[Congressional Record Volume 143, Number 156 (Saturday, November 8, 1997)]
[Senate]
[Pages S12134-S12144]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




               FOREST RECOVERY AND PROTECTION ACT OF 1997

  Mr. SMITH of Oregon. Mr. President, today I am introducing the Senate 
companion bill to H.R. 2515, the Forest Recovery and Protection Act 
introduced by my good friend and colleague, Congressman Bob Smith. My 
bill focuses on the western forest and Bureau of Land Management lands 
where there has been the most fire and disease damage.
  Let me tell you what the forest lands are like in Oregon. On the 
eastside of my State, disease and bug infestation have ravaged forests, 
creating dangerous conditions for catastrophic fires. In 1996, I 
witnessed firsthand fires that burned vast acres of forest land and 
threatened many homes. This was a situation that didn't have to happen.
  And yet, the political beliefs of a few have seemed to guide forest 
policy back in Washington, DC--where bureaucrats with personal agendas 
seem to rule the roost and sound public policy fails to get heard.
  Teddy Roosevelt said: ``The nation behaves well if it treats the 
natural resources as assets which it must turn over to the next 
generation increased, and not impaired, in value.''
  This legislation is a thoughtful approach to forest management--it 
includes accountability through reports to Congress, performance 
standards for forest inventory and analysis, and calls for the 
elimination of bureaucratic red tape and unnecessary delay that 
prevents on-the-ground results.
  Concerns that environmentalists have about cutting of timber are 
addressed by ensuring that all forest health activities are carried out 
in compliance with existing forest plans. The legislation also 
prohibits entry into wilderness areas or other areas protected by law, 
court order, or forest plan. And finally, the bill provides for 
priority treatment of areas of greatest risk of destruction or 
degradation by severe natural disturbance.
  The bill has a local component which gives the local community and 
concerned citizens the ability to identify Federal forest lands in need 
of recovery and allows them to petition the Secretary of the Interior 
and the Secretary of Agriculture to conduct forest recovery projects in 
the identified areas. In addition, money is provided to those agencies 
responsible for the forests at the local level with the necessary tools 
and incentives to address forest health problems in pro-active ways.
  Furthermore, this legislation requires the Secretary of Agriculture 
and the Secretary of the Interior to commence a 5-year national program 
to restore and protect the health of forests located on Federal forest 
lands. The program includes the following components: Within 1 year of 
enactment, standards and criteria must be established for designating 
and assigning priority ranking to forest lands in need of recovery or 
protection; a requirement that the Secretary to publish in the Federal 
Register the proposed decisions on lands to be recovered or protected.
  The bill also calls for no new forest management plans, but instead 
enhances existing ones. The bill requires that all forest health plans 
be carried out in compliance with existing forest plans; sets up an 
independent Scientific Advisory Panel, consisting of experts in forest 
management, to evaluate the Advance Recovery Projects which are 
basically pilot projects in areas of significant recovery or protection 
need as identified by the Secretary of the Interior and Secretary of 
Agriculture.
  And finally, one of the most important components of this legislation 
is the inclusion of local citizens and the prioritization that directs 
more money on the ground. This component allows local citizens to 
petition the Secretary of the Interior and the Secretary of Agriculture 
in identifying problems in forests, such as dead and diseased timber; 
provides more money to the local levels of the agencies responsible for 
the forests.

[[Page S12135]]

  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. 1467

       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 ``Forest 
     Recovery and Protection Act of 1997''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Definitions.
Sec. 4. National Program of Forest Recovery and Protection.
Sec. 5. Scientific Advisory Panel.
Sec. 6. Advance recovery projects.
Sec. 7. Forest Recovery and Protection Fund for National Forest System 
              lands.
Sec. 8. Expansion of purpose of Forest Ecosystems Health and Recovery 
              Fund for BLM lands.
Sec. 9. Effect of failure to comply with time limitations.
Sec. 10. Authorization of appropriations.
Sec. 11. Audit requirements.

     SEC. 2. FINDINGS.

       Congress finds the following:
       (1) There are tradeoffs in values associated with 
     proactive, passive, or delayed forest management, but the 
     values gained by proactive management outweigh the values 
     gained by delayed or passive management of certain Federal 
     forest lands.
       (2) Increases in both the number and severity of wildfire, 
     insect infestation, and disease outbreaks on Federal forest 
     lands are occurring as a result of high tree densities, 
     species composition, and structure that are outside the 
     historic range of variability. These disturbances cause or 
     contribute to significant soil erosion, degradation of air 
     and water quality, loss of watershed values, habitat loss, 
     and damage to other forest resources.
       (3) Serious forest health problems occur in all regions of 
     the United States. Management activities to restore and 
     protect forest health are needed in each region and should be 
     designed to address region-specific needs.
       (4) Between 35,000,000 and 40,000,000 of the 191,000,000 
     acres of Federal forest lands managed by the Forest Service 
     are at an unacceptable risk of destruction by catastrophic 
     wildfire. Additional tens of millions of Bureau of Land 
     Management lands are in the same situation. The condition of 
     these forests can pose a significant threat of destruction to 
     human life as well as fish and wildlife habitats, public 
     recreation areas, timber, and other important forest 
     resources.
       (5) Restoration of forest health requires active forest 
     management involving a range of management activities, 
     including thinning, salvage, prescribed fire (after 
     appropriate thinning), insect and disease control, riparian 
     and other habitat improvement, soil stabilization and other 
     water quality improvement, and seedling planting and 
     protection.
       (6) A comprehensive, nationwide effort is needed to address 
     forest health decline in an organized, timely, and scientific 
     manner. There should be immediate action to improve the areas 
     of Federal forest lands where forest health decline has been 
     thoroughly inventoried and assessed or where serious resource 
     destruction or degradation by natural disturbance is 
     imminent.
       (7) Frequent forest inventory and analysis of the status 
     and trends in the conditions of forests and their resources 
     are needed to identify and reverse declining forest health in 
     a timely and effective manner. The present average 12- to 15-
     year cycle of forest inventory and analysis to comply with 
     existing statutory requirements is too prolonged to provide 
     forest managers with the data necessary to make timely and 
     effective management decisions, particularly decisions 
     responsive to changing forest health conditions.

     SEC. 3. DEFINITIONS.

       For purposes of this Act:
       (1) Federal forest lands.--The term ``Federal forest 
     lands'' means--
       (A) forested lands created from the public domain that are 
     under the jurisdiction of the Bureau of Land Management; and
       (B) forested lands created from the public domain that are 
     within the National Forest System.
       (2) Secretary concerned.--The term ``Secretary concerned'' 
     means--
       (A) with respect to Federal forest lands described in 
     paragraph (1)(A), the Secretary of the Interior or the 
     Secretary's designee; and
       (B) with respect to Federal forest lands described in 
     paragraph (1)(B), the Secretary of Agriculture or the 
     Secretary's designee.
       (3) Land management plan.--The term ``land management 
     plan'' means--
       (A) a land use plan prepared by the Bureau of Land 
     Management pursuant to section 202 of the Federal Land Policy 
     and Management Act of 1976 (43 U.S.C. 1712), or other 
     multiple use plan in effect, for a unit of the Federal forest 
     lands described in paragraph (1)(A); or
       (B) a land and resource management plan (or, if no final 
     plan is in effect, a draft land and resource management plan) 
     prepared by the Forest Service pursuant to section 6 of the 
     Forest and Rangeland Renewable Resources Planning Act of 1974 
     (16 U.S.C. 1604) for Federal forest lands described in 
     paragraph (1)(B).
       (4) National program.--The term ``national program'' means 
     the National Program of Forest Recovery and Protection 
     required by section 4.
       (5) Scientific advisory panel.--The term ``Scientific 
     Advisory Panel'' means the advisory committee appointed under 
     section 5.
       (6) Recovery area.--The term ``recovery area'' means an 
     area of Federal forest lands, designated by the Secretary 
     concerned under section 4(c)--
       (A) that has experienced disturbances from wildfires, 
     insect infestations, wind, flood, or other causes, which have 
     caused or contributed to significant soil erosion, 
     degradation of water quality, loss of watershed values, 
     habitat loss, or damage to other forest resources of the 
     area; or
       (B) in which the forest structure, function, or composition 
     has been altered so as to increase substantially the 
     likelihood of wildfire, insect infestation, or disease in the 
     area and the consequent risks of damage to soils, water 
     quality, watershed values, habitat, and other forest 
     resources from wildfire, insect infestation, or disease.
       (7) Recovery project.--The terms ``recovery project'' and 
     ``forest health recovery project'' mean a project designed by 
     the Secretary concerned to improve, preserve, or protect the 
     soils, water quality, watershed values, habitat, and other 
     forest resources within a designated recovery area, including 
     stand thinning, salvage, and other harvesting activities, as 
     well as activities in which the cutting of trees is not 
     primarily featured, such as prescribed burning (after 
     appropriate thinning), insect and disease control, riparian 
     and other habitat improvement, soil stabilization and other 
     water quality improvement, and seedling planting and 
     protection.
       (8) Implementation date.--The term ``implementation date'' 
     means the first day of the first month beginning after the 
     end of the 18-month period beginning on the date of enactment 
     of this Act. However, if the implementation date would occur 
     within 6 months before August 31 of the same fiscal year in 
     which the implementation date would occur, the Secretary 
     concerned may deem that August 31 to be the implementation 
     date.
       (9) Fund.--The terms ``Fund'' and ``affected Fund'' mean--
       (A) with respect to implementation of the national program 
     on Federal forest lands described in paragraph (1)(A), the 
     revolving fund established under the heading ``(revolving 
     fund, special account)'' under the heading ``forest 
     ecosystems health and recovery'' under the heading ``Bureau 
     of Land Management'' in title I of the Department of the 
     Interior and Related Agencies Appropriations Act, 1993 
     (Public Law 102-381; 106 Stat. 1376; 43 U.S.C. 1736a); and
       (B) with respect to implementation of the national program 
     on Federal forest lands described in paragraph (1)(B), the 
     Forest Recovery and Protection Fund established under section 
     7.

     SEC. 4. NATIONAL PROGRAM OF FOREST RECOVERY AND PROTECTION.

       (a) National Program Required.--Not later than the 
     implementation date, the Secretary concerned shall commence a 
     national program to restore and protect the health of forests 
     located on Federal forest lands in the United States through 
     the performance of recovery projects in designated recovery 
     areas.
       (b) Standards and Criteria.--
       (1) Initial publication.--Not later than the implementation 
     date, the Secretary concerned shall publish in the Federal 
     Register the standards and criteria to be used for the 
     designation of, and the assignment of management priority 
     rankings to, recovery areas. In establishing the standards 
     and criteria, the Secretary concerned shall consider the 
     standards and criteria recommended by the Scientific Advisory 
     Panel under section 5. The Secretary concerned shall include 
     in the Federal Register entry required by this paragraph an 
     explanation of any significant differences between the 
     recommendations of the Scientific Advisory Panel and the 
     standards and criteria actually established by the Secretary 
     concerned.
       (2) Modification.--The Secretary concerned may modify the 
     standards and criteria established pursuant to paragraph (1). 
     Any such modification shall also be published in the Federal 
     Register.
       (c) Annual National Program Decision.--
       (1) Decision required.--To carry out the national program, 
     the Secretary concerned shall render a decision for each 
     fiscal year during the period of the national program 
     regarding the designation and ranking of recovery areas and 
     the selection of recovery projects for inclusion in the 
     national program. In rendering the decision, the Secretary 
     concerned shall comply with the requirements of subsections 
     (d) and (e).
       (2) Proposed decision.--For each fiscal year during the 
     period of the national program, the Secretary concerned shall 
     publish in the Federal Register a proposed decision regarding 
     the designation and ranking of recovery areas and the 
     selection of recovery projects. The proposed decision shall 
     be published not later than the following:
       (A) In the case of the initial proposal, the implementation 
     date.
       (B) In the case of each subsequent proposed decision, 
     August 31 of each fiscal year after the fiscal year in which 
     the implementation date occurs.

[[Page S12136]]

       (3) Final decision.--Not later than 120 days after the date 
     on which the proposed decision of the Secretary concerned is 
     published for a fiscal year under paragraph (2), the 
     Secretary concerned shall publish in the Federal Register the 
     final decision of the Secretary concerned for that fiscal 
     year regarding the designation and ranking of recovery areas 
     and the selection of recovery projects (including the 
     determinations required under subsection (e)(3)).
       (d) Requirements for Area Designation and Ranking.--In 
     making the annual decision required by subsection (c), the 
     Secretary concerned shall, in accordance with the standards 
     and criteria established and in effect under subsection (b)--
       (1) determine the total acreage requiring treatment under 
     the national program during the fiscal year;
       (2) identify recovery areas within which recovery projects 
     would be appropriate; and
       (3) rank the recovery areas for the purpose of determining 
     the order in which the recovery areas will receive recovery 
     projects.
       (e) Requirements for Recovery Project Selection.--
       (1) Compliance with land management plans.--In making the 
     annual decision required by subsection (c), the Secretary 
     concerned shall ensure that each recovery project selected is 
     consistent with the land management plan applicable to the 
     recovery area within which the project will occur.
       (2) Consideration of economic benefits.--In the selection 
     of forest health recovery projects, the Secretary concerned 
     shall consider the economic benefits to be provided to local 
     communities as a result of the forest health recovery 
     projects, but only to the extent that such considerations are 
     consistent with the standards and criteria for recovery areas 
     established and in effect under subsection (b) and the 
     priorities for ranking recovery areas under subsection 
     (d)(3).
       (3) Treatment acreage and costs.--As part of the selection 
     of each forest project, the Secretary concerned shall 
     determine the total acreage requiring treatment and the 
     estimated costs for preparation and implementation of the 
     project.
       (4) Total acreage.--The total acreage included in recovery 
     projects selected for a fiscal year under the national 
     program shall not be less than the total acreage determined 
     by the Secretary concerned under paragraphs (2) and (3) of 
     subsection (c).
       (5) Prohibited project locations.--The Secretary concerned 
     may not select or implement a recovery project under the 
     authority of this Act in any unit of the National Wilderness 
     Preservation System, any roadless area on Federal forest 
     lands designated by Congress for study for possible inclusion 
     in such System, or any other area in which the implementation 
     of recovery projects is prohibited by law, a court order, or 
     the applicable land management plan.
       (f) Petition Process.--
       (1) Request for designation.--Not later than May 31 of each 
     fiscal year after the fiscal year in which the implementation 
     date occurs, any interested person may petition the Secretary 
     concerned to designate a specific area of the Federal forest 
     lands of at least 1,000 acres in size as a recovery area.
       (2) Content.--The petition shall contain a reasonably 
     precise description of the boundaries of the area included in 
     the petition and the reasons why the petitioner believes the 
     area meets the standards and criteria, established pursuant 
     to subsection (b), required for designation as a recovery 
     area.
       (3) Determination.--If the Secretary concerned determines 
     that an area described in a petition under this subsection 
     warrants designation as a recovery area, the Secretary 
     concerned shall include the area in the proposed and final 
     decisions issued under paragraphs (2) and (3) of subsection 
     (c). If the Secretary concerned determines that the area does 
     not warrant designation as a recovery area, the Secretary 
     concerned shall provide the reasons therefor in the same 
     Federal Register entry containing the proposed or final 
     decision under such subsection.
       (g) Annual Report to Congress.--
       (1) Report required.--Not later than the implementation 
     date, and each August 31 thereafter, the Secretary concerned 
     shall submit to Congress a report on the proposed decision 
     regarding the designation and ranking of recovery areas and 
     the selection of recovery projects to be published pursuant 
     to subsection (c)(2).
       (2) Report contents.--Each report required by paragraph (1) 
     shall include the following:
       (A) The reasons for each proposed designation of a recovery 
     area and each proposed selection of a recovery project.
       (B) The total acreage requiring treatment nationally during 
     the fiscal year and the acreage proposed to be treated during 
     that fiscal year by each proposed recovery project.
       (C) The estimated preparation and implementation costs of 
     each proposed recovery project.
       (3) Additional requirements.--After the initial report 
     required by paragraph (1), each subsequent report shall also 
     include the following:
       (A) A description of the improvements to forest health 
     achieved by each completed recovery project.
       (B) An explanation of why any proposed recovery projects 
     covered by the previous report were not begun, undertaken, or 
     completed as scheduled.
       (C) A comparison of projected and actual preparation and 
     implementation costs for each completed recovery project.
       (D) A description of the economic benefits to local 
     communities achieved by each completed recovery project.
       (4) Notice of availability.--The Federal Register entry 
     required for each fiscal year under subsection (c)(2) shall 
     contain a notice of availability of the most recent report to 
     Congress required by this subsection.
       (h) Exceptions to Agency Action.--The following do not 
     constitute agency action for purposes of implementing or 
     carrying out the provisions of this Act:
       (1) The establishment and publication in the Federal 
     Register of standards and criteria to be used for the 
     designation and ranking of recovery areas under subsection 
     (b).
       (2) The proposed decision of the Secretary to designate and 
     rank recovery areas and to select recovery projects under 
     subsection (c) and the publication of such proposed decision 
     in the Federal Register.
       (3) The preparation and submission of the annual report to 
     Congress under subsection (g).
       (i) Rulemaking.--To ensure commencement of the national 
     program by the implementation date, the Secretary concerned 
     shall promulgate rules governing operation of the national 
     program by that date. The rules shall address the development 
     of procedures that, within the discretion provided by other 
     laws, would permit the Secretary concerned to make the final 
     decision on the designation and ranking of recovery areas and 
     the selection of recovery projects within the 120-day period 
     required by subsection (c)(3).

     SEC. 5. SCIENTIFIC ADVISORY PANEL.

       (a) Establishment.--There is established a panel of 
     scientific advisers to the Secretary of Agriculture and the 
     Secretary of the Interior to be known as the ``Scientific 
     Advisory Panel''.
       (b) Membership.--The Scientific Advisory Panel shall 
     consist of the following members:
       (1) 2 members, consisting of 1 scientist specializing in 
     natural resources and 1 State forester (or an individual with 
     similar management or supervisory experience), appointed 
     jointly by the Chairman of the Committee on Agriculture and 
     the Chairman of the Committee on Resources of the House of 
     Representatives, in consultation with their respective 
     ranking Minority Members.
       (2) 2 members, consisting of 1 scientist specializing in 
     natural resources and 1 State forester (or an individual with 
     similar management or supervisory experience), appointed 
     jointly by the Chairman of the Committee on Agriculture, 
     Nutrition, and Forestry and the Chairman of the Committee on 
     Energy and Natural Resources of the Senate, in consultation 
     with their respective ranking Minority Members.
       (3) 2 members, consisting of 1 scientist specializing in 
     natural resources and 1 State forester (or an individual with 
     similar management or supervisory experience), appointed by 
     the Secretary of Agriculture.
       (4) 2 members, consisting of 1 scientist specializing in 
     natural resources and 1 State forester (or individual with 
     similar management or supervisory experience), appointed by 
     the Secretary of the Interior.
       (5) 1 member, consisting of a scientist specializing in 
     natural resources, appointed by the National Academy of 
     Sciences.
       (c) Appointment.--
       (1) Time for appointment.--Appointments shall be made 
     within 90 days after the date of the enactment of this Act. 
     Appointments shall be published in the Federal Register.
       (2) Term.--A member of the Scientific Advisory Panel shall 
     be appointed for a term beginning on the date of the 
     appointment and ending on the implementation date. A vacancy 
     on the Scientific Advisory Panel shall be filled within 90 
     days in the manner in which the original appointment was 
     made.
       (d) Qualifications.--
       (1) Natural resource scientists.--Scientists who are 
     appointed as members of the Scientific Advisory Panel shall 
     be required to have expertise in, and experience with, 
     matters related to forest health, taking into account their 
     breadth of knowledge in the natural sciences as such sciences 
     relate to Federal forest lands and their familiarity with 
     specific issues regarding Federal forest lands likely to be 
     designated as recovery areas.
       (2) Other members.--State foresters (or individuals with 
     similar management or supervisory experience) who are 
     appointed as members of the Scientific Advisory Panel shall 
     be required to have expertise with, and experience in, 
     matters relating to forest management, taking into account 
     their breadth of knowledge in management science and their 
     familiarity with specific issues regarding Federal forest 
     lands likely to be designated as recovery areas.
       (e) Chairperson; Initial Meeting.--The Scientific Advisory 
     Panel shall conduct its initial meeting as soon as possible 
     after the first 4 members of the Panel are appointed. At the 
     initial meeting, the members of the Scientific Advisory Panel 
     shall select 1 member to serve as chairperson.
       (f) Duties In Connection With Implementation.--During the 
     period beginning on the initial meeting of the Scientific 
     Advisory Panel and ending on the implementation date, the 
     Scientific Advisory Panel shall be responsible for the 
     following:
       (1) The preparation and submission to the Secretary 
     concerned and the Congress of recommendations regarding the 
     standards and

[[Page S12137]]

     criteria that should be used to designate recovery areas.
       (2) The preparation and submission to the Secretary 
     concerned and the Congress of recommendations regarding the 
     ranking of recovery areas in the order in which the areas 
     should host recovery projects.
       (3) The preparation of and submission to the Secretary 
     concerned and the Congress of a monitoring plan for the 
     national program of sufficient duration to determine the 
     long-term impacts of the national program.
       (g) Considerations.--In the development of its 
     recommendations under subsection (f), the Scientific Advisory 
     Panel shall consider--
       (1) the most current scientific literature regarding the 
     duties undertaken by the Panel; and
       (2) information gathered during the implementation of the 
     advance recovery projects required under section 6.
       (h) Allocation of Forest Service and Bureau of Land 
     Management Personnel.--The Forest Service and the Bureau of 
     Land Management shall allocate administrative support staff 
     to the Scientific Advisory Panel to assist the Panel in the 
     performance of its duties as outlined in this section.
       (i) Federal Advisory Committee Act Compliance.--The 
     Scientific Advisory Panel shall be subject to sections 10 
     through 14 of the Federal Advisory Committee Act (5 U.S.C. 
     App.).

     SEC. 6. ADVANCE RECOVERY PROJECTS.

       (a) Selection of Advance Projects.--During the 18-month 
     period beginning on the date of enactment of this Act, the 
     Secretary concerned shall conduct a limited number (as 
     determined by the Secretary concerned) of advance recovery 
     projects on Federal forest lands. Subject to the approval of 
     the Secretary concerned, advance recovery projects shall be 
     selected by--
       (1) regional foresters of the Forest Service, in 
     consultation with State foresters of the States in which the 
     projects will be conducted, with respect to recovery projects 
     on Federal forest lands described in section 3(1)(B); and
       (2) State directors of the Bureau of Land Management, in 
     consultation with State foresters of the States in which the 
     projects will be conducted, with respect to recovery projects 
     on Federal forest lands described in section 3(1)(A).
       (b) Selection Criteria.--To be eligible for selection as an 
     advance recovery project, a proposed project shall be 
     required to satisfy the requirements of section 4(e) for 
     recovery projects conducted under the national program. 
     Priority shall be given to those Federal forest lands--
       (1) that pose a significant risk of loss to human life and 
     property or serious resource degradation or destruction due 
     to wildfire, disease epidemic, or severe insect infestation; 
     or
       (2) for which thorough forest health assessments and 
     inventories have been completed, including Federal forest 
     lands in the Pacific Northwest, the Interior Columbia Basin, 
     the Sierra Nevada, the Southern Appalachian Region, and the 
     Northern Forests of Maine, Vermont, New Hampshire, and New 
     York.
       (c) Time Periods for Selection, Implementation, and 
     Completion.--Final selection of advance recovery projects 
     shall be completed within the 90-day period beginning on the 
     date of enactment of this Act, and the Secretary concerned 
     shall publish the list of selected advance recovery projects 
     in the Federal Register by the end of that period. An advance 
     recovery project shall be initiated (if the project is to be 
     conducted by Federal employees) or awarded (if the project is 
     to be conducted by an outside party) within 180 days after 
     the date of enactment of this Act.
       (d) Reporting Requirements.--Not later than the 
     implementation date, and annually thereafter until completion 
     of all advance recovery projects, the Secretary concerned 
     shall submit to Congress a report on the implementation of 
     advance recovery projects. The report shall consist of a 
     description of the accomplishments of each advance recovery 
     project and incorporate the requirements under paragraphs (2) 
     and (3) of section 4(g).
       (e) Rulemaking.--No new rulemaking is required in order for 
     the Secretary concerned to carry out this section.

     SEC. 7. FOREST RECOVERY AND PROTECTION FUND FOR NATIONAL 
                   FOREST SYSTEM LANDS.

       (a) Establishment.--There is established on the books of 
     the Treasury a revolving fund to be known as the ``Forest 
     Recovery and Protection Fund''. The Chief of the Forest 
     Service shall be responsible for administering the Fund.
       (b) Credits to Fund.--There shall be credited to the Fund 
     the following:
       (1) Amounts authorized for and appropriated to the Fund.
       (2) Unobligated amounts in the roads and trails fund 
     provided for in the fourteenth paragraph under the heading 
     ``FOREST SERVICE.'' of the Act of March 4, 1913 (37 Stat. 
     843, chapter 145; 16 U.S.C. 501) as of the date of enactment 
     of this Act, and all amounts that would otherwise be 
     deposited in such fund after such date.
       (3) A 1-time transfer of $50,000,000 from amounts 
     appropriated for fire operations under the heading ``wildland 
     fire management'' under the heading ``Bureau of Land 
     Management'' in title I of the Department of the Interior and 
     Related Agencies Appropriations Act, 1998.
       (4) Subject to subsection (e), revenues generated by 
     recovery projects undertaken pursuant to sections 4 and 6.
       (5) Amounts required to be deposited in the Fund under 
     section 9.
       (c) Use of Fund.--During the time period specified in 
     section 10(a), amounts in the Fund shall be available to the 
     Chief of the Forest Service, without further appropriation, 
     to carry out the national program, to plan, carry out, and 
     administer recovery projects under sections 4 and 6, and to 
     administer the Scientific Advisory Panel.
       (d) Limitation on Overhead Expenses.--Overhead expenses for 
     a fiscal year for administration of the national program, 
     including the cost of preparation of reports required by this 
     Act and administration of the Fund, shall not exceed 12 
     percent of the amounts made available from the Fund for that 
     fiscal year. In addition, not more than $1,000,000 may be 
     expended from the Fund to finance the operation of the 
     Scientific Advisory Panel.
       (e) Treatment of Revenues as Moneys Received.--Revenues 
     generated by recovery projects undertaken pursuant to 
     sections 4 and 6 shall be considered to be money received for 
     purposes of the sixth paragraph under the heading ``FOREST 
     SERVICE.'' in the Act of May 23, 1908 (35 Stat. 260, chapter 
     192; 16 U.S.C. 500), and section 13 of the Act of March 1, 
     1911 (commonly known as the ``Weeks Act'') (36 Stat. 963, 
     chapter 186; 16 U.S.C. 500).
       (f) Conforming Amendment.--The fourteenth paragraph under 
     the heading ``FOREST SERVICE.'' of the Act of March 4, 1913 
     (37 Stat. 843, chapter 145; 16 U.S.C. 501), is amended by 
     adding at the end the following: ``During the term of the 
     Forest Recovery and Protection Fund, as established by 
     section 7 of the Forest Recovery and Protection Act of 1997, 
     amounts reserved under the authority of this paragraph shall 
     be deposited into that Fund.''.

     SEC. 8. EXPANSION OF PURPOSE OF FOREST ECOSYSTEMS HEALTH AND 
                   RECOVERY FUND FOR BLM LANDS.

       The first paragraph under the heading ``(revolving fund, 
     special accounts)'' under the heading ``forest ecosystems 
     health and recovery'' under the heading ``Bureau of Land 
     Management'' in title I of the Department of the Interior and 
     Related Agencies Appropriations Act, 1993 (Public Law 102-
     381; 106 Stat. 1376; 43 U.S.C. 1736a), is amended by adding 
     at the end the following: ``During the term of the National 
     Program of Forest Recovery and Protection established by the 
     Forest Recovery and Protection Act of 1997, unobligated 
     amounts in the fund shall be available to carry out the 
     national program and to plan, carry out, and administer 
     recovery projects under sections 4 and 6 of that Act.''.

     SEC. 9. EFFECT OF FAILURE TO COMPLY WITH TIME LIMITATIONS.

       (a) National Program.--If the final selection of a recovery 
     project under the national program is not made within the 
     time period specified in section 4(c)(3), the Secretary 
     concerned may not use amounts in the affected Fund to carry 
     out the project and shall promptly reimburse the affected 
     Fund for any expenditures previously made from that Fund in 
     connection with the project.
       (b) Advance Recovery Projects.--In the case of an advance 
     recovery project under section 6, if the project is not 
     selected, implemented, and completed within the time periods 
     specified in subsection (c) of that section, the Secretary 
     concerned may not use amounts in the affected Fund to carry 
     out the project and shall promptly reimburse the affected 
     Fund for any expenditures previously made from that Fund in 
     connection with the project.

     SEC. 10. AUTHORIZATION OF APPROPRIATIONS.

       (a) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as may be necessary to carry out 
     the provisions of this Act for fiscal year 1998 and each 
     fiscal year thereafter through the fifth full fiscal year 
     following the implementation date.
       (b) Deposit in Fund.--All sums appropriated pursuant to 
     this section for implementation of the national program on 
     Federal forest lands described in section 3(1)(B) shall be 
     deposited in the Forest Recovery and Protection Fund 
     established under section 7. All sums appropriated pursuant 
     to this section for implementation of the national program on 
     Federal forest lands described in section 3(1)(A) shall be 
     deposited in the revolving fund established under the heading 
     ``(revolving fund, special accounts)'' under the heading 
     ``forest ecosystems health and recovery'' under the heading 
     ``Bureau of Land Management'' in title I of the Department of 
     the Interior and Related Agencies Appropriations Act, 1993 
     (Public Law 102-381; 106 Stat. 1376; 43 U.S.C. 1736a).
       (c) Effect on Existing Projects.--Any contract regarding a 
     recovery project entered into before the end of the final 
     fiscal year specified in subsection (a), and still in effect 
     at the end of such fiscal year, shall remain in effect until 
     completed pursuant to the terms of the contract.

     SEC. 11. AUDIT REQUIREMENTS.

       (a) Audit Required.--The Comptroller General shall conduct 
     an audit of the national program at the end of the fourth-
     full fiscal year of the national program and submit such 
     audit to the Congress by June 1 of the next fiscal year.
       (b) Elements.--The audit shall include an analysis of--
       (1) whether the program was carried out in a manner 
     consistent with the provisions of this Act;

[[Page S12138]]

       (2) the impact on the development and implementation of the 
     national program of the advance recovery projects conducted 
     under section 6;
       (3) the extent to which the recommendations of the 
     Scientific Advisory Panel were used to develop and implement 
     the national program;
       (4) the current and projected future financial status of 
     each Fund; and
       (5) the cost savings and efficiencies achieved under the 
     national program.
                                 ______
                                 
      By Mr. BINGAMAN:
  S. 1468. A bill to provide for the conveyance of one (1) acre of land 
from Santa Fe National Forest to the Village of Jemez Springs, New 
Mexico, as the site of a fire sub-station; to the Committee on Energy 
and Natural Resources.
       S. 1469. A bill to provide for the expansion of the 
     historic community of El Rito, New Mexico, through the 
     special designation of five acres of Carson National Forest 
     adjacent to the cemetery; to the Committee on Energy and 
     Natural Resources.


    jemez springs fire sub-station and el rito cemetery legislation

  Mr. BINGAMAN. Mr. President, I rise today to introduce two bills that 
would have a significant impact on two communities within northern New 
Mexico. The villages of Jemez Springs, and El Rito, NM, are small 
communities that are completely surrounded by Forest Service land. 
Despite the fact that their populations are not growing rapidly, they 
do have some specific land needs; some of which are actually caused by 
their proximity to national forest land.
       For example, on any given weekend, the Jemez National 
     Recreation Area, within the Santa Fe National Forest will 
     have over 50,000 visitors. Village of Jemez Springs is the 
     only community wholly within the Jemez National Recreation 
     Area. As such, this community of 460 people is often called 
     upon for assistance with emergencies within the national 
     forest. In fact, over 90 percent of the village's fire 
     responses, emergency rescues, and ambulance calls are outside 
     the town limits, placing enormous strain on the village's 
     resources. To help address this problem, in 1996, the State 
     of New Mexico provided funds to Jemez Springs to build a fire 
     substation which would house three emergency vehicles. 
     However, Jemez Springs does not have a suitable location for 
     this facility, nor does the village have the tax base 
     available to buy land for it.
       Mr. President, what this first bill would do is to 
     acknowledge the services that the Santa Fe National Forest 
     currently receives from the village of Jemez Springs, and the 
     additional benefit that a fire substation would provide to 
     visitors to the forest. In recognition of these benefits, my 
     bill would transfer one acre of land to Jemez Springs for use 
     as the site of a fire substation.
       Mr. President, my second bill concerns the venerable 
     customs and religious practices of the people of El Rito, NM. 
     El Rito is a community of a little over 2,000 people nestled 
     within the Carson National Forest in New Mexico. It is a 
     community that has existed for hundreds of years, that is now 
     running out of space. Specifically the El Rito cemetery, 
     where people have buried their dead for generations, is full. 
     As a result, the residents of El Rito must now obtain special 
     permission from the Forest Service in order to bury their 
     family members on Forest Service land that is adjacent to 
     their cemetery. This situation has created what can only be 
     described as an unbecoming bureaucratic burden upon families 
     just at the time that they are grieving.
       To solve this problem, my first thought was to transfer a 
     small portion of land from the Forest Service to El Rito for 
     their cemetery. However despite its age, the community of El 
     Rito is not an incorporated town so the Forest Service would 
     not have a legal public entity to transfer the land to. In 
     order to solve this problem, my bill does not transfer the 
     land, but rather it recognizes the historic nature of this 
     cemetery, and designates five acres of adjacent Forest 
     Service land as special use land for expansion of that 
     cemetery. This will remove the need for the residents of El 
     Rito to obtain a special use permit each time someone dies.
       Mr. President, I think all of the New Mexico delegation 
     realizes that both of the problems addressed by these bills 
     need to be resolved. In fact, the House has passed a bill 
     concerning these two issues which was originally sponsored by 
     former Representative Richardson, and is currently sponsored 
     by Representative Redmond. However in response to concerns 
     raised by the Forest Service, the bill as passed by the House 
     would require these small communities to either exchange land 
     of equal value or pay for these lands. Mr. President I think 
     the reality here is that being surrounded by Forest Service 
     land, that it will be next to impossible for these 
     communities to find land of equal value to exchange. These 
     communities also do not have the financial resources for 
     outright purchases of property.
       I believe that the way my two bills are written can meet 
     the concerns of the Forest Service and still resolve the 
     underlying problems these communities are facing. I am 
     committed to working with other Members of the delegation to 
     move this legislation as quickly as possible.
       Mr. President I ask unanimous consent that these two bills 
     be entered into the Record.
  There being no objection, the bills were ordered to be printed in the 
Record, as follows:

                                S. 1468

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

     SECTION 1. FINDINGS.

       (a) The Village of Jemez Springs, New Mexico, (Jemez 
     Springs) is an incorporated town under the laws of the State 
     of New Mexico, and is completely surrounded the Jemez 
     National Recreation Area within the Santa Fe National Forest;
       (b) Jemez Springs is a small community of approximately 460 
     residents, however given it's location within the Jemez 
     National Recreation Area, as many as 30,000 people will pass 
     through this town on any given day;
       (c) The large size of the tourist crowds within the 
     surrounding national recreation area create a strain on Jemez 
     Springs' emergency response capabilities. Over ninety (90) 
     percent of the ambulance, fire, and emergency rescue calls 
     are outside of the town limits.
       (d) The State of New Mexico has appropriated funds for 
     Jemez Springs to build a fire sub-station to handle the 
     increase in emergency response needs, however, the town does 
     not have suitable land upon which to build the sub-station.

     SEC. 2 LAND CONVEYANCE, SANTA FE NATIONAL FOREST, NEW MEXICO

       (a) Conveyance.--The Secretary of Agriculture shall convey, 
     to Jemez Springs all right, title, and interest of the United 
     States in and to a parcel of real property, together with any 
     improvements thereon, consisting of approximately one acre 
     located in the Santa Fe National Forest in the State of New 
     Mexico. The emergency services provided by Jemez Springs to 
     the visitors of the Santa Fe National Recreation Area shall 
     be deemed adequate consideration to the United States for the 
     purposes of this conveyance.
       (b) Condition of Conveyance.--The conveyance under 
     subsection (a) shall be subject to the condition that Jemez 
     Springs agrees to use the real property for the purpose of 
     constructing and operating a fire sub-station for Jemez 
     Springs.
       (c) Reversionary Interest.--If the Secretary determines 
     that the real property conveyed under subsection (a) is not 
     being used in accordance with the condition in subsection 
     (b), all right, title, and interest in and to the property 
     shall revert to the United States, and the United States 
     shall have immediate right of entry thereon.
       (d) Description of Property.--The exact acreage and legal 
     description of the real property conveyed under subsection 
     (a) shall be determined by a survey satisfactory to the 
     Secretary. The cost of the survey shall be borne by Jemez 
     Springs.
       (e) Additional Terms and Conditions.--The Secretary may 
     require such additional terms and conditions in connection 
     with conveyance under subsection (a) as the Secretary 
     considers appropriate to protect the interests of the United 
     States.
                                  ____


                                S. 1469

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

     SECTION 1. FINDINGS.

       (a) The village of El Rito, New Mexico, (El Rito) is a 
     small community of approximately 2,500 residents, completely 
     surrounded by the Carson National Forest in New Mexico.
       (b) The historic community cemetery of El Rito is adjacent 
     to the lands of the Carson National Forest in New Mexico. 
     After generations of use, there is no more available space 
     left in the cemetery and the community members are required 
     to get special use permits to bury their deceased on Forest 
     Service land.
       (c) The requirement for special use permits creates an 
     undue bureaucratic requirement upon families within the El 
     Rito community when they are suffering from grief.

     SEC. 2. DESIGNATION OF LANDS.

       The Secretary of Agriculture, acting through the United 
     States Department of Agriculture Forest Service shall 
     designate five acres of land in the Carson National Forest 
     adjacent to the historic El Rito cemetery as special use land 
     for use as cemetery land for members of the El Rito community 
     to bury their deceased.
                                 ______
                                 
      By Mr. GRAHAM:
  S. 1471. A bill to prohibit the Secretary of Health and Human 
Services from treating any Medicaid-related funds recovered as part of 
State litigation from one or more tobacco companies as an overpayment 
under the Medicaid Program; to the Committee on Finance.


                          medicaid legislation

  Mr. GRAHAM. Mr. President, I rise for the purpose of introducing 
legislation which has been necessitated by a relatively arcane 
provision in the Social Security Act. That provision, Mr. President, is 
section 1903(d)3 which states that ``the pro-rata share to

[[Page S12139]]

which the United States is equitably entitled'' as determined by the 
secretary--this would be the Secretary of HHS--``of the net amount 
recovered during any quarter by a State or any political subdivision 
thereof with respect to medical assistance furnished under the State 
plan shall be considered an overpayment to be adjusted under this 
subsection.''
  Under that provision, Mr. President, the Health Care Financing 
Administration has sent a letter to the States stating that they will 
now be responsible for providing to the Federal Government through an 
offset against their otherwise entitled funds under Medicaid, the 
health financing program for the poor, that portion of any recovery 
that they have made under a tobacco settlement that would be 
attributable to the Federal Government's share of previous payments for 
those Medicaid beneficiaries who had been deemed to have suffered a 
disease or illness related to tobacco.
  The letter states, Mr. President, that ``under current law,'' the law 
that I have just read, ``tobacco settlement recoveries must be treated 
like any other Medicaid recoveries.''
  Mr. President, this is a situation which cries out for congressional 
attention. In the past, that section that I read had been interpreted 
to apply to those cases where there had been a billing error, where 
some Medicaid provider had overstated their reimbursement, the State 
had taken action to reduce that request for payment and had received 
funds from the provider that had been inappropriately paid in a 
previous account. This will be the first time that this section of the 
law is being used to really go to policy questions, and that is, what 
is the Federal Government's share of these tobacco settlements which 
have been negotiated by the States?
  I believe that the reasons that Congress should take action on this 
are several. First, this is a policy issue and should not be settled at 
a bureaucratic level, applying a statute that was written to deal with 
much different, much less policy-oriented issues as the question of the 
State and Federal share of State-initiated tobacco settlements.
  I will read, Mr. President, from a letter dated November 7 to the 
President and signed by nine of our Nation's Governors in which they 
state:

       The issue of control of the settlement funds will be 
     difficult to resolve, and clearly a discussion of the 
     distribution of hundreds of billions of dollars demands 
     congressional involvement. Unfortunately, it appears that the 
     Health Care Financing Administration is not prepared to wait 
     for Congress to act.

  Then the letter goes on to recount the fact that on November 3 the 
Health Care Financing Administration contacted the State Medicaid 
directors to begin the process of collecting what it, the Health Care 
Financing Administration, perceives to be the Federal portion of 
settlement funds attributable to Medicaid.
  Second, the reality is that the Federal Government has known about 
these suits initiated by the States since their pendency. In the case 
of the State of Florida, that means approximately 4 years. But the 
Federal Government has been passive. It did not ask or respond to 
requests to be listed as a coplaintiff and therefore be actively 
involved in litigation. It has provided none of the financing of the 
litigation, which in some cases has amounted to tens of millions of 
dollars, and yet now after a successful recovery, it wants to insert 
itself through this provision, that was designed to deal with 
reimbursements of minor amounts, to collect major amounts under these 
tobacco settlements.
  Finally, the Federal Government is not restricted from initiating its 
own effort to collect what funds it thinks it is due from the tobacco 
settlements. If the Federal Government feels--whether it is Medicare; 
programs under CHAMPUS, the health care for military personnel and 
their dependents; the Veterans Administration; or any other program in 
which the Federal Government is paying all or a substantial portion of 
health care costs--if the Federal Government feels that it has a 
legitimate case for recovery, it ought to do the same thing that the 
States have done, and that is initiate direct action toward such a 
recovery. But it is unseemly for the Federal Government to now be 
coming in after the fact and trying to collect on the good efforts that 
the States have taken.
  I have met with representatives of the White House and will continue 
to meet to determine if it is felt that specific legislation might be 
required in order to give the Federal Government the potential to 
recover those funds that the national taxpayers have paid which they 
should not have paid because they were due to illnesses or disease 
occasioned by the use of tobacco. I suggest that the representatives of 
the White House look closely at State legislation such as that which 
was passed in Florida, upon which Florida's successful settlement was 
predicated.
  Mr. President, I will be sending to the desk legislation which will 
state that the provision that I cited and other provisions analogous to 
it shall not apply to any amount recovered or paid to a State as part 
of a settlement or judgment reached in litigation initiated or pursued 
by a State against one or more manufactures of tobacco products. This 
would clearly state that as a matter of congressional policy it was not 
our intention that that arcane accounting provision should be applied 
to a major policy issue such as the allocation of funds between the 
Federal Government and the States that were recovered as a result of 
State-initiated litigation against a tobacco company.
  Rather, that is an issue which should be resolved by the policymakers 
before the Federal Government; that is, the United States Congress, in 
appropriate consultation with the President.
  So, Mr. President, I send this legislation to the desk and ask for 
its immediate referral.
  The PRESIDING OFFICER. The bill will be received and referred to the 
appropriate committee.
  Mr. GRAHAM. I ask unanimous consent to have printed in the Record 
those documents which I referred to during my remarks.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:
                                                       Health Care


                                     Financing Administration,

                                  Baltimore, MD, November 3, 1997.
       Dear State Medicaid Director: A number of States have 
     settled suits against one or more tobacco companies to recoup 
     costs incurred in treating tobacco-related illnesses. This 
     letter describes the proper accounting and reporting for 
     Federal Medicaid purposes of amounts received from such 
     settlements that are subject to Section 1903(d) of the Social 
     Security Act.
       As described in the statute, States must allocate from the 
     amount of any Medicaid-related expenditure recovery ``the 
     pro-rata share to which the United States (Federal 
     government) is equitably entitled.'' As with any recovery 
     related to a Medicaid expenditure, payments received should 
     be reported on the Quarterly Statement of Expenditures for 
     the Medicaid Assistance Program (HCFA-64) for the quarter in 
     which they are received. Specifically, these receipts should 
     be reported on the Form HCFA-64 Summary Sheet, Line 9E. This 
     line is reserved for special collections. The Federal share 
     should be calculated using the current Federal Medicaid 
     Assistance Percentage. Please note that settlement payments 
     represent a credit applicable to the Medicaid program whether 
     or not the monies are received directly by the State Medicaid 
     agency. States that have previously reported receipts from 
     tobacco litigation settlements must continue to report 
     settlement payments as they are received.
       State administrative costs incurred in pursuit of Medicaid 
     cost recoveries from tobacco firms qualify for the normal 50 
     percent Federal financial participation (FFP). They should be 
     reported on the Form HCFA-64.10, Line 14 (Other Financial 
     Participation).
       Only Medicaid-related expenditure recoveries are subject to 
     the Federal share requirement. To the extent that some non-
     Medicaid expenditures and/or recoveries were also included in 
     the underlying lawsuits, HCFA will accept a justifiable 
     allocation reflecting the Medicaid portion of the recovery, 
     as long as the State provides necessary documentation to 
     support a proposed allocation.
       Under current law, tobacco settlement recoveries must be 
     treated like any other Medicaid recoveries. We recognize that 
     Congress will consider the treatment of tobacco settlements 
     in the context of any comprehensive tobacco legislation next 
     year. Given the States' role in initiating tobacco lawsuits 
     and in financing Medicaid programs, States will, of course, 
     have an important voice in the development of such 
     legislation, including the allocation of any resulting 
     revenues. The Administration will work closely with States 
     during this legislative process as these issues are decided.
       If you would like to discuss the appropriate reporting of 
     recoveries with HCFA, please call David McNally of my staff 
     at (410) 786-3292 to arrange for a meeting or conversation. 
     We look forward to providing any assistance needed in meeting 
     a State's Medicaid obligation.
           Sincerely,

                                          Sally K. Richardson,

                                     Director, Center for Medicaid
                                             and State Operations.

[[Page S12140]]

     
                                  ____
                               National Governors Association,

                                 Washington, DC, November 7, 1997.
     The President,
     The White House, Washington, DC.
       Dear Mr. President: When Congress reconvenes in January, 
     one of its most important priorities will be the development 
     of national tobacco settlement legislation. The nation's 
     Governors look forward to working with you and with members 
     of Congress to ensure that a final, comprehensive solution is 
     found to the dozens of state lawsuits pending against the 
     tobacco industry. The very fact that a solution is in reach 
     is because of the hard work and leadership of Governors and 
     the state attorneys general on behalf of the states.
       An important component of the legislative debate will be 
     the issue of control of tobacco settlement funds. The 
     Governors attach the highest priority to clarifying that 
     settlement funds negotiated by the states to settle state 
     lawsuits must go to the states. Any efforts by the federal 
     government to seek to recoup federal costs must be separate 
     and distinct. Enclosed is a copy of the settlement funds 
     policy we, the Executive Committee of the National Governors' 
     Association, adopted last month.
       This issue of control of the settlement funds will be 
     difficult to resolve, and clearly a discussion of the 
     distribution of hundreds of billions of dollars demands 
     congressional involvement. Unfortunately, it appears that the 
     Health Care Financing Administration (HCFA) is not prepared 
     to wait for Congress to act.
       On November 3rd, HCFA contacted state Medicaid directors to 
     begin the process of collecting what it perceives to be the 
     federal portion of settlement funds attributable to Medicaid. 
     Although in its letter HCFA mentions the importance of the 
     congressional process, it effectively preempts that process 
     by beginning to collect funds from those states that have 
     already settled their individual lawsuits.
       The Governors believe that no action should be taken by 
     HCFA to withhold state Medicaid reimbursement prior to 
     congressional development of settlement legislation. Further, 
     the Governors will strongly support clarification in that 
     legislative package that tobacco settlement funds are not 
     subject to federal recoupment. Recoupment is more appropriate 
     for addressing billing errors than for inserting a federal 
     claim into the multibillion-dollar, state-driven tobacco 
     settlement. Accordingly, the Governors are supporting 
     legislation developed by Senator Bob Graham clarifying that 
     funds made available to the states through individual state 
     tobacco settlements or a national settlement are not subject 
     to federal recoupment.
       We appreciate your consideration of our concerns. If we can 
     provide you with any additional background information, 
     please do not hesitate to let us know.
           Sincerely,
         George V. Voinovich, Governor of Ohio; David M. Beasley, 
           Governor of South Carolina; Howard Dean, M.D., Governor 
           of Vermont; Bob Miller, Governor of Nevada; Tommy G. 
           Thompson, Governor of Wisconsin; Thomas R. Carper, 
           Governor of Delaware; Lawton Chiles, Governor of 
           Florida; Michael O. Leavitt, Governor of Utah; Roy 
           Romer, Governor of Colorado.
                                 ______
                                 
      By Ms. MOSELEY-BRAUN (for herself and Mr. Kennedy):
  S. 1472. A bill to amend the Internal Revenue Code of 1986 to provide 
a tax credit for public elementary and secondary school construction, 
and for other purposes; to the Committee on Finance.


             the school repair and construction act of 1997

  Ms. MOSELEY-BRAUN. Mr. President, today I am pleased to introduce the 
School Repair and Construction Act of 1997. This bill would help States 
and school districts rebuild our crumbling schools by providing tax 
credits to developers and builders who build new schools or renovate 
crumbling schools at below-market rates.
  Under this proposal, the Treasury would allocate pools of tax credits 
to States. States would allocate the credits to school districts. 
School districts would be able to give these tax credits to developers 
and builders to cover a portion of the cost of their school repair, 
renovation, modernization, and construction projects. By allocating tax 
credits in this manner, the bill would reduce the cost to school 
districts of school improvement projects by up to 30 percent.
  The School Repair and Construction Act of 1997 creates a mechanism 
for paying for this proposal that is contingent upon our future 
economic prosperity. If actual revenue into the Federal Treasury 
exceeds the revenue projections, a portion of those excess revenues 
would be deposited in a School Infrastructure Improvement Trust Fund. 
The money in this Trust Fund--up to $1 billion per year--would be 
available for disbursement to States in the form of the allocable tax 
credits.
  Earlier this year, the Congress enacted broad tax legislation 
designed to generate wealth and spur economic growth and prosperity. If 
we are right and that promise comes true, our children ought to benefit 
from our prosperity. The legislation I am introducing today will 
guarantee that these revenues are used to rebuild and modernize our 
schools so they can serve all our children into the 21st century.
  According to the U.S. General Accounting Office, 14 million children 
attend schools in such poor condition they need major renovations or 
should be replaced outright; 12 million children attend schools with 
leaky roofs; and 7 million children attend schools with life-
threatening safety-code violations. These conditions exist in every 
type of American community. Thirty-eight percent of urban schools, 30 
percent of rural schools, and 29 percent of suburban schools are 
falling down around our children. According to the GAO, it will cost 
$112 billion just to bring schools up to good, overall condition.
  The $112 billion price tag does not include the cost of upgrading 
schools for technology, the cost of upgrading electrical systems and 
installing outlets in classrooms that were built decades ago. The FCC 
recently issued a landmark ruling that will give millions of children 
access to modern computer and communications technology. Too many 
children, however, will be unable to take advantage of this 
opportunity, because their schools lack the basic infrastructure 
necessary to allow their teachers to plug computers into the classroom 
walls. According to the GAO, 15 million children attend schools that 
lack enough electrical power to fully use computers and communications 
technology. Almost 50 percent of schools lack the necessary electrical 
wiring to deploy computers to classrooms.
  In addition, public high school enrollment is expected to increase 15 
percent by the year 2007. Just to maintain current class sizes, we will 
need to build 6,000 new schools by the year 2007.
  I have visited schools in Illinois where study halls are literally 
held in hallways because of a lack of space. I have seen stairway 
landings converted into computer labs. There is a school where the 
lunchroom has been converted into two classrooms, students eat in the 
gym, and instead of gym class, many children have what the school calls 
adaptive physical education, while they stand next to their desks.
  These overcrowded and dilapidated conditions are no accident. They 
are predictable results of the way we fund education. As long as we 
continue to rely on the local property tax to fund school 
infrastructure improvements, the conditions of schools will not 
improve.
  The local property tax is simply an inadequate way of paying for 
school infrastructure improvements. According to the GAO, poor- and 
middle-class school districts try the hardest to raise revenue, but the 
system works against them. In 35 States, poor districts have higher tax 
rates than wealthy districts--but raise less revenue because there is 
less property wealth to tax.
  These districts cannot rely on State support. The GAO found that in 
fiscal year 1994, State governments only contributed $3.5 billion to 
the school infrastructure crisis--barely 3 percent of the total need.
  This local funding model does not work for school infrastructure, 
just as it would not work for highways or other infrastructure. Imagine 
what would happen if we based our system of roads on this same funding 
model. Imagine if every community were responsible for the construction 
and maintenance of the roads within its borders. In all likelihood, 
there would be smooth, good roads in the wealthy towns, a patchwork of 
mediocre roads in middle-income ones, and very few roads at all in poor 
communities. Transportation would be hostage to the vagaries of wealth 
and geography. Commerce and travel would be difficult, and navigation 
of such a system would not serve the interests of the whole country. 
That hypothetical, unfortunately, precisely describes our school 
funding system.
  The time has come for us to heed the call of superintendents, 
parents, teachers, architects, mayors, governors, contractors, and 
children from around the country and create a partnership to fix our 
Nation's crumbling schools.

[[Page S12141]]

  Winston Churchill once said, ``We shape our buildings; thereafter, 
they shape us.'' No where is that more true than in schools. The poor 
condition of America's schools has a direct affect on the ability of 
our students to learn the kinds of skills they will need to compete in 
the 21st century, global economy. America can't compete if our students 
can't learn, and our students can't learn if their schools are 
crumbling down around them.
  This School Repair and Construction Act of 1997 is a sensible way of 
helping States and school districts meet their school repair, 
renovation, modernization and construction needs. I urge all of my 
colleagues to join me in sponsoring this important legislation.
  Mr. President, I ask unanimous consent that the text of the School 
Repair and Construction Act of 1997 and a summary of the legislation be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1472

         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 ``School Repair and 
     Construction Act of 1997''.

     SEC. 2. PURPOSE.

       It is the purpose of this Act to help school districts to 
     improve their crumbling and overcrowded school facilities 
     through the use of Federal tax credits.

     SEC. 3. TAX CREDIT FOR PUBLIC ELEMENTARY AND SECONDARY SCHOOL 
                   CONSTRUCTION.

       (a) In General.--Subpart D of part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 (relating to 
     general business credits) is amended by adding at the end the 
     following new section:

     ``SEC. 45D. CREDIT FOR PUBLIC ELEMENTARY AND SECONDARY SCHOOL 
                   CONSTRUCTION.

       ``(a) In General.--For purposes of section 38, the amount 
     of the school construction credit determined under this 
     section for an eligible taxpayer for any taxable year with 
     respect to an eligible school construction project shall be 
     an amount equal to the lesser of--
       ``(1) the applicable percentage of the qualified school 
     construction costs, or
       ``(2) the excess (if any) of--
       ``(A) the taxpayer's allocable school construction amount 
     with respect to such project under subsection (d), over
       ``(B) any portion of such allocable amount used under this 
     section for preceding taxable years.
       ``(b) Eligible Taxpayer; Eligible School Construction 
     Project.--For purposes of this section--
       ``(1) Eligible taxpayer.--The term `eligible taxpayer' 
     means any person which--
       ``(A) has entered into a contract with a local educational 
     agency for the performance of construction or related 
     activities in connection with an eligible school construction 
     project, and
       ``(B) has received an allocable school construction amount 
     with respect to such contract under subsection (d).
       ``(2) Eligible school construction project.--
       ``(A) In general.--The term `eligible school construction 
     project' means any project related to a public elementary 
     school or secondary school that is conducted for 1 or more of 
     the following purposes:
       ``(i) Construction of school facilities in order to ensure 
     the health and safety of all students, which may include--

       ``(I) the removal of environmental hazards,
       ``(II) improvements in air quality, plumbing, lighting, 
     heating and air conditioning, electrical systems, or basic 
     school infrastructure, and
       ``(III) building improvements that increase school safety.

       ``(ii) Construction activities needed to meet the 
     requirements of section 504 of the Rehabilitation Act of 1973 
     (29 U.S.C. 794) or of the Americans with Disabilities Act of 
     1990 (42 U.S.C. 12101 et seq.).
       ``(iii) Construction activities that increase the energy 
     efficiency of school facilities.
       ``(iv) Construction that facilitates the use of modern 
     educational technologies.
       ``(v) Construction of new school facilities that are needed 
     to accommodate growth in school enrollments.
       ``(vi) Such other construction as the Secretary of 
     Education determines appropriate.
       ``(B) Special rules.--For purposes of this paragraph--
       ``(i) the term `construction' includes reconstruction, 
     renovation, or other substantial rehabilitation, and
       ``(ii) an eligible school construction project shall not 
     include the costs of acquiring land (or any costs related to 
     such acquisition).
       ``(c) Qualified School Construction Costs; Applicable 
     Percentage.--For purposes of this section--
       ``(1) In general.--The term `qualified school construction 
     costs' means the aggregate amounts paid to an eligible 
     taxpayer during the taxable year under the contract described 
     in subsection (b)(1).
       ``(2) Applicable percentage.--The term `applicable 
     percentage' means, in the case of an eligible school 
     construction project related to a local educational agency, 
     the higher of the following percentages:
       ``(A) If the local educational agency has a percentage or 
     number of children described in clause (i)(I) or (ii)(I) of 
     section 1125(c)(2)(A) of the Elementary and Secondary 
     Education Act of 1965 (20 U.S.C. 6335(c)(2)(A)), the 
     applicable percentage is 10 percent.
       ``(B) If the local educational agency has a percentage or 
     number of children described in clause (i)(II) or (ii)(II) of 
     such section, the applicable percentage is 15 percent.
       ``(C) If the local educational agency has a percentage or 
     number of children described in clause (i)(III) or (ii)(III) 
     of such section, the applicable percentage is 20 percent.
       ``(D) If the local educational agency has a percentage or 
     number of children described in clause (i)(IV) or (ii)(IV) of 
     such section, the applicable percentage is 25 percent.
       ``(E) If the local educational agency has a percentage or 
     number of children described in clause (i)(V) or (ii)(V) of 
     such section, the applicable percentage is 30 percent.
       ``(d) Allocable Amount.--For purposes of this section--
       ``(1) In general.--Subject to paragraph (3), a local 
     educational agency may allocate to any person a school 
     construction amount with respect to any eligible school 
     construction project.
       ``(2) Time for making allocation.--An allocation shall be 
     taken into account under paragraph (1) only if the allocation 
     is made at the time the contract described in subsection 
     (b)(1) is entered into (or such later time as the Secretary 
     may by regulation allow).
       ``(3) Coordination with state program.--A local educational 
     agency may not allocate school construction amounts for any 
     calendar year--
       ``(A) which in the aggregate exceed the amount of the State 
     school construction ceiling allocated to such agency for such 
     calendar year under subsection (e), or
       ``(B) if such allocation is inconsistent with any specific 
     allocation required by the State or this section.
       ``(e) State Ceilings and Allocation.--
       ``(1) In general.--A State educational agency shall 
     allocate to local educational agencies within the State for 
     any calendar year a portion of the State school construction 
     ceiling for such year. Such allocations shall be consistent 
     with the State application which has been approved under 
     subsection (f) and with any requirement of this section.
       ``(2) State school construction ceiling.--
       ``(A) In general.--The State school construction ceiling 
     for any State for any calendar year shall be an amount equal 
     to the State's allocable share of the national school 
     construction amount.
       ``(B) State's allocable share.--The State's allocable share 
     of the national school construction amount for a fiscal year 
     shall bear the same relation to the national school 
     construction amount for the fiscal year as the amount the 
     State received under section 1124 of the Elementary and 
     Secondary Education Act of 1965 (20 U.S.C. 6333) for the 
     preceding fiscal year bears to the total amount received by 
     all States under such section for such preceding fiscal year.
       ``(C) National school construction amount.--The national 
     school construction amount for any calendar year is the 
     lesser of--
       ``(i) $1,000,000,000, or
       ``(ii) the amount made available for such year under the 
     School Infrastructure Improvement Trust Fund established 
     under section 9512,

     reduced by any amount described in paragraph (3).
       ``(3) Special allocations for indian tribes and 
     territories.--
       ``(A) Allocation to indian tribes.--The national school 
     construction amount under paragraph (2)(C) shall be reduced 
     by 1.5 percent for each calendar year and the Secretary of 
     Interior shall allocate such amount among Indian tribes 
     according to their respective need for assistance under this 
     section.
       ``(B) Allocation to territories.--The national school 
     construction amount under paragraph (2)(C) shall be reduced 
     by 0.5 percent for each calendar year and the Secretary of 
     Education shall allocate such amount among the territories 
     according to their respective need for assistance under this 
     section.
       ``(4) Reallocation.--If the Secretary of Education 
     determines that a State is not making satisfactory progress 
     in carrying out the State's plan for the use of funds 
     allocated to the State under this section, the Secretary may 
     reallocate all or part of the State school construction 
     ceiling to 1 or more other States that are making 
     satisfactory progress.
       ``(e) State Application.--
       ``(1) In general.--A State educational agency shall not be 
     eligible to allocate any amount to a local educational agency 
     for any calendar year unless the agency submits to the 
     Secretary of Education (and the Secretary approves) an 
     application containing such information as the Secretary may 
     require, including--
       ``(A) an estimate of the overall condition of school 
     facilities in the State, including the projected cost of 
     upgrading schools to adequate condition;

[[Page S12142]]

       ``(B) an estimate of the capacity of the schools in the 
     State to house projected student enrollments, including the 
     projected cost of expanding school capacity to meet rising 
     student enrollment;
       ``(C) the extent to which the schools in the State have the 
     basic infrastructure elements necessary to incorporate modern 
     technology into their classrooms, including the projected 
     cost of upgrading school infrastructure to enable the use of 
     modern technology in classrooms;
       ``(D) the extent to which the schools in the State offer 
     the physical infrastructure needed to provide a high-quality 
     education to all students; and
       ``(E) an identification of the State agency that will 
     allocate credit amounts to local educational agencies within 
     the State.
       ``(2) Specific items in allocation.--The State shall 
     include in the State's application the process by which the 
     State will allocate the credits to local educational agencies 
     within the State. The State shall consider in its allocation 
     process the extent to which--
       ``(A) the school district served by the local educational 
     agency has--
       ``(i) a high number or percentage of the total number of 
     children aged 5 to 17, inclusive, in the State who are 
     counted under section 1124(c) of the Elementary and Secondary 
     Education Act of 1965 (20 U.S.C. 6333(c)); or
       ``(ii) a high percentage of the total number of low-income 
     residents in the State;
       ``(B) the local educational agency lacks the fiscal 
     capacity, including the ability to raise funds through the 
     full use of such agency's bonding capacity and otherwise, to 
     undertake the eligible school construction project without 
     assistance;
       ``(C) the local area makes an unusually high local tax 
     effort, or has a history of failed attempts to pass bond 
     referenda;
       ``(D) the local area contains a significant percentage of 
     federally owned land that is not subject to local taxation;
       ``(E) the threat the condition of the physical facility 
     poses to the safety and well-being of students;
       ``(F) there is a demonstrated need for the construction, 
     reconstruction, renovation, or rehabilitation based on the 
     condition of the facility;
       ``(G) the extent to which the facility is overcrowded; and
       ``(H) the extent to which assistance provided will be used 
     to support eligible school construction projects that would 
     not otherwise be possible to undertake.
       ``(3) Identification of areas.--The State shall include in 
     the State's application the process by which the State will 
     identify the areas of greatest needs (whether those areas are 
     in large urban centers, pockets of rural poverty, fast-
     growing suburbs, or elsewhere) and how the State intends to 
     meet the needs of those areas.
       ``(4) Allocations on basis of application.--The Secretary 
     of Education shall evaluate applications submitted under this 
     subsection and shall approve any such application which meets 
     the requirements of this section.
       ``(g) Required Allocations.--Notwithstanding any process 
     for allocation under a State application under subsection 
     (f), in the case of a State which contains 1 or more of the 
     100 school districts within the United States which contains 
     the largest number of poor children (as determined by the 
     Secretary of Education), the State shall allocate each 
     calendar year to the local educational agency serving such 
     districts that portion of the State school construction 
     ceiling which bears the same ratio to such ceiling as the 
     number of children in such district for the preceding 
     calendar year who are counted for purposes of section 1124(c) 
     of the Elementary and Secondary Education Act of 1965 (20 
     U.S.C. 6333(c)) bears to the total number of children in such 
     State who are so counted.
       ``(h) Definitions.--For purposes of this section--
       ``(1) Elementary school; local educational agency; 
     secondary school; state educational agency.--The terms 
     `elementary school', `local educational agency', `secondary 
     school', and `State educational agency' have the meanings 
     given the terms in section 14101 of the Elementary and 
     Secondary Education Act of 1965 (20 U.S.C. 8801).
       ``(2) Territories.--The term `territories' means the United 
     States Virgin Islands, Guam, American Samoa, the Commonwealth 
     of the Northern Mariana Islands, the Republic of the Marshall 
     Islands, the Federated States of Micronesia, and the Republic 
     of Palau.
       ``(3) State.--The term `State' means each of the several 
     States of the United States, the District of Columbia, and 
     the Commonwealth of Puerto Rico.''
       (b) Inclusion in General Business Credit.--
       (1) In general.--Section 38(b) of the Internal Revenue Code 
     of 1986 is amended by striking ``plus'' at the end of 
     paragraph (11), by striking the period at the end of 
     paragraph (12) and inserting ``, plus'', and by adding at the 
     end the following new paragraph:
       ``(13) the school construction credit determined under 
     section 45D(a).''
       (2) Transition rule.--Section 39(d) of such Code is amended 
     by adding at the end the following new paragraph:
       ``(8) No carryback of section 45d credit before 
     enactment.--No portion of the unused business credit for any 
     taxable year which is attributable to the school construction 
     credit determined under section 45D may be carried back to a 
     taxable year ending before the date of the enactment of 
     section 45D.''
       (c) Establishment of School Infrastructure Improvement 
     Trust Fund.--
       (1) In general.--Subchapter A of chapter 98 of the Internal 
     Revenue Code of 1986 is amended by adding at the end the 
     following new section:

     ``SEC. 9512. SCHOOL INFRASTRUCTURE IMPROVEMENT TRUST FUND.

       ``(a) Creation of Trust Fund.--There is established in the 
     Treasury of the United States a trust fund to be known as the 
     `School Infrastructure Improvement Trust Fund', consisting of 
     such amounts as may be credited or paid to such Trust Fund as 
     provided in this section or section 9602(b).
       ``(b) Transfers to Trust Fund.--
       ``(1) In general.--There are hereby appropriated to the 
     Trust Fund for any calendar year an amount equal to the 
     lesser of--
       ``(A) the revenue surplus determined under paragraph (2) 
     for the preceding calendar year, or
       ``(B) $1,000,000,000.
       ``(2) Revenue surplus.--The revenue surplus determined 
     under this paragraph for any calendar year is an amount equal 
     to the excess (if any) of--
       ``(A) the Secretary's estimate of revenues received in the 
     Treasury of the United States for the calendar year, over
       ``(B) the amount the Director of the Congressional Budget 
     Office estimated would be so received in the report provided 
     to the Committees on the Budget of the House and the Senate 
     pursuant to section 202(f)(1) of the Congressional Budget Act 
     of 1974.
       ``(c) Expenditures From Trust Fund.--Amounts in the Trust 
     Fund shall be transferred to the general fund of the Treasury 
     at such times as the Secretary determines appropriate to 
     offset any decrease in Federal revenues by reason of credits 
     allowed under section 38 which are attributable to the school 
     construction credit determined under section 45D.''
       (2) Conforming amendment.--The table of section for 
     subchapter A of chapter 98 of such Code is amended by adding 
     at the end the following new item:

``Sec. 9512. School Infrastructure Improvement Trust Fund.
       (d) Conforming Amendment.--The table of sections for 
     subpart D of part IV of subchapter A of chapter 1 of the 
     Internal Revenue Code of 1986 is amended by adding at the end 
     the following new item:

``Sec. 45D. Credit for public elementary and secondary school 
              construction.''
       (e) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1997.
                                  ____


          Summary: School Repair and Construction Act of 1997

       A proposal to lower the cost of school repair, renovation, 
     modernization, and construction projects by providing tax 
     credits to developers and builders to cover a portion of the 
     costs of school improvement projects. The credits are 
     allocated to States, who have flexibility to award the 
     credits to their elementary and secondary school districts 
     with the greatest needs.


                     Award of Tax Credits to States

       A total of $1 billion worth of tax credits allocated every 
     year to States, using a formula based on the number of 
     school-aged children in the State who are eligible for 
     federal education assistance. Two percent of funds reserved 
     for Indian schools and territories.


                Allocation of Tax Credits Within States

       States shall develop a system for allocating the credits to 
     their school districts. States are required to take into 
     account criteria relating to the needs of school districts 
     and the ability of the school districts to finance the 
     improvements without assistance, and are required to identify 
     their highest-priority areas first and develop plans for 
     meeting those needs.


                   Award of Tax Credits to Developers

       The developer or builder performing the school improvement 
     project receives the tax credits upon completion of the 
     project. The credits could then be counted against the 
     developer's income under the rules of general business tax 
     credits.
       The amount of the tax credit available to the developer is 
     based on the local area's ability to pay and the total cost 
     of the project. It cannot exceed 30 percent of the total cost 
     of construction, renovation, repair, or modernization, not 
     including land acquisition or other associated costs.


                           Eligible Projects

       The credits can be used by States and districts to meet 
     their highest priority projects, including school repairs or 
     renovations of substantial size, retrofitting schools for 
     modern technologies, and building new schools to alleviate 
     overcrowding.


                               Trust Fund

       Funds for this tax credit are made available only if actual 
     revenues into the Federal Treasury exceed CBO revenue 
     projections. In that case, up to $1 billion of excess 
     revenues shall be deposited annually into a School 
     Infrastructure Improvement Trust Fund, and disbursed to 
     States in the form of allocable tax credits.

    Detailed Description: School Repair and Construction Act of 1997

       A proposal to lower the cost of school repair, renovation, 
     modernization, and construction projects by providing tax 
     credits to developers and builders to cover a portion of

[[Page S12143]]

     the costs of school improvement projects. The credits are 
     allocated to States, who have flexibility to award the 
     credits to their elementary and secondary school districts 
     with the greatest needs.


                       Award of Credits to States

       Each State educational agency (or other designated agency) 
     shall receive a portion of a total of $1 billion/year worth 
     of tax credits.
       Allocation--Each State's share is based on the State's 
     prior year's relative share of funding under title I of the 
     Elementary and Secondary Education Act of 1965 (20 U.S.C. 
     6331 et seq.)
       State Minimum--No State shall receive less under this 
     program than its percentage allocation under section 1124(d) 
     of the Elementary and Secondary Education Act of 1965 (20 
     U.S.C. 6334(d)) for the previous fiscal year.
       Reallocation--If a State fails to submit an approvable 
     application for its credits, the Secretary of Treasury shall 
     redistribute that State's share to other States in the same 
     proportions as the original allocations were made.
       Indians & Outlying Territories--Of the total amount of tax 
     credits available, one and one-half percent is set aside for 
     Indian schools to be allocated at the discretion of the 
     Secretary of Interior, and one-half percent is set aside for 
     outlying territories, to be allocated at the discretion of 
     the Secretary of Education.


                           State Applications

       In order to be eligible for tax credits, the State 
     educational agency (or other designated entity) shall submit 
     an application containing information including:
       (1) an estimate of the overall condition of school 
     facilities in the State, including the projected cost of 
     upgrading schools to adequate condition;
       (2) an estimate of the capacity of the schools in the State 
     to house projected enrollments, including the projected cost 
     of expanding school capacity to meet rising enrollment;
       (3) the extend to which the schools in the State have the 
     basic infrastructure elements necessary to incorporate modern 
     technology into their classrooms, including the projected 
     cost of upgrading school infrastructure to enable the use of 
     modern technology in classrooms;
       (4) the extend to which the schools in the State offer the 
     physical infrastructure needed to provide a high-quality 
     education to all students; and
       (5) an identification of the State agency that will receive 
     the credits.
       The State shall also include in its application a plan for 
     the within-state allocation of credits, which shall be based 
     on criteria including the following:
       (1) whether a district has high numbers or percentages of 
     the total number of children aged 5 to 17, inclusive, 
     residing in the geographic area served by an eligible local 
     educational agency who are counted under title 1 of the 
     Elementary and Secondary Education Act of 1965, or a high 
     percentage of low-income residents;
       (2) whether the eligible local educational agency lacks the 
     fiscal capacity, including the ability to raise funds through 
     the full use of such agency's bonding capacity and otherwise, 
     to undertake the project without assistance;
       (3) whether the local area makes an unusually high local 
     tax effort, or has a history of failed attempts to pass bond 
     referenda;
       (4) whether the local area contains a significant 
     percentage of Federally-owned land that is not subject to 
     local taxation;
       (5) the threat the condition of the physical plant poses to 
     the safety and well-being of students;
       (6) the demonstrated need for the construction, 
     reconstruction, or renovation based on the condition of the 
     facility;
       (7) the extent to which the assistance will alleviate 
     overcrowding; and
       (8) the extent to which the assistance provided will 
     support projects that would not otherwise have been possible 
     to undertake, or will increase the size of school 
     infrastructure improvement projects.
       The State shall identify its areas of greatest need and 
     develop a plan for meeting the needs of those areas first.
       The Secretary of Education shall evaluate State 
     applications and approve those that will maximize school 
     infrastructure improvements in school districts with the 
     greatest needs and the least ability to raise revenue to meet 
     those needs. Once a State's application is approved, the 
     State educational agency (or other designated agency) 
     receives its share of the tax credits. States shall be 
     required to reapply for the credits every five years.


                  Allocation of Credits Within States

       For a period of five years, any State containing one of the 
     100 school districts with the largest numbers of poor 
     children shall make available to those districts amounts of 
     tax credits proportional to those districts' relative shares 
     of funding under section 1124A of the Elementary and 
     Secondary Education Act of 1965.
       Other credits shall be allocated within the State in 
     accordance with the criteria described in the State's 
     application to the Secretary of Education. School districts 
     shall apply to the designated State agency for the authority 
     to allocate tax credits to developers working on school 
     improvement projects within their districts.


                     award of credits to developers

       School districts will be able to offer developers or 
     builders tax credits from the State based on the cost of 
     their proposed projects.
       The developer or builder performing the eligible project 
     would receive the tax credits upon completion of the project. 
     The credits could be counted against the developer's income 
     under the rules of general business tax credits.
       The amount of the tax credit available to the developer 
     would be based on the local area's ability to pay and the 
     total cost of the project, up to 30 percent of the total cost 
     of the project, using the following formula.
       A project located within a local educational agency 
     described in--
       (1) clause (i)(I) or clause (ii)(I) of section 
     1125(c)(2)(A) of the Elementary and Secondary Education Act, 
     shall be eligible for a credit of 10 percent;
       (2) clause (i)(II) or clause (ii)(II) of section 
     1125(c)(2)(A), shall be eligible for a credit of 15 percent;
       (3) clause (i)(III) or clause (ii)(III) of section 
     1125(c)(2)(A), shall be eligible for a credit of 20 percent;
       (4) clause (i)(IV) or clause (ii)(IV) of section 
     1125(c)(2)(A), shall be eligible for a credit of 25 percent; 
     and
       (5) clause (i)(V) or clause (ii)(V) of section 
     1125(c)(2)(A), shall be eligible for a credit of 30 percent;

     of the total cost of the project.
       The ``total cost'' of the project includes the cost of 
     construction, renovation, repair, or modernization, but not 
     land acquisition or other associated costs.


                           eligible projects

       The tax credits shall be used by States to help support 
     projects of substantial size and scope such as:
       (1) the repair or upgrade of classrooms or structures 
     related to academic learning, including the repair of leaking 
     roofs, crumbling walls, inadequate plumbing, poor ventilation 
     equipment, and inadequate heating or lighting equipment;
       (2) an activity to increase physical safety at the 
     educational facility involved;
       (3) an activity to enhance the educational facility 
     involved to provide access for students, teachers, and other 
     individuals with disabilities;
       (4) an activity to improve the energy efficiency of the 
     educational facility involved;
       (5) an activity to address environmental hazards at the 
     educational facility involved, such as poor ventilation, 
     indoor air quality, or lighting;
       (6) the provision of basic infrastructure that facilitates 
     educational technology, such as communications outlets, 
     electrical systems, power outlets, or a communication closet;
       (7) the construction of new schools to meet the needs 
     imposed by enrollment growth; and
       (8) any other activity the Secretary determines achieves 
     the purpose of this title;

     as long as such projects are located in a school as defined 
     under section 12012(2) of the Elementary and Secondary 
     Education Act of 1965.


                               Trust Fund

       Funds for this tax credit are made available only if actual 
     revenues into the Federal Treasury exceed CBO revenue 
     projections. In that case, up to $1 billion of excess 
     revenues shall be deposited annually into a School 
     Infrastructure Improvement Trust Fund, and disbursed to 
     States in the form of allocable tax credits.

  Mr. KENNEDY. Mr. President, I give my strong support to the bill 
being introduced today by Senator Moseley-Braun to provide up to $1 
billion a year for improving America's school facilities.
  Good education begins with good places to learn. We can't expect 
children to learn, when school roofs are crumbling, pipes are leaking, 
and boilers are failing. Adequate school facilities are essential to 
prepare children for the 21st century. It's preposterous to pretend 
that we can prepare students for the 21st century in dilapidated 19th 
century classrooms.
  We can no longer ignore this national crisis. We need to develop 
effective public-private partnerships to address these needs. Senator 
Moseley-Braun's bill provides that opportunity.
  Schools across the country are facing enormous problems with 
crumbling facilities. 14 million children in one-third of the nation's 
schools are now learning in substandard school buildings. Over half of 
all schools report at least one major building in disrepair, with 
cracked foundations, leaking roofs, or other major problems.
  This bill can be a major start toward repairing the nation's 
crumbling schools, by encouraging business and government to work 
together. It offers tax credits to developers and builders to cover 
costs of school improvements. Each state will receive funds based on 
the number of school-age children in the state who are eligible for 
federal education assistance. The states will have the flexibility to 
award the tax credits to developers in school districts with the 
greatest need. The credits will

[[Page S12144]]

be taken against the developer's income, like other business tax 
credits.
  I urge my colleagues to support Senator Moseley-Braun's bill to help 
local communities rebuild America's crumbling schools. I look forward 
to continuing to work with her to make sure that Congress does its part 
to help address this national need.
                                 ______
                                 
      By Mr. D'AMATO (for himself, Ms. Moseley-Braun, and Mr. Cochran):
  S. 1476. A bill to authorize the President to enter into a trade 
agreement concerning Northern Ireland and certain border counties of 
the Republic of Ireland, and for other purposes; to the Committee on 
Finance.

                          ____________________