........... 1863
Service.
Statistics of Income Division, IRS. Treasury.............. 1866
Economic Research Service.......... Agriculture........... 1867
National Center for Education Education............. 1867
Statistics.
Bureau of Labor Statistics......... Labor................. 1884
Bureau of the Census............... Commerce.............. 1902
Bureau of Economic Analysis........ Commerce.............. 1912
National Center for Health Health and Human 1912
Statistics. Services.
Bureau of Justice Statistics....... Justice............... 1968
Energy Information Administration.. Energy................ 1974
Bureau of Transportation Statistics Transportation........ 1991
------------------------------------------------------------------------
need for legislation
President Kennedy once said:
Democracy is a difficult kind of government. It requires
the highest qualities of self-discipline, restraint, a
willingness to make commitments and sacrifices for the
general interest, and also it requires knowledge.
That knowledge often comes from accurate statistics. You cannot begin
to solve a problem until you can measure it.
This legislation would require the Commission to conduct a
comprehensive examination of the current statistical system and focus
particularly on whether three agencies that produce data as their
primary product--the Bureau of Economic Analysis [BEA] and the Bureau
of the Census in the Commerce Department, and the Bureau of Labor
Statistics [BLS] in the Labor Department--should be consolidated into a
Federal statistical service.
In September 1996, prior to when I first introduced a bill
establishing a commission to study the U.S. statistical system, I
received a letter from nine former chairmen of the Council of Economic
Advisers [CEA] endorsing this legislation. Excluding two recent chairs,
who at that time were still serving in the Clinton administration, the
signatories include virtually every living former chair of the CEA.
While acknowledging that the United States possesses a first-class
statistical system, these former chairmen remind us that problems
periodically arise under the current system of widely scattered
responsibilities. They conclude as follows:
Without at all prejudging the appropriate measures to deal
with these difficult problems, we believe that a
thoroughgoing review by a highly qualified and bipartisan
Commission as provided in your bill has great promise of
showing the way to major improvements.
The letter is signed by Michael J. Boskin, Martin Feldstein, Alan
Greenspan, Paul W. McCracken, Raymond J. Saulnier, Charles L. Schultze,
Beryl W. Sprinkel, Herbert Stein, and Murray Weidenbaum. I ask
unanimous consent that the full text of this letter be printed in the
Record following my statement.
It happens that this Senator's association with the statistical
system in the executive branch began over three decades ago. I was
Assistant Secretary of Labor for Policy and Planning in the
administration of President John F. Kennedy. This was a new position in
which I was nominally responsible for the Bureau of Labor Statistics. I
say nominally out of respect for the independence of that venerable
institution, which as I noted earlier long predated the Department of
Labor itself. The then-Commissioner of the BLS, Ewan Clague, could not
have been more friendly and supportive. And so were the statisticians,
who undertook to teach me to the extent I was teachable. They even
shared professional confidences. And so it was that I came to have some
familiarity with the field.
For example, we had just received a report on price indexes from a
committee led by a Nobel laureate, George Stigler. The committee
stressed the importance of accurate and timely statistics noting that:
The periodic revision of price indexes, and the almost
continuous alterations in details of their calculation, are
essential if the indexes are to serve their primary function
of measuring the average movements of prices.
While the final report of the Advisory Commission to Study the
Consumer Index, the Boskin Commission, focused primarily on the extent
to which changes in the CPI overstate inflation, the commission also
addressed issues related to the effectiveness of Federal statistical
programs and recommended that:
Congress should enact the legislation necessary for the
Department of Commerce and Labor to share information in the
interest of improving accuracy and timeliness of economic
statistics and to reduce the resources consumed in their
development and production.
And last week, we were again reminded of the importance of accurate
and timely government statistics. The front page of the Wall Street
Journal carried this headline on Tuesday October 29: ``An Extra $46
Billion in Treasury's Coffers Puzzles Washington''.
No one knows for sure the answer to this puzzle. Surely though, a
changing economy which produces more and more services--which are
harder to measure the value of than the goods it replaces--needs a top
to bottom review of its statistical infrastructure. For if the public
loses confidence in our statistics, they are likely to lose confidence
in our policies as well.
There is, of course, a long history of attempts to reform our
Nation's statistical infrastructure. From the period 1903 to 1990, 16
different committees, commissions, and study groups have convened to
assess our statistical infrastructure, but in most cases little or no
action has been taken on their recommendations. The result of this
inaction has been an ever expanding statistical system. It continues to
grow in order to meet new data needs, but with little or no regard for
the overall objectives of the system. Janet L. Norwood, former
Commissioner of the BLS, writes in her book ``Organizing to Count'':
The U.S. system has neither the advantages that come from
centralization nor the efficiency that comes from strong
coordination in decentralization. As presently organized,
therefore, the country's statistical system will be hard
pressed to meet the demands of a technologically advanced,
increasingly internationalized world in which the demand for
objective data of high quality is steadily rising.
In this era of Government downsizing and budget cutting, it is
unlikely that Congress will appropriate more funds for statistical
agencies. It is clear that to preserve and improve the statistical
system we must consider reforming it, yet we must not attempt to reform
the system until we have heard from experts in the field.
summary of legislation
The legislation establishes a commission to study the Federal
statistical system. The commission would consist of 15 members. Two--
the Chief Statistician of the Office of Management and Budget and a
high-level government official--serve ex officio on the commission. The
high-level official, selected by the President from among Cabinet
officers, the Chairman of the Board of Governors of the Federal
Reserve, the Comptroller General, or the Chairman of the Council of
Economic Advisers--will serve as chairman.
The other 13 members of the commission will be appointed as follows:
Five by the President, no more than three of whom are to be from the
same political party, four by the President pro tempore of the Senate,
no more than two of whom are to be from the same political party, and
four by the Speaker of the House, no more than two of whom are to be
from the same political party.
In an initial 18-month period, the commission would determine whether
and how to consolidate the Federal statistical system, and would also
make recommendations with respect to ways to achieve greater efficiency
in carrying out Federal statistical programs. If the commission
recommends consolidation of the Bureau of Labor Statistics, the Bureau
of the Census, and the Bureau of Economic Analysis into a newly
established independent Federal agency, designated as the Federal
Statistical Service, the commission's report would contain draft
legislation incorporating such recommendations. The legislation would
then be considered by the Congress under fast-track procedures.
If legislation establishing a Federal statistical service is enacted
by the Congress, the commission then would become a permanent body that
would:
Make recommendations for nominations for the appointment of an
Administrator and Deputy Administrator of the Federal Statistical
Service; serve
[[Page S11982]]
as an advisory body to the Federal Statistical Service on
confidentiality issues; and conduct comprehensive studies, and submit
reports to Congress on all matters relating to the Federal statistical
infrastructure, including:
An examination of the methodology involved in producing official
data; a review of information technology and recommendations of
appropriate methods for disseminating statistical data; and a
comparison of our statistical system with the systems of other nations.
This legislation is only a first step, but an essential one. The
commission will provide Congress with the blueprint for reform. It will
be up to us to finally take action after nearly a century of
inattention to this very important issue.
______
By Mr. SHELBY (for himself, Mr. Mack, Mr. Faircloth, Mr. D'Amato,
Mr. Bryan, Mr. Grams, Mr. Kerry, Mr. Bennett, Mr. Gramm, Mr.
Hagel, Mr. Allard, Mr. Enzi, and Ms. Moseley-Braun):
S. 1405. A bill to amend titles 17 and 18, United States Code, to
provide greater copyright protection by amending copyright infringement
provisions, and for other purposes; to the Committee on the Judiciary.
the financial regulatory relief and economic efficiency act of 1997
Mr. SHELBY. Mr. President, I rise today to introduce a bipartisan
bill with my colleague from Florida, Senator Connie Mack, and 11 other
original cosponsors from the Banking Committee. Entitled the
``Financial Regulatory Relief and Economic Efficiency Act of 1997,''
the bill is designed to promote greater access to capital and credit
for businesses and consumers, while ensuring the safety and soundness
of our financial system.
The acronym for the bill, FRREE, is actually indicative of the bill
itself. If enacted, the bill would free valuable resources at financial
institutions now being used to comply with the bureaucratic maze of
current rules and regulations, and instead allow institutions to commit
more of those resources to the business of lending. This is especially
important, now that we are entering the 80th month of the current
economic expansion. The 9 completed expansions since the end of World
War II have averaged 50 months. Thus, many professional economists,
businessmen, and academics worry how much longer the expansion of the
current business cycle can go. Because this bill frees up resources
that are inefficiently being used in the private sector, I believe this
bill could have a substantial positive impact on extending the current
business cycle as well as minimize any future economic downturn.
One key provision would repeal an antiquated law that disallows banks
to pay interest on business checking accounts. Due to sophisticated and
expensive technology, big corporations can get around this problem by
employing sweep accounts. However, smaller, family owned businesses
cannot take advantage of this expensive technology and are forced to
keep their money in noninterest bearing checking accounts. The Board of
Governors of the Federal Reserve System, the Federal Deposit Insurance
Corporation, the Office of the Comptroller of the Currency, and the
Office of Thrift Supervision, concluded in their 1996 Joint Report,
``Streamlining of Regulatory Requirements,'' that the statutory
prohibition against paying interest on demand deposits no longer serves
a public purpose. Today, the repeal also has the support of the Chamber
of Commerce, the National Federation of Independent Business, and the
American Farm Bureau Federation.
The bill also allows the Federal Reserve to pay interest on reserve
balances, thus reducing potential volatility in short-term lending
rates. Given the historical importance of price stability, it is
imperative we give the Federal Reserve this tool in order to better
conduct monetary policy.
In short, Mr. President, the bill repeals outdated laws that hinder
the management practices of institutions; cuts bureaucratic red tape;
eliminates unnecessary bookkeeping; increases funds available for
residential mortgage lending; and eliminates unnecessary restrictions
on the discounting, and bundling of financial services to consumers.
The bill enjoys the overwhelming support of the Senate Banking
Committee and the chairman of the committee, Chairman D'Amato, is
committed to having hearings on this bill when we return early next
year.
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. 1405
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 ``Financial
Regulatory Relief and Economic Efficiency Act of 1997''.
(b) Table of Contents.--The table of contents for this Act
is as follows:
Sec. 1. Short title; table of contents.
TITLE I--IMPROVING MONETARY POLICY AND FINANCIAL INSTITUTION MANAGEMENT
PRACTICES
Sec. 101. Payment of interest on reserves at Federal reserve banks.
Sec. 102. Amendments relating to savings and demand deposit accounts at
depository institutions.
Sec. 103. Repeal of savings association liquidity provision.
Sec. 104. Repeal of dividend notice requirement.
Sec. 105. Thrift service companies.
Sec. 106. Elimination of thrift multistate multiple holding company
restrictions.
Sec. 107. Noncontrolling investments by savings association holding
companies.
Sec. 108. Repeal of deposit broker notification and recordkeeping
requirement.
Sec. 109. Uniform regulation of extensions of credit to executive
officers.
Sec. 110. Expedited procedures for certain reorganizations.
Sec. 111. National bank directors.
Sec. 112. Amendment to Bank Consolidation and Merger Act.
Sec. 113. Loans on or purchases by institutions of their own stock;
affiliations.
Sec. 114. Depository institution management interlocks.
Sec. 115. Purchased mortgage servicing rights.
Sec. 116. Cross marketing restriction; limited purpose bank relief.
Sec. 117. Divestiture requirement.
Sec. 118. Daylight overdrafts incurred by Federal home loan banks.
Sec. 119. Federal home loan bank governance amendments.
Sec. 120. Collateralization of advances to members.
TITLE II--STREAMLINING ACTIVITIES OF INSTITUTIONS
Sec. 201. Updating of authority for community development investments.
Sec. 202. Acceptance of brokered deposits.
Sec. 203. Federal Reserve Act lending limits.
Sec. 204. Eliminate unnecessary restrictions on product marketing.
Sec. 205. Business purpose credit extensions.
Sec. 206. Affinity groups.
Sec. 207. Fair debt collection practices.
Sec. 208. Restriction on acquisitions of other insured depository
institutions.
Sec. 209. Mutual holding companies.
Sec. 210. Call report simplification.
TITLE III--STREAMLINING AGENCY ACTIONS
Sec. 301. Scheduled meetings of Affordable Housing Advisory Board.
Sec. 302. Elimination of duplicative disclosure of fair market value of
assets and liabilities.
Sec. 303. Payment of interest in receiverships with surplus funds.
Sec. 304. Repeal of reporting requirement on differences in accounting
standards.
Sec. 305. Agency review of competitive factors in Bank Merger Act
filings.
Sec. 306. Termination of the Thrift Depositor Protection Oversight
Board.
TITLE IV--DISCLOSURE SIMPLIFICATION
Sec. 401. Alternative compliance method for APR disclosure.
Sec. 402. Alternative compliance methods for advertising credit terms.
TITLE V--MISCELLANEOUS
Sec. 501. Positions of Board of Governors of Federal Reserve System on
the Executive Schedule.
Sec. 502. Consistent coverage for individuals enrolled in a health plan
administered by the Federal banking agencies.
Sec. 503. Federal Housing Finance Board.
TITLE VI--TECHNICAL CORRECTIONS
Sec. 601. Technical correction relating to deposit insurance funds.
Sec. 602. Rules for continuation of deposit insurance for member banks
converting charters.
Sec. 603. Amendments to the Revised Statutes.
Sec. 604. Conforming change to the International Banking Act.
TITLE I--IMPROVING MONETARY POLICY AND FINANCIAL INSTITUTION MANAGEMENT
PRACTICES
SEC. 101. PAYMENT OF INTEREST ON RESERVES AT FEDERAL RESERVE
BANKS.
(a) In General.--Section 19(b) of the Federal Reserve Act
(12 U.S.C. 461(b)) is amended
[[Page S11983]]
by adding at the end the following new paragraph:
``(12) Earnings on reserves.--
``(A) In general.--Balances maintained at a Federal reserve
bank by or on behalf of a depository institution to meet the
reserve requirements of this subsection applicable with
respect to such depository institution may receive earnings
to be paid by the Federal reserve bank at least once each
calendar quarter at a rate or rates not to exceed the general
level of short-term interest rates.
``(B) Regulations relating to payments and distribution.--
The Board may prescribe regulations concerning--
``(i) the payment of earnings in accordance with this
paragraph;
``(ii) the distribution of such earnings to the depository
institutions which maintain balances at such banks or on
whose behalf such balances are maintained; and
``(iii) the responsibilities of depository institutions,
Federal home loan banks, and the National Credit Union
Administration Central Liquidity Facility with respect to the
crediting and distribution of earnings attributable to
balances maintained, in accordance with subsection (c)(1)(B),
in a Federal reserve bank by any such entity on behalf of
depository institutions which are not member banks.''.
(b) Authorization for Pass Through Reserves for Member
Banks.--Section 19(c)(1)(B) of the Federal Reserve Act (12
U.S.C. 461(c)(1)(B)) is amended by striking ``which is not a
member bank''.
(c) Technical and Conforming Amendments.--Section 19 of the
Federal Reserve Act (12 U.S.C. 461) is amended--
(1) in subsection (b)(4) (12 U.S.C. 461(b)(4)), by striking
subparagraph (C) and redesignating subparagraphs (D) and (E)
as subparagraphs (C) and (D), respectively; and
(2) in subsection (c)(1)(A) (12 U.S.C. 461(c)(1)(A)), by
striking ``subsection (b)(4)(C)'' and inserting ``subsection
(b)''.
SEC. 102. AMENDMENTS RELATING TO SAVINGS AND DEMAND DEPOSIT
ACCOUNTS AT DEPOSITORY INSTITUTIONS.
(a) NOW Accounts Authorized for All Businesses.--Section 2
of Public Law 93-100 (12 U.S.C. 1832) is amended to read as
follows:
``SEC. 2. WITHDRAWALS BY NEGOTIABLE OR TRANSFERABLE
INSTRUMENTS FOR TRANSFERS TO THIRD PARTIES.
``Notwithstanding any other provision of law, any
depository institution (as defined in section 3 of the
Federal Deposit Insurance Act) may permit the owner of any
deposit or account to make withdrawals from such deposit or
account by negotiable or transferable instruments for the
purpose of making payments to third parties.''.
(b) Repeal of Prohibitions on Payment of Interest on Demand
Deposits.--
(1) Federal reserve act.--Section 19 of the Federal Reserve
Act (12 U.S.C. 371a) is amended by striking subsection (i).
(2) Home owners' loan act.--The first sentence of section
5(b)(1)(B) of the Home Owners' Loan Act (12 U.S.C.
1464(b)(1)(B)) is amended by striking ``savings association
may not--'' and all that follows through ``(ii) permit any''
and inserting ``savings association may not permit any''.
(3) Federal deposit insurance act.--Section 18 of the
Federal Deposit Insurance Act (12 U.S.C. 1828) is amended by
striking subsection (g).
SEC. 103. REPEAL OF SAVINGS ASSOCIATION LIQUIDITY PROVISION.
(a) Repeal of Liquidity Provision.--Section 6 of the Home
Owners' Loan Act (12 U.S.C. 1465) is repealed.
(b) Conforming Amendments.--
(1) Section 5.--Section 5(c)(1)(M) of the Home Owners' Loan
Act (12 U.S.C. 1464(c)(1)(M)) is amended to read as follows:
``(M) Liquidity investments.--Investments identified by the
Director, including cash, funds on deposit at a Federal
reserve bank or a Federal home loan bank, or bankers'
acceptances.''.
(2) Section 10.--Section 10(m)(4)(B)(iii) of the Home
Owners' Loan Act (12 U.S.C. 1467a(m)(4)(B)(iii)) is amended
by striking ``liquid assets'' and all that follows through
``Loan Act,'' and inserting ``cash and marketable securities
identified by the Director,''.
SEC. 104. REPEAL OF DIVIDEND NOTICE REQUIREMENT.
Section 10(f) of the Home Owners' Loan Act (12 U.S.C.
1467a(f)) is amended to read as follows:
``(f) [Reserved].''.
SEC. 105. THRIFT SERVICE COMPANIES.
(a) Streamlining Thrift Service Company Investment
Requirements.--Section 5(c)(4)(B) of the Home Owners' Loan
Act (12 U.S.C. 1464(c)(4)(B)) is amended--
(1) in the subparagraph heading, by striking
``corporations'' and inserting ``companies''; and
(2) in the first sentence, by striking ``corporation
organized'' and all that follows through ``such State.'' and
inserting ``company, if such company engages or will engage
only in activities reasonably related to the activities of
financial institutions, as the Director may determine and
approve. For purposes of this subparagraph, the term
`company' includes any corporation and any limited liability
company (as defined in section 1(b)(7) of the Bank Service
Company Act).''.
(b) Regulation and Examination of Service Providers.--
Section 5(d) of the Home Owners' Loan Act (12 U.S.C. 1464(d))
is amended by adding at the end the following new paragraphs:
``(7) Regulation and examination of savings association
service companies.--
``(A) Service performed by contract or otherwise.--If a
savings association, subsidiary, or any savings and loan
affiliate or entity, as identified by section 8(b)(9) of the
Federal Deposit Insurance Act, that is regularly examined or
subject to examination by the Director, causes to be
performed for itself, by contract or otherwise, any services
authorized under this Act or other applicable Federal law,
whether on or off its premises--
``(i) such performance shall be subject to regulation and
examination by the Director to the same extent as if such
services were being performed by the savings association on
its own premises;
``(ii) the Director may authorize any other Federal banking
agency (as defined in section 3 of the Federal Deposit
Insurance Act) that supervises such subsidiary, savings and
loan affiliate, or entity to perform an examination referred
to in clause (i); and
``(iii) the savings association shall notify the Director
of the existence of the service relationship not later than
30 days after the earlier of the date of the making of such
service contract or the date of initiation of the service.
``(B) Administration by the director.--The Director may
issue such regulations and orders, including those issued
pursuant to section 8 of the Federal Deposit Insurance Act,
as may be necessary to enable the Director to administer and
carry out this paragraph and to prevent evasion of this
paragraph.''.
(c) Conforming Amendments to Section 8 of the Federal
Deposit Insurance Act.--Section 8 of the Federal Deposit
Insurance Act (12 U.S.C. 1818) is amended--
(1) in subsection (b)(9), by striking ``to any service
corporation of a savings association and to any subsidiary of
such service corporation''; and
(2) in subsection (e)(7)(A)(ii), by striking ``(b)(8)'' and
inserting ``(b)(9)''.
SEC. 106. ELIMINATION OF THRIFT MULTISTATE MULTIPLE HOLDING
COMPANY RESTRICTIONS.
Section 10(e) of the Home Owners' Loan Act (12 U.S.C.
1467a(e)) is amended--
(1) by striking paragraph (3); and
(2) by redesignating paragraphs (4), (5), and (6) as
paragraphs (3), (4), and (5), respectively.
SEC. 107. NONCONTROLLING INVESTMENTS BY SAVINGS ASSOCIATION
HOLDING COMPANIES.
Section 10(e)(1)(A)(iii) of the Home Owners' Loan Act (12
U.S.C. 1467a(e)(1)(A)(iii)) is amended--
(1) by inserting ``, except with the prior approval of the
Director,'' after ``or to retain''; and
(2) by striking ``to so acquire or retain'' and inserting
``to acquire, by purchase or otherwise, or to retain''.
SEC. 108. REPEAL OF DEPOSIT BROKER NOTIFICATION AND
RECORDKEEPING REQUIREMENT.
Section 29A of the Federal Deposit Insurance Act (12 U.S.C.
1831f-1) is repealed.
SEC. 109. UNIFORM REGULATION OF EXTENSIONS OF CREDIT TO
EXECUTIVE OFFICERS.
Section 22(g)(4) of the Federal Reserve Act (12 U.S.C.
375a(4)) is amended by striking ``member bank's appropriate
Federal banking agency'' and inserting ``Board''.
SEC. 110. EXPEDITED PROCEDURES FOR CERTAIN REORGANIZATIONS.
The National Bank Consolidation and Merger Act (12 U.S.C.
215 et seq.) is amended--
(1) by redesignating section 5 as section 7; and
(2) by inserting after section 4 the following new section:
``SEC. 5. EXPEDITED PROCEDURES FOR CERTAIN REORGANIZATIONS.
``(a) In General.--A national banking association may, with
the approval of the Comptroller, pursuant to rules and
regulations promulgated by the Comptroller, and upon the
affirmative vote of the shareholders of such association
owning at least two-thirds of its capital stock outstanding,
reorganize so as to become a subsidiary of a bank holding
company or a company that will, upon consummation of such
reorganization, become a bank holding company.
``(b) Reorganization Plan.--A reorganization authorized
under subsection (a) shall be carried out in accordance with
a reorganization plan that--
``(1) specifies the manner in which the reorganization
shall be carried out;
``(2) is approved by a majority of the entire board of
directors of the association;
``(3) specifies--
``(A) the amount of cash or securities of the bank holding
company, or both, or other consideration, to be paid to the
shareholders of the reorganizing association in exchange for
their shares of stock of the association;
``(B) the date as of which the rights of each shareholder
to participate in such exchange will be determined; and
``(C) the manner in which the exchange will be carried out;
and
``(4) is submitted to the shareholders of the reorganizing
association at a meeting to be held on the call of the
directors in accordance with the procedures prescribed in
connection with a merger of a national bank under section 3.
``(c) Rights of Dissenting Shareholders.--If, pursuant to
this section, a reorganization plan has been approved by the
shareholders and the Comptroller, any shareholder of the
association who has voted
[[Page S11984]]
against the reorganization at the meeting referred to in
subsection (b)(4), or has given notice in writing at or prior
to that meeting to the presiding officer that the shareholder
dissents from the reorganization plan, shall be entitled to
receive the value of his or her shares, as provided by
section 3 for the merger of a national bank.
``(d) Effect of Reorganization.--The corporate existence of
an association that reorganizes in accordance with this
section shall not be deemed to have been affected in any way
by reason of such reorganization.''.
SEC. 111. NATIONAL BANK DIRECTORS.
(a) Amendments to the Revised Statutes.--Section 5145 of
the Revised Statutes (12 U.S.C. 71) is amended--
(1) by striking ``for one year'' and inserting ``for a
period of not more than 3 years,''; and
(2) by adding at the end the following: ``In accordance
with regulations issued by the Comptroller of the Currency,
an association may adopt bylaws that provide for staggering
the terms of its directors.''.
(b) Amendment to the Banking Act of 1933.--Section 31 of
the Banking Act of 1933 (12 U.S.C. 71a) is amended in the
first sentence, by inserting before the period ``, except
that the Comptroller of the Currency may, by regulation or
order, exempt a national banking association from the 25-
member limit established by this section''.
SEC. 112. AMENDMENT TO BANK CONSOLIDATION AND MERGER ACT.
The National Bank Consolidation and Merger Act (12 U.S.C.
215 et seq.) is amended by inserting after section 5, as
added by section 110 of this Act, the following new section:
``SEC. 6. MERGERS AND CONSOLIDATIONS WITH SUBSIDIARIES AND
NONBANK AFFILIATES.
``(a) In General.--Upon the approval of the Comptroller, a
national banking association may merge with 1 or more of its
subsidiaries or nonbank affiliates.
``(b) Scope.--Nothing in this section shall be construed--
``(1) to affect the applicability of section 18(c)(1) of
the Federal Deposit Insurance Act; or
``(2) to grant a national banking association any power or
authority that is not permissible for a national banking
association under other applicable provisions of law.
``(c) Regulations.--The Comptroller shall promulgate
regulations to implement this section.''.
SEC. 113. LOANS ON OR PURCHASES BY INSTITUTIONS OF THEIR OWN
STOCK; AFFILIATIONS.
(a) Amendment to Revised Statutes.--Section 5201 of the
Revised Statutes of the United States (12 U.S.C. 83) is
amended to read as follows:
``SEC. 5201. LOANS BY BANK ON ITS OWN STOCK.
``(a) General Prohibition.--No national banking association
shall make any loan or discount on the security of the shares
of its own capital stock.
``(b) Exclusion.--For purposes of this section, an
association shall not be deemed to be making a loan or
discount on the security of the shares of its own capital
stock if it acquires the stock to prevent loss upon a debt
contracted for in good faith before the date of the loan or
discount transaction.''.
(b) Amendment to Federal Deposit Insurance Act.--Section 18
of the Federal Deposit Insurance Act (12 U.S.C. 1828) is
amended by adding at the end the following new subsection:
``(t) Loans by Insured Institutions on Their Own Stock.--
``(1) General prohibition.--No insured depository
institution shall make any loan or discount on the security
of the shares of its own capital stock.
``(2) Exclusion.--For purposes of this subsection, an
insured depository institution shall not be deemed to be
making a loan or discount on the security of the shares of
its own capital stock if it acquires the stock to prevent
loss upon a debt contracted for in good faith before the date
of the loan or discount transaction.''.
(c) Removal of Prohibition on Certain Affiliations.--
Section 18(s)(1) of the Federal Deposit Insurance Act (12
U.S.C. 1828(s)) is amended by striking ``be an affiliate
of,''.
SEC. 114. DEPOSITORY INSTITUTION MANAGEMENT INTERLOCKS.
Section 205(8) of the Depository Institution Management
Interlocks Act (12 U.S.C. 3204(8)) is amended by striking
``director'' each place it appears and inserting ``management
official''.
SEC. 115. PURCHASED MORTGAGE SERVICING RIGHTS.
Section 475(a) of the Federal Deposit Insurance Corporation
Improvement Act of 1991 (12 U.S.C. 1828 note) is amended--
(1) by striking ``purchased'';
(2) by striking ``rights'' each place it appears and
inserting ``assets''; and
(3) by striking ``90'' and inserting ``100''.
SEC. 116. CROSS MARKETING RESTRICTION; LIMITED PURPOSE BANK
RELIEF.
(a) Cross Marketing Restriction.--Section 4(f) of the Bank
Holding Company Act of 1956 (12 U.S.C. 1843(f)) is amended by
striking paragraph (3).
(b) Daylight Overdrafts.--Section 4(f) of the Bank Holding
Company Act of 1956 (12 U.S.C. 1843(f)) is amended by
inserting after paragraph (2) the following:
``(3) Permissible overdrafts described.--For purposes of
paragraph (2)(C), an overdraft is described in this paragraph
if--
``(A) such overdraft results from an inadvertent computer
or accounting error that is beyond the control of both the
bank and the affiliate;
``(B) such overdraft--
``(i) is permitted or incurred on behalf of an affiliate
that is monitored by, reports to, and is recognized as a
primary dealer by the Federal Reserve Bank of New York; and
``(ii) is fully secured, as required by the Board, by
bonds, notes, or other obligations that are direct
obligations of the United States or on which the principal
and interest are fully guaranteed by the United States or by
securities and obligations eligible for settlement on the
Federal Reserve book entry system; or
``(C) such overdraft--
``(i) is permitted or incurred by, or on behalf of, an
affiliate that is engaged in activities that are so closely
related to banking, or managing or controlling banks, as to
be a proper incident thereto; and
``(ii) does not cause the bank to violate any provision of
section 23A or 23B of the Federal Reserve Act, either
directly, in the case of a bank that is a member of the
Federal Reserve System, or by virtue of section 18(j) of the
Federal Deposit Insurance Act, in the case of a bank that is
not a member of the Federal Reserve System.''.
(c) Conforming Amendment.--Section 4(f)(2) of the Bank
Holding Company Act of 1956 (12 U.S.C. 1843(f)(2)) is amended
by striking ``Paragraph (1) shall cease to apply to any
company described in such paragraph if--'' and inserting
``Subject to paragraph (3), a company described in paragraph
(1) shall no longer qualify for the exemption provided under
that paragraph
if--''.
(d) Activities Limitations.--Section 4(f)(2) of the Bank
Holding Company Act of 1956 (12 U.S.C. 1843(f)(2)) is amended
by striking subparagraph (B) and inserting the following:
``(B) any bank subsidiary of such company engages in any
activity in which the bank was not lawfully engaged as of
March 5, 1987;
``(C) any bank subsidiary of such company that--
``(i) accepts demand deposits or deposits that the
depositor may withdraw by check or similar means for payment
to third parties; and
``(ii) engages in the business of making commercial loans
(and, for purposes of this clause, loans made in the ordinary
course of a credit card operation shall not be treated as
commercial loans); or
``(D) after the date of enactment of the Competitive
Equality Amendments of 1987, any bank subsidiary of such
company permits any overdraft (including any intraday
overdraft), or incurs any such overdraft in the account of
the bank at a Federal reserve bank, on behalf of an
affiliate, other than an overdraft described in paragraph
(3).''.
SEC. 117. DIVESTITURE REQUIREMENT.
(a) In General.--Section 4(f)(4) of the Bank Holding
Company Act of 1956 (12 U.S.C. 1843(f)(4)) is amended to read
as follows:
``(4) Divestiture in case of loss of exemption.--If any
company described in paragraph (1) fails to qualify for the
exemption provided under such paragraph by operation of
paragraph (2), such exemption shall cease to apply to such
company and such company shall divest control of each bank it
controls before the end of the 180-day period beginning on
the date that the company receives notice from the Board that
the company has failed to continue to qualify for such
exemption, unless before the end of such 180-day period, the
company has--
``(A) either--
``(i) corrected the condition or ceased the activity that
caused the company to fail to continue to qualify for the
exemption; or
``(ii) submitted a plan to the Board for approval to cease
the activity or correct the condition in a timely manner
(which shall not exceed 1 year); and
``(B) implemented procedures that are reasonably adapted to
avoid the reoccurrence of such condition or activity.''.
(b) Technical and Conforming Amendment.--Section 4(f)(2) of
the Bank Holding Company Act of 1956 (12 U.S.C. 1843(f)(2))
is amended by striking ``Paragraph (1) shall cease to apply
to any company described in such paragraph if--'' and
inserting ``A company described in paragraph (1) shall no
longer qualify for the exemption provided under such
paragraph if--''.
SEC. 118. DAYLIGHT OVERDRAFTS INCURRED BY FEDERAL HOME LOAN
BANKS.
The Federal Reserve Act (12 U.S.C. 221 et seq.) is amended
by inserting after section 11A the following new section:
``SEC. 11B. DAYLIGHT OVERDRAFTS INCURRED BY FEDERAL HOME LOAN
BANKS.
``(a) In General.--Any policy or regulation adopted by the
Board governing payment system risk or intraday credit
shall--
``(1) include--
``(A) the establishment of net debit caps appropriate to
the credit quality of each Federal Home Loan Bank; and
``(B) the imposition of normal fees for daylight
overdrafts, calculated in the same manner as fees for other
users; or
``(2) exempt Federal Home Loan Banks from such policy or
regulation.
``(b) Definition.--For purposes of this section, the term
`Federal Home Loan Bank' has the same meaning as in section 2
of the Federal Home Loan Bank Act.''.
SEC. 119. FEDERAL HOME LOAN BANK GOVERNANCE AMENDMENTS.
The Federal Home Loan Bank Act (12 U.S.C. 1421 et seq.) is
amended--
(1) in section 7(i) (12 U.S.C. 1427(i)), by striking ``,
subject to the approval of the board'';
(2) in section 12(a) (12 U.S.C. 1432(a))--
[[Page S11985]]
(A) by striking ``, but, except'' and all that follows
through ``ten years'';
(B) by striking ``and by its board of directors'' and all
that follows through ``enjoyed subject to the approval of the
Board'' and inserting ``and, by its board of directors, to
prescribe, amend, and repeal bylaws governing the manner in
which its affairs may be administered, consistent with this
Act''; and
(C) by adding at the end the following: ``A Federal home
loan bank shall not be required to submit to the board of
directors of the bank for its approval, budget or business
plans, including annual operating and capital budgets,
strategic plans, or business plans.'';
(3) in section 9 (12 U.S.C. 1429)--
(A) in the second sentence, by striking ``with the approval
of the Board''; and
(B) in the third sentence, by striking ``, subject to the
approval of the Board,'';
(4) in section 10(a)(5) (12 U.S.C. 1430(a)(5))--
(A) by striking ``and the Board''; and
(B) by striking ``by the Board'' and inserting ``by the
Federal home loan bank''.
(5) in section 10(c) (12 U.S.C. 1430(c)), by striking
``Board'' and inserting ``Federal home loan bank'';
(6) in section 10(d) (12 U.S.C. 1430(d))--
(A) by striking ``and the approval of the Board''; and
(B) by striking ``Subject to the approval of the Board,
any'' and inserting ``Any''; and
(7) in section 16(a) (12 U.S.C. 1436(a)), by striking ``,
and then only with the approval of the Federal Housing
Finance Board''.
SEC. 120. COLLATERALIZATION OF ADVANCES TO MEMBERS.
Section 10(a) of the Federal Home Loan Bank Act (12 U.S.C.
1430(a)) is amended--
(1) by striking paragraph (1) and inserting the following:
``(1) Fully disbursed, whole first mortgages on improved
residential property that are not more than 90 days
delinquent, mortgages on improved residential property
insured or guaranteed by the United States Government or any
agency thereof, or securities representing a whole interest
in such mortgages.''; and
(2) in paragraph (4), by striking ``If an advance'' and all
that follows through ``is appropriate.''.
TITLE II--STREAMLINING ACTIVITIES OF INSTITUTIONS
SEC. 201. UPDATING OF AUTHORITY FOR COMMUNITY DEVELOPMENT
INVESTMENTS.
Section 5(c)(3)(A) of the Home Owners' Loan Act (12 U.S.C.
1464(c)(3)(A)) is amended by striking ``located'' and all
that follows through ``1974'' and inserting ``for the primary
purpose of promoting the public welfare, including the
welfare of low- and moderate-income communities or families
(including the provision of housing, services, or jobs)''.
SEC. 202. ACCEPTANCE OF BROKERED DEPOSITS.
Section 29 of the Federal Deposit Insurance Act (12 U.S.C.
1831f) is amended--
(1) by striking subsections (e) and (h);
(2) by redesignating subsections (f) through (g) as
subsections (e) through (f), respectively;
(3) in subsection (f), as redesignated, by striking
paragraph (3) and redesignating paragraph (4) as paragraph
(3); and
(4) by adding at the end the following new subsection:
``(g) Deposit Solicitations Restricted.--
``(1) In general.--An insured depository institution may
not solicit deposits by offering rates of interest that are
significantly higher than the national rate of interest on
insured deposits, as established by the Corporation, if--
``(A) the institution is undercapitalized or adequately
capitalized, as those terms are defined in section 38; or
``(B) the Corporation has been appointed conservator for
the institution.
``(2) Exclusion.--Paragraph (1) does not apply to an
insured depository institution that is well capitalized, as
defined in section 38.''.
SEC. 203. FEDERAL RESERVE ACT LENDING LIMITS.
Section 11 of the Federal Reserve Act (12 U.S.C. 248) is
amended--
(1) by striking subsection (m); and
(2) by redesignating subsection (o) as subsection (m).
SEC. 204. ELIMINATE UNNECESSARY RESTRICTIONS ON PRODUCT
MARKETING.
Section 106(b) of the Bank Holding Company Act Amendments
of 1970 (12 U.S.C. 1972) is amended--
(1) by striking paragraph (1);
(2) in paragraph (2)--
(A) by striking ``(2)''; and
(B) by redesignating subparagraphs (A) through (I) as
paragraphs (1) through (9), respectively;
(3) in paragraph (6), as redesignated--
(A) by redesignating clauses (i) through (ix) as
subparagraphs (A) through (I), respectively;
(B) by striking ``clause (i)'' each place it appears and
inserting ``subparagraph (A)'';
(C) in subparagraph (B), as redesignated--
(i) by redesignating subclauses (I) and (II) as clauses (i)
and (ii), respectively;
(ii) by striking ``(aa)'' each place it appears and
inserting ``(I)'';
(iii) by striking ``(bb)'' each place it appears and
inserting ``(II)''; and
(iv) by striking ``(cc)'' each place it appears and
inserting ``(III)'';
(D) in subparagraph (C), as redesignated--
(i) by striking ``clauses (i) and (ii)'' and inserting
``subparagraphs (A) and (B)'';
(ii) by redesignating subclauses (I) and (II) as clauses
(i) and (ii), respectively;
(iii) in clause (i), as redesignated, by redesignating
items (aa) through (cc) as subclauses (I) through (III),
respectively; and
(iv) by striking ``clause (iv)'' and inserting
``subparagraph (D)'';
(E) in subparagraph (D), as redesignated--
(i) by striking ``clause (iii)'' each place it appears and
inserting ``subparagraph (C)'';
(ii) by redesignating subclauses (I) and (II) as clauses
(i) and (ii), respectively:
(iii) by striking ``(aa)'' and inserting ``(I)''; and
(iv) by striking ``(bb)'' and inserting ``(II)''; and
(F) in subparagraph (E), as redesignated--
(i) by striking ``(ii) or (iii)'' and inserting ``(B), or
(C)''; and
(ii) by redesignating subclauses (I) through (III) as
clauses (i) through (iii), respectively;
(4) in paragraph (7), as redesignated--
(A) by redesignating clauses (i) and (ii) as subparagraphs
(A) and (B), respectively; and
(B) in subparagraph (A), as redesignated--
(i) by redesignating paragraphs (1) through (4) as clauses
(i) through (iv), respectively;
(ii) by striking ``(a)'' each place it appears and
inserting ``(I)'';
(iii) by striking ``(b)'' each place it appears and
inserting ``(II)''; and
(iv) by striking ``(c)'' each place it appears and
inserting ``(III)'';
(5) by striking ``this paragraph'' each place it appears
and inserting ``this subsection''; and
(6) by striking ``this subparagraph'' each place it appears
and inserting ``this paragraph''.
SEC. 205. BUSINESS PURPOSE CREDIT EXTENSIONS.
Section 4 of the Bank Holding Company Act of 1956 (12
U.S.C. 1843) is amended by adding at the end the following
new subsection:
``(k) Business Purpose Credit Extensions.--
``(1) In general.--An institution referred to in section
2(c)(2)(F) or 4(f)(3) may engage in the provision of credit
card accounts for business purposes, including the issuance
of such accounts to small businesses.
``(2) Definition.--For purposes of this subsection, the
term `credit card' has the same meaning as in section 103 of
the Truth In Lending Act (15 U.S.C. 1602).''.
SEC. 206. AFFINITY GROUPS.
(a) Definitions.--For purposes of this section--
(1) the term ``affinity group'' means any person, other
than an individual, that--
(A) is established for a common objective or purpose;
(B) is not established by 1 or more settlement service
providers for the principal purpose of endorsing the products
or services of a settlement service provider;
(C) the common objective or purpose of which is not
principally the conduct of settlement services; and
(D) does not consist of member organizations whose
principal business is providing settlement services; and
(2) the terms ``person'', ``settlement services'', and
``thing of value'' have the meanings given those terms in
section 3 of the Real Estate Settlement Procedures Act of
1974 (12 U.S.C. 2602).
(b) Marketing Modernization.--Notwithstanding any other
provision of law, it shall not be unlawful to make a payment
or otherwise transfer any thing of value to an affinity group
for or in connection with an endorsement (written or oral),
either through an advertisement or through a communication
addressed to a consumer by name or by mailing address, of the
products or services of a settlement service provider, if
disclosure is clearly made at the time of the first written
communication with the consumer of the fact that a payment
has been made or may be made or any other thing of value may
accrue to the affinity group for the endorsement.
SEC. 207. FAIR DEBT COLLECTION PRACTICES.
(a) Exemption for Communications Involving Legal
Proceedings.--Section 803 of the Fair Debt Collection
Practices Act (15 U.S.C. 1692a) is amended--
(1) in paragraph (2)--
(A) by striking ``communication' means the'' and inserting
the following: ``communication'--
``(A) means the''; and
(B) by striking the period at the end and inserting the
following: ``; and
``(B) does not include communications made pursuant to the
Federal Rules of Civil Procedure, in the case of a proceeding
in a State court, the rules of civil procedure available
under the laws of that State, or a nonjudicial foreclosure
proceeding.''; and
(2) in paragraph (5)--
(A) by striking ``debt' means any'' and inserting the
following: ``debt'--
``(A) means any'';
(B) by striking the period at the end and inserting the
following: ``; and
``(B) does not include a draft drawn on a bank for a sum
certain, payable on demand and signed by the maker.''.
(b) Collection Activity Following Initial Notice.--Section
809 of the Fair Debt Collection Practices Act (15 U.S.C.
1692(g)) is amended by adding at the end the following new
subsection:
``(d) Continuation During Period.--Collection activities
and communications may continue during the 30-day period
described in subsection (a) unless the consumer requests the
cessation of such activities.''.
(c) Definition of ``Communication''.--Section 803 of the
Fair Debt Collection Practices Act (15 U.S.C. 1692a) is
amended--
[[Page S11986]]
(1) by striking ``title--'' and inserting ``title, the
following definitions shall apply:''; and
(2) in paragraph (2)--
(A) by striking ``term `communication' means'' and
inserting ``term `communication'--
``(A) means'';
(B) by striking the period at the end and inserting ``; and
``(B) does not include any communication made or action
taken to collect on loans made, insured, or guaranteed under
the Higher Education Act of 1965.''.
SEC. 208. RESTRICTION ON ACQUISITIONS OF OTHER INSURED
DEPOSITORY INSTITUTIONS.
Section 4(f)(12) of the Bank Holding Company Act of 1956
(12 U.S.C. 1843(f)(12)) is amended--
(1) in subparagraph (A), by striking ``or'' at the end;
(2) in subparagraph (B), by striking the period at the end
and inserting ``; or''; and
(3) by adding at the end the following new subparagraph:
``(C) in an acquisition in which the insured institution
has been found to be undercapitalized by the appropriate
Federal or State authority.''.
SEC. 209. MUTUAL HOLDING COMPANIES.
Section 10(o) of the Home Owners' Loan Act (12 U.S.C.
1467a(o)) is amended--
(1) by striking paragraph (1) and inserting the following:
``(1) Reorganization.--A savings association operating in
mutual form may reorganize so as to become a holding
company--
``(A) by chartering a savings association, the stock of
which is to be wholly owned, except as otherwise provided in
this section, directly or indirectly by the mutual
association and by transferring the substantial part of its
assets and liabilities, by merger or otherwise, including all
of its insured liabilities, to the interim savings
association;
``(B) by converting to a stock association charter and
simultaneously forming a subsidiary stock holding company
that owns 100 percent of the voting stock of the converting
association; or
``(C) in any other manner approved by the Director,
including by the formation of a subsidiary stock holding
company, transferring assets and liabilities by merger or
otherwise to the subsidiary stock holding company, or through
the use of one or more interim institutions.'';
(2) in paragraph (3)(D)--
(A) by striking ``savings association'' and inserting ``the
mutual holding company or subsidiary stock holding company'';
(B) by striking ``such capital'' and inserting ``the
capital of the association'';
(C) by striking ``association's''; and
(D) by inserting ``of the association'' before
``established'';
(3) in paragraph (5)--
(A) by inserting ``or subsidiary stock holding company''
before ``may engage'';
(B) in subparagraph (A)--
(i) by inserting ``or acquiring'' after ``Investing in'';
and
(ii) by inserting ``, savings bank, or bank'' before the
period; and
(C) in subparagraph (C), by inserting ``or bank'' before
the period;
(4) by striking paragraph (7) and inserting the following:
``(7) Chartering and regulation.--
``(A) In general.--A mutual holding company shall be
chartered by the Director, and a subsidiary stock holding
company may be chartered under State law, and such holding
companies shall be subject to such regulations as the
Director may prescribe. Unless the context otherwise
requires, a mutual holding company shall be subject to the
other requirements of this section regarding regulation of
holding companies.
``(B) Conversion to state charter.--A mutual holding
company organized pursuant to paragraph (1) may convert its
charter to a State mutual holding company charter.
``(C) Conversion to federal charter.--Notwithstanding any
other provision of Federal law, a mutual holding company
organized under State law may convert its State mutual
holding company charter to a Federal mutual holding company
charter.'';
(5) in paragraph (8)--
(A) in subparagraph (A), by inserting ``or subsidiary stock
holding company'' after ``company''; and
(B) by striking subparagraph (B) and inserting the
following:
``(B) Issuance of shares.--This section shall not prohibit
a savings association or subsidiary stock holding company
chartered as part of a transaction described in paragraph (1)
from--
``(i) issuing any nonvoting shares or less than 50 percent
of the voting share of such association or subsidiary stock
holding company to any person other than the mutual holding
company;
``(ii) issuing all of the voting shares of such association
to a subsidiary stock holding company, if more than 50
percent of the voting shares of the subsidiary stock holding
company are owned by the mutual holding company; and
``(iii) issuing to any person other than the mutual holding
company, in connection with the formation of the mutual
holding company or at a later date, a separate class of
voting shares, the rights and preferences of which are
identical to those of the class of voting shares issued to
the mutual holding company, except with respect to the
payment of dividends.
``(C) Mutual savings association.--In the case of a mutual
savings association in which holders of accounts or obligors
exercise voting rights, such holders of accounts or obligors
shall have the right to subscribe on a priority basis for
voting shares of the subsidiary stock holding company or
savings association chartered pursuant to paragraph (1),
pursuant to regulations of the Director, but only with
respect to the voting shares issued in connection with the
initial reorganization pursuant to paragraph (1). The
priority subscription rights applicable to voting shares
issued to the mutual holding company in connection with the
initial reorganization pursuant to paragraph (1) shall be
exercisable at such time as the shares are subsequently sold
by the subsidiary savings association or subsidiary stock
holding company.'';
(6) in paragraph (9)(A)(i)(I), by inserting ``, directly or
indirectly,'' after ``owned''; and
(7) in paragraph (10)--
(A) by striking ``subsection--'' and inserting
``subsection, the following definitions shall apply:''; and
(B) by adding at the end the following:
``(D) Subsidiary stock holding company.--The term
`subsidiary stock holding company' means a stock holding
company organized under applicable State law, that is wholly-
owned, except as otherwise provided in this section, by the
mutual holding company.''.
SEC. 210. CALL REPORT SIMPLIFICATION.
(a) Modernization of Call Report Filing and Disclosure
System.--In order to reduce the administrative requirements
pertaining to bank reports of condition, savings association
financial reports, and bank holding company consolidated and
parent-only financial statements, and to improve the
timeliness of such reports and statements, the Federal
banking agencies shall--
(1) work jointly to develop a system under which--
(A) insured depository institutions and their affiliates
may file such reports and statements electronically; and
(B) the Federal banking agencies may make such reports and
statements available to the public electronically; and
(2) not later than 1 year after the date of enactment of
this Act, report to the Congress and make recommendations for
legislation that would enhance efficiency for filers and
users of such reports and statements.
(b) Uniform Reports and Simplification of Instructions.--
The Federal banking agencies shall, consistent with the
principles of safety and soundness, work jointly--
(1) to adopt a single form for the filing of core
information required to be submitted under Federal law to all
such agencies in the reports and statements referred to in
subsection (a); and
(2) to simplify instructions accompanying such reports and
statements and to provide an index to the instructions that
is adequate to meet the needs of both filers and users.
(c) Review of Call Report Schedule.--Each Federal banking
agency shall--
(1) review the information required by schedules
supplementing the core information referred to in subsection
(b); and
(2) eliminate requirements that are not warranted for
reasons of safety and soundness or other public purposes.
TITLE III--STREAMLINING AGENCY ACTIONS
SEC. 301. SCHEDULED MEETINGS OF AFFORDABLE HOUSING ADVISORY
BOARD.
Section 14(b)(6)(A) of the Resolution Trust Corporation
Completion Act (12 U.S.C. 1831q note) is amended--
(1) by striking ``4 times a year, or more frequently if
requested'' and inserting ``2 times a year, or as
requested''; and
(2) by striking ``In each year'' and all that follows
through ``located.''.
SEC. 302. ELIMINATION OF DUPLICATIVE DISCLOSURE OF FAIR
MARKET VALUE OF ASSETS AND LIABILITIES.
Section 37(a)(3) of the Federal Deposit Insurance Act (12
U.S.C. 1831n(a)(3)) is amended by striking subparagraph (D).
SEC. 303. PAYMENT OF INTEREST IN RECEIVERSHIPS WITH SURPLUS
FUNDS.
Section 11(d)(10) of the Federal Deposit Insurance Act (12
U.S.C. 1821(d)(10)) is amended by adding at the end the
following new subparagraph:
``(C) Rulemaking authority of corporation.--The Corporation
may prescribe such rules, including definitions of terms, as
it deems appropriate to establish the interest rate for or to
make payments of postinsolvency interest to creditors holding
proven claims against the receivership estates of insured
Federal or State depository institutions following
satisfaction by the receiver of the principal amount of all
creditor claims.''.
SEC. 304. REPEAL OF REPORTING REQUIREMENT ON DIFFERENCES IN
ACCOUNTING STANDARDS.
Section 37 of the Federal Deposit Insurance Act (12 U.S.C.
1831n) is amended by striking subsection (c).
SEC. 305. AGENCY REVIEW OF COMPETITIVE FACTORS IN BANK MERGER
ACT FILINGS.
(a) Report Required.--Section 18(c)(4) of the Federal
Deposit Insurance Act (12 U.S.C. 1828(c)(4)) is amended by
striking ``request reports'' and all that follows through the
end of the paragraph and inserting the following: ``request a
report on the competitive factors involved from the Attorney
General. The report shall be furnished not later than 30
calendar days after the date on which it is requested, or not
later than 10 calendar days
[[Page S11987]]
after such date if the requesting agency advises the Attorney
General that an emergency exists requiring expeditious
action.''.
(b) Timing of Transaction.--Section 18(c)(6) of the Federal
Deposit Insurance Act (12 U.S.C. 1828(c)(6)) is amended by
striking the third sentence and inserting the following: ``If
the agency has advised the Attorney General of the existence
of an emergency requiring expeditious action and has
requested a report on the competitive factors within 10 days,
the transaction may not be consummated before the fifth
calendar day after the date of approval by the agency.''.
(c) Evaluation of Competitive Effect.--
(1) Amendments to bank holding company act of 1956.--
Section 3(c) of the Bank Holding Company Act of 1956 (12
U.S.C. 1842(c)) is amended--
(A) by adding at the end the following new paragraph:
``(6) Evaluation of competitive effect.--The Board may not
disapprove of a transaction pursuant to paragraph (1)(B)
unless the Board takes into account--
``(A) competition from institutions, other than depository
institutions (as defined in section 3 of the Federal Deposit
Insurance Act), that provide financial services;
``(B) efficiencies and cost savings that the transaction
may create;
``(C) deposits of the participants in the transaction that
are not derived from the relevant market;
``(D) the capacity of savings associations to make small
business loans;
``(E) lending by institutions other than depository
institutions to small businesses; and
``(F) such other factors as the Board deems relevant.'';
and
(B) in paragraph (1), by striking ``restraint or trade''
and inserting ``restraint of trade''.
(2) Amendments to federal deposit insurance act.--Section
18(c)(5) of the Federal Deposit Insurance Act (12 U.S.C.
1828(c)(5)) is amended--
(A) by redesignating subparagraphs (A) and (B) as clauses
(i) and (ii), respectively;
(B) by inserting ``(A)'' after ``(5)'';
(C) by striking ``In every case'' and inserting the
following:
``(B) In every case under this subsection''; and
(D) by adding at the end the following:
``(C) The responsible agency may not disapprove of a
transaction pursuant to subparagraph (A), unless the agency
takes into account--
``(i) competition from institutions that provide financial
services;
``(ii) efficiencies and cost savings that the transaction
may create;
``(iii) deposits of the participants in the transaction
that are not derived from the relevant markets;
``(iv) the capacity of the institutions to make small
business loans;
``(v) lending by institutions other than depository
institutions to small businesses; and
``(vi) such other factors as the responsible agency deems
relevant.''.
SEC. 306. TERMINATION OF THE THRIFT DEPOSITOR PROTECTION
OVERSIGHT BOARD.
(a) In General.--Effective 3 months after the date of
enactment of this Act, the Thrift Depositor Protection
Oversight Board established under section 21A of the Federal
Home Loan Bank Act (hereafter in this section referred to as
the ``Board'') is terminated.
(b) Disposition of Affairs.--
(1) In general.--Effective on the date of enactment of this
Act, the Chairman of the Board (or the designee of the
Chairman) may exercise on behalf of the Board any power of
the Board necessary to settle and conclude the affairs of the
Board.
(2) Availability of funds.--Funds available to the Board
shall be available to the Chairman of the Board to pay
expenses incurred in carrying out paragraph (1).
(c) Savings Provision.--
(1) Existing rights, duties, and obligations not
affected.--Nothing in this Act affects the validity of any
right, duty, or obligation of the United States, the Board,
the Resolution Trust Corporation, or any other person, that--
(A) arises under or pursuant to the Federal Home Loan Bank
Act, or any other provision of law applicable with respect to
the Board; and
(B) existed on the day before the effective date of the
termination of the Board under this Act.
(2) Continuation of suits.--No action or other proceeding
commenced by or against the Board with respect to any
function of the Board shall abate by reason of the enactment
of this Act.
(3) Liabilities.--All liabilities arising out of the
operation of the Board during the period beginning on August
9, 1989, and ending on the date that is 3 months after the
date of enactment of this Act shall remain the direct
liabilities of the United States. The Secretary of the
Treasury shall not be substituted for the Board as a party to
any such action or proceeding.
(4) Continuations of orders, resolutions, determinations,
and regulations pertaining to the resolution funding
corporation.--
(A) In general.--Each order, resolution, determination, and
regulation regarding the Resolution Funding Corporation shall
continue in effect according to its terms until modified,
terminated, set aside, or superseded in accordance with
applicable law, if such order, resolution, determination, or
regulation--
(i) was issued, made, and prescribed, or allowed to become
effective by the Board or by a court of competent
jurisdiction, in the performance of functions transferred by
this Act; and
(ii) is in effect on the date that is 3 months after the
date of enactment of this Act.
(B) Enforceability.--All orders, resolutions,
determinations, and regulations pertaining to the Resolution
Funding Corporation are enforceable by and against--
(i) the United States prior to the effective date of the
transfer of responsibilities to the Secretary of the Treasury
under this Act; and
(ii) the Secretary of the Treasury on and after the
effective date of the transfer of responsibilities to the
Secretary of the Treasury under this Act.
(d) Transfer of Certain Resolution Funding Corporation
Responsibilities to Secretary of Treasury.--Effective 3
months after the date of enactment of this Act, the
authorities and duties of the Board under sections
21A(a)(6)(I) and 21B of the Federal Home Loan Bank Act are
transferred to the Secretary of the Treasury (or the designee
of the Secretary).
(e) Membership of the Affordable Housing Advisory Board.--
Effective on the date of enactment of this Act, section
14(b)(2) of the Resolution Trust Corporation Completion Act
(12 U.S.C. 1831q note) is amended by striking subparagraph
(C) and redesignating subparagraphs (D) and (E) as
subparagraphs (C) and (D), respectively.
TITLE IV--DISCLOSURE SIMPLIFICATION
SEC. 401. ALTERNATIVE COMPLIANCE METHOD FOR APR DISCLOSURE.
Section 127A(a)(2)(G) of the Truth in Lending Act (15
U.S.C. 1637a(a)(2)(G)) is amended by inserting before the
semicolon ``or, at the option of the creditor, a statement
that the periodic payments may increase or decrease
substantially''.
SEC. 402. ALTERNATIVE COMPLIANCE METHODS FOR ADVERTISING
CREDIT TERMS.
(a) Downpayment Amounts.--Section 144(d) of the Truth in
Lending Act (15 U.S.C. 1664(d)) is amended--
(1) by striking ``or the number of installments or the
period of repayment, then''; and
(2) by inserting ``or'' before ``the dollar''.
(b) Alternative Disclosures.--Chapter 3 of the Truth in
Lending Act (15 U.S.C. 1661 et seq.) is amended by adding at
the end the following new section:
``SEC. 148. ALTERNATIVE DISCLOSURES.
``(a) In General.--A radio or television advertisement to
aid, promote, or assist, directly or indirectly, any
extension of consumer credit may satisfy the disclosure
requirements in sections 143, 144(d), 147(a), or 147(e), by
complying with all of the requirements in subsections (b) and
(c) of this section.
``(b) Information To Be Disclosed.--A radio or television
advertisement referred to in subsection (a) complies with
this subsection if it clearly and conspicuously sets forth,
in such form and manner as the Board may require--
``(1) the annual percentage rate of any finance charge, and
with respect to an open-end credit plan, the simple interest
rate or the periodic rate in addition to the annual
percentage rate;
``(2) whether the interest rate may vary;
``(3) if the advertisement states an introductory rate (or
states with respect to a variable-rate plan an initial rate
that is not based on the index and margin used to make later
rate adjustments)--
``(A) with equal prominence, the annual percentage rate
that will be in effect after the introductory or initial rate
period expires (or for a variable-rate plan, a reasonably
current annual percentage rate that would have been in effect
using the index and margin); and
``(B) the period during which the introductory or initial
rate will remain in effect;
``(4) the amount of any annual fee for an open-end credit
plan;
``(5) a telephone number established in accordance with
subsection (c) that may be used by consumers to obtain all of
the information otherwise required to be disclosed pursuant
to sections 143 and 144(d), and subsections (a) and (e) of
section 147; and
``(6) a statement that the consumer may use the telephone
number established in accordance with subsection (c) to
obtain further details about additional terms and costs
associated with the offer of credit.
``(c) Requirements for Telephone Numbers.--In the case of
an advertisement described in subsection (b) that refers to a
telephone number--
``(1) the creditor shall establish the telephone number for
a broadcast area not later than the date on which the
advertisement is first broadcast in that area;
``(2) the required information shall be available by
telephone for a broadcast area for a period of not less than
10 days following the date of the final broadcast of the
advertisement in that area;
``(3) the creditor shall provide all of the information
that is otherwise required pursuant to sections 143 and
144(d), and subsections (a) and (e) of section 147 orally by
telephone or, if requested by the consumer, in written form;
and
``(4) the consumer shall obtain the required information by
telephone without incurring any long-distance charges.''.
[[Page S11988]]
TITLE V--MISCELLANEOUS
SEC. 501. POSITIONS OF BOARD OF GOVERNORS OF FEDERAL RESERVE
SYSTEM ON THE EXECUTIVE SCHEDULE.
(a) In General.--
(1) Positions at level i of the executive schedule.--
Section 5312 of title 5, United States Code, is amended by
adding at the end the following:
``Chairman, Board of Governors of the Federal Reserve
System.''.
(2) Positions at level ii of the executive schedule.--
Section 5313 of title 5, United States Code, is amended--
(A) by striking ``Chairman, Board of Governors of the
Federal Reserve System.''; and
(B) by adding at the end the following:
``Members, Board of Governors of the Federal Reserve
System.''.
(3) Positions at level iii of the executive schedule.--
Section 5314 of title 5, United States Code, is amended by
striking ``Members, Board of Governors of the Federal Reserve
System.''.
(b) Effective Date.--This section and the amendments made
by this section shall take effect on the first day of the
first pay period for the Chairman and Members of the Board of
Governors of the Federal Reserve System beginning on or after
the date of enactment of this section.
SEC. 502. CONSISTENT COVERAGE FOR INDIVIDUALS ENROLLED IN A
HEALTH PLAN ADMINISTERED BY THE FEDERAL BANKING
AGENCIES.
(a) Enrollment in Chapter 89 Plan.--For purposes of chapter
89 of title 5, United States Code, any period of enrollment
shall be deemed to be a period of enrollment in a health
benefits plan under chapter 89 of such title, if such
enrollment is--
(1) in a health benefits plan administered by the Federal
Deposit Insurance Corporation before the termination of such
plan on January 3, 1998; or
(2) subject to subsection (c), in a health benefits plan
(not under chapter 89 of such title) with respect to which
the eligibility of any employees or retired employees of the
Board of Governors of the Federal Reserve System terminates
on January 3, 1998.
(b) Enrollment; Continued Coverage.--
(1) Enrollment.--Subject to subsection (c), any individual
who, on January 3, 1998, is enrolled in a health benefits
plan described in paragraph (1) or (2) of subsection (a) may
enroll in an approved health benefits plan under chapter 89
of title 5, United States Code, either as an individual or
for self and family, if, after taking into account the
provisions of subsection (a), such individual--
(A) meets the requirements of that chapter 89 for
eligibility to become so enrolled as an employee, annuitant,
or former spouse (within the meaning of that chapter); or
(B) would meet the requirements of that chapter 89 if, to
the extent such requirements involve either retirement system
under such title 5, such individual satisfies similar
requirements or provisions of the Retirement Plan for
Employees of the Federal Reserve System.
(2) Determinations.--Any determination under paragraph
(1)(B) shall be made under guidelines established by the
Office of Personnel Management in consultation with the Board
of Governors of the Federal Reserve System.
(3) Continued coverage.--Subject to subsection (c), any
individual who, on January 3, 1998, is entitled to continued
coverage under a health benefits plan described in paragraph
(1) or (2) of subsection (a) shall be deemed to be entitled
to continued coverage under section 8905a of title 5, United
States Code, but only for the same remaining period as would
have been allowable under the health benefits plan in which
such individual was enrolled on January 3, 1998, if--
(A) the individual had remained enrolled in that plan; and
(B) that plan did not terminate, or the eligibility of such
individual with respect to that plan did not terminate, as
described in subsection (a).
(4) Comparable treatment.--Subject to subsection (c), any
individual (other than an individual under paragraph (3))
who, on January 3, 1998, is covered under a health benefits
plan described in paragraph (1) or (2) of subsection (a) as
an unmarried dependent child, but who does not then qualify
for coverage under chapter 89 of title 5, United States Code,
as a family member (within the meaning of that chapter) shall
be deemed to be entitled to continued coverage under section
8905a of that title, to the same extent and in the same
manner as if such individual had, on January 3, 1998, ceased
to meet the requirements for being considered an unmarried
dependent child of an enrollee under such chapter.
(5) Effective date.--Coverage under chapter 89 of title 5,
United States Code, pursuant to an enrollment under this
section shall become effective on January 4, 1998.
(c) Eligibility for FEHBP Limited to Individuals Losing
Eligibility Under Former Health Plan.--Nothing in subsection
(a)(2) or any paragraph of subsection (b) (to the extent that
paragraph (2) relates to the plan described in subsection
(a)(2)) shall be considered to apply with respect to any
individual whose eligibility for coverage under the plan does
not involuntarily terminate on January 3, 1998.
(d) Transfers to the Employees Health Benefits Fund.--The
Federal Deposit Insurance Corporation and the Board of
Governors of the Federal Reserve System shall transfer to the
Employees Health Benefits Fund, under section 8909 of title
5, United States Code, amounts determined by the Director of
the Office of Personnel Management, after consultation with
the Federal Deposit Insurance Corporation and the Board of
Governors of the Federal Reserve System, to be necessary to
reimburse the Fund for the cost of providing benefits under
this section not otherwise paid for by the individuals
covered by this section. The amounts so transferred shall be
held in the Fund and used by the Office of Personnel
Management in addition to amounts available under section
8906(g)(1) of title 5, United States Code.
(e) Administration and Regulations.--The Office of
Personnel Management--
(1) shall administer the provisions of this section to
provide for--
(A) a period of notice and open enrollment for individuals
affected by this section; and
(B) no lapse of health coverage for individuals who enroll
in a health benefits plan under chapter 89 of title 5, United
States Code, in accordance with this section; and
(2) may prescribe regulations to implement this section.
SEC. 503. FEDERAL HOUSING FINANCE BOARD.
Section 2A(b)(2) of the Federal Home Loan Bank Act (12
U.S.C. 1422a(b)(2)) is amended--
(1) by striking subparagraph (B); and
(2) by redesignating subparagraphs (C) and (D) as
subparagraphs (B) and (C), respectively.
TITLE VI--TECHNICAL CORRECTIONS
SEC. 601. TECHNICAL CORRECTION RELATING TO DEPOSIT INSURANCE
FUNDS.
(a) In General.--Section 2707 of the Deposit Insurance
Funds Act of 1996 (Public Law 104-208; 110 Stat. 3009-496) is
amended by striking ``7(b)(2)(C)'' and inserting
``7(b)(2)(E)''.
(b) Effective Date.--The amendment made by subsection (a)
shall be deemed to have the same effective date as section
2707 of the Deposit Insurance Funds Act of 1996.
SEC. 602. RULES FOR CONTINUATION OF DEPOSIT INSURANCE FOR
MEMBER BANKS CONVERTING CHARTERS.
Section 8(o) of the Federal Deposit Insurance Act (12
U.S.C. 1818(o)) is amended in the second sentence, by
striking ``subsection (d) of section 4'' and inserting
``subsection (c) or (d) of section 4''.
SEC. 603. AMENDMENTS TO THE REVISED STATUTES.
(a) Waiver of Citizenship Requirement for National Bank
Directors.--Section 5146 of the Revised Statutes of the
United States (12 U.S.C. 72) is amended in the first
sentence, by inserting before the period ``, and waive the
requirement of citizenship in the case of not more than a
minority of the total number of directors''.
(b) Technical Amendment to the Revised Statutes.--Section
329 of the Revised Statutes of the United States (12 U.S.C.
11) is amended by striking ``to be interested in any
association issuing national currency under the laws of the
United States'' and inserting ``to hold an interest in any
national bank''.
(c) Repeal of Unnecessary Capital and Surplus
Requirement.--Section 5138 of the Revised Statutes of the
United States (12 U.S.C. 51) is repealed.
SEC. 604. CONFORMING CHANGE TO THE INTERNATIONAL BANKING ACT.
Section 4(b) of the International Banking Act of 1978 (12
U.S.C. 3102(b)) is amended in the second sentence, by
striking paragraph (1) and by redesignating paragraphs (2)
through (4) as paragraphs (1) through (3), respectively.
Ms. MOSELEY-BRAUN. Mr. President, today, Senator Shelby and several
of my other colleagues on the Banking Committee are introducing the
Financial Regulatory Relief and Economic Efficiency Act of 1997. I am
cosponsoring this legislation because I have long been committed to the
process of reducing unnecessary regulatory burdens on financial
institutions. Many of the provisions were drafted in consultation with
the banking regulatory agencies and will remove duplicative,
unnecessary restrictions that no longer make sense and are no longer
appropriate, given this era of great change in the financial services
industry. This bill will allow the banks to be more efficient and cost-
effective in their activities. It will also allow them to better meet
the needs of the users of the system, the individuals, the communities,
the businesses, the exporters, the farmers, and all those who depend on
our financial system. We live in capital-scarce times and that means
that it is imperative that our financial system provides capital to
those who need it in the most cost-effective manner possible. We can be
longer tolerate inefficiencies due to outmoded regulation.
However, it is important to note that I do not support every
provision of this bill, and in fact I have serious concerns about
portions of it. I believe that certain sections of the bill will need
to be changed significantly as it works its way through the Banking
Committee and the Senate floor. That said, I want to be a part of this
process, because I believe in the objectives of the bill: reducing
unnecessary regulatory burden. Furthermore, I think the issue should be
addressed in a bipartisan manner.
[[Page S11989]]
This type of effort needs to be a priority for Banking Committee and
the Senate as a whole, and that is why I am an original cosponsor of
the Financial Regulatory Relief and Economic Efficiency Act of 1997.
______
By Mr. SMITH of Oregon:
S. 1406. A bill to amend section 2301 of title 38, United States
Code, to provide for the furnishing of burial flags on behalf of
certain deceased members and former members of the Selected Reserve; to
the Committee on Veterans Affairs.
burial flags for members of the guard and reserves legislation
Mr. SMITH of Oregon. Mr. President, several months ago, one of my
constituents, Gilbert Miller, a retired Air Force senior master
sergeant, walked into my Medford, OR office to share an idea with me.
After doing some research, he discovered that some military reserve
component members who had honorably served their country as Selected
Reservists were not eligible for funeral burial flags. In response to
this inequity, and in recognition of Veterans' Day, I rise to introduce
a bill authorizing the Department of Veterans' Affairs to issue burial
flags to deceased members of the reserve component.
Mr. President, National Guard and Reserve units and individual
members increasingly share the day-to-day burden of our national
defense. Their service is routinely performed in a drill or short
active duty tour status alongside an active component service member.
Their status, however, does not make their contribution to our national
defense any less important or less critical. Simply put, many
requirements could not be met without the direct involvement of Reserve
forces, either in a drill status or on short active duty tours.
In view of this reality, I believe it is time to expand the current
law regarding burial flags to include these members of the total force.
Therefore, my bill permits the issuance of a burial flag to those
National Guard and Reserve members who honorably served in the reserve
component.
Mr. President, I would like to thank the Non Commissioned Officers
Association and all the veterans' groups for their support of this
bill.
Finally, Mr. President, I would like to pay tribute to our veterans
as we prepare to celebrate Veterans' Day. Each day as I drive to work
at the U.S. Senate, I cannot help but notice the beautiful monuments of
our Nation's capital. These monuments were built to honor great people
and great events, and each has its own inspirational story to tell.
What you will find in the stories is that the greatness of our country
and of its leaders was founded in the willingness of common men and
women, our veterans, to risk their lives defending the principle of
right. Serving both at home and on foreign soil, their service must
always be remembered.
Working in Washington in this great institution and among these
beautiful monuments, I frequently am reminded of the sacrifices of our
veterans. Even outside of Washington, in almost every town across
America, there are monuments dedicated to our veterans. I urge each
American to discover their story, not only from a historical
perspective, but also through the eyes of the veterans living in their
communities, where you will find common men and women who simply did
the right thing when called upon. And because of them, we live in a
world where there is more peace than ever before. They deserve our
thanks.
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. 1406
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. ISSUANCE OF BURIAL FLAGS FOR DECEASED MEMBERS AND
FORMER MEMBERS OF THE SELECTED RESERVE.
Section 2301(a)(2) of title 38, United States Code, is
amended to read as follows:
``(2) deceased individual who--
``(A) was serving as a member of the Selected Reserve (as
described in section 10143 of title 10) at the time of death;
``(B) had served at least one enlistment, or the period of
initial obligated service, as a member of the Selected
Reserve and was discharged from service in the Armed Forces
under conditions not less favorable than honorable; or
``(C) was discharged from service in the Armed Forces under
conditions not less favorable than honorable by reason of a
disability incurred or aggravated in line of duty during the
individual's initial enlistment, or period of initial
obligated service, as a member of the Selected Reserve.''.
______
By Mr. BURNS:
S. 1407. A bill to allow participation by the communities surrounding
Yellowstone National Park in decisions affecting the park, and for
other purposes; to the Committee on Energy and Natural Resources.
THE YELLOWSTONE NATIONAL PARK COMMUNITY PARTICIPATION ACT
Mr. BURNS. Madam President, I rise today to introduce the Yellowstone
National Park Community Participation Act. This is a bill to require
the National Park Service to work in conjunction and consult with the
communities surrounding Yellowstone National Park in both Montana and
Wyoming.
The communities surrounding Yellowstone National Park, are as
directly affected by actions within the park, as anything in the park
itself. These communities' stability and economic viability are in a
large part dependent on the actions within the park. Their future is
dependent upon the actions taken both by local park management, and the
management of the National Park Service in Washington, DC.
The Department of the Interior and the Director of the National Park
Service have stated that the management of the parks and the Park
Service itself should work in a cooperative effort to make sure that
the local communities, affected by actions in the parks, are consulted
before action occurs. Well unfortunately this is not always the case.
Last year in the 104th Congress, authority was given to the National
Park Service to provide for a demonstration project as it relates to
fees charged to enter our national park. This was done with the
understanding that this would assist the parks in coming up with
additional funding for the backlog of construction and maintenance in
each individual parks. Dollars which are sorely needed in the parks and
which it is hoped would be put to good use.
Communities surrounding our parks, especially Yellowstone, understand
the need for the repairs to the infrastructure in the parks. They are
all very willing to work with park management to do what they can to
assist in maintaining the parks and assisting management in working on
a means for caring for the parks.
Yet, when the Park Service asked for input and provided each
individual park with an opportunity to use and develop a new fee
structure for the parks not all the communities were asked or informed
of the increases in the fees. This was the case in Yellowstone National
Park.
While the management of Grand Teton, just a few miles south of
Yellowstone, worked with and notified the communities affected by the
future fee changes. Providing these communities an opportunity to
prepare for the effects these changes would have on their business and
economic vitality.
An announcement was made by the management in Yellowstone to address
the upcoming changes without very much, if any interaction with the
surrounding communities. This then affected their ability to provide
the information necessary to people who use their communities as a
staging site for their visit to Yellowstone. It put them in the
unenviable position of either subjecting their businesses to a loss,
due to the fact that they either accepted the additional cost for
operating their park tours, or charging the difference to those
consumers who were there on the spur of the moment. This is not what
any of us would like to do to our customers, nor anything that the
Government should require of taxpayers who are either living at the
gates of our national parks or visiting them for recreation.
Had a consultation occurred in this instance, it is possible that
relations between the communities and the park management could have
developed to find a way to work through this process. However no
consultation occurred and as a result, relations between park
management and the local communities have been strained.
Another telling facet of this dissolution of relations between local
communities and the park management, is
[[Page S11990]]
what occurred just last winter. Due to what the park management called
reduced funding, they changed the winter opening dates for the
entrances to Yellowstone. This had a dramatic effect on the economic
stability of the communities which are located at the entrances to
Yellowstone.
The basis for business in those communities at the entrances to
Yellowstone, is not just the traffic they see during the summer, but
rests in large part on winter tourism in and around Yellowstone. As
beautiful and magnificent, as Yellowstone can be during the summer, the
visual experiences a person can enjoy during the winter are multiplied.
Many of the businesses in these local communities look upon winter
tourism as a means of keeping them in business for the next year.
When any change is announced, without suitable notification or
adequate consultation, these communities suffer greatly. Last winter
visitors arrived at Yellowstone with the understanding that the park
would be open, to allow them to experience the beauty of the Nation's
``Crown Jewel'' as it lay under a winter coating of snow. However, when
they arrived at the entrance to the park, they were greeted not with a
welcome, but with a barrier which kept them from enjoying their park.
This delayed opening had a devastating effect on the communities at
the gateways to Yellowstone. Many tours were canceled and groups which
had planned future winter events in the area, have since canceled those
plans. Although it was not true, many of these tour and business groups
were of the understanding that Yellowstone was closed to winter travel
and activity.
The language in this bill would assure stability for the future of
those communities located at the gateways to Yellowstone National Park.
The legislation would provide for an opening and closing date, which
the people of the community of West Yellowstone, MT, could count on in
planning for tour groups and the hiring of personnel to make the
visitors' stays a memorable experience.
I have attempted to work with the Park Service and the local
communities to see if some means of consultation could be worked out
among all the parties involved. Last January a series of meetings
occurred, between members of the local community the Park Service and
my staff, to discuss the problems which the local communities were
facing due to the actions taken last winter. As a result of these
meetings, it was hoped that the management of the park would be more
receptive to the working with the local communities in the development
of changes affecting their lives. So far this has not been the case.
I am offering this legislation today, in an attempt to open dialog to
find suitable arrangements for consultation between the park and the
gateway communities of Yellowstone National Park. I will request a
hearing on this matter to open that dialog and to seek a means by which
all parties are comfortable in a process of exchange and consultation
on the future of the business related to Yellowstone. I look forward to
working with the Park Service and the local communities to find a means
of keeping Yellowstone a treasure for all America and the world to
enjoy, during all seasons of the year.
Thank you, Madam President.
______
By Mr. D'AMATO (for himself and Mr. Moynihan):
S. 1408. A bill to establish the Lower East Side Tenement National
Historic Site, and for other purposes; to the Committee on Energy and
Natural Resources.
the lower east side tenement museum national historic site act of 1997
Mr. D'AMATO. Mr. President, I rise today to join with my friend and
colleague, Senator Moynihan, to introduce legislation that will declare
the Lower East Side Tenement Museum a national historic site. Most of
us have heard the stories of how the great wave of immigrants of
generations ago entered our Nation, but few really know what happened
to them after they landed at Ellis Island. At the Lower East Side
Tenement Museum at 97 Orchard Street in New York City, one is able to
follow the lives of the immigrants beyond the first hours on our
shores. The museum tells their history, displays their courage and
showcases their values in an interpretive setting that brings the
visitor back to an era from which many of us came. The museum presents
to many of us an awareness of our ancestral roots that we may never
have known existed. Through the legislation being introduced by Senator
Moynihan and me, the museum will be able to affiliate itself with the
National Park Service, bestowing national recognition on the humble
beginnings of millions of our ancestors.
The Tenement Museum is unique in that it not only traces the quality
of life inside the tenement, but presents a picture of the immigrant's
outside world as well. Due to the cramped and dingy nature of the
tenement, as much time as possible was spent outside. Thus, in order to
fully explore their lives, it is essential to look toward their work,
their houses of worship, their organizations, and their entertainment.
The museum incorporates the experiences of yesteryear's immigrants and
interprets them for today's generations. It gives the visitor a
powerful glimpse into the life and living arrangements that our
ancestors faced on a daily basis. Besides onsite programs, the museum
utilizes the surrounding neighborhood; an area which continues to this
day in its role as a receiver of immigrants.
Throughout our Nation we have preserved, remembered and cherished
places of national significance and beauty. We have put enormous energy
toward maintaining homes of noted Americans and protecting vast areas
of wilderness. What we do not have, though, is a monument to the so-
called ordinary citizen. The Tenement Museum can fill that role and
will do so at no cost to the Federal Government under this legislation.
It is unlikely that many of those who lived in buildings like the one
at 97 Orchard Street felt that they were special. Rather, they were
probably grateful for the chance to come to America to try to make a
better life for themselves and their families. Given the living and
working conditions that we now take for granted, the language and
cultural obstacles they had to overcome, we should applaud their
ability to take hold of an opportunity and not only survive, but
thrive. It is their contributions to society in the face of
overwhelming obstacles that defined an era and established an ethic
that survives to this day. It is their spirit that we admire, and that,
in retrospect, makes these otherwise ordinary individuals special. The
Tenement Museum is their monument, and as their descendants, it is ours
as well.
Congress has an opportunity to recognize the pioneer spirit of our
ancestors and deliver it to future generations of Americans. The museum
reminds us all of an important and often forgotten chapter in our
immigrant heritage, mainly, that millions of families made their first
stand in our Nation not in a log cabin or farmhouse or mansion, but in
a city tenement. Granting the Lower East Side Tenement Museum
affiliated status within the National Park Service will shed light on
that chapter while linking it to the chain of the Status of Liberty,
Ellis Island, and Castle Clinton in the story of our urban immigrant
heritage. I urge my colleagues to join Senator Moynihan and me in
cosponsoring this bill, and I urge its speedy consideration by the
Senate.
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. 1408
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 ``Lower East Side Tenement
National Historic Site Act of 1997''.
SEC. 2. FINDINGS AND PURPOSES.
(a) Findings.--Congress finds that--
(1)(A) immigration, and the resulting diversity of cultural
influences, is a key factor in defining the identity of the
United States; and
(B) many United States citizens trace their ancestry to
persons born in nations other than the United States;
(2) the latter part of the 19th century and the early part
of the 20th century marked a period in which the volume of
immigrants coming to the United States far exceeded that of
any time prior to or since that period;
(3) no single identifiable neighborhood in the United
States absorbed a comparable
[[Page S11991]]
number of immigrants than the Lower East Side neighborhood of
Manhattan in New York City;
(4) the Lower East Side Tenement at 97 Orchard Street in
New York City is an outstanding survivor of the vast number
of humble buildings that housed immigrants to New York City
during the greatest wave of immigration in American history;
(5) the Lower East Side Tenement is owned and operated as a
museum by the Lower East Side Tenement Museum;
(6) the Lower East Side Tenement Museum is dedicated to
interpreting immigrant life within a neighborhood long
associated with the immigrant experience in the United
States, New York City's Lower East Side, and its importance
to United States history; and
(7)(A) the Director of the National Park Service found the
Lower East Side Tenement at 97 Orchard Street to be
nationally significant; and
(B) the Secretary of the Interior declared the Lower East
Side Tenement a National Historic Landmark on April 19, 1994;
and
(C) the Director of the National Park Service, through a
special resource study, found the Lower East Side Tenement
suitable and feasible for inclusion in the National Park
System.
(b) Purposes.--The purposes of this Act are--
(1) to ensure the preservation, maintenance, and
interpretation of this site and to interpret at the site the
themes of immigration, tenement life in the latter half of
the 19th century and the first half of the 20th century, the
housing reform movement, and tenement architecture in the
United States;
(2) to ensure continued interpretation of the nationally
significant immigrant phenomenon associated with New York
City's Lower East Side and the Lower East Side's role in the
history of immigration to the United States; and
(3) to enhance the interpretation of the Castle Clinton,
Ellis Island, and Statue of Liberty National Monuments.
SEC. 3. DEFINITIONS.
As used in this Act:
(1) Historic site.--The term ``historic site'' means the
Lower East Side Tenement found at 97 Orchard Street on
Manhattan Island in City of New York, State of New York, and
designated as a national historic site by section 4.
(2) Museum.--The term ``Museum'' means the Lower East Side
Tenement Museum, a nonprofit organization established in City
of New York, State of New York, which owns and operates the
tenement building at 97 Orchard Street and manages other
properties in the vicinity of 97 Orchard Street as
administrative and program support facilities for 97 Orchard
Street.
(3) Secretary.--The term ``Secretary'' means the Secretary
of the Interior.
SEC. 4. ESTABLISHMENT OF HISTORIC SITE.
(a) In General.--To further the purposes of this Act and
the Act entitled ``An Act to provide for the preservation of
historic American sites, buildings, objects, and antiquities
of national significance, and for other purposes'', approved
August 21, 1935 (16 U.S.C. 461 et seq.), the Lower East Side
Tenement at 97 Orchard Street, in the City of New York, State
of New York, is designated a national historic site.
(b) Coordination with National Park System.--
(1) Affiliated site.--The historic site shall be an
affiliated site of the National Park System.
(2) Coordination.--The Secretary, in consultation with the
Museum, shall coordinate the operation and interpretation of
the historic site with the Statue of Liberty National
Monument, Ellis Island National Monument, and Castle Clinton
National Monument. The historic site's story and
interpretation of the immigrant experience in the United
States is directly related to the themes and purposes of
these National Monuments.
(c) Ownership.--The historic site shall continue to be
owned, operated, and managed by the Museum.
SEC. 5. MANAGEMENT OF THE SITE.
(a) Cooperative Agreement.--The Secretary may enter into a
cooperative agreement with the Museum to ensure the marking,
interpretation, and preservation of the national historic
site designated by section 4(a).
(b) Technical and Financial Assistance.--The Secretary may
provide technical and financial assistance to the Museum to
mark, interpret, and preserve the historic site, including
making preservation-related capital improvements and repairs.
(c) General Management Plan.--
(1) In general.--The Secretary, in consultation with the
Museum, shall develop a general management plan for the
historic site that defines the role and responsibility of the
Secretary with regard to the interpretation and the
preservation of the historic site.
(2) Integration with national monuments.--The plan shall
outline how interpretation and programming for the historic
site shall be integrated and coordinated with the Statue of
Liberty National Monument, Ellis Island National Monument,
and Castle Clinton National Monument to enhance the story of
the historic site and these National Monuments.
(3) Completion.--The plan shall be completed not later than
2 years after the date of enactment of this Act.
(d) Limited Role of Secretary.--Nothing in this Act
authorizes the Secretary to acquire the property at 97
Orchard Street or to assume overall financial responsibility
for the operation, maintenance, or management of the historic
site.
SEC. 6. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated such sums as are
necessary to carry out this Act.
Mr. MOYNIHAN. Mr. President, I rise to join my friend and colleague
Senator D'Amato in introducing a bill that will authorize a small but
most significant addition to the National Park system by designating
the Lower East Side Tenement Museum a national historic site. For 150
years New York City's Lower East Side has been the most vibrant,
populous, and famous immigrant neighborhood in the Nation. From the
first waves of Irish and German immigrants to Italians and Eastern
European Jews to the Asian, Latin, and Caribbean immigrants arriving
today, the Lower East Side has provided millions their first American
home.
For many of them that home was a brick tenement; six or so stories,
no elevator, maybe no plumbing, maybe no windows, a business on the
ground floor, and millions of our forbearers upstairs. The Nation has
with great pride preserved log cabins, farm houses, and other symbols
of our agrarian roots. We have reopened Ellis Island to commemorate and
display the first stop for 12 million immigrants who arrived in New
York City.
Until now we have not preserved a sample of urban, working class life
as part of the immigrant experience. For many of those disembarked on
Ellis Island the next stop was a tenement on the Lower East Side, such
as the one at 97 Orchard Street. It is here that the Lower East Side
Tenement Museum shows us what that next stop was like.
The tenement at 97 Orchard was built in the 1860's, during the first
phase of tenement construction. It provided housing for 20 families on
a plot of land planned for a single family residence. Each floor had
four 3-room apartments, each of which had two windows in one of the
rooms and none in the others. The privies were out back, as was the
spigot that provided water for everyone. The public bathhouse was down
the street.
In 1900 this block was the most crowded per acre on Earth. Conditions
improved at 97 Orchard Street after the passage of the New York
Tenement House Act of 1901, though the crowding remained. Two toilets
were installed on each floor. A skylight was installed over the
stairway and interior windows were cut in the walls to allow some light
throughout each apartment. For the first time the ground floor became
commercial space. In 1918 electricity was installed. Further
improvements were mandated in 1935, but the owner of this building
chose to board it up rather than follow the new regulations. It
remained boarded up for 60 years until the idea of a museum took hold.
The tenement museum will keep at least one apartment in the
dilapidated condition in which it was found when reopened, to show
visitors the process of urban archaeology. Others are being restored to
show how real families lived at different periods in the building's
history. Across the street there are interpretive programs to better
explain the larger experience of gaining a foothold on America in the
Lower East Side of New York. There are also plans for programmatic ties
with Ellis Island and its precursor, Castle Clinton. And the museum
plans to play an active role in the immigrant community around it,
further integrating the past and present immigrant experience on the
Lower East Side.
This bill designates the tenement museum a national historic site. It
also authorizes the Secretary of the Interior to enter into a
cooperative agreement with the museum to ensure the marking,
interpretation, and preservation of the site. The Secretary will also
coordinate with the Statue of Liberty, Ellis Island, and Castle Clinton
sites to help with the interpretation of the immigrant experience. It
will be a productive partnership.
Mr. President, I believe the tenement museum provides an outstanding
opportunity to preserve and present an important stage of the immigrant
experience and the move for social change in our cities at the turn of
the century. I know of no better place than 97 Orchard Street to do so,
and no
[[Page S11992]]
other place in the National Park system doing so already. I look
forward to the realization of this grand idea, and I ask my colleagues
for their support.
______
By Ms. COLLINS (for herself, Mr. Thompson, and Mr. Bennett):
S. 1409. A bill for the relief of Sheila Heslin of Bethesda, MD; to
the Committee on the Judiciary.
private relief legislation
Ms. COLLINS. Mr. President, today I am introducing a bill, along with
my colleagues Senators Thompson and Bennett, that will require the
Department of Justice to pay the legal fees of a former Federal
employee, Sheila Heslin, who incurred these expenses as a direct result
of the campaign finance investigations conducted by the Congress, the
Department of Justice, and the Central Intelligence Agency.
Earlier this fall, Ms. Heslin testified before the Senate
Governmental Affairs Committee about actions she took while performing
her official duties as an employee of the National Security Council.
Everyone who observed her testimony was impressed with her honesty and
courage in resisting high-level political pressure. Ms. Heslin told us
how other governmental and political officials pressured her to approve
a request that Roger Tamraz, a major contributor with an unsavory
reputation, be allowed to meet with President Clinton. She resisted
these overtures in an effort to protect the integrity of the White
House and to ensure that our foreign policy was conducted
appropriately. Of all the individuals who testified before the Senate
Governmental Affairs Committee about the campaign finance problems, Ms.
Heslin provided the best example of how career Government officials
ought to conduct themselves. She demonstrated courage and a high regard
for the proper conduct of U.S. foreign policy.
Ms. Heslin participated in these proceedings as a witness, not as the
subject of any investigation. She has provided important information on
events and activities that may well become the subject of prosecution.
As a result, Ms. Heslin was forced to retain private counsel to advise
her in the various investigations because representation by Government
counsel would have presented a clear conflict of interest.
It is my understanding that the Department of Justice has to date
declined to reimburse Ms. Heslin for the legal fees relating to her
testimony before the Senate Governmental Affairs Committee and other
similar inquiries. She is now a private citizen with a new baby and
without the personal wealth to afford the legal representation her
service as a Government employee has required. As an important and
fully cooperative witness in these investigations, she has set an
example that ought to not be discouraged by denying Government payment
for outside legal representation in a case involving appropriate
actions taken during her Federal employment.
Under existing regulations, the Department of Justice normally
approves the payment of legal fees for Government employees when ``the
actions for which representation is requested reasonably appears to
have been performed within the scope of the employees's employment''
and payment is ``in the interest of the United States.'' Both
requirements have been met in the case Sheila Heslin.
Moreover, Mr. President, in connection with other investigations, the
Department of Justice has paid the legal fees of hundreds of Government
employees, some of whom were high-level political appointees. For
example, in fiscal year 1996, political appointees at the White House
and on the Vice President's staff were reimbursed thousands of dollars
in attorneys' fees. To deny the payment of legal fees to Ms. Heslin,
who is not suspected of any wrongdoing, while at the same time paying
the legal fees of many other Government employees, some of whom were
being investigated for possible illegal activities, is simply unfair.
Earlier this month, I asked the Attorney General to personally
address this matter and to reverse the decision denying reimbursement
to Ms. Heslin. I am still waiting for Attorney General Reno's response
to my letter.
In the absence of action by the Department of Justice, I am
introducing this bill which directs the Attorney General to pay
reasonable attorney's fees incurred by Ms. Heslin as a result of the
campaign finance investigations. To ensure that such payments are not
excessive, it is intended that the amounts be determined in accordance
with applicable Justice Department regulations.
Mr. President, this bill is not only for Sheila Heslin. It is also to
send a clear message to every career Government employee who in the
future has to choose between succumbing to inappropriate political
pressure or doing the right thing. It is also for the American people
who are the ultimate beneficiaries when public servants put the
interests of the country ahead of the interests of those seeking to buy
access and influence for their own narrow purposes.
Mr. President, it is regrettable that we cannot do more to reward
people who follow the high standards of conduct we all espouse. At the
very least, we should ensure that the actions of their Government do
not penalize them. For that reason, I hope my colleagues will support
this measure.
______
By Mr. REED:
S. 1410. A bill to amend section 258 of the Communications Act of
1934 to enhance to protections against unauthorized changes in
subscriber selections of telephone service providers, and for other
purposes; to the Committee on Commerce, Science, and Transportation.
the anti-slamming act of 1997
Mr. REED. Mr. President, I rise today to make a few comments
concerning legislation which I am introducing to deal with the problem
of slamming. Earlier this year, I outlined the remedies necessary to
deal with this serious consumer problem in a Sense of the Senate
Resolution which was amended to the Commerce State Justice
Appropriations legislation. The legislation I introduce today embodies
those remedies. I would like to take a moment to thank Ranking Member
Hollings and Chairmen McCain and Burns for the assistance they have
lent to me on this issue.
Telephone ``slamming'' is the illegal practice of switching a
consumer's long distance service without the individual's consent. This
problem has increased dramatically over the last several years, as
competition between long distance carriers has risen. Slamming is the
top consumer complaint lodged at the Federal Communications Commission
(FCC), with 11,278 reported complaints in 1995, and 16,500 in 1996. In
the first nine months of 1997 alone, 15,000 complaints have been filed.
Unfortunately, this represents only the tip of the iceberg because most
consumers never report violations to the FCC. One regional Bell company
estimates that 1 in every 20 switches is fraudulent. Media reports
indicate that as many as 1 million illegal transfers occur annually.
Thus, slamming threatens to rob consumers of the benefit of a
competitive market, which is now composed of over 500 companies which
generate $72.5 billion. As a result of slamming, consumers face not
only increased phone bills, but also the significant expenditure of
time and energy in attempting to identify and reverse the fraud. The
results of slamming are clear: higher phone bills and immense consumer
frustration.
Mr. President, we are all aware of the stiff competition which occurs
for customers in the long distance telephone service industry. The goal
of deregulating the telecommunications industry was to allow consumers
to easily avail themselves of lower prices and better service.
Hopefully, this option will soon be presented to consumers for in-state
calls and local phone service. Indeed, better service at lower cost is
a main objective of those who seek to deregulate the utility industry.
Unfortunately, fraud threatens to rob many consumers of the benefits of
a competitive industry.
Telemarketing is one of the least expensive and most effective forms
of marketing, and it has exponentially expanded in recent years. By
statute, the Federal Trade Commission (FTC) regulates most
telemarketing, prohibiting deceptive or abusive sales calls, requiring
that homes not be called at certain times, and that companies honor a
consumer's request not to be called again. The law mandates that
records concerning sales be maintained for two years. While the FTC is
charged with primary enforcement, the law allows consumers, or state
Attorneys General on their behalf, to bring legal action
[[Page S11993]]
against violators. Yet, phone companies are exempt from these
regulations, since they are subject to FCC regulation.
While the FCC has brought action against twenty-two of the industry's
largest and smallest firms for slamming violations with penalties
totaling over $1.8 million, this represents a minute fraction of the
violations. FCC prosecution does not effectively address or deter this
serious fraud. To date, state officials have been more aggressive in
pursuing violators. The California Public Utility Commission fined a
company $2 million earlier this year after 56,000 complaints were filed
against it. Arizona, Arkansas, Idaho, Illinois, Kansas, Minnesota,
Mississippi, Missouri, New Jersey, Ohio, Vermont, and Wisconsin have
all pursued litigation against slammers. Earlier this summer, public
officials of twenty-five states asked the FCC to adopt tougher rules
against slammers.
As directed by the Telecommunications Act of 1996, the FCC has
recently moved to close several loopholes which have allowed slamming
to continue unabated. Most importantly, the FCC has proposed to
eliminate the financial incentive which encourages many companies to
slam by mandating that all revenues generated from an illegal switch be
returned to the original carrier. At present, a slammer can retain the
profits generated from an illegal switch. Additionally, the FCC
proposed regulations would require that a carrier confirm all switches
generated by telemarketing through either (1) a letter of agency, known
as a LOA, from the consumer; (2) a recording of the consumer verifying
his or her choice on a toll free line provided by the carrier; or (3) a
record of verification by an appropriately qualified and independent
third party. The regulations are expected to be finalized by the FCC
early in 1998. While this represents a start, I believe that these
remedies will be wholly inadequate to address the ever-increasing
problem of slamming. The problem is that slammed consumers would still
be left without conclusive proof that their consent was properly
obtained and verified.
My legislation encompasses a three part approach to stop slamming by
strengthening the procedures used to verify consent obtained by
marketers; increasing enforcement procedures by allowing citizens or
their representatives to pursue slammers in court with the evidence
necessary to win; and encouraging all stakeholders to use emerging
technology to prevent fraud.
Mr. President, let me also thank the National Association of
Attorneys General, the National Association of Regulatory Utility
Commissioners which through both their national offices and individual
members provided extensive recommendations to improve this bill.
Additionally, I have found extremely helpful the input of several
groups which advocate on behalf of consumers. I was particularly
pleased to work with the Consumer Federation of America to address
concerns which its members expressed, and I am honored that this
legislation has received the endorsement of their organization.
Mr. President, let me take a few minutes to outline the specific
provisions of my bill. My legislation requires that a consumer's
consent to change service is verified so that discrepancies can be
adjudicated quickly and efficiently. Like the 1996 Act, my bill
requires a legal switch to include verification. However, my
legislation enumerates the necessary elements of a valid verification.
First, the bill requires verification to be maintained by the provider,
either in the form of a letter from the consumer or by recording
verification of the consumer's consent via the phone. The length that
the verification must be maintained is to be determined by the FCC.
Second, the bill stipulates the form that verification must take.
Written verification remains the same as current regulations. Oral
verification must include the voice of the subscriber affirmatively
demonstrating that she wants her long distance provider to be changed;
is authorized to make the change; and is currently verifying an
imminent switch. The bill mandates oral verification to be conducted in
a separate call from that of the telemarketer, by an independent,
disinterested party. This verifying call must promptly disclose the
nature and purpose of the call. Third, after a change has been
executed, the new service provider must send a letter to the consumer,
within five business days of the change in service, informing the
consumer that the change, which he requested and verified, has been
effected. Fourth, the bill mandates that a copy of verification be
provided to the consumer upon request. Finally, the bill requires the
FCC to finalize rules implementing these mandates within nine months of
enactment of the bill.
These procedures should help ensure that consumers can efficiently
avail themselves of the phone service they seek, without being exposed
to random and undetectable fraudulent switches. If an individual is
switched without his or her consent, the mandate of recorded,
maintained verification will provide the consumer with the proof
necessary to prove that the switch was illegal.
The second main provision of my legislation would provide consumers,
or their public representatives, a legal right to pursue violators in
court. Following the model of Senator Hollings' 1991 Telephone Consumer
Protection Act, my bill provides aggrieved consumers with a private
right of action in any state court which allows, under specific
slamming laws or more general consumer protection statutes such an
action. The 1991 Act has been adjudicated to withstand constitutional
challenges on both equal protection and tenth amendment claims. Thus,
the bill has the benefit of specifying one forum in which to resolve
illegal switches of all types of service: long distance, in-state, and
local service.
Realizing that many individuals will not have the time, resources, or
inclination to pursue a civil action, my bill also allows state
Attorneys Generals, or other officials authorized by state law, to
bring an action on behalf of citizens. Like the private right of action
in suits brought by public officials damages are statutorily set at
$1,000 or actual damages, whichever is greater. Treble damages are
awarded in cases of knowing or willful violations. In addition to
monetary awards, states are entitled to seek relief in the form of
writs of mandamus, injunction, or similar relief. To ensure a proper
role for the FCC, state actions must be brought in a federal district
court where the victim or defendant resides. Additionally, state
actions must be certified with the Commission, which maintains a right
to intervening in an action. The bill makes express the fact that it
has no impact on state authority to investigate consumer fraud or bring
legal action under any state law.
Finally, Mr. President, my legislation recognizes that neither
legislators nor regulators can solve tomorrow's problems with today's
technology. Therefore my bill mandates that the FCC provide Congress
with a report on other, less burdensome but more secure means of
obtaining and recording consumer consent. Such methods might include
utilization of Internet technology or issuing PIN numbers or customer
codes to be used before carrier changes are authorized. The bill
requires that the FCC report to Congress on such methodology by
December 31, 1999.
Mr. President, I appreciate the opportunity to discuss my initiative
to stop slamming. I hope that this issue can be addressed quickly. As a
result, I would urge all my colleagues to cosponsor this legislation.
______
By Mr. MACK (for himself, Mr. Harkin, Mr. DeWine, Mr. Santorum,
Ms. Collins, Ms. Snowe, Mr. D'Amato, Mr. Smith of Oregon, Mrs.
Boxer, Mr. Kennedy, Mrs. Feinstein, Mr. Lautenberg, Mr. Graham,
Mr. Dodd, Mr. Durbin, and Mr. Wellstone):
S. 1411. A bill to amend the Internal Revenue Code of 1986 to
disallow a Federal income tax deduction for payments to the Federal
Government or any State or local government in connection with any
tobacco litigation or settlement and to use any increased Federal
revenues to promote public health; to the Committee on Finance.
THE NATIONAL INSTITUTES OF HEALTH TRUST FUND ACT OF 1997
Mr. MACK. Mr. President, today I am joined by Senators Harkin,
DeWine, Santorum, Collins, Snowe, D'Amato, Smith of Oregon, Boxer,
Kennedy, Feinstein, Lautenberg, Graham,
[[Page S11994]]
Dodd, Durbin, and Wellstone in introducing legislation that begins to
realize the paramount goal of doubling funding for the National
Institutes of Health [NIH] over the next 5 years. The bill ensures that
any tobacco settlements or judgments are not tax deductible.
As currently crafted, the global settlement specifically allows the
tobacco companies to deduct the entire amount of their payments. That
is a possible $128 billion break on their tax bill. I believe it is
fundamentally wrong to allow them such a free ride at taxpayers'
expense. More importantly, any settlement should provide funds for
biomedical research, including funding to find better treatment and
cures for the diseases caused by tobacco.
Although the Tax Code often allows settlement amounts to be
deductible, the current law provides that fines or penalties paid to a
Government entity are not. The unprecedented situation we face with the
tobacco industry demands that the Congress define these payments as
more akin to such a fine or penalty. If a businessman cannot deduct a
speeding ticket he received on his way to a meeting, tobacco shouldn't
be able to deduct its payment for guaranteed immunity and certainty of
liability. Which is worse, a speeding ticket or knowingly addicting and
killing millions of Americans?
I want my colleagues to understand that the success of our efforts on
this front does not hinge on the enactment of a final Federal
settlement. The bill applies to any settlement or judgment at the State
or Federal level. As such, if the tobacco companies are found liable in
any forum, or see fit to settle any of their cases with governmental
entities, those payments will not be deductible. However, the bill
leaves in place the deductibility of compensatory sums paid to
individuals for harm done to them. Now is the time for Congress to step
forward and pledge that we will not be a party to any tobacco
settlement that comes at taxpayers' expense.
Allowing the companies to state that they are willing to pay $368.5
billion to the Government, when in reality they are only paying two-
thirds of that amount, is false advertising. The bill corrects this
misleading situation to the benefit of thousands, perhaps millions, of
Americans whose tobacco-related illnesses might be cured now through
medical research.
As my colleagues will recall, the Senate passed by a vote of 98 to 0
a Sense of the Senate Resolution that Congress, and the Nation, should
commit to the goal of doubling funding for NIH over the next 5 years.
The actions we are taking today will help us to achieve that goal.
The tax revenues which will be derived as a result of making the
settlement or judgments nondeductible will be used to establish the
National Trust Fund for Biomedical Research. Each year, after the
President has signed the Labor/HHS/Education bill into law, the moneys
in the medical research trust fund established by this bipartisan
legislation will be allocated to NIH for biomedical research.
Research has demonstrated that many diseases can be prevented,
eliminated, detected earlier, or managed more effectively through a
vast array of new medical procedures and therapies.
For the first time in history, overall death rates from cancer have
begun a steady decline in the United States. Ten years ago, cancer
patients were offered little hope of survival. Today, however, if a
breast cancer is detected at an early stage, there is a 94-percent
survival rate. Today, 80 percent of children diagnosed with acute
lymphoblastic leukemia [ALL] are alive and free of the disease 5 years
after diagnosis.
Genetic research has enabled Americans to learn if they are more
likely to develop osteoporosis, breast cancer, Lou Gehrig's disease and
other illnesses. Scientists now know that, in at least 50 percent, and
possibly as many as 80 percent, of all cancers, one gene--p53--is
damaged. If cancer cells growing in a dish are given healthy p53 genes,
they immediately stop proliferating and die.
We now know that if one inherits a mutated gene for hemochromatosis,
more commonly known as iron overload disease, a disease which affects
approximately 1 million Americans, then one will actually develop the
disease. The benefit of knowing this is that giving blood is an
effective way to manage the disease.
Because of the advances made in biomedical research, people with
Parkinson's disease, AIDS, Alzheimer's disease, and other ailments are
living longer and healthier lives. We are on the verge of cures and new
treatments for diseases which have plagued our society for many years.
Research is the key which will unlock the knowledge needed to find
these cures.
But doubling our commitment to NIH, we could improve the grant
success rate from 25 to 40 percent. More patients would have access to
clinical trials. Approximately 2 percent of all cancer patients are now
enrolled in clinical trials. We could increase that to 20 percent. The
result is that more families would have access to the most effective
state-of-the-art treatment.
Patients would also benefit by advances in new methods of treatment
including gene therapy, immunotherapy, spinal cord rejuvenation;
helping diabetics naturally produce insulin; relief for Parkinson's
disease patients, and reduction in heart disease, which is the leading
cause of death in the United States.
We have entered a new era of medical research in this country, but we
must provide the necessary funding in order to translate discoveries
into new methods of diagnosis and treatment.
There can be little argument that scientific advances will also have
a significant positive impact upon our Nation's economy. They will
result in reduced health expenditures for Medicare, Medicaid, DOD, VA,
and other public and private health programs. A recent study by the
National Science Foundation concluded that every dollar spent on basic
research permanently adds 50 cents or more each year to national
output.
In addition, the medical technology industry provides high-wage jobs
to millions of Americans. Investment in basic science helps the United
States compete in the global marketplace in such industries as
pharmacology, biotechnology, and medical technology. Combined with the
actions taken earlier this year to reform the FDA, public and private
investment in biomedical research will ensure our ability to compete in
this important industry and create new jobs.
Mr. President, there are millions of Americans who are fighting a
day-to-day battle against cancer, sickle cell anemia, AIDS,
osteoporosis, Parkinson's disease, and other ailments. Their lives are
in our hands. They are asking for hope and the opportunity for a cure.
We must act now.
This legislation is supported by more than 175 organizations
representing a broad base of research, patient, health professions,
consumer, and education communities. I ask unanimous consent that a
list of these organizations be included in the Record.
I urge my colleagues to join this bipartisan effort to help achieve
the goal of doubling NIH funding over the next 5 years.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Organizations Supporting Mack-Harkin Tobacco Research Fund as of
November 6, 1997
1. Alliance for Eye and Vision Research.
2. Alzheimer's Association.
3. American Academy of Allergy, Asthma and Immunology.
4. American Academy of Child and Adolescent Psychiatry.
5. American Academy of Dermatology.
6. American Academy of Neurology.
7. American Academy of Opthalmology.
8. American Academy of Orthopaedic Surgeons.
9. American Academy of Otolaryngology-Head and Neck
Surgery, Inc.
10. American Academy of Pediatrics.
11. American Academy of Physical Medicine and
Rehabilitation.
12. American Association for Cancer Education.
13. American Association for Cancer Research.
14. American Association for Dental Research.
15. American Association for the Surgery of Trauma.
16. American Association of Anatomists.
17. American Association of Colleges of Nursing.
18. American Association of Colleges of Osteopathic
Medicine.
19. American Association of Colleges of Pharmacy.
20. American Association of Immunologists.
21. American Association of Pharmaceutical Scientists.
[[Page S11995]]
22. American Cancer Society.
23. American College of Cardiology.
24. American College of Clinical Pharmacology.
25. American College of Medical Genetics.
26. American College of Neuropsychopharmacology.
27. American College of Rheumatology.
28. American Dermatological Association.
29. American Federation for Medical Research.
30. American Foundation for AIDS Research.
31. American Gastroenterological Association.
32. American Geriatrics Society.
33. American Heart Association.
34. American Liver Foundation.
35. American Lung Association.
36. American Optometric Association.
37. American Pediatric Society.
38. American Physiological Society.
39. American Podiatric Medical Association.
40. American Psychiatric Association.
41. American Psychological Association.
42. American Psychological Society.
43. American Sleep Disorders Association.
44. American Society for Biochemistry and Molecular
Biology.
45. American Society for Cell Biology.
46. American Society for Clinical Nutrition.
47. American Society for Clinical Pharmacology and
Therapeutics.
48. American Society for Dermatologic Surgery.
49. American Society for Microbiology.
50. American Society for Nutritional Sciences.
51. American Society for Pharmacology and Experimental
Therapeutics.
52. American Society for Reproductive Medicine.
53. American Society for Therapeutic Radiology and
Oncology.
54. American Society of Cataract and Refractive surgery.
55. American Society of Clinical Oncology.
56. American Society of Hematology.
57. American Society of Human Genetics.
58. American Society of Nephrology.
59. American Society of Tropical Medicine and Hygiene.
60. American Thoracic Society.
61. American Uveitis Society.
62. American Urogynecologic Society.
63. American Urological Association.
64. America's Blood Centers.
65. Arthritic Foundation.
66. Association for Medical School Pharmacology.
67. Association of Research in Vision and Ophthalmology.
68. Association of Academic Health Centers.
69. Association of Academic Physiatrists.
70. Association of American Cancer Institutes.
71. Association of American Medical Colleges.
72. Association of American Universities.
73. Association of Anatomy, Cell Biology, and Neurobiology
Chairpersons.
74. Association of Independent Research Institutes.
75. Association of Medical and Graduate Departments of
Biochemistry.
76. Association of Medical School Microbiology and
Immunology Chairs.
77. Association of Medical School Pediatric Department
Chairmen.
78. Association of Minority Health Professions Schools.
79. Association of Pediatric Oncology Nurses.
80. Association of Professors of Dermatology.
81. Association of Professors of Medicine.
82. Association of Schools and Colleges of Optometry.
83. Association of Schools of Public Health.
84. Association of Subspecialty Professors.
85. Association of Teachers of Preventive Medicine.
86. Association of University Environmental Health Sciences
Center.
87. Association of University Professors of Ophthalmology.
88. Association of University Programs in Occupational
Safety and Health.
89. Association of University Radiologists.
90. Astra Merck.
91. Cancer Research Foundation of America.
92. The Candlelighters Childhood Cancer Foundation.
93. Citizens for Public Action.
94. Coalition for American Trauma Care.
95. Coalition of Patient Advocates for Skin Disease
Research.
96. College on Problems of Drug Dependence, Inc.
97. Columbia University.
98. Communication Disorders Program University of Virginia.
99. Consortium of Social Science Associations.
100. Cooley's Anemia Foundation.
101. Corporation for the Advancement of Psychiatry.
102. Cystic Fibrosis Foundation.
103. Digestive Disease National Coalition.
104. Dystonia Medical Research Foundation.
105. Dystrophic Epidermolysis Bullosa Research Association
of America, Inc.
106. East Carolina University School of Medicine.
107. Emory University.
108. The Endocrine Society.
109. ESA, Incorporated.
110. Families Against Cancer.
111. Federation of American Societies for Experimental
Biology.
112. Federation of Behavioral, Psychological and Cognitive
Sciences.
113. Foundation for Icthyosis and Related Skin Types.
114. Fred Hutchinson Cancer Research Center.
115. Friends of the National Library of Medicine.
116. Fox Chase Cancer Center.
117. Gay Men's Health Crisis.
118. General Clinical Research Center Project Directors
Association.
119. Glaucoma Research Foundation.
120. Immune Deficiency Foundation.
121. Inova Institute of Research and Education.
122. Joint Council of Allergy, Asthma & Immunology.
123. Juvenile Diabetes Foundation International.
124. The Lighthouse, Inc.
125. Lombardi Cancer Center.
126. Lupus Foundation of America.
127. Lymphoma Research Foundation of America.
128. Medical Library Association.
129. National Alliance for Eye and Vision Research.
130. National Alliance for the Mentally Ill.
131. National Alopecia Areata Foundation.
132. National Association for Biomedical Research.
133. National Association for Pseudoxanthoma Elasticum.
134. National Association of Children's Hospitals.
135. National Association of State Universities and Land-
Grant Colleges.
136. National Campaign to end Neurological Disorders.
137. National Caucus of Basic Biomedical Science Chairs.
138. National Coalition for Cancer Research.
139. National Committee to Preserve Social Security and
Medicare.
140. National Council on Spinal Cord Injury.
141. National Eczema Association for Science & Education.
142. National Foundation for Ectodermal Dysplasias.
143. National Marfan Foundation.
144. National Mental Health Association.
145. National Multiple Sclerosis Society.
146. National Organization for Rare Disorders.
147. National Osteoporosis foundation.
148. The National Pemphigus Foundation.
149. National Perinatal Association.
150. National Psoriasis Foundation.
151. National Vitiligo Foundation, Incorporated.
152. New York University Medical Center.
153. Oncology Nursing Society.
154. Parkinson's Action Network.
155. Prevent Blindness America.
156. Prevention of Blindness.
157. PXE International Inc.
158. Radiation Research Society.
159. Research America.
160. Research Society on Alcoholism.
161. RESOLVE.
162. Roswell Park Cancer Institute.
163. Society for Academic Emergency Medicine.
164. Society for Inherited Metabolic Diseases.
165. Society for Society for Investigative Dermatology.
166. Society for Neuroscience.
167. Society for Pediatric Research.
168. Society for the Advancement of Women's Health
Research.
169. Society of Gynecologic Oncologists.
170. Society of Medical College Directors of Continuing
Medical Education.
171. Society of University Otolaryngologists.
172. Society of University Urologists.
173. St. Jude Children's Research Hospital.
174. Sudden Infant Death Syndrome Alliance.
175. Tourette Syndrome Association, Inc.
176. United Scleroderma Foundation, Incorporated.
177. University of California, Berkeley School of
Optometry.
178. Women in Ophthalmology.
179. Women's Dermatologic Society.
Mr. HARKIN. Mr. President, today Senator Mack and I, joined by a
strong bipartisan group of our colleagues, are introducing legislation
that would prevent tobacco companies from claiming the settlement or
judgement payments as a tax-deductible expense, and use the resulting
savings to substantially expand our Nation's investment in the search
for medical breakthroughs.
It is important to note that this common sense proposal is the first
major tobacco legislation this year to be introduced with strong
bipartisan support. We have 16 cosponsors--8 Democrats and 8
Republicans--and I believe we'll have many more as more of our
colleagues have the time to review this bill. Senator Mack and I are
also very pleased to have the support of over 170 organizations from
across the Nation signed up in support of this plan.
During the negotiations that led to the proposed national tobacco
settlement, lawyers for the big tobacco companies insisted on a
provision stating
[[Page S11996]]
that ``all payments pursuant to this agreement shall be deemed ordinary
and necessary business expenses.'' This means that all payments under
this proposal, an estimated $368.5 billion over 25 years, would be tax
deductible. Thus the industry could write off about 35 percent of the
entire settlement payment of $368.5 billion, as well as any future
payments or fines. So, if this were allowed to happen, the American
people--not Big Tobacco--would be forced to pay approximately $130
billion of the tobacco settlement.
But the American people have paid enough. They've paid by having
their kids deliberately targeted in slick advertising campaigns.
They've paid by having the industry lie to them about the health
effects of tobacco. And they've paid with disease and death.
Tobacco products kill more than 400,000 Americans every year--that's
more deaths than from AIDS, alcohol, car accidents, murders, suicides,
drugs, and fires combined. Last year, close to 5,000 Iowans died from
smoking related illnesses.
Mr. President, our bipartisan bill would close this outrageous
loophole in the proposed national tobacco settlement, and open a new
source of funding for investing in health research.
And that's what we really need. The proposed settlement provides
funding for smoking cessation programs, anti-smoking education
programs, and FDA enforcement--but only a tiny amount is set aside for
vital scientific research on lung cancer, emphysema, and heart disease.
The Senate is already on record, in a vote of 98-0, to double the
budget of NIH within 5 years. If we create a trust fund for medical
research as I have been calling for since 1993 and deposit in it the
savings from the elimination of this special interest loophole, we
could take a major step to meet the Senate's objective and make even
more headway in curing killer diseases.
A fund for health research would provide additional resources for our
search for medical breakthroughs over and above those provided to NIH
in the annual appropriations process. The fund would greatly enhance
the quality of health care by investing more in finding preventive
measures, cures and more cost effective treatments for the major
illnesses and conditions that strike Americans.
In 1993 and 1994 I argued that any health care reform plan should
include additional funding for health research. Health care reform was
taken off the front burner but the need to increase our Nation's
commitment to health research has only grown.
While health care spending devours nearly $1 trillion annually our
medical research budget is dying of starvation. The United States
devotes less than 2 percent of its total health care budget to health
research. The Defense Department spends 15 percent of its budget on
research. Does this make sense? The cold war is over but the war
against disease and disability continues.
Increased investment in health research is key to reducing health
costs in the long run. If we can find cures for lung cancer, emphysema,
and heart disease, the savings would be enormous.
Mr. President, I do everything I can to increase funding for NIH
through the appropriations process. But, given the current budget
situation and freeze in discretionary spending what we can do is
limited. Without action, our investment in medical research through the
NIH is likely to decline in real terms.
The NIH is able to fund only about 25 percent of competing research
projects or grant applications deemed worthy of funding. This is
compared to rates of 30 percent or more just over a decade ago. Science
and cutting edge medical research are being put on hold. We may be
giving up possible cures for diabetes, Parkinson's, cancer, and
countless other diseases.
Our lack of investment in research may also be discouraging our young
people from pursuing careers in medical research. The number of people
under the age of 36 even applying for NIH grants dropped by 54 percent
between 1985 and 1993. This is due to a host of factors but I'm afraid
that the lower success rates among applicants is making biomedical
research less and less attractive to young people.
I am tremendously heartened by the significant bipartisan coalition
of 16 Senators that has formed in support of our bill. Our colleagues
who have joined with us on this legislation understand that health
research is an investment in our future--an investment in our children
and grandchildren.
Mr. President, this legislation is common sense, bipartisan--and it's
the right thing to do. Senator Mack and I join in asking our colleagues
for their willingness to carefully review our proposal. Certainly any
tobacco legislation that this Congress adopts next year should
contribute significantly to our Nation's commitment in the search for
medical breakthroughs.
Mr. DODD. Mr. President, I rise today to join my colleagues, Senator
Mack, Senator Harkin, and others in introducing the National Institutes
of Health Trust Fund Act of 1997. This bill, very simply, is intended
to ensure that payments made by the tobacco industry under any
settlement legislation enacted by Congress on behalf of the people of
this Nation, will be the full responsibility of the tobacco companies.
Many of us were dismayed to learn that under current law, those
payments could be deducted by these companies as a business expense--
effectively reducing the cost to manufacturers by one-third. I don't
think that this is what the negotiators of the settlement intended, nor
is it what the public expects. This bill would disallow the
deductibility of the proposed settlement or the settlement of any other
tobacco-related civil action. The tax revenues from the disallowance of
the deduction, estimated at $100 billion, would go toward a trust fund
for the National Institutes of Health.
My primary interest in the tobacco settlement originates in the
dramatically high incidence of teen smoking in our country. The
statistics are startling--3,000 young children begin smoking each day
and over 90 percent of adults that smoke started before the age of 18.
Our hope and expectation is that with resources generated by a tobacco
settlement, we can fund effective programs to help addicted teens quit
smoking and prevent most children from ever starting.
In essence, we want to encourage young people to take responsibility
for their health. Tobacco companies must set a precedent for our youth
by taking full financial responsibility for the damage they have
inflicted on the public health of the Nation. Tobacco companies have
already conceded the points that tobacco is harmful and addictive and
information that would have been useful to our understanding of tobacco
addition was withheld. Avoiding full payment of penalties for their
actions through the tax deduction loophole is ethically wrong, even if
legal. The tobacco industry needs to serve as an example for the
children of the Nation by accepting the full financial consequences of
the settlement.
Just a few months ago, the public loudly voiced its disgust with the
covert attempt to give the tobacco industry a $50 billion credit toward
payment of a future settlement. While we were successful in eliminating
that loophole, an unfortunate repercussion has been the exacerbation of
the public's doubts about the settlement. Even if they didn't before,
many now believe that the industry will exploit any loophole to escape
its responsibility. We must restore the public's faith in this process.
We must send a clear message that any tobacco settlement reached will
be grounded in the principle that tobacco companies take full
responsibility for their actions. That objective can best be achieved
by swift passage of this bill.
______
By Mr. SMITH of Oregon (for himself, Mrs. Feinstein, Mr. Wyden,
Mr. Baucus and Mr. Gorton):
S. 1412. A bill to amend the Internal Revenue Code of 1986 to permit
certain tax free corporate liquidations into a 501(c)(3) organization
and to revise the unrelated business income tax rules regarding receipt
of debt-financed property in such a liquidation; to the Committee on
Finance.
THE CHARITABLE GIVING INCENTIVE ACT
Mr. SMITH of Oregon. Mr. President, I rise to introduce with Senator
Feinstein legislation that will provide incentives to taxpayers to use
their wealth for charitable causes. In this era of ever-tightening
fiscal constraints placed on congressional ability
[[Page S11997]]
to authorize discretionary funding, we have asked our communities to do
more and more for those less fortunate. Charitable organizations in our
communities have become an integral part of the safety net for the poor
and homeless and significant sources of assistance for education in
every community.
To help charities take advantage of those donors who wish to
contribute significant wealth for charitable purposes, we are
introducing the Charitable Giving Incentive Act. This legislation will
change current tax law to encourage prospective donors to contribute a
controlling interest in a closely-held corporation to charity.
When a donor is willing to make a gift of a controlling interest in a
company, a tax is imposed on the corporation upon its liquidation,
reducing the gift that the charity receives by 35 percent. The Smith/
Feinstein bill would eliminate this egregious tax that is levied upon
the value of these qualifying corporations. We sincerely hope that this
will directly encourage meaningful contributions to charitable
organizations that help a variety of causes. I ask that my colleagues
support this legislation and look forward to its being considered by
the Finance Committee in the near 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. 1412
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 ``Charitable Giving Incentive
Act''.
SEC. 2. ELIMINATION OF CORPORATE LEVEL TAX UPON LIQUIDATION
OF CLOSELY HELD CORPORATIONS UNDER CERTAIN
CONDITIONS.
(a) In General.--Paragraph (2) of section 337(b) of the
Internal Revenue Code 1986 (relating to treatment of
indebtedness of subsidiary, etc.) is amended--
(1) by striking ``Except as provided in subparagraph (B)''
in subparagraph (A) and inserting ``Except as provided in
subparagraph (B) or (C)'', and
(2) by adding at the end the following new subparagraph:
``(C) Exception in the case of closely-held stock acquired
without consideration.--If the 80-percent distributee is an
organization described in section 501(c)(3) and acquired
stock in a liquidated domestic corporation from either a
decedent (within the meaning of section 1014(b)) or the
decedent's spouse, subparagraph (A) shall not apply to any
distribution of property to the 80-percent distributee. This
subparagraph shall apply only if all of the following
conditions are met:
``(i) 80 percent or more of the stock in the liquidated
corporation was acquired by the distributee, solely by a
distribution from an estate or trust created by one or more
qualified persons. For purposes of this clause, the term
`qualified person' means a citizen or individual resident of
the United States, an estate (other than a foreign estate
within the meaning of section 7701(a)(31)(A)), or any trust
described in clause (i), (ii), or (iii) of section
1361(c)(2)(A).
``(ii) The liquidated corporation adopted its plan of
liquidation on or after January 1, 1999.
``(iii) The 80-percent distributee is an organization
created or organized under the laws of the United States or
of any State.
``(iv) All of the stock in the liquidated corporation is
non-readily-tradable stock (as defined in section
6166(b)(7)(B)).
Nothing in subsection (d) shall be construed to limit the
application of this subsection in circumstances in which this
subparagraph applies.''.
(b) Revision of Unrelated Business Income Tax Rules To
Exempt Certain Assets.--Subparagrph (B) of section 514(c)(2)
of the Internal Revenue Code of 1986 (relating to property
acquired subject to mortgage, etc.) is amended by inserting
``or pursuant to a liquidation described in section
337(b)(2)9C),'' after ``bequest or devise,''.
(c) Effective Date.--The amendments made by this section
shall take effect on the date of the enactment of this Act.
Mrs. FEINSTEIN. Mr. President, I rise today with my colleagues
Senator Gordon Smith and Ron Wyden of Oregon, as well Senator Max
Baucus and Senator Slade Gorton to introduce legislation to strengthen
tax incentives and encourage more charitable giving in America. The
legislation, based on S. 1121 which I introduced last year, represents
an important step to encourage greater private sector support for
important educational, medical, and other goals in local communities
across the country.
Americans are among the most caring in the world, contributing
generously to charities in their communities: American families
contribute, on average, nearly $650 for each household, or about $130
billion annually, to charities. Approximately, three out of every four
households give to nonprofit charitable organizations.
However, charities are very concerned for the future, as Federal
efforts to balance the budget will limit funds for social spending for
urgent needs like children's services, homelessness, job training, and
health care. While support for charities grew by 3.7 percent in 1994,
contributions for human services, the area most closely associated with
poverty programs, dropped by 6 percent. Nonprofit charities are very
concerned about their ability to maintain their current level of
services or grow to address unmet needs.
Nonprofit charities can never replace government programs, but they
can play a critical role and provide vital social services. The Federal
Government must ensure we are doing everything we can to encourage
support for charities, which supplement Federal programs.
expanding tax incentives for charitable giving
The Federal Government must provide the leadership and the tools to
encourage more charitable giving through the Tax Code. One source of
untapped resources for charitable purposes is closely held corporate
stock. A closely held business is a corporation, in which stock is
issued to a small number shareholders, such as family members, but is
not publicly traded on an exchange. This type of business is very
popular for family businesses involving different generations.
However, the tax cost of contributing closely held stock to a charity
or foundation can be prohibitively high. The tax burden discourages
families and owners from winding down a business and contributing the
proceeds to charity. This legislation would permit certain tax-free
liquidations of closely held corporations into one or more tax exempt
501(c)(3) organizations.
Under current law, a corporation may have to be liquidated to
effectively complete the transfer of assets to a charity, incurring a
corporate tax at the 35 percent tax rate. In 1986, Congress repealed
the ``General Utilities'' doctrine, imposing a corporate level tax on
all corporate transfers, including those to tax exempt charitable
organizations. A charity may also be subject to taxation on its
unrelated business income from certain types of donated property.
These tax costs make contributions of closely held stock a costly and
ineffective means of giving funds to a charity. If we are going to find
new ways to strengthen charities, we need to review the tax costs which
undercut the incentive to give and the value of a charitable gift.
Volunteers are already hard at work in their communities and
charitable funding is already stretched dangerously thin. Charities
need added tools to unlock the public's desire to give generously. We
need to create appropriate incentives for the private sector to do
more.
In California, volunteer and charitable organizations, together,
perform vital roles in the community and deserve our support. I would
like to offer some examples, which can be also found throughout the
country:
Summer Search: In San Francisco, the Summer Search Foundation is hard
at work preventing students from dropping out of high school. Summer
Search helps students successfully complete school and, for 93 percent
of the participants, go on to college. With increased charitable
contributions, Summer Search could help keep kids in school and on
track toward graduation and a more productive contribution to the
Nation.
Drew Center for Child Development: I am deeply concerned with
increases in the number of child abuse and neglect cases, which now
total nearly 3 million children in the United States. Social services
block grants cuts will impose new burdens on local communities. The
Drew Child Development Center, located in the Watts area of Los
Angeles, works directly with children and families involved in child
abuse environments. There are thousands of other families that could
benefit from the Drew Center program if only more resources were
available. Stronger tax
[[Page S11998]]
incentives to boost charitable giving could provide the Drew Center
with some of the resources needed to combat this enormous problem.
The Chrysalis Center: In 1993 I visited the Chrysalis Center, a Los
Angeles organization dedicated to helping homeless individuals find and
keep jobs. Chrysalis provides employment assistance, from training in
jobseeking skills to supervised searches for permanent employment. The
Center has helped place thousands of people in permanent, full-time
jobs in the last decade.
Jobs for the Homeless: Jobs for the Homeless assists with job
placement services for the homeless in Berkeley and Oakland, supporting
over 1,400 men and women. However, thousands more need their help. The
former homeless individuals have landed successful positions in
manufacturer, retailers, and small and large businesses. Without more
contributions, Jobs for the Homeless will be unable to provide the
necessary support and increase their literacy or drug rehabilitation
programs, critical ingredients in moving people back to work.
Today, Senators Smith, Wyden, Baucus, Gorton, and I introduce tax
incentive legislation to encourage stronger support for the Nation's
vital charities. The proposal: Eliminates the corporate tax upon
liquidation of a qualifying closely held corporation under certain
circumstances. The legislation would require 80 percent or more of the
stock to be dedicated to a charity; and clarifies that a charity can
receive mortgaged property in a qualified liquidation, without
triggering unrelated business income tax for 10 years.
By eliminating the corporate tax upon liquidation, Congress would
encourage additional, and much needed, charitable gifts. Across
America, countless thousands have built successful careers and have
generated substantial wealth in closely held corporations. As the
individuals age and plan their estates, we should help them channel
their wealth to philanthropic goals. Individuals who are willing to
make generous bequests of companies and assets, often companies they
have spent years building, should not be discouraged by substantially
reducing the value of their gifts through Federal taxes.
While the Joint Tax Committee has not yet prepared an official
revenue cost, previous estimates suggest a cost of about $400 million
over 5 years. However, as a result of capital gains tax reform adopted
earlier this year, the cost if likely to be significantly lower. Of
equal significance, the same revenue estimating assumptions project big
increases in charitable giving as a result of the legislation,
stimulating between $3 and 5 billion in charitable contributions. This
tax proposal may generate as much as seven or eight times its projected
revenue loss in expanded charitable giving.
I encourage others to review this legislation and listen to the
charities in your community. The legislation has been endorsed by the
Council on Foundations, which represents foundations throughout the
country, and the Council of Jewish Federations. Since the introduction
of the legislation last year, the proposal has been revised to sharpen
the bill's focus and target the legislation in the most effective
manner. I want to encourage the review process to continue, so we may
continue to build support and target the bill's impact for the benefit
of the Nation's nonprofit community.
With virtually limitless need, we must look at new ways to encourage
and nurture a strong charitable sector. Private charities cannot
replace the government, but if the desire to support charitable
activity exists, we should not impose taxes to decrease the value of
that support. Tax laws should encourage, rather than impede, charitable
giving. By inhibiting charitable gifts, Federal tax laws hurt those
individuals that most need the help of their government and theie
community.
______
By Mr. LUGAR (for himself, Mr. Hagel, Mr. Roberts, Mr. Thomas,
Mr. Grams, Mr. Kerrey, Mrs. Feinstein, and Mr. Chafee):
S. 1413. A bill to provide a framework for consideration by the
legislative and executive branches of unilateral economic sanctions; to
the Committee on Foreign Relations.
THE ENHANCEMENT OF TRADE, SECURITY, AND HUMAN RIGHTS THROUGH SANCTIONS
REFORM ACT
Mr. LUGAR. Mr. President, I rise to introduce the Enhancement of
Trade, Security, and Human Rights Through Sanctions Reform Act, a bill
that will establish a more deliberative, commonsense approach to U.S.
sanctions policy. I'm pleased to be joined by several distinguished
colleagues, in introducing this important piece of legislation.
In recent years, there has been a proliferation in the use of
unilateral economic sanctions as a tool of American foreign policy.
While unilateral sanctions may be a low cost alternative to the
deployment of American Armed Forces abroad--or to milder, less coercive
choices--they almost never succeed in achieving their foreign policy
objectives. They frequently impose a greater burden on American
companies, producers, farmers, and workers than on the intended target
country.
A cardinal test of foreign policy is that when we act
internationally, our actions should do less harm to ourselves than to
others. Unilateral economic sanctions, unfortunately, often fail this
crucial test.
Mr. President, there have been a large number of studies on
unilateral economic sanctions in recent years and they provide some
interesting results. Manufacturers revealed that in the period 1993 to
1996, the United States imposed unilateral sanctions to achieve foreign
policy goals 61 times in 35 different countries. Last year, the report
of the President's Export Council cited 75 countries representing 52
percent of the world's population that have been subject to or
threatened by U.S. unilateral economic sanctions.
These actions have jeopardized billions in export earnings and
hundreds of thousands of American jobs, while weakening our ability to
provide humanitarian assistance abroad. In another study, the Institute
for International Economics concluded that, in 1995 alone, economic
sanctions cost U.S. exports--to 26 countries--between $15-19 billion,
and eliminated upwards to 200,000 U.S. jobs, many in high wage export
sector.
The damage to the U.S. economy can have long-term consequences. Once
foreign competitors establish a presence in international markets
abandoned by the United States, the potential losses begin to magnify.
Over time, the cumulative effect of sanctions will be a loss of
commercial contracts, but more importantly, may be a loss of confidence
in American suppliers and in the United States as a reliable partner to
do business. Frequent resort to economic sanctions, however,
meritorious they may be, runs the risk of weakening the export sector
which has contributed so greatly to our economic prosperity. This
weakening effect can, in turn, have an adverse effect on our political
influence abroad.
The major difficulty with our increased use of unilateral economic
sanctions is that they rarely achieve the foreign policy goals they are
intended to achieve. Sanctions frequently give the illusion of action
by substituting for more decisive action or by serving as a palliative
for those who demand that some action be taken--any action--by the
United States against another country with whom we have a disagreement.
Sanctions can also make it more difficult diplomatically to engage
foreign governments in dialogue to help bring about a political opening
or a change in behavior. Serious trade sanctions can, in fact, inhibit,
rather than facilitate, constructive dialogue with others.
As a nation, we often seek instant gratification or quick results
from our actions. Sanctions, however, take a long time to work and the
change in behavior we seek in other countries will most often take
place incrementally over time. In some cases, our sanctions have the
unintended consequences of providing authoritarian leaders a basis for
increasing their political support and rally opposition to the United
States because our sanctions can be used to divert popular anger and
resentment away from their own mis-deeds and mis-rule.
Unilateral sanctions almost never help those we want to assist, they
frequently harm the United States more than the sanctioned country and
undermine our international economic
[[Page S11999]]
competitiveness and economic security. Most regrettably, unilateral
sanctions have become a policy of first choice when other policy
alternatives exist.
Nonetheless, some economic sanctions are effective and, therefore,
must remain a tool of American foreign policy. Multilateral, unlike
unilateral, sanctions have frequently advanced American national
interests. The multilateral sanctions against Saddam Hussein following
Iraq's aggression against Kuwait have slowed down Iraq's weapons of
mass destruction program. Similarly, international sanctions aimed at
Serbia and the Federal Republic of Yugoslavia functioned to isolate
them diplomatically and protect United States and allied interests in
the Balkans. The international sanctions against apartheid in South
Africa in the 1980's had a significant influence on bringing about a
nonviolent peaceful transition in that country.
Finally, the broad consensus to oppose Soviet expansion through
export restraints on East-West trade in the Coordinating Committee, or
CoCom, proved to be enormously effective. Most economic sanctions,
whether unilateral or multilateral, must be in place for a long time
before they are effective and their success will almost always be
dependent upon extensive multilateral cooperation and compliance.
Nothing in our proposed legislation prohibits unilateral economic
sanctions. There are situations where other foreign policy options have
been exhausted and where the actions of others are so outrageous or so
threatening to the United States and our national interests that our
response, short of the use of force, must be firm and unambiguous. In
such instances, economic sanctions may be a useful instrument of
American foreign policy.
Mr. President, my proposed legislation is prospective. It will not
affect existing U.S. sanctions. It will apply only to unilateral
sanctions and to those sanctions intended to achieve foreign policy or
national security objectives. It would exclude, by definition, U.S.
trade laws, Jackson-Vanik and munitions list controls. It would not
address the complex and important issue of state and local sanctions
designed to achieve foreign policy goals, although these so-called
vertical sanctions are increasingly important features of American
foreign policy.
More specifically, Mr. President, this legislation seeks to establish
clear guidelines and informational requirements to help us understand
better the likely consequences of our actions before we opt to impose
economic sanctions. We should know in advance of voting on sanctions
legislation what our goals are, the anticipated economic, political and
humanitarian benefits and costs to the United States and
other countries, the possible impact on our reputation as a reliable
supplier, the other policy options that have been explored, and whether
the proposed sanctions are likely to contribute to achieving the
foreign policy objectives sought by legislation. Comparable
requirements are also in the bill for sanctions mandated by the
executive branch.
Once sanctions are implemented, the bill also requires an annual
report from the President detailing the degree to which sanctions have
accomplished U.S. goals, as well as their impact on our economic,
political and humanitarian interests, including our relations with
other countries.
The bill also provides for more active and timely consultations
between Congress and the President. It provides Presidential waiver
authority in emergencies or if he determines it is in the national
interest.
It includes a sunset provision that would terminate unilateral
economic sanctions after 2 years duration unless the Congress or the
President acts to reauthorize them.
It includes language on contract sanctity to help ensure the United
States is a reliable supplier.
It identifies U.S. agriculture as an especially vulnerable sector of
our economy that has borne a disproportionate burden stemming from U.S.
economic sanctions. Because of this, there is discretionary authority
for agricultural assistance in the bill. In addition, the bill opposes
agricultural embargoes as a foreign policy weapon and urges that
economic sanctions be targeted as narrowly as possible in order to
minimize harm to innocent people and humanitarian activities.
Mr. President, my sanctions reform bill represents an attempt to
develop an improved and comprehensive approach to an important foreign
policy issue. We, in the Congress, are often called upon to make
difficult choices between conflicting interests or among our core
values as a nation and our international interests.
These are frequently hard choices that should be given careful
attention and preceded by careful analysis. We should never turn our
back on our fundamental values of supporting democracy, human rights,
and basic freedoms abroad but we should ask whether we can alter the
behavior of other countries by imposing sanctions on them. Many times
we cannot do so and many times we exacerbate the very behavior we hope
to reverse. There is no magic formula for influencing the behavior of
other countries, but unilateral economic sanctions are rarely the
answer.
Nothing in this bill prevents the imposition of U.S. unilateral
economic sanctions or dictates a particular trade-off between American
core values and our commercial and other interests. The steps detailed
in this bill provide for better policy procedures so that consideration
of economic sanctions are preceded by a more deliberative process by
which the President and the Congress can make reasoned and balanced
choices affecting the totality of American values and interests.
Mr. President, I feel strongly about this issue. I hope my colleagues
will join the other original cosponsors by taking a close look at this
legislation. I welcome their support and believe that if we deal with
the sanctions issues in a careful and systematic manner, we can make a
significant positive contribution to our national interest.
Mr. President, I ask unanimous consent that additional material be
printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
S. 1413
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 ``Enhancement of Trade,
Security, and Human Rights through Sanctions Reform Act''.
SEC. 2. PURPOSE.
It is the purpose of this Act to establish an effective
framework for consideration by the legislative and executive
branches of unilateral economic sanctions.
SEC. 3. STATEMENT OF POLICY.
It is the policy of the United States--
(1) to pursue United States interests through vigorous and
effective diplomatic, political, commercial, charitable,
educational, cultural, and strategic engagement with other
countries, while recognizing that the national security
interests of the United States may sometimes require the
imposition of economic sanctions on other countries;
(2) to foster multilateral cooperation on vital matters of
United States foreign policy, including promoting human
rights and democracy, combating international terrorism,
proliferation of weapons of mass destruction, and
international narcotics trafficking, and ensuring adequate
environmental protection;
(3) to promote United States economic growth and job
creation by expanding exports of goods, services, and
agricultural commodities, and by encouraging investment that
supports the sale abroad of products and services of the
United States;
(4) to maintain the reputation of United States businesses
and farmers as reliable suppliers to international customers
of quality products and services, including United States
manufactures, technology products, financial services, and
agricultural commodities;
(5) to avoid the use of restrictions on exports of
agricultural commodities as a foreign policy weapon;
(6) to oppose policies of other countries designed to
discourage economic interaction with countries friendly to
the United States or with any United States national, and to
avoid use of such measures as instruments of United States
foreign policy; and
(7) when economic sanctions are necessary--
(A) to target them as narrowly as possible on those foreign
governments, entities, and officials that are responsible for
the conduct being targeted, thereby minimizing unnecessary or
disproportionate harm to individuals who are not responsible
for such conduct; and
(B) to the extent feasible, to avoid any adverse impact of
economic sanctions on the humanitarian activities of United
States and foreign nongovernmental organizations in a country
against which sanctions are imposed.
[[Page S12000]]
SEC. 4. DEFINITIONS.
As used in this Act:
(1) Unilateral economic sanction.--
(A) In general.--The term ``unilateral economic sanction''
means any restriction or condition on economic activity with
respect to a foreign country or foreign entity that is
imposed by the United States for reasons of foreign policy or
national security, including any of the measures described in
subparagraph (B), except in a case in which the United States
imposes the measure pursuant to a multilateral regime and the
other members of that regime have agreed to impose
substantially equivalent measures.
(B) Particular measures.--The measures referred to in
subparagraph (A) are the following:
(i) The suspension, restriction, or prohibition of exports
or imports of any product, technology, or service to or from
a foreign country or entity.
(ii) The suspension of, or any restriction or prohibition
on, financial transactions with a foreign country or entity.
(iii) The suspension of, or any restriction or prohibition
on, direct or indirect investment in or from a foreign
country or entity.
(iv) The imposition of increased tariffs on, or other
restrictions on imports of, products of a foreign country or
entity, including the denial, revocation, or conditioning of
nondiscriminatory (most-favored-nation) trade treatment.
(v) The suspension of, or any restriction or prohibition
on--
(I) the authority of the Export-Import Bank of the United
States to give approval to the issuance of any guarantee,
insurance, or extension of credit in connection with the
export of goods or services to a foreign country or entity;
(II) the authority of the Trade and Development Agency to
provide assistance in connection with projects in a foreign
country or in which a particular foreign entity participates;
or
(III) the authority of the Overseas Private Investment
Corporation to provide insurance, reinsurance, financing, or
conduct other activities in connection with projects in a
foreign country or in which a particular foreign entity
participates.
(vi) A requirement that the United States representative to
an international financial institution vote against any loan
or other utilization of funds to, for, or in a foreign
country or particular foreign entity.
(vii) A measure imposing any restriction or condition on
economic activity on any foreign government or entity on the
ground that such government or entity does business in or
with a foreign country.
(viii) A measure imposing any restriction or condition on
economic activity on any person that is a national of a
foreign country, or on any government or other entity of a
foreign country, on the ground that the government of that
country has not taken measures in cooperation with, or
similar to, sanctions imposed by the United States on a third
country.
(ix) The suspension of, or any restriction or prohibition
on, travel rights or air transportation to or from a foreign
country.
(x) Any restriction on the filing or maintenance in a
foreign country of any proprietary interest in intellectual
property rights (including patents, copyrights, and
trademarks), including payment of patent maintenance fees.
(C) Multilateral regime.--As used in this paragraph, the
term ``multilateral regime'' means an agreement, arrangement,
or obligation under which the United States cooperates with
other countries in restricting commerce for reasons of
foreign policy or national security, including--
(i) obligations under resolutions of the United Nations;
(ii) nonproliferation and export control arrangements, such
as the Australia Group, the Nuclear Supplier's Group, the
Missile Technology Control Regime, and the Wassenaar
Arrangement;
(iii) treaty obligations, such as under the Chemical
Weapons Convention, the Treaty on the Non-Proliferation of
Nuclear Weapons, and the Biological Weapons Convention; and
(iv) agreements concerning protection of the environment,
such as the International Convention for the Conservation of
Atlantic Tunas, the Declaration of Panama referred to in
section 2(a)(1) of the International Dolphin Conservation Act
(16 U.S.C. 1361 note), the Convention on International Trade
in Endangered Species, the Montreal Protocol on Substances
that Deplete the Ozone Layer, and the Basel Convention on the
Control of Transboundary Movements of Hazardous Wastes.
(D) Financial transaction.--As used in this paragraph, the
term ``financial transaction'' has the meaning given that
term in section 1956(c)(4) of title 18, United States Code.
(E) Investment.--As used in this paragraph, the term
``investment'' means any contribution or commitment of funds,
commodities, services, patents, or other forms of
intellectual property, processes, or techniques, including--
(i) a loan or loans;
(ii) the purchase of a share of ownership;
(iii) participation in royalties, earnings, or profits; and
(iv) the furnishing or commodities or services pursuant to
a lease or other contract.
(F) Exclusions.--The term ``unilateral economic sanction''
does not include--
(i) any measure imposed to remedy unfair trade practices or
to enforce United States rights under a trade agreement,
including under section 337 of the Tariff Act of 1930, title
VII of that Act, title III of the Trade Act of 1974, sections
1374 and 1377 of the Omnibus Trade and Competitiveness Act of
1988 (19 U.S.C. 3103 and 3106), and section 3 of the Act of
March 3, 1933 (41 U.S.C. 10b-1);
(ii) any measure imposed to remedy market disruption or to
respond to injury to a domestic industry for which increased
imports are a substantial cause or threat thereof, including
remedies under sections 201 and 406 of the Trade Act of 1974,
and textile import restrictions (including those imposed
under section 204 of the Agricultural Act of 1956 (7 U.S.C.
1784));
(iii) any action taken under title IV of the Trade Act of
1974, including the enactment of a joint resolution under
section 402(d)(2) of that Act;
(iv) any measure imposed to restrict imports of
agricultural commodities to protect food safety or to ensure
the orderly marketing of commodities in the United States,
including actions taken under section 22 of the Agricultural
Adjustment Act (7 U.S.C. 624);
(v) any measure imposed to restrict imports of any other
products in order to protect domestic health or safety;
(vi) any measure authorized by, or imposed under, a
multilateral or bilateral trade agreement to which the United
States is a signatory, including the Uruguay Round
Agreements, the North American Free Trade Agreement, the
United States-Israel Free Trade Agreement, and the United
States-Canada Free Trade Agreement; and
(vii) any export control imposed on any item on the United
States Munitions List.
(2) National emergency.--The term ``national emergency''
means any unusual or extraordinary threat, which has its
source in whole or substantial part outside the United
States, to the national security, foreign policy, or economy
of the United States.
(3) Agricultural commodity.--The term ``agricultural
commodity'' has the meaning given that term in section 102(1)
of the Agricultural Trade Act of 1978 (7 U.S.C. 5602(1)).
(4) Appropriate committees.--The term ``appropriate
committees'' means the Committee on Agriculture, the
Committee on International Relations, the Committee on Ways
and Means, and the Committee on Banking and Financial
Services of the House of Representatives, and the Committee
on Agriculture, Nutrition, and Forestry, the Committee on
Finance, and the Committee on Foreign Relations of the
Senate.
(5) Contract sanctity.--The term ``contract sanctity'',
with respect to a unilateral economic sanction, refers to the
inapplicability of the sanction to--
(A) a contract or agreement entered into before the
sanction is imposed, or to a valid export license or other
authorization to export; and
(B) actions taken to enforce the right to maintain
intellectual property rights, in the foreign country against
which the sanction is imposed, which existed before the
imposition of the sanction.
SEC. 5. GUIDELINES FOR UNILATERAL ECONOMIC SANCTIONS
LEGISLATION.
Any bill or joint resolution that imposes any unilateral
economic sanction, or authorizes the imposition of any
unilateral economic sanction by the executive branch, and is
considered by the House of Representatives or the Senate,
should--
(1) state the foreign policy or national security objective
or objectives of the United States that the economic sanction
is intended to achieve;
(2) provide that the economic sanction terminate 2 years
after it is imposed, unless specifically reauthorized by
Congress;
(3) provide for contract sanctity;
(4) provide authority for the President both to adjust the
timing and scope of the sanction and to waive the sanction,
if the President determines it is in the national interest to
do so;
(5)(A) target the sanction as narrowly as possible on
foreign governments, entities, and officials that are
responsible for the conduct being targeted; and
(B) seek to minimize any adverse impact on the humanitarian
activities of United States and foreign nongovernmental
organizations in any country against which the sanction may
be imposed; and
(6) provide, to the extent that the Secretary of
Agriculture or the Congressional Budget Office finds that--
(A) the proposed sanction is likely to restrict exports of
any agricultural commodity or is likely to result in
retaliation against exports of any agricultural commodity
from the United States, and
(B) the sanction is proposed to be imposed, or is likely to
be imposed, on a country or countries that constituted, in
the preceding calendar year, the market for more than 3
percent of all export sales from the United States of an
agricultural commodity,
that the Secretary of Agriculture expand agricultural export
assistance under United States market development, food
assistance, or export promotion programs to offset the likely
damage to incomes of producers of the affected agricultural
commodity or commodities, to the maximum extent permitted by
the obligations of the United States under the Agreement on
Agriculture referred to in section 101(d)(2) of the Uruguay
Round Agreements Act (19 U.S.C. 3511(d)(2)).
[[Page S12001]]
SEC. 6. REQUIREMENTS FOR BILL OR JOINT RESOLUTION.
(a) Public Comment.--Before considering a bill or joint
resolution that imposes any unilateral economic sanction, or
authorizes the imposition of any unilateral economic sanction
by the executive branch, the committee of primary
jurisdiction shall publish a notice which provides an
opportunity for interested members of the public to submit
comments to the committee on the proposed sanction.
(b) When Reports Requested.--The committee of primary
jurisdiction that orders reported a bill or joint resolution
described in section 5 shall timely request from the
President and the Secretary of Agriculture the reports
identified in subsection (c). Each such report that has been
timely submitted prior to the filing of the committee report
accompanying the bill or joint resolution shall be included
in the committee report. The committee report shall also
contain, if the bill or joint resolution does not meet any of
the guidelines specified in paragraphs (1) through (6) of
section 5, an explanation of why it does not.
(c) Reports.--
(1) Report by the president.--The President's report to
Congress under subsection (b) shall contain--
(A) an assessment of--
(i) the likelihood that the proposed unilateral economic
sanction will achieve its stated objective within a
reasonable period of time; and
(ii) the impact of the proposed unilateral economic
sanction on--
(I) humanitarian conditions, including the impact on
conditions in any specific countries on which the sanction is
proposed to be or may be imposed;
(II) humanitarian activities of United States and foreign
nongovernmental organizations;
(III) relations with United States allies;
(IV) other United States national security and foreign
policy interests; and
(V) countries and entities other than those on which the
sanction is proposed to be or may be imposed;
(B) a description and assessment of--
(i) diplomatic and other steps the United States has taken
to accomplish the intended objectives of the unilateral
sanction legislation;
(ii) the likelihood of multilateral adoption of comparable
measures;
(iii) comparable measures undertaken by other countries;
(iv) alternative measures to promote the same objectives,
and an assessment of their potential effectiveness;
(v) any obligations of the United States under
international treaties or trade agreements with which the
proposed sanction may conflict;
(vi) the likelihood that the proposed sanction will lead to
retaliation against United States interests, including
agricultural interests; and
(vii) whether the achievement of the objectives of the
proposed sanction outweighs any likely costs to United States
foreign policy, national security, economic, and humanitarian
interests, including any potential harm to United States
business, agriculture, and consumers, and any potential harm
to the international reputation of the United States as a
reliable supplier of products, technology, agricultural
commodities, and services.
(2) Report by the secretary of agriculture.--The Secretary
of Agriculture shall submit to the appropriate committees a
report which shall contain an assessment of--
(A) the extent to which any country or countries proposed
to be sanctioned or likely to be sanctioned are markets that
accounted for, in the preceding calendar year, more than 3
percent of all export sales from the United States of any
agricultural commodity;
(B) the likelihood that exports of agricultural commodities
from the United States will be affected by the proposed
sanction or by retaliation by any country proposed to be
sanctioned or likely to be sanctioned, and specific
commodities which are most likely to be affected;
(C) the likely effect on incomes of producers of the
specific commodities identified by the Secretary;
(D) the extent to which the proposed sanction would permit
foreign suppliers to replace United States suppliers; and
(E) the likely effect of the proposed sanction on the
reputation of United States farmers as reliable suppliers of
agricultural commodities in general, and of the specific
commodities identified by the Secretary.
(3) Federal private sector mandate.--
(A) In general.--Any bill or joint resolution that imposes
any unilateral economic sanction described in section 5 shall
be considered to include a Federal private sector mandate for
purposes of part B of title IV of the Congressional Budget
Act of 1974.
(B) Report by the congressional budget office.--The report
by the Congressional Budget Office pursuant to subparagraph
(A) shall include an assessment of the likely short-term and
long-term costs of the proposed sanction to the United States
economy, including the potential impact on United States
trade performance, employment, and growth, the international
reputation of the United States as a reliable supplier of
products, agricultural commodities, technology, and services,
and the economic well-being and international competitive
position of United States industries, firms, workers,
farmers, and communities.
SEC. 7. REQUIREMENTS FOR EXECUTIVE ACTION.
(a) In General.--The President may implement a unilateral
economic sanction under any provision of law not less than 60
days after announcing his intention to do so.
(b) Consultation.--The President shall consult with the
appropriate committees regarding the proposed unilateral
economic sanction, including consultations regarding efforts
to achieve or increase multilateral cooperation on the issues
or problems prompting the proposed sanction.
(c) Public Hearings; Record.--The President shall publish a
notice in the Federal Register of the opportunity for
interested persons to submit comments on the proposed
unilateral economic sanction.
(d) Guidelines for Executive Branch Sanctions.--Any
unilateral economic sanction imposed by the President--
(1) shall--
(A) include a clear finding that the sanction is likely to
achieve a specific United States foreign policy or national
security objective within a reasonable period of time, which
shall be specified, and that the achievement of the
objectives of the sanction outweighs any costs to United
States national interests;
(B) provide for contract sanctity;
(C) terminate not later than 2 years after the sanction is
imposed, unless specifically extended by the President in
accordance with the procedures of this section;
(D)(i) be targeted as narrowly as possible on foreign
governments, entities, and officials that are responsible for
the conduct being targeted; and
(ii) seek to minimize any adverse impact on the
humanitarian activities of United States and foreign
nongovernmental organizations in a country against which the
sanction may be imposed; and
(2) should provide, to the extent that the Secretary of
Agriculture finds that--
(A) a unilateral economic sanction is likely to restrict
exports of any agricultural commodity from the United States
or is likely to risk retaliation against exports of any
agricultural commodity from the United States, and
(B) the sanction is proposed to be imposed, or is likely to
be imposed, on a country or countries that constituted, in
the preceding calendar year, the market for more than 3
percent of all export sales from the United States of an
agricultural commodity,
that the Secretary of Agriculture expand agricultural export
assistance under United States market development, food
assistance, or export promotion programs to offset the likely
damage to incomes of producers of the affected agricultural
commodity or commodities, to the maximum extent permitted by
law and by the obligations of the United States under the
Agreement on Agriculture referred to in section 101(d)(2) of
the Uruguay Round Agreements Act (19 U.S.C. 3511(d)(2)).
(e) Report by the President.--Prior to imposing any
unilateral economic sanction, the President shall provide a
report to the appropriate committees on the proposed
sanction. The report shall include the report of the
International Trade Commission under subsection (g) (if
timely submitted prior to the filing of the report). The
President's report shall contain the following:
(1) An explanation of the foreign policy or national
security objective or objectives intended to be achieved
through the proposed sanction.
(2) An assessment of--
(A) the likelihood that the proposed unilateral economic
sanction will achieve its stated objectives within the stated
period of time; and
(B) the impact of the proposed unilateral economic sanction
on--
(i) humanitarian conditions, including the impact on
conditions in any specific countries on which the sanctions
are proposed to be imposed;
(ii) humanitarian activities of United States and foreign
nongovernmental organizations;
(iii) relations with United States allies;
(iv) other United States national security and foreign
policy interests; and
(v) countries and entities other than those on which the
sanction is proposed to be imposed.
(3) A description and assessment of--
(A) diplomatic and other steps the United States has taken
to accomplish the intended objectives of the proposed
sanction;
(B) the likelihood of multilateral adoption of comparable
measures;
(C) comparable measures undertaken by other countries;
(D) alternative measures to promote the same objectives,
and an assessment of their potential effectiveness;
(E) any obligations of the United States under
international treaties or trade agreements with which the
proposed sanction may conflict;
(F) the likelihood that the proposed sanction will lead to
retaliation against United States interests, including
agricultural interests; and
(G) whether the achievement of the objectives of the
proposed sanction outweighs any likely costs to United States
foreign policy, national security, economic, and humanitarian
interests, including any potential harm to United States
business, agriculture, and consumers, and any potential harm
to the international reputation of the United States as a
reliable supplier of products, technology, agricultural
commodities, and services.
[[Page S12002]]
(f) Report by the Secretary of Agriculture.--Prior to the
imposition of a unilateral economic sanction by the
President, the Secretary of Agriculture shall submit to the
appropriate committees a report which shall contain an
assessment of--
(1) the extent to which any country or countries proposed
to be sanctioned are markets that accounted for, in the
preceding calendar year, more than 3 percent of all export
sales from the United States of any agricultural commodity;
(2) the likelihood that exports of agricultural commodities
from the United States will be affected by the proposed
sanction or by retaliation by any country proposed to be
sanctioned, including specific commodities which are most
likely to be affected;
(3) the likely effect on incomes of producers of the
specific commodities identified by the Secretary;
(4) the extent to which the proposed sanction would permit
foreign suppliers to replace United States suppliers; and
(5) the likely effect of the prosed sanction on the
reputation of United States farmers as reliable suppliers of
agricultural commodities in general, and of the specific
commodities identified by the Secretary.
(g) Report by the United States International Trade
Commission.--Before imposing a unilateral economic sanction,
the President shall make a timely request to the United
States International Trade Commission for a report on the
likely short-term and long-term costs of the proposed
sanction to the United States economy, including the
potential impact on United States trade performance,
employment, and growth, the international reputation of the
United States as a reliable supplier of products,
agricultural commodities, technology, and services, and the
economic well-being and international competitive position of
United States industries, firms, workers, farmers, and
communities.
(h) Waiver in Case of National Emergency.--The President
may waive any of the requirements of subsections (a), (b),
(c), (e), (f), and (g), in the event that the President
determines that there exists a national emergency that
requires the exercise of the waiver. In the event of such a
waiver, the requirements waived shall be met during the 60-
day period immediately following the imposition of the
unilateral economic sanction, and the sanction shall
terminate 90 days after being imposed unless such
requirements are met. The President may waive any of the
requirements of paragraphs (1)(B), (1)(D), and (2) of
subsection (d) in the event that the President determines
that the unilateral economic sanction is related to actual or
imminent armed conflict involving the United States.
(i) Sanctions Review Committee.--The President shall
establish a Sanctions Review Committee to coordinate United
States policy regarding unilateral economic sanctions and to
provide appropriate recommendations to the President prior to
decisions regarding such sanctions. The Committee shall be
comprised of--
(1) the Secretary of State;
(2) the Secretary of the Treasury;
(3) the Secretary of Defense;
(4) the Secretary of Agriculture;
(5) the Secretary of Commerce;
(6) the Secretary of Energy;
(7) the United States Trade Representative;
(8) the Director of the Office of Management and Budget;
(9) the Chairman of the Council of Economic Advisers;
(10) the Assistant to the President for National Security
Affairs; and
(11) the Assistant to the President for Economic Policy.
(j) Inapplicability of Other Provisions.--This section
applies notwithstanding any other provision of law.
SEC. 8. ANNUAL REPORTS.
(a) Annual Report.--Not later than 6 months after the date
of enactment of this Act, and annually thereafter, the
President shall submit to the appropriate committees a report
detailing with respect to each country or entity against
which a unilateral economic sanction has been imposed--
(1) the extent to which the sanction has achieved foreign
policy or national security objectives of the United States
with respect to that country or entity;
(2) the extent to which the sanction has harmed
humanitarian interests in that country, the country in which
that entity is located, or in other countries; and
(3) the impact of the sanction on other national security
and foreign policy interests of the United States, including
relations with countries friendly to the United States, and
on the United States economy.
(b) Report by the United States International Trade
Commission.--Not later than 6 months after the date of
enactment of this Act, and annually thereafter, the United
States International Trade Commission shall report to the
appropriate committees on the costs, individually and in the
aggregate, of all unilateral economic sanctions in effect
under United States law, regulation, or Executive order. The
calculation of such costs shall include an assessment of the
impact of such measures on the international reputation of
the United States as a reliable supplier of products,
agricultural commodities, technology, and services.
____
Enhancement of Trade, Security and Human Rights Through Sanctions
Reform Act--Section-by-Section Analysis
Section 1: Short Title. The act may be cited as the
``Enhancement of Trade, Security and Human Rights through
Sanctions Reform Act.''
Section 2: Purpose. The purpose of the Act is to establish
an effective framework for consideration of unilateral
economic sanctions.
Section 3: Statement of Policy. This section sets forth
U.S. policy to pursue American security, trade, and
humanitarian interests through broad-ranging engagement with
other countries, while recognizing the need at times to
impose sanctions as a last resort. It supports multilateral
cooperation as an alternative to unilateral U.S. sanctions.
It seeks to promote U.S. economic growth through trade and to
maintain America's reputation as a reliable supplier. It
opposes boycotts and use of agricultural embargoes as a
foreign policy weapon. It urges that economic sanctions be
targeted as narrowly as possible, to minimize harm to
innocent people or to humanitarian activities.
Section 4: Definitions. This section defines ``unilateral
economic sanction'' as any restriction or condition on
economic activity with respect to a foreign country or entity
imposed for reasons of foreign policy or national security.
This definition excludes multilateral sanctions, where other
countries have agreed to adopt ``substantially equivalent''
measures. The definition also excludes U.S. trade laws,
Jackson-Vanik, and munitions list controls. This section also
defines the terms ``national emergency,'' ``agricultural
commodity,'' ``appropriate committees,'' and ``contract
sanctity.''
Section 5: Guidelines for Unilateral Economic Sanctions
Legislation. This section provides that any bill or joint
resolution imposing or authorizing a unilateral economic
sanction should state the U.S. foreign policy or national
security objective, sunset after two years unless
specifically reauthorized, protect contract sanctity, provide
Presidential authority to adjust or waive the sanction in the
national interest, target the sanction as narrowly as
possible against the parties responsible for the offending
conduct, and provide for expanded export promotion if
sanctions target a major export market for American farmers.
Section 6: Requirements for Report Accompanying the Bill.
The committee reporting sanctions legislation shall request
reports from the President and Secretary of Agriculture.
These reports shall be included in the committee report. If
the legislation does not meet any Section 5 guideline, the
committee report shall explain why not.
The President's report shall contain an assessment of the
likelihood that the proposed sanction will achieve its stated
objective within a reasonable time. It must weigh the likely
foreign policy, national security, economic, and humanitarian
benefits against the costs of acting unilaterally. The report
will also assess alternatives, such as prior diplomatic and
other U.S. steps and comparable multilateral measures.
The Secretary of Agriculture's report shall assess the
likely extent of the proposed legislation in terms of market
share in affected countries, the likelihood that U.S.
agricultural exports will be affected on the reputation of
U.S. farmers as reliable suppliers.
Section 6 also considers unilateral sanctions as unfunded
federal mandates for purposes of the Unfunded Mandates Act.
The Congressional Budget Office shall assess the likely
short- and long-term cost of the proposed sanctions to the
U.S. economy.
Section 7: Requirements for Executive Action. The President
may impose a unilateral sanction no less than 60 days after
announcing his intention to do so, during which time he shall
consult with Congressional committees and publish a notice in
the Federal Register seeking public comment. Any Executive
sanction must meet the same guidelines that Section 5 applies
to the Congress and must, in addition, include a clear
finding that the sanction is likely to achieve a specific
U.S. foreign policy or national security objective within a
reasonable--and specified--period of time.
Section 7 also requires--prior to the imposition of a
unilateral sanction--the President and the Secretary of
Agriculture to provide to the appropriate Congressional
committees reports that contain the same assessment as
required in the reports described in Section 6. The President
shall also request a report by the U.S. International Trade
Commission on the likely short- and long-term costs of the
proposed sanctions to the U.S. economy, including the
potential impact on U.S. competitiveness.
In case of national emergency, the bill allows the
President temporarily to waive most Section 7 requirements in
order to act immediately. If the President acts on an
emergency basis, the waived requirements must be met within
sixty days. Finally, the President shall establish an
interagency Sanctions Review Committee to improve
coordination of U.S. policy regarding unilateral sanctions.
Section 8: Annual Report. The President must submit to the
appropriate committees a report each year detailing the
extent to which sanctions have achieved U.S. objectives, as
well as their impact on humanitarian and other U.S.
interests, including relations with friendly countries. The
U.S. International Trade Commission shall report to the
Congress on the costs, individually and in the aggregate, of
all unilateral economic sanctions in effect under U.S. law,
regulation, or Executive order, including the impact on U.S.
competitiveness.
[[Page S12003]]
______
By Mr. McCAIN (for himself, Mr. Hollings, Mr. Breaux, and Mr.
Gorton):
S. 1415. A bill to reform and restructure the processes by which
tobacco products are manufactured, marketed, and distributed, to
prevent the use of tobacco products by minors, to redress the adverse
health effects of tobacco use, and for other purposes; to the Committee
on Commerce, Science, and Transportation.
the universal tobacco settlement act
Mr. McCAIN. Mr. President, I am pleased today to introduce the
Universal Tobacco Settlement Act. This bill is cosponsored by the
Commerce Committee Ranking Member Senator Hollings, Senator Gorton, and
Senator Breaux.
Mr. President, the bill we are introducing today is the legislative
version of the Universal Tobacco Settlement agreed upon by the
attorneys general and the tobacco companies. We hope it will serve as
the basis of discussion and amendment here in the Senate.
I want briefly to discuss what this bill is and is not. It is the
basis for hearings, discussion, and amendment. After this bill is
introduced, I will ask consent to have it jointly referred to various
committees of jurisdiction for consideration. As the chairman of the
Commerce Committee, I intend to hold extensive hearings on this bill
and use it as the vehicle for amendment.
First, let me emphasize that this legislation was drafted by Senate
legislative counsel who was requested to write a bill that would
implement and mirror the universal tobacco agreement without any
direction or input from Members and without any alteration from the
agreement.
The substance of the bill is not perfect, complete, comprehensive, or
legislation that could ever be signed into law without considerable
debate and amendments. None of the cosponsors endorse this bill as
being the answer to our Nation's problem with tobacco-related death and
illness. But it can and should serve as a basis to began negotiations
between all concerned parties.
The bipartisan group of attorneys general and the tobacco companies
deserve praise for developing this language. I know it was not easy.
But much more needs to be done. The Universal Tobacco Settlement
Agreement presents more questions than it answers. That is why we must
move the legislative process forward and begin debating substantive
language.
I had hoped that the administration would send the Congress
legislation in this area. I would have liked for the Congress to begin
considering the proposals developed and advocated by the White House.
Unfortunately, the White House chose not to take such action. As a
result, I have chosen to begin this discussion with attorneys general
agreement.
There has been one addition to the settlement developed by the
attorneys general. The universal tobacco settlement did not address the
issue of tobacco farmers and the communities whose existence and
economy depends on the growing of tobacco. To address this concern, a
new title IX has been added to the bill. The text of title IX is the
language of S. 1310, legislation introduced by Senator Ford. It is my
hope that with the addition of this language to the bill, we can begin
the comprehensive debate necessary on this subject.
Mr. President, let there be no mistake, the Senate takes its role in
this matter very seriously. Millions of lives have been lost and
millions more will follow. Every day 3,000 young adults and children
begin smoking. We cannot and should not allow this to continue. With
the introduction of this bill we will begin this debate and I am
hopeful that by early next year we can move forward on the floor on
this matter.
______
By Mr. McCONNELL:
S. 1416. A bill to amend Federal election laws to repeal the public
financing of national political party conventions and Presidential
elections and spending limits on Presidential election campaigns, to
repeal the limits on coordinated expenditures by political parties, and
for other purposes; to the Committee on Finance.
the presidential campaign reform act of 1997
Mr. McCONNELL. Mr. President, the Governmental Affairs hearings
investigating the 1996 Presidential election affirmed what
knowledgeable observers have contended for years--that the Presidential
campaign finance system of spending limits and taxpayer funding is a
fraud.
Not soon forgotten will be the seamy videos of the White House coffee
fundraisers in which the President was caught on tape extolling the
virtues of circumventing the Presidential system's contribution and
spending limits, via soft money contributions to the DNC--that once
proud institution hijacked by the Clinton-Gore campaign bent on
reelection in 1996. The 1996 Clinton-Gore reelection campaign took
campaign finance chicanery to new heights, or lows, depending on your
perspective.
Mr. President, I am no fan of spending limits so am not without
sympathy for those who must campaign under them. The Presidential
system, while technically voluntary, presents a Hobson's choice to
those contemplating a campaign. Candidates can choose between
compliance with arbitrary and severe spending limits, burdensome
regulatory requirements, and the prospect of years of FEC audits or
trying to mount a credible campaign under the severe constraints of
outdated contribution limits.
It's difficult enough to mount a statewide Senate campaign with
individual contributions limited to $1,000 a pop. Conducting a
nationwide effort under the same contribution limits must be a
nightmare. It requires, at the least, a Herculean effort, unless a
candidate has the good fortune to have a fortune sufficient to bankroll
their own campaign out of their own pocket. So I might be inclined to
cut the President and Vice President some slack for this particular
malfeasance--they have so many fundraising misdeeds to account for this
one got lost in the shuffle until recently. I might cut them some slack
if they were not such shameless hypocrites, portraying themselves as
victims of the system and America's biggest fans of reform, when they
aren't pleading incompetence.
``William J. Clinton'' signed a letter, addressed to the Chairman of
the Federal Election Commission, on October 13, 1995, in which the
President agreed to comply with the Presidential system's limits in
exchange for which the Clinton-Gore campaign would receive taxpayer
dollars. All told, the Clinton-Gore campaign received $75 million for
the primary and general elections in 1996. The Democratic National
Committee received over $12 million for its convention extravaganza in
Chicago. It was a lie.
The Clinton-Gore campaign took the money--$75 million from the U.S.
Treasury--and never had any intention of confining their campaign to
the spending limits. The Presidential system, from its inception, has
been a bad joke on the American taxpayers, limiting neither spending,
nor so-called ``special interests,'' as its creators--self-styled
reformers--said it would.
Unwilling to concede that their utopian reform vision has become a
taxpayer-funded debacle worthy only of dismantling, the inside-the-
beltway reform industry agitates instead for even more restrictions--on
the party committees and independent groups. It would be like putting
band-aids on the Titanic, and unconstitutional, to boot.
The reform dream is the taxpayers' nightmare. Over $1 billion has
been squandered on the Presidential system. It is an entitlement
program for politicians. And a boondoggle for the likes of fringe
candidates such as Lenora Fulani and Lyndon LaRouche who have flocked
to the Presidential campaign entitlement program, like moths to a
flame.
Even Ross Perot's Reform Party has gotten into the act--as the Texas
billionaire received $30 million from the U.S. Treasury last year for
his campaign. An irony is that the Perot Reform Party's partaking of
taxpayer funds from the Presidential system coffers will be the straw
that breaks the camel's back in 2000. The Reform Party is going to
bleed the reform dream dry if it takes what it will be entitled to in
primary matching, convention, and general election funding. This is the
gist of a recent FEC staff report on the fund's prospects for the 2000
campaign.
At the outset of the 2000 Presidential primaries, the Presidential
fund will be so near bankruptcy that candidates will be able to receive
only a tiny fraction of what they are entitled to. FEC
[[Page S12004]]
staff predict this dearth of funding will prompt some candidates to opt
out of the Presidential spending limit system altogether. Where would
such an exodus leave the competitive field? The candidates would still
be stuck with the quarter-century old contribution limits, bestowing a
tremendous advantage on those select few who have a huge donor base
from which to draw or the wherewithal to fund a campaign out of their
own pocket.
This is a very real campaign finance crisis--a Presidential system on
the edge of oblivion and a wide-open contest looming in the year 2000.
So I rise today to introduce a bill to reform the Presidential system--
the object of so much scandal and scorn. This reform legislation would
repeal the Presidential system's spending limits and taxpayer funding.
It would save the American taxpayers hundreds of millions of dollars
every election. To compensate for the loss of taxpayer funding and make
the system more realistic, the contribution limit for Presidential
candidates would be adjusted to $10,000, up from the current $1,000.
The PAC limit would also be adjusted up to $10,000.
It would also strengthen the political parties by updating the hard
money contribution limits regulating donations to them. These limits
are a quarter-century old and long overdue for adjustments. Candidates
and political parties should not be shackled in the year 2000 with
circa-1970's contribution limits. The bill would also do what the
Supreme Court talked about doing in the 1996 Colorado decision and is
likely to do in the near future: abolish the coordinated spending
limit. This arbitrary restriction on what parties can do in
coordination with their nominees is absurd. The parties prefer to
operate in hard money over soft money. These reforms would facilitate
that activity.
Mr. President, these are commonsense reforms that would enhance
competition and increase accountability in Presidential elections. In
the interest of heading off a complete breakdown of the Presidential
system in 2000, I urge Senators to step away from the traditional
reform paradigm and join me in this effort.
______
By Mr. AKAKA (for himself, Mr. Craig, and Ms. Landrieu):
S. 1418. A bill to promote the research, identification, assessment,
exploration, and development of methane hydrate resources, and for
other purposes; to the Committee on Energy and Natural Resources.
the methane hydrate research and development act of 1997
Mr. AKAKA. Mr. President, on behalf of myself and Senators Craig and
Landrieu, I am introducing the Methane Hydrate Research and Development
Act of 1997.
Methane hydrate is a methane-bearing, ice-like substance that occurs
in abundance in marine sediments. It is a crystalline solid of methane
molecules surrounded by a structure of water molecules.
Methane hydrates are stable at moderately high pressures and low
temperatures and contain large quantities of methane. One unit volume
of methane hydrate contains more than 160 volumes of methane at
standard temperature and pressure.
Methane hydrates are found in deep ocean sediments. Significant
quantities are also found in the permafrost of Alaska, Canada, and
Siberia.
Despite their potential as an energy resource, methane hydrates have
not received the attention they deserve. We are only beginning to
understand the magnitude of this potential resource. The amount of
methane sequestered in gas hydrates is enormous. Worldwide estimates
range from 100,000 trillion cubic feet to 270 million trillion cubic
feet. Locations of known methane hydrate deposits within the Untied
States include the Arctic, the seabed adjacent to northern California,
the Gulf of Mexico, and the Eastern Seaboard.
A conservative estimate of deposits under U.S. jurisdiction is 2,700
trillion cubic feet to seven million trillion cubic feet of gas. A
recent U.S. Geological Survey analysis indicates the presence of over
500 trillion cubic feet of methane at the Black Ridge site off the
coast of Carolinas alone. When you consider that current U.S.
consumption is less than 25 trillion cubic feet of natural gas per
year, you begin to appreciate the magnitude of this energy resource.
The U.S. energy outlook is perilous at best. Our dependence on
imported oil is steadily increasing. Soon we will import over 60
percent of the oil we consume. Air pollution is a persistent problem.
We are spending enormous resources to improve air quality. Global
climate change poses a looming challenge. With these concerns in mind,
it is easy to recognize the importance of methane hydrates.
Methane hydrates are a strategic resource because they contain huge
amounts of methane in a concentrated form. Extracted methane from
hydrates represents an extraordinarily large energy resource and
petrochemical feedstock. Methane is less polluting than other
hydrocarbons because of its higher hydrogen-to-carbon ratio. Given the
concerns about global climate change, a transition to methane as an
energy resource is an attractive solution.
The U.S. is not doing enough to explore this viable energy source.
Other countries, primarily Japan and India, have aggressive programs to
develop methane hydrates. Japan has launched an exploration project for
methane hydrates in its surrounding waters. The Japanese National Oil
Corporation is conducting a seismic survey off Hokkaido Island and will
drill test wells in two locations in 1999. Commercial production is
planned for 2010. About six trillion cubic meters of methane hydrates
can be found in the seabed near Japan. Recovery of one-tenth of this
reserve could yield about 100 years supply of natural gas for Japan.
As part of its plan to boost natural gas resources, the Oil Industry
Development Board of India has earmarked $56 million for a program of
methane hydrates research and development. We cannot be left behind
these and other nations in the race to develop this important energy
resource.
Science News recently published an article summarizing the hopes and
hazards associated with methane hydrates. Mr. President, I ask
unanimous consent that a copy of this article be printed in the Record.
This is an exciting area of research and of new knowledge. It has an
enormous payoff, not only for our energy security, but also for the
global environment.
My bill establishes a small research and development program with the
potential for major payback. It would direct the Department of Energy
to conduct research and development in collaboration with the Naval
Research Laboratory and the U.S. Geological Survey. The Secretary of
Energy would also consult with other Federal and State agencies,
industry, and academia. It directs the Department to conduct research
on, and identify, explore, assess, and develop methane hydrate
resources as a source of energy. It also directs the Department to
develop technologies needed to develop methane resources in an
environmentally sound manner. It provides for research to develop safe
means of transportation and storage of methane produced from methane
hydrates. To alleviate the concerns related to releases of methane, the
legislation directs the Department to undertake research to assess and
mitigate hydrate degassing, both natural and that associated with
commercial development. It requires the Department to develop
technologies to reduce the risk of drilling through the gas hydrates.
And finally, it provides for the training of scientists and engineers
that would be needed for this new and exciting field on endeavor.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
S. 1418
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 ``Methane Hydrate Research and
Development Act of 1997''.
SEC. 2. DEFINITIONS.
In this Act:
(1) Contract.--The term ``contract'' means a procurement
contract within the meaning of 6303 of title 31, United
States Code.
(2) Cooperative agreement.--The term ``cooperative
agreement'' means a cooperative agreement within the meaning
of section 6305 of title 31, United States Code.
[[Page S12005]]
(3) Grant.--The term ``grant'' means a grant agreement
within the meaning of section 6304 of title 31, United States
Code.
(4) Methane hydrate.--The term ``methane hydrate'' means a
methane clathrate that--
(A) is in the form of a methane-water ice-like crystalline
material; and
(B) is stable and occurs naturally in deep-ocean and
permafrost areas.
(5) Secretary.--The term ``Secretary'' means the Secretary
of Energy.
(6) Secretary of Defense.--The term ``Secretary of
Defense'' means the Secretary of Defense, acting through the
Secretary of the Navy.
(7) Secretary of the Interior.--The term ``Secretary of the
Interior'' means the Secretary of the Interior, acting
through the Director of the United States Geological Survey.
SEC. 3. METHANE HYDRATE RESEARCH AND DEVELOPMENT PROGRAM.
(a) In General.--
(1) Commencement of program.--Not later than 180 days after
the date of enactment of this Act, the Secretary, in
consultation with the Secretary of Defense and the Secretary
of the Interior, shall commence a program of methane hydrate
research and development.
(2) Designations.--The Secretary, Secretary of Defense, and
Secretary of the Interior shall designate individuals to
implement this Act.
(3) Meetings.--The individuals designated under paragraph
(2) shall meet not less frequently than every 120 days to
review the progress of the program under paragraph (1) and
make recommendations on future activities.
(b) Grants, Contracts, and Cooperative Agreements.--
(1) Assistance and coordination.--The Secretary may award
grants or contracts to, or enter into cooperative agreements
with, universities and industrial enterprises to--
(A) conduct basic and applied research to identify,
explore, assess, and develop methane hydrate as a source of
energy;
(B) assist in developing technologies required for
efficient and environmentally sound development of methane
hydrate resources;
(C) undertake research programs to provide safe means of
transport and storage of methane produced from methane
hydrates;
(D) promote education and training in methane hydrate
resources research and resource development;
(E) conduct basic and applied research to assess and
mitigate the environmental impacts of hydrate degassing, both
natural and that associated with commercial development; and
(F) develop technologies to reduce the risks of drilling
through methane hydrates.
(2) Consultation.--The Secretary may establish an advisory
panel consisting of experts from industry, academia, and
Federal agencies to advise the Secretary on potential
applications of methane hydrate and assist in developing
recommendations and priorities for the methane hydrate
research and development program carried out under this
section.
(c) Limitations.--
(1) Administrative expenses.--Not more than 5 percent of
the amount made available to carry out this section for a
fiscal year may be used by the Secretary for expenses
associated with the administration of the program subsection
(a)(1).
(2) Construction costs.--None of the funds made available
to carry out this section may be used for the construction of
a new building or the acquisition, expansion, remodeling, or
alteration of an existing building (including site grading
and improvement and architect fees.)
(d) Responsibilities of the Secretary.--In carrying out
subsection (b)(1), the Secretary shall--
(1) facilitate and develop partnerships among government,
industry, and academia to research, identify, assess, and
explore methane hydrate resources;
(2) undertake programs to develop basic information
necessary for promoting long-term interest in methane hydrate
resources as an energy source;
(3) ensure that the data and information developed through
the program are accessible and widely disseminated as needed
and appropriate;
(4) promote cooperation among agencies that are developing
technologies that may hold promise for methane hydrate
resource development; and
(5) report annually to Congress on accomplishments under
this Act.
SEC. 4. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated such sums as are
necessary to carry out this Act.
____
[From the Science News, Vol. 150, Nov. 9, 1996]
The Mother Lode of Natural Gas
(By Richard McNastersky)
For kicks, oceanographer William P. Dillon likes to
surprise visitors to his lab by taking ordinary-looking ice
balls and setting them on fire.
``They're easy to light. You just put a match to them and
they will go,'' says Dillon, a researcher with the U.S.
Geological Survey (USGS) in Woods Hole, Mass.
If the truth be told, this is not typical ice. The prop in
Dillon's show is a curious and poorly known structure called
methane hydrate. Unlike ordinary water ice, methane hydrate
consists of single molecules of natural gas trapped within
crystalline cages formed by frozen water molecules. Although
chemists first discovered gas hydrates in the early part of
the 19th century, geoscientists have only recently started
documenting their existence in underground deposits and
exploring their importance as potential fuel.
Late last year a team of oceanographers conducted the most
in-depth investigation of methane hydrates to date by
drilling into an extensive accumulation beneath the seabed
off the coast of the southeastern United States. The results
of this research, which are now beginning to appear in the
scientific literature, seem to bolster extremely sketchy
estimates made years ago about the vastness of the hydrate
resource.
``It turns out there is a tremendous amount of gas down
there,'' says Charles Paull, a marine geologist at the
University of North Carolina at Chapel Hill and a leader of
the recent drilling expedition. ``It shores up the fact that
these are large reserves and makes it increasingly important
that they get assessed in terms of whether they are energy-
producing deposits or not.''
At the same time, scientists wonder whether this resource
also has a dark side. ``There have been extremely rapid
changes in climate in the past. Some think that these were
caused by methane released from methane hydrate,'' says
Dillon.
Despite their potential importance, methane hydrates have
evaded scientific scrutiny until now, largely because they
are extremely difficult to study. They exist only where high
pressures and low temperatures squeeze water and methane into
a solid form.
Most known deposits of methane hydrate lie below the
seafloor in regions that slope from the continents to the
deep ocean basins thousands of meters underwater. Marine
geologists have tentatively identified deposits off the
coasts of Costa Rica, New Jersey, Oregon, Japan, India, and
hundreds of other sites around the globe. Petroleum companies
have also encountered hydrates while drilling through Arctic
pernafrost in Siberia, Alaska, and Canada.
Like vampires, hydrates disintegrate quickly if pulled from
their dark lair. When researchers on the recent drilling
expedition hauled up cores of sediment from the ocean floor,
the drastic reduction in pressure caused much of the hydrate
to melt before it even reached the ship. Without unusual
precautions, any remaining hydrate fizzed away when the
scientists cut open the core.
``Gas hydrates have largely escaped traditional geologic
observation because gas hydrates and humans are sort of
incompatible. The gas hydrates decompose under the conditions
[in which] people traditionally analyze cores. Conversely,
humans have no experience in operating in the conditions
where gas hydrates are stable. We die under the conditions of
gas hydrate stability,'' says Paull.
Oceanographers first drilled through methane hydrates
unintentionally, on an expedition in 1970. Although that
encounter was uneventful, research drilling cruises purposely
avoided suspected hydrate deposits for 2 decades afterward,
fearing they might hit an overpressureized pocket of gas,
which could blast away the drilling equipment. Concerns over
pressurized gas gradually diminished, and mounting scientific
curiosity emboldened researchers to try boring through more
hydrate fields. Starting in 1992, the International Ocean
Drilling Program (ODP) intentionally breached hydrate
deposits several times without incident.
On the recent expedition, Paull and his colleagues drilled
at three sites along the Blake Ridge, a large, submerged
promontory 330 kilometers off the southeast coast of the
United States. Working in water depths of 2,800 meters, the
researchers penetrated 700 meters below the seafloor with
a hollow drill bit that cuts away a core of sediment the
diameter of a soda can.
The investigators had to take special precautions to
prevent losing methane-hydrate during the 10 minutes it too
to haul fresh sections of core up from the ocean bottom. At
various depths, they sealed small bits of core in pressurized
barrels, thereby containing the gas until the core reached
shipboard laboratories. These samples provided the first
direct measurements of how much methane-hydrate exists at
different depths beneath the seafloor.
``The amount of hydrate down there is much higher than has
previously been estimated says Paull. ``It was not uncommon
to go from 10 liters up to 30 liters of gas per liter of
sediment.''
The researchers also measured, for the first time, large
amounts of free gas trapped beneath the frozen hydra-
deposits. The volume of gas was far more than expected,
exceeding even the amount within the frozen layer, says
Paull.
Although the exact origin of hydrate remains unknown, Paull
and others suspect that bacteria within the sediment consume
rich organic material and generate methane gas. At a certain
depth beneath the seafloor, the low temperatures and high
pressures ensnare the gas within the frozen hydrate
structures. Methane below the hydrate layer remains in
gaseous form because the temperatures there are too high to
support freezing.
Conventional deposits of methane, a natural gas, form
through a different process, when seafloor sediments are
buried far deeper. Exposed to much higher temperatures, the
organic material the sediments simmers until it transforms
into petroleum and eventually methane.
[[Page S12006]]
Nearly a decade ago, several researchers independently
tried to estimate how much methane exists in hydrate
deposits. Because of the scarcity of direct hyro-measurements
at the time, the estimate rested on indirect seismic studies
which probe the ocean bottom sediments with blasts of sound
that reflect off hidden layers.
These studies suggested that global hydrate deposits
contain approximately 10,000 gigatons, or 10 tons, of carbon.
That number represents double the combined amount in all
reserves of coal, oil, and conventional natural gas.
The newly emerging evidence, supports these rough
approximations, says Gordon J. MacDonald, one of the
scientists who made the calculations in the 1980s. ``All
these estimates are quite uncertain. But it remains
abundantly clear that methane hydrates contain the largest
store of carbon that we know about that is underground,''
says MacDonald, who now directs the International Institute
for Applied Systems Analysis in Laxenburg, Austria.
In fact, hydrates may be more widespread than previously
thought. The recent ODP expedition found hydrates in regions
that lack the seismically reflective layers usually used to
identify potential deposits, the team reports in the Sept. 27
Science.
``Given their worldwide distribution and their very large
quantities, they make a very attractive energy source,
provided that one can bring the gas up at somewhere near
market price,'' MacDonald says. The cost of accessing
hydrates has served as a barrier in the past, but some
energy-hungry nations lacking conventional fossil fuels are
extremely interested in future use of hydrates.
Japan plans to drill exploratory wells in the next few
years, first on land in Alaska and then in Japanese waters.
The Japanese National Oil Company is currently negotiating
with the U.S. and Canadian governments to conduct
experimental drilling of hydrate deposits near Prudhoe Bay,
Alaska in early 1998. They hope to have more success than the
nations and commercial companies that tried to extract frozen
methane in Canada, Alaska and Siberia during the 1970s and
1980s.
In nature, methane hydrates are fickle molecules, liable to
melt whenever the pressure drops slightly or the temperature
creeps upward. Evidence of this instability pockmarks the
ocean floor along the Blake Ridge. Marine geologists have
identified numerous craters there that apparently formed when
hydrates melted, releasing methane gas.
``The Blake Ridge is a pressure cooker, over geological
time. The gas and fluids come up and blow thought the
sediments. We can see depressions 500 to 700 meters wide and
20 to 30 meters deep,'' says Dillon.
In other cases, melting at the base of the hydrate layer
has destabilized seafloor slopes, leading to massive
submarine landslides. Researchers have suggested hydrate
weakness as a factor behind landslides off Alaska, the U.S.
Atlantic coast, British Columbia, Norway, and Africa, says
Keith A. Kvenvolden of the USGS in Menlo Park, Calif.
Such inherent instability could spell problems for future
drilling platforms resting on top of hydrate-rich deposits.
If the collapses are large enough, they could also produce
the destructive waves called tsunamis that race across ocean
basins.
Hydrates may exert their greatest impact through their
indirect links to climate. Because methane is a powerful
greenhouse gas--about 10 times as strong as carbon dioxide--
massive melting of hydrates and the ensuing release of
methane gas could raise Earth's surface temperature.
James P. Kennett of the University of California, Santa
Barbara has recently discovered intriguing evidence
implicating methane hydrates as an instigator of climate
change. Sediments off the California coast show signs that
carbon isotopic ratios in the ocean shifted quite
dramatically and quickly at several times during the last
70,000 years. Because methane has a distinctive isotopic
fingerprint that matches the shifts, Kennett suggests that
large volumes of methane must have poured into the ocean at
these times.
In this theory, the methane came from hydrates that melted
when ocean waters warmed slightly. The liberation of so much
methane over a few decades would have caused widespread
warming that affected the entire globe. As supporting
evidence, Kennett notes that the ocean's isotopic shifts
indeed coincide with well-known Dansgaard-Oeschger episodes
when Earth's ice age climate went suddenly warm.
``Until now, [hydrates] haven't really entered into
discussions of climate change. They have been almost
completely ignored. Until the beginning of this year, I had
not even considered them. But I'm now convinced that they are
of great importance to the global environment and have been
for billions of years,'' says Kennett. He presented his
findings in September at a gas hydrate conference in Ghent,
Belgium.
Kvenvolden has proposed a different mechanism that might
have released hydrates at the end of the last ice age. As the
great blanket of continental ice melted at that time, global
sea levels swelled by more than 90 meters, submerging many
Arctic regions where hydrate layers exist. The relatively
warm ocean water would have melted the hydrates, unleashing
tremendous amounts of methane into the atmosphere, Kvenvolden
believes.
The same rationale could apply to the modern world. Sea
levels are currently rising slowly, at a rate of a few
centimeters per decade. Projections suggest that they will
rise even faster in the future because of the climatic
warming caused by greenhouse gas pollution. At the same time,
ocean temperatures are expected to creep upward.
``If you reason that hydrates were important in climate
change in the past, there is no reason they wouldn't be
important in the future,'' says Kvenvolden. Indeed, some
scientists speculate that melting methane hydrates could
greatly exacerbate global warming.
For now, though, Kvenvolden and others remain unsure
exactly what role hydrates have played in past climate
changes. Lacking this knowledge, they say it is impossible to
predict how hydrates will behave in the future.
A greater understanding of hydrates and their importance
will come as oceanographers tap deposits in other areas of
the world, testing whether the lessons learned on the Blake
Ridge apply elsewhere. Scientists are also creating synthetic
hydrates in the laboratory (SN:10/19/96, p. 252). By
squeezing methane and water in a pressurized apparatus,
Dillon and his colleagues can not only gauge how hydrates
weaken seafloor sediments but also improve seismic methods
for detecting hydrates.
When the experiments are over, the remaining synthetic
hydrates could have other uses. ``I hadn't really thought of
it before, but you could try cooking with them'' says Dillon,
``I wouldn't want to plan a major meal, but you could
probably scramble an egg on it.''
______
By Mrs. FEINSTEIN (for herself and Mr. Kyl):
S. 1420. A bill to amend the Illegal Immigration Reform and Immigrant
Responsibility Act of 1996 to provide for full reimbursement of States
and localities for costs related to providing emergency medical
treatment to individuals injured while entering the United States
illegally; to the Committee on the Judiciary.
THE ILLEGAL ALIEN EMERGENCY MEDICAL SERVICES REIMBURSEMENT ACT OF 1997
Mrs. FEINSTEIN. Mr. President, I am offering legislation with Senator
Kyl as original cosponsor, a legislation which provides full
reimbursement to state and local counties for costs incurred for
emergency medical services and ambulatory services provided to
undocumented aliens injured during a pursuit by border patrol or under
the custody of federal, state, or local authorities.
This legislation: Authorizes full reimbursement for emergency medical
costs, including ambulatory services for illegal aliens who are injured
during illegal crossings at land and sea ports, or during a pursuit by
border patrol, or while in custody of federal, state, or local
authorities;
Authorizes up to $18 million per year for the next 4 years from a
separate account under the Attorney General to reimburse states and
localities for emergency medical services provided to illegal aliens.
Requires the Attorney General to submit a written report to Senate
and House Judiciary Committees on the policy and practice, including
custody practice, of the border patrol by March 1, 1998.
Requires annual report by the Attorney General to Senate and House
Judiciary and Appropriations Committees on the implementation of this
bill.
INS reports show that in FY96, 1.65 million illegal aliens were
apprehended, of which 97% or 1.6 million apprehensions were made at the
Southwest Border. INS also reports that more than 300,000 illegal
aliens come into the country every year and in FY97, over 111,000
criminal and other illegal aliens were put through formal deportation
proceedings.
With increased focus on apprehending illegal aliens at the 140 mile
stretch of our Southwest border, recent reports also show increases in
unreimbursed emergency medical service cost of illegal aliens to state
and local county hospitals.
The California State Auditor recently released a report which charged
that San Diego alone incurred up to $8.1 million in unreimbursed
charges in emergency medical service for illegal aliens between January
1996 and May 1997. The Auditor estimates that San Diego hospitals
incurred from $4.9 million to $8.1 million in unreimbursed emergency
medical services and ambulatory services for up to 1074 illegal aliens
during the seventeen month period. The unreimbursed medical service
costs include hospital care, costs incurred for paramedics and air
transportations, physicians, surgeons and laboratories. These
uncompensated services, which hospitals and other emergency service
providers are required to
[[Page S12007]]
provide under California law, were provided to illegal aliens who were
injured during illegal crossings at the border and while escaping
border patrol pursuits.
The Sacramento Bee recently reported the following:
Every time a Border patrol chase results in injuries, San
Diego area hospitals provide `free' care to those injured...
(For instance), medical care for Fransciso Quintera--who was
struck by a car while fleeing Border patrol agents--cost UCSD
Medical Center over $1 million in uncompensated expenses. In
one recent vehicle chase, a van loaded with illegal
immigrants crashed while evading the Border Patrol, costing
Scripps Hospital $200,000 and Mercy Hospital $100,000 in
uncompensated care.
In the 1996 Immigration Act, Congress acknowledged the huge cost
shift to state and local county hospitals in unreimbursed cost for
emergency medical services provided to illegal aliens by authorizing
full reimbursement for emergency Medicaid and ambulatory services.
However, the $25 million appropriated annually over the next 4 years
under the Balance Budget Act for emergency Medicaid for illegal aliens
is insufficient to cover the full cost of emergency medical services
for illegal aliens nationwide, where high immigrant States like
California, Texas, New York, Florida, Illinois, New Jersey, Arizona and
Massachusetts end up picking up the responsibility for caring for the
injured illegal aliens.
In fact, for fiscal year 1998, there are no appropriations for
reimbursement for emergency ambulatory services, as authorized by the
1996 Immigration Act. Instead, Congress only requires INS to perform a
pilot project in Nogales, Arizona and report its findings to Congress.
Appropriating $25 million over the next 4 years and performing a
pilot project in Nogales, Arizona is not enough to cover the millions
of dollars high immigrant States like California incur every year in
unreimbursed emergency medical and ambulatory costs for illegal aliens
injured at the border or during a border patrol pursuit.
Mr. President, time has come for the Federal Government to take full
responsibility for the cost associated with providing emergency medical
services, including ambulatory services, for illegal aliens and lifting
the fiscal burden on State and local counties.
Thank you and I urge all my colleagues to support this legislation.
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. 1420
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. AMENDMENT OF THE ILLEGAL IMMIGRATION REFORM AND
IMMIGRANT RESPONSIBILITY ACT OF 1996.
Section 563 of the Illegal Immigration Reform and Immigrant
Responsibility Act of 1996 is amended to read as follows:
``SEC. 563. REIMBURSEMENT OF STATES AND LOCALITIES FOR
EMERGENCY MEDICAL SERVICES.
``(a) Subject to the availability of appropriations, the
Attorney General shall fully reimburse States and political
subdivisions of States for their costs of providing medical
services, including ambulatory services, related to an
emergency medical condition of an individual who--
``(1) is injured while, or being pursued immediately after,
crossing a land or sea border of the United States without
inspection or at any time or place other than as designated
by the Attorney General; and
``(2) is under the custody of the State or subdivision
pursuant to a transfer, request, or other action by a Federal
authority.
``(b) There is established in the general fund of the
Treasury a separate account out of which the Attorney General
shall provide reimbursement under this section.
``(c) Reimbursement under this section shall not be taken
out of monies appropriated for the Immigration and
Naturalization Service.
``(d) There are authorized to be appropriated for fiscal
years 1998-2002 an amount not to exceed $18,000,000 annually
for the purpose of carrying out this section.
``(e) The Attorney General shall report to the Judiciary
and Appropriations Committees of the House of Representatives
and the Senate annually on the implementation of this
section.
``(f) By March 1, 1998, the Attorney General shall submit a
written report to the Judiciary Committees of the House of
Representatives and Senate on the policy and practice,
including custody practice, of the United States Border
Patrol with respect to injured aliens.
``(g) For purposes of this section, the term `emergency
medical condition' has the same meaning as that term has
under section 562 of the Illegal Immigration Reform and
Immigrant Responsibility Act of 1996.''.
______
Mr. KENNEDY (for himself, Mr. Cochran, Mr. Durbin, Mr. Faircloth,
and Ms. Mikulski):
S. 1421. A bill to amend the Public Health Service Act to provide
additional support for and to expand clinical research programs, and
for other purposes; to the Committee on Labor and Human Resources.
THE CLINICAL RESEARCH ENHANCEMENT ACT OF 1997
Mr. KENNEDY. Mr. President, the promise of new biomedical research is
boundless. As impressive as the progress of the past has been, it pales
in comparison to future opportunities. We stand on the threshold of
stunning advances in medicine. Supporting biomedical research is among
the wisest possible investments we can make in our Nation's future.
Support for clinical research is central to biomedical research.
Clinical research is essential for the advancement of scientific
knowledge and the development of cures and improvement treatments of
disease. Tremendous advances in basic biological research are opening
doors to new insights into all aspects of medicine. As a result, there
are extraordinary opportunities for cutting-edge clinical research to
translate breakthroughs in the laboratory to the bedsides of patients.
Improvements in patient care and diagnosis and prevention of disease
depend upon clinical research that brings basic research discoveries to
the bedside. In addition, the results of clinical research are
incorporated by industry and developed into new drugs, vaccines, and
health care products. These developments strengthen the economy and
create jobs.
Advances in biomedical research may also prove to be the most
effective way to reduce the country's health care costs in the long
run. As our Nation's demographics change and the baby boomers move
toward retirement, financing Medicare has become an increasing concern.
A Duke University study released earlier this year suggests that a
small improvement in the disability rate of older Americans can bring
large cost savings for Medicare. Investment in medical research will
result in healthier older Americans and lower costs to Medicare.
Despite these clear benefits, clinical research is in crisis. The
resources dedicated to such research, particularly at the NIH, have
fallen to a level that places the United States at a serious
international disadvantage.
Studies by the Institute of Medicine, the National Research Council,
the National Academy of Sciences, and the National Institutes of Health
have highlighted significant problems in the Nation's clinical research
efforts. A 1994 report by the Institute of Medicine, for example,
characterized the current level of training and support for health
research professionals as ``fragmented, frequently undervalued and
potentially underfunded.''
The legislation we are introducing today seeks to enhance support of
clinical research by addressing the issues that have caused this crisis
in clinical research.
First, it will implement the longstanding recommendations regarding
the merit review process for clinical research proposals at NIH.
Second, it will provide greater support for general clinical research
centers.
Third, it will create new opportunities to pursue clinical research.
A Clinical Research Career Enhancement Award will enable a clinical
researcher to pursue research projects with a mentor prior to
independent pursuit of research. For more established researchers, the
Innovative Medical Science Award will provide funds to apply basic
scientific discoveries to medical treatment. Both awards will generate
the protected time which is so valuable to physician-scientists.
Fourth, the bill provides support for individuals seeking advanced
degrees in clinical investigation.
Fifth, it expands the Loan Repayment Program for clinical researchers
to encourage the recruitment of new investigators.
[[Page S12008]]
A solid infrastructure is essential to any research program. In
clinical research, that infrastructure is provided by the general
clinical research centers at academic health centers throughout the
country. Support for these centers was once largely provided by
academic health centers. Today, academic health centers provide
approximately $1 billion annually from clinical revenues to support
clinical research. However, academic health centers are confronted with
heavy competition from nonteaching institutions and are increasingly
obligated to emphasize patient care over research to minimize costs. In
the face of these changes, clinical researchers have become more
dependent on NIH for infrastructure support.
In spite of the expanding need, NIH support for the general clinical
research centers has barely kept up with inflation. The centers are
consistently funded at 75 percent of the funding level recommended by
the NIH's own Advisory Council. This level is not adequate for the
backbone of the Nation's clinical research efforts. Clearly we need to
do more.
The number of physicians choosing careers in clinical investigation
is in serious decline. Between 1985 and 1997, the number of physicians
increased by 34 percent, while the number of physicians pursuing
research decreased by 37 percent. Fewer young physicians are choosing
careers in research, and we need to reverse that decline.
Student debt is a major barrier to pursuing clinical research. Young
physicians graduate from medical school with an average debt burden of
$80,000. Limited financial opportunity in clinical research has caused
many young physicians to choose more lucrative medical practice. NIH
has acknowledged this problem and has established a loan repayment
subsidy to encourage the recruitment of clinical researchers to NIH.
Our legislation expands the current program.
Many of today's young clinical investigators are unfamiliar with
research methodology. Dr. Harold Varmus, the Director of NIH, has
articulated the need for individuals seeking careers in clinical
research to have access to clinical research-specific training programs
after they graduate from medical school. The NIH already supports a
postgraduate training for those pursuing basic research. This
legislation will support a comparable program for clinical
investigators.
Clinical researchers at academic health centers are also increasingly
urged to turn their attention away from research to generate greater
revenues. This loss of protected time has a significant adverse impact
on their ability to compete for NIH research grants. This problem is
particularly difficult for young researchers still seeking mentored
research experience during the early years of clinical investigation.
The NIH currently has awards to provide mentored career development
experiences for basic scientists. Our legislation creates career
development awards to help meet this need.
Less than a third of all NIH grantees are physicians. Only a fraction
of them receive awards for clinical investigation. The funding gap for
clinical research is most severe in the earliest phases of clinical
investigation, where basic scientific discoveries are tested on a small
scale in studies involving few patients. Industry will not support such
research in non-product-oriented studies and often regard such efforts
as too speculative. The medical science awards in our bill will ensure
funding for these important research initiatives.
The need for reform of the peer review system has been documented by
studies by the Institute of Medicine and an outside review committee of
the NIH Division of Research Grants, which is responsible for the peer
review process. So far, their recommendations have not been
implemented, and the bias against clinical research persists. Our
legislation will implement these recommendations and provide effective
evaluation of clinical research proposals.
The funds authorized by our legislation to support clinical research
do not target specific diseases. The funds would go to peer-reviewed
proposals to translate basic scientific discoveries into treatment and
prevention of disease. Without such legislation, clinical research will
continue to decline to a point where advances in medicine will no
longer come from this country but from abroad.
Mr. President, our bill is supported by more than a hundred and forty
biomedical associations and organizations. I would like to thank the
American Federation for Medical Research for their efforts to support
this legislation and ask unanimous consent that the list of supporters,
the letters of support be and a copy of the bill be included in the
Record.
I look forward to working with my colleagues as we move this
important legislation through Congress.
There being no objection, the material was ordered to be printed in
the Record, as follows:
S. 1421
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 ``Clinical Research
Enhancement Act of 1997''.
SEC. 2. FINDINGS AND PURPOSE.
(a) Findings.--Congress makes the following findings:
(1) Clinical research is critical to the advancement of
scientific knowledge and to the development of cures and
improved treatment for disease.
(2) Tremendous advances in biology are opening doors to new
insights into human physiology, pathophysiology and disease,
creating extraordinary opportunities for clinical research.
(3) Clinical research includes translational research which
is an integral part of the research process leading to
general human applications. It is the bridge between the
laboratory and new methods of diagnosis, treatment, and
prevention and is thus essential to progress against cancer
and other diseases.
(4) The United States will spend more than $1 trillion on
health care in 1997, but the Federal budget for health
research at the National Institutes of Health was $12.7
billion, only 1 percent of that total.
(5) Studies at the Institute of Medicine, the National
Research Council, and the National Academy of Sciences have
all addressed the current problems in clinical research.
(6) The Director of the National Institutes of Health has
recognized the current problems in clinical research and has
through the use of an advisory committee begun to evaluate
these problems.
(7) The current level of training and support for health
professionals in clinical research is fragmented, frequently
undervalued, and potentially underfunded.
(8) Young investigators are not only apprentices for future
positions but a crucial source of energy, enthusiasm, and
ideas in the day-to-day research that constitutes the
scientific enterprise. Serious questions about the future of
life-science research are raised by the following:
(A) The number of young investigators applying for grants
dropped by 54 percent between 1985 and 1993.
(B) The number of federally funded research (R01) grants
awarded to persons under the age of 36 have decreased by 70
percent from 1985 to 1993.
(C) Newly independent life-scientists are expected to raise
funds to support their new research programs and a
substantial proportion of their own salaries.
(9) The following have been cited as reasons for the
decline in the number of active clinical researchers, and
those choosing this career path:
(A) A medical school graduate incurs an average debt of
$80,000, as reported in the Medical School Graduation
Questionnaire by the American Association of Medical Colleges
(AAMC).
(B) The prolonged period of clinical training required
increases the accumulated debt burden.
(C) The decreasing number of mentors and role models.
(D) The perceived instability of funding from the National
Institutes of Health and other Federal agencies.
(E) The almost complete absence of clinical research
training in the curriculum of training grant awardees.
(F) Academic Medical Centers are experiencing difficulties
in maintaining a proper environment for research in a highly
competitive health care marketplace, which are compounded by
the decreased willingness of third party payers to cover
health care costs for patients engaged in research studies
and research procedures.
(10) In 1960, general clinical research centers were
established under the Office of the Director of the National
Institutes of Health with an initial appropriation of
$3,000,000.
(11) Appropriations for general clinical research centers
in fiscal year 1997 equaled $153,000,000.
(12) In fiscal year 1997, there were 74 general clinical
research centers in operation, supplying patients in the
areas in which such centers operate with access to the most
modern clinical research and clinical research facilities and
technologies.
(13) The average annual amount allocated for each general
clinical research center is $1,900,000, establishing a
current funding level of 75 percent of the amounts approved
by the Advisory Council of the National Center for Research
Resources.
[[Page S12009]]
(b) Purpose.--It is the purpose of this Act to provide
additional support for and to expand clinical research
programs.
SEC. 3. INCREASING THE INVOLVEMENT OF THE NATIONAL INSTITUTES
OF HEALTH IN CLINICAL RESEARCH.
Section 402 of the Public Health Service Act (42 U.S.C.
282) is amended by adding at the end the following:
``(l)(1) The Director of NIH shall undertake activities to
support and expand the involvement of the National Institutes
of Health in clinical research.
``(2) In carrying out paragraph (1), the Director of NIH
shall--
``(A) design test pilot projects and implement the
recommendations of the Division of Research Grants Clinical
Research Study Group and other recommendations for enhancing
clinical research, where applicable; and
``(B) establish an intramural clinical research fellowship
program and a continuing education clinical research training
program at NIH.
``(3) The Director of NIH, in cooperation with the
Directors of the Institutes, Centers, and Divisions of the
National Institutes of Health, shall support and expand the
resources available for the diverse needs of the clinical
research community, including inpatient, outpatient, and
critical care clinical research.
``(4) The Director of NIH shall establish peer review
mechanisms to evaluate applications for--
``(A) clinical research career enhancement awards;
``(B) innovative medical science awards;
``(C) graduate training in clinical investigation awards;
``(D) intramural clinical research fellowships.
Such review mechanisms shall include individuals who are
exceptionally qualified to appraise the merits of potential
clinical research training and research grant proposals.''.
SEC. 4. GENERAL CLINICAL RESEARCH CENTERS.
Part B of title IV of the Public Health Service Act (42
U.S.C. 284 et seq.) is further amended by adding at the end
the following:
``SEC. 409B. GENERAL CLINICAL RESEARCH CENTERS.
``(a) Grants.--The Director of the National Center for
Research Resources shall award grants for the establishment
of general clinical research centers to provide the
infrastructure for clinical research including clinical
research training and career enhancement. Such centers shall
support clinical studies and career development in all
settings of the hospital or academic medical center involved.
``(b) Activities.--In carrying out subsection (a), the
Director of NIH shall expand the activities of the general
clinical research centers through the increased use of
telecommunications and telemedicine initiatives.
``(c) Authorization of Appropriations.--There are
authorized to be appropriated to carry out this section, such
sums as may be necessary.
``SEC. 409C. ENHANCEMENT AWARDS.
``(a) Clinical Research Career Enhancement Award.--
``(1) In general.--The Director of the National Center for
Research Resources shall make grants (to be referred to as
`clinical research career enhancement awards') to support
individual careers in clinical research at general clinical
research centers or at other institutions that have the
infrastructure and resources deemed appropriate for
conducting patient-oriented clinical research. The Director
of the National Center for Research Resources shall, where
practicable, collaborate or consult with other Institute
Directors in making awards under this subsection.
``(2) Applications.--An application for a grant under this
subsection shall be submitted by an individual scientist at
such time as the Director may require.
``(3) Limitations.--The amount of a grant under this
subsection shall not exceed $125,000 per year per grant.
Grants shall be for terms of 5 years. The Director shall
award not more than 20 grants in the first fiscal year, and
not more than 40 grants in the second fiscal year, in which
grants are awarded under this subsection.
``(4) Authorization of appropriations.--There is authorized
to be appropriated to make grants under paragraph (1),
$3,000,000 for fiscal year 1998, and such sums as may be
necessary for each subsequent fiscal year.
``(b) Innovative Medical Science Award.--
``(1) In general.--The Director of the National Center for
Research Resources shall make grants (to be referred to as
`innovative medical science awards') to support individual
clinical research projects at general clinical research
centers or at other institutions that have the infrastructure
and resources deemed appropriate for conducting patient-
oriented clinical research. The Director of the National
Center for Research Resources shall, where practicable,
collaborate or consult with other Institute Directors in
making awards under this subsection.
``(2) Applications.--An application for a grant under this
subsection shall be submitted by an individual scientist at
such time as the Director requires.
``(3) Limitations.--The amount of a grant under this
subsection shall not exceed $175,000 per year per grant.
``(4) Authorization of appropriations.--There is authorized
to be appropriated to make grants under this subsection,
$52,500,000 for fiscal year 1998, and such sums as may be
necessary for each subsequent fiscal year.
``(c) Graduate Training in Clinical Investigation Award.--
``(1) In general.--The Director of the National Center for
Research Resources shall make grants (to be referred to as
`graduate training in clinical investigation awards') to
support individuals pursuing master's or doctoral degrees in
clinical investigation.
``(2) Applications.--An application for a grant under this
subsection shall be submitted by an individual scientist at
such time as the Director may require.
``(3) Limitations.--The amount of a grant under this
subsection shall not exceed $75,000 per year per grant.
Grants shall be for terms of 2 years or more and will provide
stipend, tuition, and institutional support for individual
advanced degree programs in clinical investigation.
``(4) Definition.--As used in this subsection, the term
`advanced degree programs in clinical investigation' means
programs that award a master's or Ph.D. degree after 2 or
more years of training in areas such as the following:
``(A) Analytical methods, biostatistics, and study design.
``(B) Principles of clinical pharmacology and
pharmacokinetics.
``(C) Clinical epidemiology.
``(D) Computer data management and medical informatics.
``(E) Ethical and regulatory issues.
``(F) Biomedical writing.
``(5) Authorization of Appropriations.--There is authorized
to be appropriated to make grants under this subsection,
$3,000,000 for fiscal year 1998, and such sums as may be
necessary for each subsequent fiscal year.''.
SEC. 5. CLINICAL RESEARCH ASSISTANCE.
(a) National Research Service Awards.--Section 487(a)(1)(C)
of the Public Health Service Act (42 U.S.C. 288(a)(1)(C)) is
amended by striking ``50 such'' and inserting ``100 such''.
(b) Loan Repayment Program.--Section 487E of the Public
Health Service Act (42 U.S.C. 288-5) is amended--
(1) in the section heading, by striking ``from
disadvantaged backgrounds'';
(2) in subsection (a)(1)--
(A) by striking ``who are from disadvantaged backgrounds'';
and
(B) by striking ``as employees of the National Institutes
of Health'' and inserting ``as part of a clinical research
training position'';
(3) in subsection (a), by striking paragraph (3) and
inserting the following:
``(3) Applicability of certain provisions regarding
obligated service.--With respect to the National Health
Service Corps Loan Repayment Program established under
subpart III of part D of title III, the provisions of such
subpart shall, except as inconsistent with this section,
apply to the program established in this section in the same
manner and to the same extent as such provisions apply to
such loan repayment program.'';
(4) in subsection (b)--
(A) by striking ``Amounts'' and inserting the following:
``(1) In general.--Amounts''; and
(B) by adding at the end the following:
``(2) Disadvantaged backgrounds set-aside.--In carrying out
this section, the Secretary shall ensure that not less than
50 percent of the contracts involve those appropriately
qualified health professionals who are from disadvantaged
backgrounds.''; and
(5) by adding at the end the following:
``(c) Definition.--As used in subsection (a)(1), the term
`clinical research training position' means an individual
serving in a general clinical research center or in clinical
research at the National Institutes of Health, or a physician
receiving a clinical research career enhancement award, an
innovative medical science award, or a graduate training in
clinical investigation award.
``(d) Authorization of Appropriations.--There is authorized
to be appropriated to carry out this section such sums as may
be necessary for each fiscal year.''.
SEC. 6. DEFINITION.
Section 409 of the Public Health Service Act (42 U.S.C.
284d) is amended--
(1) by striking ``For purposes'' and inserting ``(a) Health
Service Research.--For purposes''; and
(2) by adding at the end the following:
``(b) Clinical Research.--As used in this title, the term
`clinical research' means patient oriented clinical research
conducted with human subjects, or research on the causes and
consequences of disease in human populations involving
material of human origin (such as tissue specimens and
cognitive phenomena) for which an investigator or colleague
directly interacts with human subjects in an outpatient or
inpatient setting to clarify a problem in human physiology,
pathophysiology, or disease; or epidemiologic or behavioral
studies, outcomes research, or health services research, or
developing new technologies or therapeutic interventions.''.
____
Supporters of Clinical Research Enhancement Act
Alliance for Aging Research
Alzheimer's Association
Ambulatory Pediatric Association
American Academy of Child and Adolescent Psychiatry
American Academy of Dermatology
[[Page S12010]]
American Academy of Neurology
American Academy of Optometry
American Academy of Ophthalmology
American Academy of Otolaryngology-Head and Neck Surgery
American Academy of Physical Medicine and Rehabilitation
American Association for Cancer Research
American Association for the Surgery of Trauma
American Association of Anatomists
American Association of Colleges of Nursing
American Association of Neurological Surgeons
American Cancer Society
American Celiac Society--Dietary Support Coalition
American College of Chest Physicians
American College of Clinical Pharmacology
American College of Medical Genetics
American College of Neuropsychopharmacology
American Diabetes Association
American Federation for Medical Research
American Gastroenterological Association
American Geriatrics Society
American Heart Association
American Kidney Fund
American Liver Foundation
American Lung Association
American Neurological Association
American Optometric Association
American Pediatric Society
American Psychiatric Association
American Skin Association
American Society for Bone and Mineral Research
American Society for Clinical Nutrition
American Society for Clinical Pharmacology and Therapeutics
American Society for Reproductive Medicine
American Society of Addiction Medicine
American Society of Adults with Pseudo-Obstruction, Inc.
American Society of Clinical Nutrition
American Society of Hematology
American Society of Nephrology
American Thoracic Society
American Urological Association
Americans for Medical Progress
Arthritis Foundation
Association for Medical School Pharmacology
Association for Research in Vision and Ophthalmology
Association of Academic Health Centers
Association of Academic Physiatrists
Association of American Cancer Institutes
Association of American Medical Colleges
Association of American Veterinary Medical Colleges
Association of Behavorial Sciences and Medical Education
Association of Departments of Family Medicine
Association of Medical and Graduate Departments of
Biochemistry
Association of Medical School Pediatric Department Chairmen
Association of Pathology Chairs
Association of Professors of Dermatology
Association of Professors of Medicine
Association of Program Directors in Internal Medicine
Association of Schools and Colleges of Optometry
Association of Schools of Public Health
Association of Subspecialty Professors
Association of University Radiologists
American Urogynecologic Society
Center for Ulcer Research and Education Foundation
Citizens for Public Action
Cooley's Anemia Foundation
Crohn's and Colitis Foundation of America
Cystic Fibrosis Foundation
Dean Thiel Foundation
Digestive Disease National Coalition
East Carolina University School of Medicine
Ehlers-Danlos National Foundation
Ermory University School of Medicine
The Endocrine Society
Epilepsy Foundation of America
Foundation for Ichthyosis and Related Skin Types
Gay Men's Health Crisis
General Clinical Research Center Program Directors'
Association
Gluten Intolerance Group
Hemochromatosis Research Foundation
Hepatitis Foundation International
Inova Institute of Research and Education
Institute for Asthma and Allergy
International Foundation for Functional Gastrointestinal
Disorders
Jeffrey Modell Foundation
Joint Council of Allergy, Asthma and Immunology
Juvenile Diabetes Foundation International
Lawson Wilkins Pediatric Endocrine Society
Lupus Foundation of America, Inc.
Medical Dermatology Society
Mount Sinai Medical Center
National Caucus of Basic Biomedical Science Chairs
National Committee to Preserve Social Security and Medicare
National Health Council
National Marfan Foundation
National Multiple Sclerosis Society
National Organization for Rare Disorders
National Osteoporosis Foundation
National Perinatal Association
National Tuberous Sclerosis Association
National Vitiligo Foundation, Inc.
National Vulvodynia Association
North America Society of Pacing and Electrophysiology
Oley Foundation for Home Parenteral and Enteral Nutrition
The Orton Dyslexia Society
Osteogenesis Imperfecta Foundation
PXE International
RESOLVE
Schepens Eye Research Institute
Scleroderma Research Foundation
Society for Academic Emergency Medicine
Society for the Advancement of Women's Health Research
Society for Inherited Metabolic Disorders
Society for Investigative Dermatology
Society for Pediatric Research
Society of Gastroenterology Nurses and Associates, Inc.
Society of Gynecologic Oncologists
Society of Medical College Directors of Continuing Medical
Education
Soviety of University Urologists
St. Jude Children's Research Hospital
Tourette Syndrome Association, Inc.
United Ostomy Association
United Scleroderma Foundation
University of Rochester School of Medicine and Dentistry
Wound, Ostomy and Continence Nurses Society
Yale University School of Medicine.
____
American Federation
for Medical Research
November 7, 1997.
Hon. Thad Cochran
The Honorable Edward Kennedy,
U.S. Senate, Washington, DC.
Dear Senators Cochran and Kennedy: I write to express the
strong support of the American Federation for Medical
Research for the legislation you will introduce to enhance
clinical research programs at the National Institutes of
Health. The AFMR is a national organization of 6,000
physician scientists engaged in basic, clinical, and health
services research. Most of our members receive NIH support
for their basic research but are finding it increasingly
difficult to obtain public or private funding for
translational or clinical research--studies through which
basic science discoveries are translated to the care of
patients. In the past, academic medical centers provided
institutional support for this research through revenues
generated by patient care activities. However, as the health
care marketplace has become increasingly competitive,
academic centers have all but eliminated internal subsidizes
clinical research or the training of clinical investigators.
In fact, the Association of American Medical Colleges has
estimated that these institutions have lost approximately
$800 million in annual ``purchasing power'' for research and
research training within their institutions. In this context,
the $60 million in spending entailed in your legislation
(representing less than one-half of one percent of the NIH
budget) would seem an extremely modest investment in a much-
needed program to reinvigorate our nation's clinical research
capabilities.
The Clinical Research Enhancement Act is a conservative
approach to a severe problem. The Institute of Medicine (IOM)
expressed alarm about the challenges confronting clinical
research in a 1994 report, and your bill is based on the
initiatives recommended by the IOM:
The IOM recommended that the General Clinical Research
Centers program be strengthened. Your bill would codify this
program, which has existed since the late 1950's, so that the
Congress will have greater discretion over GCRC funding.
The IOM recommended enhanced career development in clinical
investigation, and your bill proposes such awards.
The IOM noted problems with the NIH peer review of clinical
research. Your bill directs the NIH to improve the peer
review process for such research and establishes ``innovative
science awards'' that will be reviewed by scientists
knowledgeable in clinical investigation.
The IOM recommended programs to relieve the tuition debt of
physicians pursuing clinical research careers. Your bill
would expand an existing NIH intramural program for this
purpose to the extramural community.
The IOM recommended structured, didactic training in
clinical investigation. Your bill authorizes funding for
advanced degree (master's and Ph.D.) training in clinical
research as successfully initiated at several institutions
around the country.
The list of almost 150 organizations that support the
Clinical Research Enhancement Act indicates the consensus of
scientific, medical, consumer, and patient organizations that
steps must be taken as soon as possible to stop the
deterioration of the U.S. clinical research capacity, to
reinvigorate the clinical research programs of academic
medical centers, and to assure that the American people and
the American economy benefit from the translation of basic
science breakthroughs to improved clinical care and new
medical products. The American Federation for Medical
Research is pleased to have the opportunity to express its
strong support for your legislation.
Sincerely,
Jeffrey Kern, MD.,
President.
____
As a coalition of organizations concerned about improving
the quality of health care, the National Health Council
strongly
[[Page S12011]]
supports the Clinical Research Enhancement Act. As you know,
it has been more than three years since the Institute of
Medicine (IOM) documented the major challenges confronting
clinical research in our country. Your bill would implement a
number of the IOM recommendations for addressing these
problems. It is critically important that the NIH move
forward as rapidly as possible with these initiatives.
The NIH is the major funding source in the United States
for basic biomedical research. However, the major dividends
from this investment are discoveries that improve our ability
to prevent, effectively treat, and cure disease and
disability. The NIH must foster not only the basic research
that begins this process but also the translational research
through which a basic science discovery is applied to a
medical problem. There is generous industry support for
clinical research and clinical trials aimed at the
development of new products. However, private funding is
extremely limited for initial translational research that may
have little or no commercial product potential. Examples of
such research include studies of nutritional therapies, new
approaches to disease prevention, transplantation techniques,
behavioral interventions, and studies of off-label uses of
approved drugs. In the past, such research was often
subsidized from patient care revenues to academic medical
centers. However, competition in the health care marketplace
has begun to erode this source of funding; therefore, NIH
must play an expanded role in providing support for this
research. The Clinical Research Enhancement Act would foster
NIH funding opportunities for this type of research through
the establishment of ``innovative medical science awards.''
Such studies will focus on translating basic research
discoveries into tools that health care professionals can use
to cure disease and relieve suffering.
In addition, we support provisions of the bill that would
foster opportunities for physicians to pursue careers in
clinical research. There is ample evidence that American
physicians are opting out of careers in science for a variety
of reasons. Steps must be taken to rebuild our nation's
supply of well-trained physician scientists if the United
States is to continue its leadership of the world in medical
science.
Finally, the bill would direct the NIH to improve the peer
review of patient-oriented research. Studies have documented
the fact that clinical research proposals are at a
disadvantage when reviewed by NIH study sections because of
NIH's primary focus on basic biomedical research. This must
be changed, as proposed in your bill, so that scientific
opportunities to improve medical care are not lost.
The undersigned organizations are extremely grateful for
your leadership in addressing the problems confronting
clinical research. We support your initiative to assure that
the NIH invests in the translational research that holds the
key for patients around the country who are waiting for a
cure. We are pleased to endorse the clinical Research
Enhancement Act.
Alzheimer's Association
American Autoimmune Related Diseases Association
American Diabetes Association
American Kidney Fund
American Paralysis Association
Digestive Diseases National Coalition
Epilepsy Foundation of America
Foundation Fighting Blindness
Juvenile Diabetes Foundation International
Glaucoma Research Foundation
Myasthenia Gravis Foundation
National Alopecia Areata Foundation
National Multiple Sclerosis Society
National Osteoporosis Foundation
National Tuberous Sclerosis Association
Paget Foundation
Sjogren's Syndrome Foundation
Tourette Syndrome Association.
______
By Mr. McCAIN (for himself, Mr. Burns, Mr. Conrad, and Mr.
Dorgan):
S. 1422. A bill to amend the Communications Act of 1934 to promote
competition in the market for delivery of multichannel video
programming and for other purposes; to the Committee on Commerce,
Science, and Transportation.
the federal communications commission satellite carrier oversight act
Mr. McCAIN. Madam President, today I am introducing the Federal
Communications Commission Satellite Carrier Oversight Act. This bill
will do a number of things to promote competition in the multichannel
video marketplace. I wish to thank Senator Burns for his support on
this bill.
Congress has had a longstanding interest in promoting competition in
the multichannel video marketplace so as to enable consumers to have a
choice of video providers at competitive rates. However, a recent
regulatory action threatens the ability of direct-to-home [DTH]
satellite television operators to compete effectively with cable
operators.
On October 27, 1997, the Librarian of Congress adopted a Copyright
Arbitration Royalty Panel's recommendation of a precipitous and wholly
unjustified increase in the copyright fees satellite carriers pay for
superstation and network affiliate signals delivered to satellite TV
households. This action will result in a rate increase for satellite
television subscribers and have a detrimental effect on the ability of
DTH operators to compete with cable.
This bill will ensure that this rate increase does not take effect as
scheduled on January 1, 1998. It delays the effective date of the rate
increase to January 1, 1999. The 7.5 million U.S. households who
currently subscribe to satellite television deserve to have Congress
examine the effect of this copyright fee increase on video competition
and to consider changes to the law that would ensure a less arbitrary
and more consumer friendly result. This delay will give the FCC an
opportunity to determine what impact the increased copyright fees will
have on satellite's ability to compete with cable, and it will give
Congress an opportunity to evaluate the FCC's report and respond
accordingly.
The current satellite copyright rates are 14 cents per subscriber per
month for each superstation signal and 6 cents per subscriber per month
for each network signal. Cable operators currently pay an average of
9.7 cents for the exact same superstations and 2.7 cents for the exact
same network signals. At the 27-cent rate adopted by the Librarian,
satellite carriers will be paying almost 270 percent more than cable
for the exact same superstations and 900 percent more for the exact
same network signals.
This creates an enormous disparity in the copyright fees paid for the
same signals and will result in rate increases to satellite
subscribers, which in turn will have a negative impact on competition
between cable and satellite. Such a result is directly contrary to the
intent of Congress to give consumers a choice of video providers at
competitive rates.
The bill also addresses an issue of continuing concern to the DTH
industry. Signal theft represents a serious threat to DTH operators. In
the Telecommunications Act of 1996, Congress confirmed the
applicability of penalties for unauthorized decryption of DTH satellite
services. The amendment we propose would confirm the judicial
interpretation that civil suits may be brought by DTH operators for
signal theft.
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. 1422
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 ``Federal Communications
Commission Satellite Carrier Oversight Act''.
SEC. 2. FINDINGS.
(a) The Congress finds that:
(1) Signal theft represents a serious threat to direct-to-
home satellite television. In the Telecommunications Act of
1996, Congress confirmed the applicability of penalties for
unauthorized decryption of direct-to-home satellite services.
Nevertheless, concerns remain about civil liability for such
unauthorized decryption.
(2) In view of the desire to establish competition to the
cable television industry, Congress authorized consumers to
utilize direct-to-home satellite systems for viewing video
programming through the Cable Communications Policy Act of
1984.
(3) Congress found in the Cable Television Consumer
Protection and Competition Act of 1992 that without the
presence of another multichannel video programming
distributor, a cable television operator faces no local
competition and that the result is undue market power for the
cable operator as compared to that of consumers and other
video programmers.
(4) The Federal Communications Commission, under the Cable
Television Consumer Protection and Competition Act of 1992,
has the responsibility for reporting annually to the Congress
on the state of competition in the market for delivery of
multichannel video programming.
(5) In the Cable Television Consumer Protection and
Competition Act of 1992, Congress stated its policy of
promoting the availability to the public of a diversity of
[[Page S12012]]
views and information through cable television and other
video distribution media.
(6) Direct-to-home satellite television service is the
fastest growing multichannel video programming service with
approximately 8 million households subscribing to video
programming delivered by satellite carriers.
(7) Direct-to-home satellite television service is the
service that most likely can provide effective competition to
cable television service.
(8) Through the compulsory copyright license created by
Section 119 of the Satellite Home Viewer Act of 1988,
satellite carriers have paid a royalty fee per subscriber,
per month to retransmit network and superstation signals by
satellite to subscribers for private home viewing.
(9) Congress set the 1988 fees to equal the average fees
paid by cable television operators for the same superstation
and network signals.
(10) Effective May 1, 1992, the royalty fees payable by
satellite carriers were increased through compulsory
arbitration to $0.06 per subscriber per month for
retransmission of network signals and $0.175 per subscriber
per month for retransmission of superstation signals, unless
all of the programming contained in the superstation signal
is free from syndicated exclusivity protection under the
rules of the Federal Communications Commission, in which case
the fee was decreased to $0.14 per subscriber per month.
These fees were 40-70 percent higher than the royalty fees
paid by cable television operators to retransmit the same
signals.
(11) On October 27, 1997, the Librarian of Congress adopted
the recommendation of the Copyright Arbitration Royalty Panel
and approved raising the royalty fees of satellite carriers
to $0.27 per subscriber per month for both superstation and
network signals, effective January 1, 1998.
(12) The fees adopted by the Librarian are 270 percent
higher for superstations and 900 percent higher for network
signals than the royalty fees paid by cable television
operators for the exact same signals.
(13) To be an effective competitor to cable, direct-to-home
satellite television must have access to the same programming
carried by its competitors and at comparable rates. In
addition, consumers living in areas where over-the-air
network signals are not available rely upon satellite
carriers for access to important news and entertainment.
(14) The Copyright Arbitration Royalty Panel did not
adequately consider the adverse competitive effect of the
differential in satellite and cable royalty fees on promoting
competition among multichannel video programming providers
and the importance of evaluating the fees satellite carriers
pay in the context of the competitive nature of the
multichannel video programming marketplace.
(15) If the recommendation of the Copyright Arbitration
Royalty Panel is allowed to stand, the direct-to-home
satellite industry, whose total subscriber base is equivalent
in size to approximately 11 percent of all cable households,
will be paying royalties that equal half the size of the
cable royalty pool, thus giving satellite subscribers a
disproportionate burden for paying copyright royalties when
compared to cable television subscribers.
SEC. 3. DBS SIGNAL SECURITY.
(a) Section 605(d) of the Communications Act of 1934 (47
U.S.C. 605) is amended by adding after ``satellite cable
programming,'' the following: ``or direct-to-home satellite
services,''.
SEC. 4. PROCEEDING ON RETRANSMISSION OF DISTANT BROADCAST
SIGNALS; REPORT ON EFFECT OF INCREASED ROYALTY
FEES FOR SATELLITE CARRIERS ON COMPETITION IN
THE MARKET FOR DELIVERY OF MULTICHANNEL VIDEO
PROGRAMMING.
(a) Section 628 of the Communications Act of 1934 (47
U.S.C. 548) is amended--
(1) by adding at the end of subsection (g): ``The
Commission shall, within 180 days of enactment of this
amendment initiate a notice of inquiry to determine the best
way in which to facilitate the retransmission of distant
broadcast signals such that it is more consistent with the
1992 Cable Act's goal of promoting competition in the market
for delivery of multichannel video programming and the public
interest. The Commission also shall within 180 days of
enactment report to Congress on the effect of the increase in
royalty fees paid by satellite carriers pursuant to the
decision by the Librarian of Congress on competition in the
market for delivery of multichannel video programming and the
ability of the direct-to-home satellite industry to
compete.''
SEC. 5. EFFECTIVE DATE OF INCREASED ROYALTY FEES.
(a) Notwithstanding any other provision of law, the
Copyright Office shall be prohibited from implementing,
enforcing, collecting or awarding copyright royalty fees, and
no obligation or liability for copyright royalty fees shall
accrue pursuant to the decision of the Librarian of Congress
on October 27, 1997, which established a royalty fee of $0.27
per subscriber per month for the retransmission of distant
broadcast signals by satellite carriers, before January 1,
1999.
______
By Mr. HAGEL (for himself, Mr. Bennett, Mr. Kerrey, and Mr.
Grams):
S. 1423. A bill to modernize and improve the Federal Home Loan Bank
System; to the Committee on Banking, Housing, and Urban Affairs.
the federal home loan bank system modernization act
Mr. HAGEL. Mr. President, I rise today to introduce the Federal Home
Loan Bank System Modernization Act of 1997. I am joined in this effort
by my distinguished colleagues Senators Bennett, Grams, and Kerrey.
This legislation represents months of work in crafting a bill that
has bipartisan support. The process has been open, and we have included
all the affected parties: The Federal Home Loan Banks themselves, the
Federal Housing Finance Board, and the banking industry. This process
has allowed us to craft legislation that represents, above all, sound
banking policy.
This bill will help community banks and the consumers who rely on
them. Take, for example, the case of Commercial State Bank in Wausa,
NE. Commercial has served northeast Nebraska as an agricultural and
business lender for more than 70 years.
Now, with a growing economy in the region, the bank is growing as
well. In the small community of 600 people, deposits cannot keep pace
with the growing demand for loans--and that means the bank's liquidity
is declining. With less liquidity, there just isn't as much money
available for lending as the community demands.
This bill would help banks like Commercial and communities like
Wausa. As Doug Johnson, president of Commercial State Bank, wrote to me
about this legislation:
If banks like the Commercial State Bank were able to access
the Federal Home Loan Bank, our customers would be better
able to be serviced with a consistent and competitive source
of funding. Denying credit to qualified borrowers is not
productive for Nebraska or the Midwest. Unfortunately, those
borrowers may miss the opportunities available to them at
this time to improve their economic prosperity.
Mr. President, that is what this bill is all about--helping small
communities to better secure their economic futures.
The Federal Home Loan Bank system was established in 1932, primarily
to provide a source of credit to savings and loan institutions for home
lending. Now, a majority of the members in the FHLB system are
commercial banks. We should update this system to recognize this change
in its membership.
Not since 1989 has significant Federal Home Loan Bank legislation
become law. The system is working well, but I believe Congress can make
it better. It's time for Congress to act.
This legislation has four main components:
First, it recognizes the importance of the FHLB system to community
banks. Many smaller institutions are dependent on deposits to fund
lending in their local communities. Because of competition from non
bank competitors, those deposits are shrinking. That is going to mean
less community lending--which will hurt the economies of these small
communities. A recent article in American Banker newspaper titled
``Small Banks Face Crisis as Deposits Drain Away'' highlighted this
problem, and I ask that this article be printed in the Record at the
conclusion of my remarks.
Our legislation would ease membership requirements for smaller
community banks and thrifts that are vital sources of credit in their
local communities. It would allow the FHLB System to be more easily
accessed as an important source of liquidity for community lenders.
These institutions would be permitted to post different types of
collateral for various kinds of lending. This critical change will
facilitate more small business, rural development, agricultural, and
low-income community development lending in rural and urban
communities.
The second main component of this bill is an issue of basic fairness.
Federally chartered savings associations, or thrifts as they are called
today, are required to be members of the Federal Home Loan Bank System.
Commercial banks, on the other hand, are voluntary members. This
disparity is unfair.
Our legislation allows federally chartered thrifts to become
voluntary members. This is important to these institutions, which are
large stockholders in the Federal Home Loan Bank System. It is critical
that all member financial institutions have the ability to choose
whether Federal Home Loan Bank membership is appropriate or not. As a
result of this action, we also equalize stock purchase requirements for
all member institutions. We do this in a way that maintains and
enhances the safety and soundness of the FHLB system.
The third component of this legislation fixes an imbalance in the
system's annual REFCORP obligation. Currently, the 12 FHLBanks must
collectively pay a fixed $300 million obligation to service the REFCORP
bonds
[[Page S12013]]
that were issued to help pay for the S&L bailout. This fixed obligation
has driven the banks to increase their levels of non-mission-related
investments.
Under our legislation each FHLBank would be required to pay 20.75
percent of its earnings to service the REFCORP debt. Freeing the
FHLBanks of the obligation to generate a specific dollar figure would
allow them to concentrate on their primary mission of housing finance
and community lending. This change was scored by the Congressional
Budget Office as increasing Federal revenues by $44 million over the
next 5 years. In other words, this change would allow a $44 million
reduction in taxpayer obligations.
Fourth and finally, the legislation addresses the issue of devolution
of management functions from the Finance Board to the FHLBanks. On
issues of day-to-day management, the FHLBanks should be able to govern
themselves independently of their regulator. The function of the
Finance Board should be mission regulation and safety-and-soundness
regulation. The provisions of the legislation that accomplish this goal
are non controversial and enjoy broad support.
Mr. President, it is time to modernize the Federal Home Loan Bank
System. The landscape of the financial services industry is rapidly
evolving. The Federal Home Loan Banks should be allowed to modernize to
keep pace with these changes. I am proud to take up this issue in the
Senate and build on the work done in the House of Representatives by
Congressmen Baker and Kanjorski, both tireless proponents for Federal
Home Loan Bank modernization. Their help in the formulation of this
legislation was critical.
I sincerely hope the Senate Banking Committee and the full Senate
will have the chance to consider this important legislation, and I
encourage my colleagues to support it.
Mr. President, I ask unanimous consent that additional material be
printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
[From American Banker, Oct. 14, 1997]
Small Banks Face Crisis as Deposits Drain Away
(By Laura Pavlenko Lutton)
Community banks are finding it increasingly tough to meet
deposit and withdrawal demands as customers shift their
deposits into higher-yielding investments like mutual funds.
``I think it could become a crisis,'' said C. William
Landefeld, president of Citizens Savings Bank in Bloomington,
Ill., and chairman of America's Community Bankers. ``It's one
of our biggest concerns.''
Over the last three years, loans at banks with assets
between $100 million and $1 billion have grown nearly 11%
while deposits only increased 3.27%, according to the Federal
Deposit Insurance Corp. At June 30, loans at these banks
averaged 74% of deposits--an all-time high. ``We're clearly
seeing some community banks struggle with liquidity,'' said
Keith Leggett, an economist at the American Bankers
Association. Loan-to-deposit ratios above 70% force these
institutions to seek alternative sources of funds to meet
loan demand--a move that can squeeze profit margins.
``Banks may give up liquidity to meet loan demand and that
raises a safety question,'' he added. While deposits are
leaving banks of all sizes, the problem is worst at small
banks because they have fewer funding sources. ``The big
banks can issue debt securities, but we can't really do
that,'' said Arthur C. Johnson, president of United Bank of
Michigan, a $165 million-asset bank in Grand Rapids.
``Smaller banks don't have the same access to the capital
markets.'' Many of these banks also are in towns with
dwindling populations or slumping economies. Dennis Utter,
president of $45 million-asset Adams County Bank, said it's
difficult to keep deposits in the bank's hometown of Kenesaw,
Neb. Baby boomers have moved much of their savings to
alternative investments, and younger depositors are even
tougher to attract, he said. ``When an old, loyal customer
passes away, those funds don't stay in Adams County Bank,''
he said. ``The heirs don't live here anymore.''
To increase liquidity, community bankers are turning to the
Federal Home Loan Bank System, seeking out deposit brokers,
nudging up interest rates, or selling off assets. The 12
Federal Home Loan banks, which lend money to member
institutions, are a popular source of funds for community
banks nationwide. Membership in the system has doubled in the
last six years to roughly 6,300, and through August total
loans were up 10.3%, to 177.8 billion.
Mr. Johnson said United Bank of Michigan has borrowed $5
million from the Federal Home Loan Bank of Indianapolis to
fund loan growth. But the Federal Home Loan Bank System is
not the answer for all community banks. Membership is limited
to banks and thrifts with mortgages making up at least 10% of
their total loan portfolios. What's more, only mortgage loans
may be used as collateral, further limiting what some
institutions may borrow.
William L. McQuillan, president of City National Bank in
Greely, Neb., said his bank went out and brought enough
mortgages to meet the 10% test so it could start borrowing.
``We couldn't continue to go out in the local market and pay
up for deposits,'' he said. The membership and collateral
requirements soon may be relaxed through rule change and
pending legislation.
For example, banks may be able to reclassify some
agricultural loans as mortgages under a proposed rule, and
pending legislation would waive the 10% mortgage rule for
banks with assets under $500 million--making 800 more banks
eligible for membership. In the meantime, banks may buy
deposits from brokers. Mr. Utter said he buys about $5
million of deposits to get Adams County Bank through the peak
agricultural lending season of April through October.
``Brokered deposits used to be really frowned upon by
regulators, but we're not funding long-term investments'' he
said. Bank also sell older loans in their portfolio,
branches, or other investments to boost liquidity.
Gary Scott, president of Cheatam State Bank in Kingston
Springs, Tenn., said his bank occasionally bundles 15- to 20-
year mortgages and then sells them to raise cash. Citizens
Savings Bank recently sold one of its under-performing
branches to bring in new funds. The bank sacrificed the
branch's $7 million of deposits, but Citizens was able to use
cash from the sale to pay off some Federal Home Loan bank
advances, Mr. Landefeld said.
First Dakota National Bank in Yankton, S.D., has sold off
municipal bond securities in recent years to increase its
loan capacity, according to its president, James Ahrendt. Lew
Stone, president of Goleta (Calif.) National Bank, said his
bank is using the Internet to solve liquidity problems.
Goleta sells certificates of deposit through an electronic
bulletin board, raising and lowering the rates depending on
how much money the bank needs. ``We could raise $10 million
overnight if we had to,'' Mr. Stone said.
Industry experts say they expect the current trend of
declining deposit growth and increasing loan demand to
continue. ``I don't see any real relief for community
banks,'' said Charles N. Cranmer, head of equity research at
M.A. Schapiro & Co. in New York. ``You've got a banking
population that's been educated that they can do better
things with their money than put it in a bank.''
______
By Mr. MURKOWSKI (for himself, Mr. Akaka, Mr. Stevens, and Mr.
Inouye):
S. 1424. A bill to amend the Internal Revenue Code of 1986 to modify
the air transportation tax changes made by the Taxpayer Relief Act of
1997; to the Committee on Finance.
aviation taxes modification legislation
Mr. MURKOWSKI. Mr. President, today, along with Senators Akaka,
Stevens, and Inouye, I am introducing legislation that will provide a
measure of relief to the citizens of Alaska and Hawaii who must rely on
air transport far more than citizens in the lower-48.
When Congress adopted the balanced budget legislation last summer,
one of the provisions of the tax bill re-wrote the formula for
calculating the air passenger tax for domestic and international
flights. As part of this formula change, Congress adopted a per
passenger, per segment fee which disproportionately penalizes travelers
to and from Alaska and Hawaii who have no choice but to travel by air.
Th legislation we are introducing today would reinstate the prior law
10 percent tax formula for flights to and from our states. In addition,
the $6 international departure fees that are imposed on such flights
would be retained at the current level and would not be indexed. I see
no reason why passengers flying to and from our states must face a
guaranteed increase in tax every year because of inflation. We don't
index tobacco taxes, we don't index fuel taxes; why should government
automatically gain additional revenue from air passengers simply
because of inflation?
Mr. President, this legislation requires that intrastate Alaska and
Hawaii flights will be subject to a flat 10 percent tax if such flights
do not originate or terminate at a rural airport in our states. In
addition, the definition of a rural airport is expanded to include
airports within 75 miles of each other where no roads connect the
communities. In many towns in Alaska, air transport is the only viable
means of transportation from one community to another. There is no
reason these airports should be denied the benefit of the special rural
airport tax rate simply because our state does not have the
[[Page S12014]]
transportation infrastructure or geographic definition that exists in
most of the lower-48.
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. 1424
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. MODIFICATIONS TO AIR TRANSPORTATION TAX CHANGES
MADE BY TAXPAYER RELIEF ACT OF 1997.
(a) Elimination of Inflation Adjustment for Tax on Certain
Use of International Travel Facilities.--Section 4261(e)(4)
of the Internal Revenue Code of 1986 (relating to inflation
adjustment of dollar rates of tax) is amended--
(1) in subparagraph (A), by striking ``each dollar amount
contained in subsection (c)'' and inserting ``the $12.00
amount contained in subsection (c)(1)'', and
(2) in subparagraph (B)(ii), by striking ``the dollar
amounts contained in subsection (c)'' and inserting ``the
$12.00 amount contained in subsection (c)(1)''.
(b) Modification of Rural Airport Definition.--Subclause
(I) of section 4261(e)(1)(B) of the Internal Revenue Code of
1986 (defining rural airport) is amended by inserting ``(or
is so located but is not connected to such other airport by
paved roads)'' after ``clause (i)''.
(c) Imposition of Ticket Tax on Segments to and from Alaska
or Hawaii or Within Alaska or Hawaii at Rate in Effect Before
the Taxpayer Relief Act of 1997.--Section 4261(e) of the
Internal Revenue Code of 1986 (relating to special rules) is
amended by adding at the end the following:
``(6) Segments to and from alaska or hawaii or within
alaska or hawaii.--Except with respect to any domestic
segment described in paragraph (1), in the case of
transportation involving 1 or more domestic segments at least
1 of which begins or ends in Alaska or Hawaii or in the case
of a domestic segment beginning and ending in Alaska or
Hawaii--
``(A) subsection (a) shall be applied by substituting ``10
percent'' for the otherwise applicable percentage, and
``(B) the tax imposed by subsection (b)(1) shall not
apply.''.
(d) Effective Date.--The amendments made by this section
shall take effect as if included in the amendments made by
section 1031 of the Taxpayer Relief Act of 1997.
Mr. INOUYE. Mr. President, I am pleased to lend my support to Senator
Murkowski's bill that would amend Public Law 105-34, the Taxpayer
Relief Act of 1997, with respect to domestic aviation travel to, from,
and within Hawaii and Alaska. Hawaii, unlike any other State, save
Alaska, does not have the transportation alternatives that are
available to citizens of other States. Roads, bridges, trains, and
buses do not operate between the islands of Hawaii. This geographic
difference causes any tax imposed on the cost of flying, our citizens'
only means of getting from one island to another, to fall
disproportionately on our citizens.
This bill would correct any injustice that the citizens of Hawaii and
Alaska were, perhaps inadvertently, subjected to as a result of last
summer's passage of increased excise taxes on air transportation.
Specifically, the Taxpayer Relief Act of 1997's provision for the
collection of an additional segment tax for each segment of air travel
among the Hawaiian Islands disproportionately penalized Hawaii
citizens.
In addition, the current law definition of ``rural airports'' is
under inclusive. Under the current law, Hawaii citizens traveling to
and from an airport located within 75 miles of a high-traffic airport
that is inaccessible to them because there are no paved roads
connecting the two airports, are nonetheless ineligible for the reduced
7.5 percent tax. By amending the definition of ``rural airports,'' this
bill will afford Hawaii citizens the same tax benefits as similarly
situated citizens of other States.
Therefore, I support the reinstatement of the pre-act formula for
computing taxes on domestic segments that begin or end in Alaska and
Hawaii, which would correct the inequitable tax treatment of Hawaii
passengers under the current law.
It is my hope that my colleagues will support this measure during the
second session of the 105th Congress.
Mr. AKAKA. I am pleased to join Senator Murkowski and other
colleagues in introducing legislation today that addresses certain
aviation tax inequities that were enacted as part of Public Law 105-34,
the Taxpayer Relief Act of 1997.
Among other aviation provisions, Public Law 105-34 lowered the
passenger ticket tax from 10 percent to 9 percent, falling
incrementally to 7.5 percent over 3 years. In addition, the law
established a new domestic segment fee of $1, rising incrementally to
$3 over 5 years, which will ultimately be indexed for inflation.
However, flights from certain small, rural airports are taxed at a
simple 7.5 percent rate and exempted from the segment fee. Finally,
while the existing $6 international departure tax for flights between
Hawaii and other states is maintained, the charge is indexed for
inflation beginning in 1999.
Mr. President, these taxes unfairly discriminate against Hawaii
travellers. Residents of and visitors to Hawaii are entirely dependent
on plane service for communication among the State's eight major
islands as well as for travel to and from the distant U.S. mainland.
The new aviation charges make personal, commercial, and Government
travel within Hawaii more costly and hurts our tourism-based economy by
inhibiting visitation from other States. I understand that many of
these problems also apply to Alaska, which has similar transportation
concerns.
The bill we are introducing today addresses these shortcomings. Our
legislation would reinstate the prior 10 percent ticket tax and
eliminate the new segment fee on flights between our States and the
mainland as well as on intrastate flights in Hawaii and Alaska. The
measure would also eliminate the inflation adjustment for the $6
international departure tax to which flights to and from our States are
subject. Finally, the bill would redefine the rural airport exemption
in such a way that will qualify many passengers travelling within
Hawaii and Alaska for the reduced 7.5 percent rate.
Thank you, Mr. President. For the sake of Hawaii's and Alaska's
unique air transportation needs, I urge my colleagues to support this
initiative.
______
By Mr. BURNS:
S. 1425. A bill to provide for the preservation and sustainability of
the family farm through the transfer of responsibility for operation
and maintenance of the Flathead Indian Irrigation Project, Montana; to
the Committee on Indian Affairs.
the flathead irrigation project transfer act of 1997
Mr. BURNS. Madam President, I rise today to introduce a bill to
transfer the operation of an irrigation project in Montana from the
Bureau of Indian Affairs to the local irrigators. This is a bill, which
has been before Congress before, but has been changed to address the
concerns expressed by the BIA and groups which have opposed this
legislation in the past.
Years of management by the Bureau of Indian Affairs has led to a
project in poor physical condition. Rather than being an asset for the
government and the users, the Flathead Irrigation is rapidly becoming a
liability. Using current estimates, the project is in need of $15 to
$20 million worth of repair and conditioning. Government managers admit
that costs associated with rehabilation of this project could be as
much as 40 percent higher than if the project were under local control.
The irony of this project however, is the fact that studies on
locally owned irrigation projects in Montana and Wyoming show that the
costs of operation and maintenance of the Flathead project are some of
the highest in the Rocky Mountain Region the condition of the project
may be worst in that same region. What do these people, and for that
matter the taxpayer, get for the higher costs associated with the
current management? Not much if anything at all.
Let's take a moment here to see what local control of this irrigation
project would mean to the irrigators and to the taxpayer. First of all,
local control will mean increased accountability of the monies
collected by and used in the operation of the Flathead Irrigation
Project. At the current time the BIA is unable, or unwilling, to
provide basic financial information to the local irrigation districts.
This despite the fact that the local farmers and ranchers pay 100% of
the costs to operate and maintain the project. At the same time, the
current management cannot even deliver a year-end balance of funds paid
by the local irrigation users.
[[Page S12015]]
Local control will also create savings over the current operation
management. By using these savings the local management could be used
to restore the Flathead Irrigation Project to a fully functioning,
efficiently operating unit.
Without the transfer to local control, the residents of the Flathead
face an uncertain future. This irrigation project is located in one of
the most beautiful valleys in western Montana. Current trends in
agriculture have put farmers and ranchers in a difficult position.
Montana farmers and ranchers have always been land rich and cash poor.
In the case of this valley in Montana, this is the rule and not the
exception. They live in an area that is being changed daily due to the
number of summer home construction, because of the beauty and a
temperate climate for Montana.
The family farmers and ranchers in this area continue to face
economic pressures from outside. Which has led to a number of folks
packing up and subdividing their land for residential home sites. Those
who have packed up and left the area, have taken their land and
subdivided it for the residential development, removing the land from
agricultural production.
The subdivision of the land has a number of negative impacts on this
valley and Montana and the Nation. The landscape is dotted with
magnificent homes which impacts on the landscape and open spaces, and
of course wildlife. Another of the major impacts sin on the local and
state economies and governments. Agriculture land in Montana pays
approximately $1.29 in property taxes for every dollar invested by the
local government for services. Residential subdivisions only pay
approximately $0.89 for every dollar they receive in local government
services.
Preservation of the small family farm and ranch in the Mission, Jocko
and Camas valleys in Montana is dependent upon local control. As local
control of the Flathead Irrigation Project will provide these hard
working Americans an opportunity to control and have input on the costs
associated with the operation of this vital water source.
The local control of this project is supported by a wide cross
section of Montanan's. Governor Marc Racicot, the Lake County
Commissioners and local irrigation districts are among the local
government officials in support of this bill. Organizations which have
voiced their support for the measure include the Montana Stockgrowers
Association, Montana Water Resources Association and the National Water
Resources Association. The support of this measure in bipartisan in
nature as well.
Madam President. I am pleased to introduce this measure today, and I
look forward to moving this bill forward through committee and to the
floor in an attempt to give local control back to the people who depend
on the Flathead Irrigation Project for their way of living.
______
By Mr. LAUTENBERG:
S. 1426. A bill to encourage beneficiary developing countries to
provide adequate protection of intellectual property rights, and for
other purposes; to the Committee on Finance.
the rights of intellectual property owners fairness facilitation act of
1997
Mr. LAUTENBERG. Mr. President, I rise today to introduce legislation
I believe will encourage many of our trading partners to improve their
protection of American intellectual property rights. This is not an
insignificant matter, Mr. President. It is estimated that American
companies lose approximately $50 billion every year from intellectual
property violations. This theft not only affects a company's bottom
line, it means losses to America's competitiveness, and, most
importantly, it means loss of American jobs.
The ``Rights of Intellectual Property Owners Fairness Facilitation
Act of 1997,'' or RIP-OFF, will require participants in the Generalized
System of Preferences program to expedite their implementation of the
intellectual property agreement contained in the Uruguay Round of the
General Agreement on Tariffs and Trade. In addition, to continue as a
GSP beneficiary, a country must fully comply with the terms of any
bilateral or other multilateral intellectual property agreement it has
with the United States.
Mr. President, the Agreement on the Trade-Related Aspects of
Intellectual Property Rights, known as TRIPS, requires signatories to
improve and better enforce the rights of intellectual property holders.
Unfortunately, too many countries are able to delay implementation of
TRIPS for an inordinately long period of time. Developing countries
have until 2000 and least developed countries are permitted to delay
some TRIPS requirements for as long as 2006. The United States simply
cannot afford to permit piracy to continue unabated for such a lengthy
period.
The GSP program enables certain products from developing countries to
be exported to the United States duty-free. Through the years, Congress
has conditioned the receipt of these tariff preferences on such factors
as whether a country enforces arbitral awards in favor of US citizens,
whether it affords internationally recognized worker rights to its
workers, and whether it harbors terrorists. Although GSP beneficiaries
are supposed to provide 'adequate and effective' intellectual property
protection, it is an amorphous standard that has only been used a
handful of times against countries, and then, only for a limited period
of time, and with limited success. By tying the GSP program to
expedited implementation of TRIPS and full compliance with agreements
they have negotiated with the U.S., countries will know what they must
do and by when to continue receiving GSP benefits. It also demonstrates
our commitment to protecting American intellectual property rights
overseas.
My legislation conforms to current law, which provides the President
with the discretion, via a waiver, to continue or extend GSP benefits
to a country that does not comply with the requirements of this bill by
allowing a waiver. The President has every right to determine that
designating a country as a GSP beneficiary is in the national economic
interest of the United States. I thought it was important to maintain
the existing flexibility in this program. My bill will also enable our
government to provide support and technical assistance to countries
having difficulty meeting their intellectual property protection
requirements.
The GSP program provides countries with a benefit, not a right.
Congress continues to downsize the federal government. Resources are
scarce. In this climate, it is inappropriate to provide GSP benefits to
countries that do not uphold our intellectual property rights.
Industries reliant upon strong intellectual property protection,
pharmaceutical, telecommunications, and motion picture companies, for
example, are among this country's most competitive. We should be
fostering this competitiveness by using appropriate tools to protect
our innovators. Mr. President, this legislation will accomplish this
goal.
This legislation is very similar to a bill I introduced several years
ago with Senator Roth. The modifications I have made account for the
time countries have already had to commence changes to their
intellectual property laws and regulations. Additionally, the bill
clarifies that the standards provided in TRIPS should be the floor for
intellectual property agreements, and that our government should
continue seeking stronger protection for American intellectual property
owners.
Mr. President, I urge my colleagues to support this legislation and
ask unanimous consent that the text of the bill be inserted into the
Record along with letters of support.
There being no objection, the material was ordered to be printed in
the Record, as follows:
S. 1426
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 ``Rights of Intellectual
Property Owners Fairness Facilitation Act of 1997''.
SEC. 2. FINDINGS.
Congress makes the following findings:
(1) United States industry loses billions of dollars each
year to countries that do not provide adequate protection of
intellectual property rights.
(2) According to the Department of Commerce, United States
companies lose approximately $50,000,000,000 annually as a
result of violations of intellectual property rights by
foreign countries.
[[Page S12016]]
(3) It is in the interest of the United States to leverage
its foreign policy to achieve certain trade policy
objectives, such as adequate, effective, and timely
protection of intellectual property rights.
(4) Several countries that qualify under the generalized
system of preferences provisions have been identified under
section 182 of the Trade Act of 1974 (19 U.S.C. 2242) as
countries that do not provide adequate and effective
protection of patents, copyrights, and trademarks or deny
fair and equitable market access to United States persons
that rely on intellectual property rights protection.
(5) Several countries that receive United States foreign
assistance also have been identified under section 182 of the
Trade Act of 1974 as countries that do not provide adequate
and effective protection of patents, copyrights, and
trademarks or deny fair and equitable market access to United
States persons that rely on intellectual property rights
protection.
SEC. 3. COUNTRIES INELIGIBLE FOR GSP TREATMENT.
(a) In General.--
(1) Implementation of agreement on trips and other
agreements relating to intellectual property rights.--Section
502(b)(2) of the Trade Act of 1974 (19 U.S.C. 2462(b)(2)) is
amended--
(A) by inserting immediately after subparagraph (G) the
following new subparagraphs:
``(H) Such country is not implementing parts I, II, and III
of the Agreement on TRIPS--
``(i) beginning on the date that is 1 year after the date
of enactment of the Rights of Intellectual Property Owners
Fairness Facilitation Act of 1997; or
``(ii) by January 1, 2000, in the case of a least-developed
beneficiary developing country.
``(I) Beginning on the date that is 90 days after the date
of enactment of the Rights of Intellectual Property Owners
Fairness Facilitation Act of 1997, such country is not
implementing--
``(i) article 70(9) of part VII of the Agreement on TRIPS;
or
``(ii) any bilateral or multilateral agreement (other than
an agreement described in subparagraph (H) or clause (i)) to
protect and enforce intellectual property rights entered into
with the United States.''.
(B) in the last sentence, by striking ``(D), (E), (F), and
(G)'' and inserting ``(D), (E), (F), (G), (H), and (I)''.
(2) Conforming amendment.--Section 507 of such Act (19
U.S.C. 2467) is amended by adding at the end the following
new paragraph:
``(6) Agreement on trips.--
``(A) TRIPS.--The term `Agreement on TRIPS' means the
Agreement on Trade-Related Aspects of Intellectual Property
Rights entered into as part of the Uruguay Round Agreements.
``(B) Uruguay round agreements.--The term `Uruguay Round
Agreements' means the trade agreements resulting from the
Uruguay Round of multilateral trade negotiations under the
auspices of the General Agreement on Tariffs and Trade.''.
(b) Designation as Eligible GSP Country.--Section 502 of
such Act (19 U.S.C. 2462) is amended by adding at the end the
following new subsection:
``(g) Designation Where Country Adheres to the Agreement on
TRIPS and Other Intellectual Property Rights Agreements;
Annual Reports.--
``(1) Designation as beneficiary developing country.--A
country--
``(A) which has been denied designation as a beneficiary
developing country on the basis of subsection (b)(2)(H) or
(I), or
``(B) with respect to which such designation has been
withdrawn or suspended based on subsection (b)(2) (H) or (I),
may be designated as a beneficiary developing country under
this title, if the President determines that the country is
fully implementing parts I, II, III and article 70(9) of part
VII of the Agreement on TRIPS, and any other agreement
entered into with the United States that relates to
intellectual property rights, and reports the determination
to Congress.
``(2) Reports.--
``(A) Annual reports.--Not later than the date that is 1
year after the date of enactment of the Rights of
Intellectual Property Owners Fairness Facilitation Act of
1997, and annually thereafter, the President shall determine
whether each country designated as a beneficiary developing
country under this title is fully implementing parts I, II,
and III of the Agreement on TRIPS and shall report such
findings to Congress.
``(B) Other reports.--Not later than 90 days after the date
of enactment of the Rights of Intellectual Property Owners
Fairness Facilitation Act of 1997, and annually thereafter,
the President shall determine whether each country designated
as a beneficiary developing country under this title is fully
implementing article 70(9) of part VII of the Agreement on
TRIPS and any other agreement entered into with the United
States that relates to intellectual property rights and shall
report such determination to Congress.''.
SEC. 4. COORDINATION OF TRADE POLICY AND FOREIGN POLICY.
(a) Other Efforts To Improve Protection of Intellectual
Property Rights.--The United States Trade Representative
shall notify the Secretary of State, the Secretary of
Commerce, and the Administrator of the Agency for
International Development on a regular basis of any country
which is not fully implementing parts I, II, III and article
70(9) of part VII of the Agreement on TRIPS, and any other
agreement entered into with the United States that relates to
intellectual property rights.
(b) Encouraging Implementation of Agreement on TRIPS.--The
Secretary of State, the Secretary of Commerce, and the
Administrator of the Agency for International Development
shall cooperate with the United States Trade Representative
by encouraging any country that receives foreign assistance
and is not fully implementing the Agreement on TRIPS or any
other agreement entered into with the United States that
relates to intellectual property rights to enact and enforce
laws that will enable the country to implement the Agreement
on TRIPS and any other intellectual property rights
agreement. To further this objective, the Secretary of State
shall instruct the head of each United States diplomatic
mission abroad to include intellectual property rights
protection as a priority objective of the mission.
(c) Other Actions To Encourage Protection of Intellectual
Property Rights.--Notwithstanding any other provision of law,
the President is authorized to undertake the following
actions, where appropriate, with respect to a developing
country to encourage and help the country improve the
protection of intellectual property rights:
(1) Provide Overseas Private Investment Corporation
insurance for intellectual property assets.
(2) Require foreign assistance programs to provide support
for the development of national intellectual property laws
and regulations and for the development of the infrastructure
necessary to protect intellectual property rights.
(3) Establish technical cooperation committees on
intellectual property standards within regional
organizations.
(4) Establish, as a joint effort between the United States
Government and the private sector, a council to facilitate
and provide intellectual property-related technical
assistance through the Agency for International Development
and the Department of Commerce.
(5) Require United States representatives to multilateral
lending institutions to seek the establishment of programs
within the institutions to support strong intellectual
property rights protection in recipient countries that have
fully implemented parts I, II, III and article 70(9) of part
VII of the Agreement on TRIPS, and any other agreement
entered into with the United States that relates to
intellectual property rights.
(d) Definitions.--In this section:
(1) Agreement on trips.--The term ``Agreement on TRIPS''
means the Agreement on Trade-Related Aspects of Intellectual
Property Rights entered into as part of the trade agreements
resulting from the Uruguay Round of multilateral trade
negotiations under the auspices of the General Agreement on
Tariffs and Trade.
(2) Developing country.--The term ``developing country''
means any country which is--
(A) eligible to be designated a beneficiary developing
country pursuant to title V of the Trade Act of 1974 (19
U.S.C. 2461 et seq.); or
(B) designated as a least-developed beneficiary developing
country pursuant to section 502 of such Act (19 U.S.C. 2462).
____
Pharmaceutical Research and Manufacturers of America,
Washington, DC, September 19, 1997.
Hon. Frank Lautenberg,
United States Senate,
Washington, DC.
Dear Senator Lautenberg: I am writing to express PhRMA's
appreciation and support for your legislation, the ``rights
of Intellectual Property Owners Fairness Facilitation Act of
1997.'' The protection and enhancement of American
intellectual property is fundamental to the competitiveness
of many U.S. industries, especially the research-based
pharmaceutical industry. Thanks to the support of the
Congress and the Executive Branch, over the years many
countries such as Mexico and Brazil have improved their
intellectual property regimes, thereby improving their
prospects for economic development and setting a positive
example for other countries around the world.
I believe your legislation, by providing a balanced range
of incentives for countries to improve their protection of
intellectual property rights, will send a positive signal to
our trading partners. Please do not hesitate to contact me if
there is anything PHRMA can do to support the passage of your
legislation.
Sincerely,
Alan F. Holmer,
President.
____
Procter & Gamble,
Washington, DC, October 28, 1997.
Hon. Frank Lautenberg,
United States Senate,
Washington, DC.
Dear Senator Lautenberg: On behalf of Procter & Gamble, I
write in strong support of your efforts to protect U.S.
intellectual property rights through your bill, the ``Rights
of Intellectual Property Owners Fairness Facilitation Act of
1997.''
Procter & Gamble now generates over half of its $35 billion
annual sales from international markets. America's leadership
to create rules-based international markets is
[[Page S12017]]
one of our primary concerns. As we continue to build our
business in developing countries, we seek a ``level playing
field'' in the form of transparent, rules-based treatment and
protection of investments, including trademarks,
technologies, and ideas. Your bill, which requires that
developing countries adequately protect our intellectual
property rights or lose GSP benefits, represents a positive
step.
We are all too familiar with what can happen overseas when
U.S. intellectual property rights are not adequately
protected. For instance, in the Persian Gulf countries, P&G
suffers from severe counterfeit activity. In certain other
nations receiving GSP preferences, we estimate that nearly
10% of our total sales is lost to counterfeit products. If
GSP can be used as an incentive for countries to implement
the TRIPS standards at an accelerated pace, we would avoid
those losses.
Your proposed similar legislation in 1994, which we and
many of our trade associations such as IPO and PhRMA
supported. We will encourage those organizations to again
support this initiative.
Sincerely,
R. Scott Miller,
Director.
______
By Mr. FORD:
S. 1427. A bill to amend the Communications Act of 1934 to require
the Federal Communications Commission to preserve lowpower television
stations that provide community broadcasting, and for other purposes;
to the Committee on Commerce, Science, and Transportation.
THE COMMUNITY BROADCASTERS PROTECTION ACT OF 1997
Mr. FORD. Mr. President, today, I am pleased to introduce the
Community Broadcasters Protection Act of 1997. This legislation is
designed to provide some limited protections for the owners and
operators of low-power television, or LPTV.
Mr. President, when the Federal Communications Commission created
low-power television licenses in the early 1980's, it did so with a
simple premise: television stations unable to reach a large area, can
still offer a valuable service to our communities. Low-power television
stations operate at the higher ends of the broadcast spectrum and serve
a more limited area, generally a coverage area of approximately 12 to
15 miles. In addition, LPTV licensees operate as a ``secondary
status''. That is, they cannot interfere with the transmission of full
power television stations.
Since their creation almost 20 years ago, LPTV stations have
flourished. As entrepreneurs, LPTV owners and operators have
experimented with various kinds of programming. Many have been
extremely successful as local, community broadcasters, providing
regional news and sports coverage. In fact, LPTV stations have much in
common with full power stations. Many offer a full service daily
program schedule. Other LPTV stations have predominantly religious, all
news, all sports, or all movie formats. Still, many other LPTV stations
offer more local and ``niche'' programming because their service areas
are smaller, their audiences more targeted.
Unfortunately, the transition to the digital television era threatens
the viability of many LPTV stations. As their spectrum is reclaimed by
the FCC for the purpose of providing the second channel for digital
television, some of the LPTV stations may face darkness during the
transition to digital television, or afterwards.
Let me say, Mr. President, that I have been and continue to be, a
supporter of the transition to digital television. I believe the move
to digital television is a prudent use of modern technology for the use
of a scarce public resource, the electromagnetic spectrum. But I also
believe that as we make this transition, good public policy must
support the investments made by LPTV licensees. I would note, Mr.
President, that a majority of Members of the Senate agreed with me on
this point as a number of Members joined me on a March 6, 1997 letter
to then FCC Chairman Reed Hundt in which we expressed concerns about
the plans for the transition to digital television.
And while the FCC agrees that LPTV licensees have been successful and
offer a valuable enterprise, there remains regulatory uncertainty for
LPTV licensees in the digital age. That is why I have introduced the
Community Broadcasters Protection Act of 1997. This legislation will
elevate some LPTV stations from their current secondary status to a
newly created Class A license. In so doing, Class A LPTV licensees
would be treated under law and FCC regulations like a full power
television station. That is, Class A LPTV licensees would assume the
same duties and responsibilities as their full power counterparts.
To qualify for a Class A license, an LPTV station must broadcast a
minimum of 18 hours per day, and broadcast an average of at least 3
hours per week of programming produced within the market area served by
the LPTV station. LPTV stations must be operating under these
conditions within the last 2 years before enactment of this legislation
and within 6 months of filing for the license. Once an LPTV station
obtains a Class A license, the FCC would be required to find spectrum
for the station in the new digital television era. Like its full power
counterparts, a Class A licensee could not be forced off the air by
having its license terminated or rescinded. However, in those instances
where the FCC cannot accommodate an LPTV licensee in one market,
because of the potential for interference with full power digital
transmissions, the FCC is authorized to award the LPTV Class A licensee
another license in an adjacent community, or if that is not available,
in another community acceptable to the licensee.
Lower-power television licensees are willing and prepared to join
their full power counterparts in the transition to digital television--
a transition which is technically complex and potentially costly for
both full power and low-power broadcasters. But as long as there
remains a regulatory uncertainty about the future of LPTV, they will
not be able to obtain the investments and capital to make that
transition.
It is an interesting historic footnote, that at the time LPTV was
authorized by the FCC, then FCC Chairman Charles Ferris suggested that
one day, LPTV could develop into full power television stations. While
this legislation does not elevate LPTV to full power status, I do
believe that this legislation addresses a critical issue for LPTV
supporters--the development of adequate protections in the digital age
for broadcasters who provide a significant benefit to the public. I
hope my colleagues, who are also supporters of their community
broadcasters agree with me and will lend their support to move this
legislation forward towards enactment.
______
By Mr. GRAHAM (for himself, Mr. Mack and Mr. Bumpers):
S. 1428. A bill to waive time limitations specified by law in order
to allow the Medal of Honor to be awarded to be awarded to Robert R.
Ingram of Jacksonville, Florida, for acts of valor while a Navy
Hospital Corpsman in the Republic of Vietnam during the Vietnam
conflict; to the Committee on Armed Services.
the robert r. ingram recognition act of 1997
Mr. GRAHAM. Mr. President, I rise today to urge passage of a private
bill that will honor a man that served this country with honor and
bravery. This bill will allow Robert R. Ingram to receive the Medal of
Honor for conspicuous gallantry and intrepidity at the risk to his life
above and beyond the call of duty.
Robert R. Ingram served as Corpsman with Company C, First Battalion,
Seventh Marines in Vietnam. On March 28, 1966, Corpsman Ingram
accompanied Marine point platoon as it dispatched an outpost of a North
Vietnam Aggressor battalion in Quang Ngai Province, Republic of
Vietnam. They were sabotaged by the Vietnamese, and the platoon was
decimated, suffering numerous casualties. Corpsman Ingram was himself
injured four times during the attack while he administered first aid to
other members of his platoon.
Enduring the pain from his many injuries and disregarding his own
life, Corpsman Ingram's selfless actions saved many U.S. soldiers that
day. By his indomitable fighting spirit, daring initiative, and
unfaltering dedication to duty, Corpsman Ingram clearly earned the
Medal of Honor as a result of his actions. However, the Navy failed to
process an award, and Corpsman Ingram received no official commendation
for his actions. The men with whom he served that fateful day, and the
men whose lives he saved, all feel that a commendation is due. However,
there is no evidence of an award recommendation.
[[Page S12018]]
Mr. President, it is time that Robert R. Ingram receives an honor
that should have been bestowed upon him over thirty years ago. This
bill calls for the time limitations in Section 6248 to be waived so
that this action may be taken.
Mr. President, I ask unanimous consent that the full text of the
legislation be printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 1428
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. AUTHORITY FOR AWARD OF MEDAL OF HONOR TO ROBERT R.
INGRAM FOR VALOR DURING THE VIETNAM CONFLICT.
(a) Waiver of Time Limitations.--Notwithstanding the time
limitations specified in section 6248 of title 10, United
States Code, or any other time limitation with respect to the
awarding of certain medals to persons who served in the naval
service, the President may award the Medal of Honor under
section 6241 of that title to Robert R. Ingram of
Jacksonville, Florida, for the acts of valor referred to in
subsection (b).
(b) Action Described.--The acts of valor referred to in
subsection (a) are the actions of Robert R. Ingram on March
28, 1966, as a Hospital Corpsman Third Class in the Navy
serving in the Republic of Vietnam with Company C of the
First Battalion, Seventh Marines, during a combat operation
designated as Operation Indiana.
______
By Mr. ROCKEFELLER (for himself, Mr. Burns, and Mr. Dorgan):
S. 1429. A bill to enhance rail competition and to ensure reasonable
rail rates in any case in which there is an absence of effective
competition; to the Committee on Commerce, Science, and Transportation.
the railroad shipper protection act of 1997
Mr. ROCKEFELLER. Mr. President, I am pleased and proud to be joined
by two of my distinguished colleagues, Senator Conrad Burns and Senator
Byron Dorgan, in introducing today the Railroad Shipper Protection Act
of 1997. This legislation is the result of many months of effort to
develop constructive and pragmatic proposals for addressing the
increasingly serious problems faced by shippers in need of affordable
access to railroad service in every region of the country. As a
bipartisan team committed to achieving urgently needed results in the
coming year, we offer this bill with the hope that it will generate the
interest, input, and support needed to help shippers obtain fair
treatment and true competitive access from railroads across the
country. I commend both Senators Burns and Dorgan for their leadership
and constant attention to these issues, which can be complex and yet
affect numerous communities, key industries, and workers nationwide.
This legislation deals with issues of longstanding concern to me.
Because of the importance of the relationship between the Nation's
railroads and the shippers and communities that they serve, especially
in my State of West Virginia, I have made a special effort throughout
my tenure in the Senate to promote a rail transportation system that is
fair and economically sound for all parties. Of all of the things that
have troubled me about that system over the years, none is more
troubling than the plight of captive rail shippers--businesses and
communities that are dependent on a single railroad for freight
transportation service.
West Virginia has more than its fair share of captive shippers. Many
of our coal fields, most of our chemical manufacturers, and one of our
finest steel manufacturing facilities--and the largest single employer
in our State--all are captive to a single railroad for shipments to
domestic and foreign markets. The result is that West Virginia
businesses too often suffer from unreasonable freight rates and
inadequate transportation service.
Today, two events are conspiring to create additional captive rail
shippers--and worsen the competitive position of existing captive rail
shippers--in West Virginia and across the Nation.
First, our national freight rail system continues to concentrate into
fewer and fewer major railroads. Since Congress deregulated the
railroads in 1980, the number of major Class I railroads has declined
from 43 to 5--and will drop to 4 if the division of Conrail is
approved. For a long time the fears expressed by shippers, and by those
of us in Congress who are dedicated to protecting shippers, have fallen
on deaf ears. In the past several months, however, the entire Nation
has witnessed the far-reaching economic impact of a merger gone awry.
The 1996 merger of Union Pacific and Southern Pacific has made dramatic
headlines as service is disrupted, trains pile up, shipments are lost,
and ultimately facilities and jobs are put in jeopardy. The chemical
industry alone has had to grapple with service disruptions costing an
average of $35 to $60 million per month through the summer and into the
fall.
The UP-SP service crisis has caught my attention in part because the
effects are so far-reaching that a number of West Virginia shippers
have asked for my help, and in part because I now face a major merger
in my own backyard with the proposal to divide Conrail between CSX and
Norfolk Southern. The UP-SP situation is expected to improve in the
coming months, following implementation of a comprehensive service
recovery plan and unprecedented intervention by the Surface
Transportation Board, but the UP-SP story has only reinforced my belief
that concentration of the Nation's railroads is an ominous development
for many shippers and for States like West Virginia. Railroad
concentration is reducing transportation options and worsening the
competitive position of captive shippers.
Second, the Surface Transportation Board, established in 1995 to
succeed the Interstate Commerce Commission, is understaffed and
underfunded, and is not adequately promoting rail competition and
protecting captive shippers. As I feared at the time it was passed, the
effect of the ICC Termination Act has been to reduce our national
commitment to a strong and effective regulatory body to protect rail
shippers. Rather than being vigilant in protecting captive shippers
from railroad abuses, the STB has instead been consumed with reviewing
major railroad mergers, conducting annual revenue adequacy
determinations which serve no purpose, and making matters worse for
shippers by deciding in December 1996 that railroads may render captive
a shipper that is otherwise positioned to enjoy competitive service by
refusing to quote a rate on a bottleneck segment.
Mr. President, just as the railroad industry has become more and more
concentrated, the regulatory agency charged with protecting captive
railroad customers has become less and less able to do its job.
Some may wonder how the STB, which is directly charged with
protecting against unreasonable rates and promoting competition, came
to make such an anticompetitive and antishipper decision as that set
forth in the 1996 bottleneck cases, and I think the answer illustrates
well the need for Congress to correct the current imbalance between
railroads and their customers.
The answer lies in the confusing instructions that were given to the
STB in the ICC Termination Act, and previously in the Staggers Rail Act
of 1980 and the Railroad Revitalization and Regulatory Reform Act of
1976. In these statutes Congress directed the STB and its predecessor,
the ICC, to promote our national rail transportation system ``by
allowing rail carriers to earn adequate revenues'' (49 U.S.C. 10101(3))
and by making ``an adequate and continuing effort to assist those
carriers in attaining revenue levels'' that allow them ``to attract and
retain capital in amounts adequate to provide a sound transportation
system in the United States'' (49 U.S.C. 10704(a)(2)). Congress has
further directed the STB to make an annual determination of each
railroad's revenue adequacy--a determination that finds most class I
railroads to be revenue inadequate, contrary to the view of Wall Street
and industry observers about the financial strength of individual
railroads and the industry as a whole.
As is evident in reading the Board's bottleneck decision, the
perceived revenue inadequacy of the major railroads, and the belief
that protecting revenue adequacy is the preeminent responsibility of
the agency, formed the basis of the STB's agreement with the railroads
that they should have the right to prevent rail-to-rail competition
even where competition is physically possible. At this point in the
evolution of the railroad industry, such an approach is not only
inequitable, it is harmful to our national economy.
[[Page S12019]]
Today, I join with my colleagues in proposing legislation to clarify
the policy of the U.S. Government with regard to railroad competition
and to restore the intended balance between railroads and shippers in
the laws governing their relationship and the oversight role of the
STB. This bill would accomplish five major objectives: First, making
clear that it is the policy of the U.S. Government to promote rail
competition and protect captive shippers; second, reducing the
regulatory burden on captive shippers by simplifying the market
dominance test; third, overturning the bottleneck decision by requiring
railroads to quote a rate on any available segment of service; fourth,
eliminating the ``revenue adequacy'' test, which serves no practical
purpose and perpetuates the erroneous view that railroads are in dire
financial straits; and fifth, requiring the STB to open its process
more widely in order to meet the needs of small shippers.
It is our intention to pursue this legislation in the context of the
STB's reauthorization next year. I am firmly committed to ensuring that
the Board is reauthorized in a timely way and is provided with the
funds it needs to perform its mission as the primary oversight agency
for the Nation's railroads, but I want to make clear that I will not
support continuation of the status quo in the relationship between
railroads and shippers.
The legislation I introduce today will begin to afford rail-to-rail
competition and captive shipper protection the priority they deserve in
our national transportation policy. It is an important first-step, and
I look forward to working with Senator Burns, Senator Dorgan, and
others over the course of the next several months to expand upon the
shipper protections we propose today. I invite our colleagues to join
us in this effort, and genuinely seek constructive input and assistance
to achieve needed solutions.
Mr. President, I ask unanimous consent that a copy of the bill be
printed in its entirety in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 1429
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 ``Railroad Shipper Protection
Act of 1997''.
SEC. 2. FINDINGS.
The Congress finds that--
(1) the railroad industry has consolidated dramatically
since passage of the Staggers Rail Act of 1980 (94 Stat. 1895
et seq.), leaving the railroad industry with only a few major
carriers and providing shippers with limited competitive
options;
(2) the financial health of the railroad industry has
improved substantially since the passage of the Staggers Rail
Act of 1980;
(3) due partly to the continued consolidation of the
railroad industry, captive rail shippers--
(A) continue to exist; and
(B) are increasing in number; and
(4) rail shippers, including captive rail shippers, will
benefit from increased competition among railroads and a
streamlined process under which the Surface Transportation
Board determines the reasonableness of captive rail shipper
rates.
SEC. 3. DEFINITIONS.
In this Act:
(1) Secretary.--The term ``Secretary'' means the Secretary
of Transportation.
(2) Surface transportation board.--The term ``Surface
Transportation Board'' or ``Board'' means the Surface
Transportation Board established under section 701 of title
49, United States Code.
SEC. 4. PURPOSES.
The purposes of this Act are--
(1) to clarify the rail transportation policy of the United
States;
(2) to ensure rail competition for shippers in geographic
areas in which rail competition is physically available;
(3) to ensure reasonable rates for captive rail shippers;
and
(4) to remove unnecessary regulatory burdens from the rate
reasonableness process of the Surface Transportation Board.
SEC. 5. CLARIFICATION OF RAIL TRANSPORTATION POLICY.
Section 10101 of title 49, United States Code, is amended--
(1) by inserting ``(a) In General.--'' before ``In
regulating''; and
(2) by adding at the end the following:
``(b) Primary Objectives.--The primary objectives of the
rail transportation policy of the United States shall be--
``(1) to ensure effective competition among rail carriers
at origin and destination; and
``(2) to maintain reasonable rates in the absence of
effective competition.''.
SEC. 6. REQUIREMENT OF RAILROADS TO ESTABLISH RATES TO
FACILITATE RAIL TO RAIL COMPETITION.
(a) Establishment of Rate.--Section 11101(a) of title 49,
United States Code, is amended by inserting after the first
sentence the following: ``Upon the request of a shipper, a
rail carrier shall establish a rate for transportation
requested by the shipper between any 2 points on the system
of that rail carrier where traffic originates, terminates, or
may be interchanged. A rate established under the preceding
sentence shall apply to the shipper that makes the request
for the rate without regard to whether the rate established
is for part of a through transportation route between an
origin and a destination or whether the shipper has made
arrangements for transportation over any other part of that
through route.''.
(b) Review of Reasonableness of Rate.--Section 10701(d) of
title 49, United States Code, is amended--
(1) by redesignating paragraph (3) as paragraph (4); and
(2) by inserting after paragraph (2) the following:
``(3) If a rail carrier establishes a rate for
transportation between any 2 points on the system of that
rail carrier where rail traffic originates, terminates, or
may be interchanged, the shipper may challenge the
reasonableness of--
``(A) that rate; or
``(B) the aggregate rate between origin and destination (if
the rate established is for part of a through route).''.
SEC. 7. SIMPLIFIED STANDARD FOR MARKET DOMINANCE.
Section 10707(d) of title 49, United States Code, is
amended--
(1) by striking paragraph (2);
(2) by striking ``(1)(A)'' and inserting ``(3)'';
(3) by striking ``(B) For purposes'' and inserting ``(4)
For purposes''; and
(4) by inserting before paragraph (3), as redesignated, the
following:
``(1) In making a determination under this section, the
Board shall find that the rail carrier establishing the
challenged rate referred to in subsection (b) has market
dominance over the transportation to which the rate applies
if that rail carrier--
``(A) is the only rail carrier serving the origin,
destination, or intermediate portion of the route involved;
and
``(B) does not prove to the Board that the rate charged
results in a revenue-variable cost percentage for that
transportation that is less than 180 percent.
``(2) In making a market dominance determination under this
section in any case in which 2 or more rail carriers provide
service at an origin or destination, the Board shall consider
only transportation competition at that origin or
destination.''.
SEC. 8. REVENUE ADEQUACY DETERMINATIONS.
(a) Rail Transportation Policy.--Section 10101(3) of title
49, United States Code, is amended by striking ``, as
determined by the Board;''.
(b) Authority for Revenue Adequacy Determination.--Section
10704(a) of title 49, United States Code, is amended--
(1) by striking ``(a)(1)'' and inserting ``(a)''; and
(2) by striking paragraphs (2) and (3).
SEC. 9. REDUCTION OF PROCEDURAL BARRIERS FACED BY SMALL
SHIPPERS.
(a) Administrative Relief.--Not later than 180 days after
the date of enactment of this Act, the Surface Transportation
Board shall--
(1) review the rules and procedures applicable to rate
complaints and other complaints filed with the Board by small
shippers;
(2) identify any such rules or procedures that are unduly
burdensome to small shippers; and
(3) take such action, including rulemaking, as is
appropriate to reduce or eliminate the aspects of the rules
and procedures that the Board determines under paragraph (2)
to be unduly burdensome to small shippers.
(b) Legislative Relief.--The Board shall notify the
Committee on Commerce, Science, and Transportation of the
Senate and the Committee on Transportation and Infrastructure
of the House of Representatives if the Board determines that
additional changes in the rules and procedures described in
subsection (a) are appropriate and require commensurate
changes in statutory law. In making that notification, the
Board shall make recommendations concerning those changes.
Mr. DORGAN. Mr. President, today I am joining Senator Rockefeller and
others in introducing legislation that is designed to address some
chronic problems facing rail shippers, especially small, captive
shippers such as the small grain elevators in agricultural States like
North Dakota. As this bill is introduced in the Senate today, thousands
of bushels of grain are lying on the ground in North Dakota because
there are no cars available to small elevators to take wheat and barley
to market. The frustration of North Dakota farmers and grain shippers
is focused not only on the availability of grain cars to take their
products to market this time of year, but also on what they have to pay
when they have only one railroad serving them. The rates captive
shippers pay to get their products to market reflect the basic
principles of economics: where there is competition there are lower
rates and where there is not, the captive shipper pays significantly
more.
[[Page S12020]]
While the legislation we are introducing today will not create more
grain cars this year and it will not solve full the myriad of concerns
that many captive shippers have with respect to rail service in this
country, this bill will take a step towards addressing some issues that
will help improve the situation of captive shippers.
The inspiration of this bill is the fact that 20 years ago there were
more than 40 Class I railroads and today there are eight, of which 5 of
these ``mega carriers'' generate 94 percent of the Class I rail
industry's gross income and own over 90 percent of the track miles, and
produce nearly 95 percent of the gross ton miles. Today, the western
two-thirds of the country is divided up between two mega carriers that
own approximately 85 percent of the track, generate over 90 percent of
the gross ton miles, and earn about 90 percent of the total net
railroad operating income west of the Mississippi River.
As the railroad industry has consolidated over the past 20 years,
more and more shippers have become captive to one carrier, replacing
competitive service with monopoly service. At the same time, small
captive shippers face insurmountable obstacles to seek relief on
unreasonable rates before the Surface Transportation Board [STB]. It
seems to me that the Congress needs to begin a serious debate on issues
effecting captive shippers. The STB still operates under outdated
regulatory structures and too many hurdles and red tape stand between
the small shipper and relief on unreasonable rates. This legislation
takes a modest step at addressing a few specific issues in these areas.
This legislation addresses the broader issues of promoting rail
competition and protecting captive shippers where competition does not
exist by identifying these issues as priorities for the STB. The also
makes a couple of changes in specific policies of the STB. First, this
bill overturns the STB's decision on the so-called ``bottleneck'' case
where the STB concluded that carriers have no obligation to quote a
rate for a segment of line. The essence of the bottleneck case was that
some shippers believe that in areas where their products were being
shipped where rail competition exists, they want to take advantage of
the lower rates for that particular segment of line. This legislation
would require a carrier to quote a rate for a specific segment at the
request of the shipper. If the carrier did not quote a rate, then the
STB would have to set a rate. This circumstance will permit captive
shippers to take advantage of the little competition that does exist in
the rail industry.
This legislation also repeals the outdated revenue adequacy test. The
Vice Chairman of the STB, Gus Owen, has appropriately questioned the
appropriateness and the relevance of the STB conducting this outdated
exercise of determining the revenue adequacy of railroads. This test is
so out of date that the two largest railroads in the Nation failed the
last revenue adequacy test by the STB. However, these and other major
railroads have no problem leveraging capital and their own financial
reports indicate record profits. It is a ridiculous test and it serves
no useful purpose for STB procedures.
In addition, the legislation attempts to streamline the bureaucratic
hurdles facing small shippers in seeking rate relief before the STB.
One provision streamlines the requirements imposed on the shipper to
demonstrate that the rail carrier serving them meets the STB's
definition of ``market dominance.'' Under current law, market dominance
is defined as ``the absence of effective competition from other rail
carriers or modes of transportation'' and the STB cannot find market
dominance unless the revenue to variable cost percentage exceeds 180
percent. Under the STB's interpretation of this requirement, the STB
requires shippers to demonstrate that there is no product nor
geographic competition under he what constitutes transportation
competition. This legislation makes the market dominance test simple
and easier to understand. Under this bill, a shipper need only
demonstrate that they are served by only one rail carrier and that
their rates exceed 180 percent revenue to variable cost to determine
market dominance.
This legislation would also require the STB to review its regulations
and rules with respect to barriers that impede a small shippers'
ability to file rate and other complaints against railroads before the
STB. The STB would be required to minimize their red tape and barriers
for shippers and also to report to Congress on barriers that require
legislative action to remedy.
Mr. President, this legislation is modest, but it will make a
difference for small shippers in this country. The premise of the bill
is that the STB ought to emphasize competition and where competition
does not exist, the STB needs to make it easier for captive shippers to
seek relief from unreasonable rates.
Next year, the Senate Committee on Commerce, Science, and
Transportation will be debating reauthorization legislation on the STB.
That will be a very important debate. Senator Rockefeller, I and others
intend to make sure that one element of that debate will focus on the
problems facing small, captive shippers and we consider this
legislation as a building block for next year's debate. I hope my
colleagues will support this legislation.
______
By Mr. DODD:
S. 1453. A bill to establish a Commission on Fairness in the
Workplace, and for other purposes; to the Committee on Labor and Human
Resources.
THE NATIONAL COMMISSION ON FAIRNESS IN THE WORKPLACE ACT
Mr. DODD. Mr. President, today I am introducing the National
Commission on Fairness in the Workplace Act. This commission will be
tasked to review the trend of creating more part-time jobs than full-
time jobs; assess the relationship between part-time work and wage
levels, benefits, earning potential, and productivity; and examine the
practice of having different wage and benefit levels for part-time and
full-time workers. This commission, comprised of representatives of the
business community, labor, academia and government, will report its
findings and recommendations to Congress and the President.
I fully recognize that for many individuals, part-time employment is
a perfect solution. Full-time students and individuals wanting to
combine work and family responsibilities choose to work part-time. But,
part-time work should not be a passport to second class status. Often
these employees perform the same duties as their full-time
counterparts, but for less money and no benefits. And for those
individuals seeking employment, too often they can only find work that
requires full-time hours, but not full-time pay and benefits.
Too many Americans are forced to work two and three part-time jobs to
pay their rent or mortgage, and put food on their tables. Let's not
forget that employees who work full-time, earning benefits and living
wages, are often still struggling. How do we expect individuals and
families to survive on part-time wages and no benefits. Their status
may be classified as part-time, but their expenses certainly are not.
Employers must strive to provide salaries and benefits that meet the
demands of today's circumstances, while searching for ways to increase
productivity and remain competitive in a global environment.
The recent UPS experience put a national spotlight on this issue;
working full-time hours at part-time status and receiving less money
and fewer benefits than a full-time employee. One of the concessions of
the negotiations was that UPS would agree to create 10,000 full-time
jobs from existing part-time positions.
A poll of 500 individuals by the University of Connecticut in
September found strong support for action that would guarantee part-
time workers some benefits and compel employers to pay those workers
hourly wages equal to their full-time counterparts. Part-time employees
in Connecticut comprise 12 percent of the work-force, less than the 18
percent national average.
Our work-force is one of our countries most treasured assets.
Employees deserve to receive living wages and benefits and we must act
now. Therefore, I urge my colleagues to join me in cosponsoring this
legislation.
Mr. President, I ask unanimous consent that a copy of the Hartford
Courant article ``Part-timers' Rights Backed'' be included in the
Record and I ask unanimous consent that the bill be printed in the
Record.
[[Page S12021]]
There being no objection, the material was ordered to be printed in
the Record, as follows:
S. 1453
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 ``National Commission on
Fairness in the Workplace Act''.
SEC. 2. FINDINGS.
Congress finds that--
(1) there is an increasing trend toward the use of part-
time workers;
(2) part-time jobs often have no or limited health or
pension benefits and few labor protections;
(3) there is a trend toward the creation of more part-time
jobs than full-time jobs;
(4) questions have been raised regarding the impact of
part-time employment on wage levels, benefits, earning
potential, and productivity; and
(5) a Federal commission should be established to conduct a
thorough study of all matters relating to the impact of part-
time employment on wage levels, benefits, earning potential,
and productivity and to study the practice of providing
different wage and benefit levels to part-time and full-time
workers.
SEC. 3. ESTABLISHMENT OF COMMISSION.
(a) Establishment.--There is established a commission to be
known as the National Commission on Fairness in the Workplace
(hereafter referred to in this Act as the ``Commission'').
(b) Membership.--The Commission shall be composed of 9
members of whom--
(1) 3 shall be appointed by the President;
(2) 3 shall be appointed by the President pro tempore of
the Senate, upon the recommendation of the Majority and
Minority Leaders of the Senate; and
(3) 3 shall be appointed by the Speaker of the House of
Representatives, in consultation with the Minority Leader of
the House of Representatives.
(c) Period of Appointment; Vacancies.--Members shall be
appointed for the life of the Commission. Any vacancy in the
Commission shall not affect its powers, but shall be filled
in the same manner as the original appointment.
(d) Initial Meeting.--Not later than 30 days after the date
on which all members of the Commission have been appointed,
the Commission shall hold its first meeting as directed by
the President.
(e) Meetings.--After the initial meeting, the Commission
shall meet at the call of the Chairperson.
(f) Quorum.--A majority of the members of the Commission
shall constitute a quorum for the transaction of business,
but a lesser number of members may hold hearings.
(g) Chairperson and Vice Chairperson.--The Commission shall
select a Chairperson and Vice Chairperson from among its
members.
SEC. 4. DUTIES OF THE COMMISSION.
(a) Study.--
(1) In general.--The Commission shall conduct a
comprehensive study of the impact of part-time employment in
the United States.
(2) Matters to be studied.--The matters to be studied by
the Commission under paragraph (1) shall include--
(A) a review of the trend toward creation of more part-time
than full-time jobs;
(B) an assessment of the relationship between part-time
work and wage levels, benefits, earning potential, and
productivity; and
(C) a review of the practice of providing different wage
and benefit levels to part-time and full-time workers.
(b) Report.--No later than 12 months after the Commission
holds its first meeting, the Commission shall submit a report
on the study to the President and Congress. The report shall
contain a detailed statement of the findings and conclusions
of the Commission, together with its recommendations for such
legislation and administrative actions as it considers
appropriate.
SEC. 5. POWERS OF THE COMMISSION.
(a) Hearings.--The Commission may hold such hearings, sit
and act at such times and places, take such testimony, and
receive such evidence as the Commission considers advisable
to carry out its duties of this Act.
(b) Information From Federal Agencies.--The Commission may
secure directly from any Federal department or agency such
information as the Commission considers necessary to carry
out the provisions of this Act. Upon request of the
Chairperson of the Committee, the head of such department or
agency shall furnish such information to the Commission.
SEC. 6. COMMISSION PERSONNEL MATTERS.
(a) Compensation of Members.--Each member of the Commission
who is not otherwise an officer or employee of the Federal
Government shall be compensated at a rate equal to the daily
equivalent of the annual rate of basic pay prescribed for a
position at level IV of the Executive Schedule under section
5315 of title 5, United States Code, for each day (including
travel time) during which such member is engaged in the
performance of the duties of the Commission. Each member of
the Commission who is otherwise an officer or employee of the
United States shall serve without compensation in addition to
that received for services as an officer or employee of the
United States.
(b) Travel Expenses.--The members of the Commission shall
be allowed travel expenses, including per diem in lieu of
subsistence, at rates authorized for employees of agencies
under subchapter I of chapter 57 of title 5, United States
Code, while away from their homes or regular places of
business in the performance of service for the Commission.
(c) Staff.--
(1) In general.--The Chairperson of the Commission may,
without regard to the civil service laws and regulations,
appoint and terminate an executive director and such other
additional personnel as may be necessary to enable the
Commission to perform its duties. The employment and
termination of an executive director shall be subject to
confirmation by a majority of the members of the Commission.
(2) Compensation.--The executive director shall be
compensated at a rate not to exceed the rate payable for a
position at level V of the Executive Schedule under section
5316 of title 5, United States Code. The Chairperson may fix
the compensation of other personnel without regard to the
provisions of chapter 51 and subchapter III of chapter 53 of
title 5, United States Code, relating to classification of
positions and General Schedule pay rates, except that the
rate of pay for such personnel may not exceed the rate
payable for a position at level V of the Executive Schedule
under section 5316 of such title.
(3) Detail of government employees.--Any Federal Government
employee, with the approval of the head of the appropriate
Federal agency, may be detailed to the Commission without
reimbursement, and such detail shall be without interruption
or loss of civil service status, benefits, or privilege.
(d) Procurement of Temporary and Intermittent Services.--
The Chairperson of the Commission may procure temporary and
intermittent services under section 3109(b) of title 5,
United States Code, at rates for individuals not to exceed
the daily equivalent of the annual rate of basic pay
prescribed for a position at level V of the Executive
Schedule under section 5316 of such title.
SEC. 7. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated to the Commission
such sums as may be necessary to carry out the purposes of
this Act. Any sums appropriated shall remain available,
without fiscal year limitation, until expended.
SEC. 8. TERMINATION.
The Commission shall terminate 30 days after submission of
its report under section 4(b).
____
[From the Hartford Courant, October 8, 1997]
Part-timers' Rights Backed; Residents Polled by the University of
Connecticut in September Strongly Support Government Action That Would
guarantee Part-timers Some Benefits; Courant/UCONN Connecticut Poll
(By Liz Halloran)
It was the workplace issue that tripped up UPS and snarled
the nation's package delivery system during a 15-day strike
this summer: the growing use of part-time employees to do
America's business.
UPS workers agreed to go back to work after the giant
delivery company said it would create 10,000 new full-time
jobs from existing part-time positions.
The strike was over, but the national conversation about
the country's estimated 23 million part-time workers--their
rights and the government's role in protecting them--kicked
into high gear.
``Not everyone can work full time, and part-time work
offers extra freedom and income to families in need,'' said
Sen. Christopher J. Dodd, D-Conn., who is urging Congress to
set up a committee to study part-time work.
``[Part-time work] shouldn't be a passport to second-class
status,'' he said.
It seems those in Connecticut agree strongly that part-time
work that provides significant pay, benefits and stature must
remain an option for families and individuals struggling to
satisfy their own needs, those of their children and demands
of their careers.
Part-timers in Connecticut make up about 12 percent of the
work force--less than the 18 percent national average--and
most don't want a full-time job, a new Courant/Connecticut
Poll shows.
But the residents polled by telephone by the University of
Connecticut Sept. 9-15 showed remarkable support for
government action that would guarantee part-timers some
benefits, and compel companies to pay those workers hourly
wages equal to their full-time counterparts. Only one in
three said they would support laws restricting companies from
hiring part-time workers instead of creating full-time jobs.
But two-thirds said they would support laws requiring
employers to give part-time workers benefits such as health
insurance, pensions and vacations. Three out of four of those
polled said that there should be no difference in the hourly
pay of part- and full-time workers.
``There is backing for `fairness'--especially in hourly
rates and for the provision of at least some fringe
benefits,'' said G. Donald Ferree Jr., poll director.
A majority of the 500 residents polled, however, seemed
more interested in making sure that all workers--including
part-timers--are paid equitably, than in judging whether jobs
should be part or full time, Ferree said.
Democrats were more apt than Republicans to support
government policies regarding part-time work, as were women,
who
[[Page S12022]]
are more likely than men to work part time, he said.
The strong support the poll results show for part-time
worker benefits and equal pay did not surprise Joseph F.
Brennan, vice president of legislative affairs at the
Connecticut Business and Industry Association.
``I think the timing of the poll may have skewed results
somewhat because the UPS strike was in the headlines, and
general polling at that time seemed to support the workers,''
Brennan said.
Polling done in the past by the business association tells
a different story, he said, suggesting that residents do not
support greater governmental control of general business
practices. The association polls, however, have not asked
specifically about part-time work.
Some business leaders have also argued that state
intervention into policies regarding part-time employee pay
and benefits could hamper Connecticut's ability to compete
with other states for jobs. They have also said that any
requirements should come from Congress and be applied
uniformly nationwide.
A package of state legislative proposals aimed at
regulating corporate behavior, including a requirement to pay
part-timers the same hourly wage as full-timers doing the
same job, made little headway in the General Assembly this
year.
Union officials say they believe that public sentiment for
part-time workers runs deeper than simply timing.
``The people in the poll have said it all--it's about equal
pay and equal benefits for equal work,'' said John W. Olsen,
president of the state AFL-CIO. ``It's not as much about part
and full time anymore.''
Olsen said that if part-timers are compensated equally,
employers will find it less attractive to use them to replace
full-time positions.
The issue was central to a demonstration in mid-September
against Pratt & Whitney, a division of United Technologies
Corp. About 400 workers and supporters, dozens of whom were
arrested, gathered in downtown Hartford to protest Pratt's
decision to cut contracted full-time cleaning jobs and
replace them with part-time, lower-paying positions.
While there are instances in Connecticut where workers have
been affected by company decisions to replace full-time jobs
with low-wage, no-benefit positions, most part-time employees
polled said they are not looking for full-time work.
Only one out of five part-timers questioned in the poll
said they were actively seeking full-time work.
``Part-time work plays a real role in Connecticut, and many
engaged in it do not want full-time work instead,'' Ferree
said.
One other thing the poll made clear, Ferree said, was that
the days when one income was deemed enough for a family to
live on are over. About half of those polled said their
family could live on what the main earner is paid, but nearly
as many said that their household needs the income of more
than one person.
On the job, some of the time:
Connecticut residents show remarkable support for requiring
employers to pay part-time workers at the same hourly rate as
full-time workers and to provide part-time workers some
benefits. Those polled also strongly believe it is important
to preserve part-time employment as a work option.
* * * * *
The Courant/Connecticut Poll on part-time workers was
conducted by the University of Connecticut from Sept. 9-15.
Five hundred randomly selected people were interviewed by
telephone. Percentages are rounded to the nearest whole
number and may not add up to 100.
The poll has a margin of error of plus or minus 5
percentage points. This means there is a 1-in-20 chance that
the results would differ by more than 5 points in either
direction from the results of a survey of all adult
residents.
A poll's margin of error increases as the sample size
shrinks. Results for a subgroup within the poll have a higher
margin of error.
The telephone numbers were generated by a computer in
proportion to the number of adults living in each area. The
actual respondent in each household also was selected at
random.
____________________