Congressional Record, Volume 143 Issue 160 (Thursday, November 13, 1997)

[Congressional Record Volume 143, Number 160 (Thursday, November 13, 1997)]
[Senate]
[Pages S12576-S12614]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

By Mr. BURNS:
S. 1526. A bill to authorize an exchange of land between the
Secretary of Agriculture and Secretary of the Interior and the Big Sky
Lumber Co.; to the Committee on Energy and Natural Resources.

the gallatin land consolidation act of 1997

Mr. BURNS. Madam President, I am introducing draft legislation to
complete the third phase of the Gallatin Land Consolidation Act. As
Congress winds down to the final hours of this session it has become
increasingly important to show Montanans that we are committed to
completing this act.
In Montana there are many folks who have small problems with the
details of the proposed agreement between Big Sky Lumber and the U.S.
Forest Service. Also at stake are the exceptional natural resources of
the Taylors Fork lands. These lands are privately owned and face an
uncertain future. By showing the private landowners that Congress is,
in fact, committed to completing this exchange, the environmental value
of Taylors Fork will be preserved.
Taylors Fork is a migration corridor for wildlife which leave
Yellowstone National Park for winter range in Montana. With legislation
I am committed to preserving Taylors Fork as close to a natural state
as possible.
I am confident that by working together, the Montana congressional
delegation will be able to resolve the outstanding land use issues in
the Bridger-Bangtail area. I also believe we can resolve the concerns
of the timber small business set-aside.
This bill is a placeholder. There are many details that need to be
included. The deadline for ensuring the Taylors Fork lands remain
included in the agreement is December 31 of this year. My intent with
this bill is to satisfy the deadline to preserve our option on Taylors
Fork and to provide a forum for Montanans to begin to comment on the
details of the package. I look forward to moving ahead with Senator
Baucus and Congressman Hill and completing the original act of 1993 in
the next session of Congress.
______

By Mr. KENNEDY (for himself, Mr. Specter, Mr. Wyden, Mrs.
Feinstein, and Mr. Torricelli):
S. 1529. A bill to enhance Federal enforcement of hate crimes, and
for other purposes; to the Committee on the Judiciary.

the hate crimes prevention act of 1998

Mr. KENNEDY. Mr. President, it is a privilege to join Senator Specter
and Senator Wyden in introducing the Hate Crimes Prevention Act of
1998. Last Monday, President Clinton convened a historic White House
Conference on Hate Crimes. This conference brought together community
leaders, law enforcement officials, religious and academic leaders,
parents, and victims for a national dialogue on how to reduce hate
violence in our society.
I commend President Clinton for his leadership on this important
issue. Few crimes tear at the fabric of society more than hate crimes.
They injure the immediate victims, but they also injure the entire
community--and sometimes the entire nation. So it is entirely
appropriate to use the full power of the federal government to punish
them.
This bill is the product of careful consultation with the Department
of Justice, constitutional scholars, law enforcement officials, and
many organizations with a long and distinguished history of involvement
in combating hate crimes, including the Anti-Defamation League, the
National Organization of Women Legal Defense Fund, the Human Rights
Campaign, the National Coalition Against Domestic Violence, and the
American Psychological Association. President Clinton strongly supports
the bill, and we look forward to working closely with the
administration to ensure its passage.
Hate crimes are on the rise throughout America. The Federal Bureau of
Investigation documented 8,000 hate crimes in 1995, a 33-percent
increase over 1994. The 8,000 documented hate crimes actually
understate the true number of hate crimes, because reporting is
voluntary and not all law enforcement agencies report such crimes.
The National Asian Pacific American Legal Consortium recently
released its 1997 Audit of anti-Asian violence. Their report documented
a 17-percent increase in hate crimes against Asian-Americans. The
National Gay and Lesbian Task Force documented a 6-percent increase in
hate violence against gay, lesbian, and bisexual citizens in 1996.
Eighty-two percent of hate crimes based on religion in 1995 were anti-
Semitic.
Gender motivated violence occurs at alarming rates. The Leadership
Conference on Civil Rights recently issued a report on hate crimes
which correctly noted that ``society is beginning to realize that many
assaults against women are not `random' acts of violence but are
actually bias-related crimes.''
The rising incidence of hate crimes is simply intolerable. Yet, our
current Federal laws are inadequate to deal with this violent bigotry.
The Justice Department is forced to fight the battle against hate
crimes with one hand tied behind its back.
There are two principal gaps in existing law that prevent federal
prosecutors from adequately responding to hate crimes. First, the
principal federal hate crimes law, 18 United States Code 245, contains
anachronistic and onerous jurisdictional requirements that frequently
make it impossible for

[[Page S12577]]

federal officials to prosecute flagrant acts of racial or religious
violence. Second, federal hate crimes law do not cover gay bashing,
gender-motivated violence, or hate crimes against the disabled.
Our bill closes these gaps in existing law, and gives prosecutors the
tools they need to fight bigots who seek to divide the nation through
violence. Our bill expands the federal government's ability to punish
racial violence by removing the unnecessary jurisdictional requirements
from existing law. In addition, the bill gives federal prosecutors new
authority to prosecute violence against women, against the disabled,
and against gays and lesbians.
The bill also provides additional resources to hire the necessary law
enforcement personnel to assist in the investigation and prosecution of
hate crimes. The bill also provides additional resources for programs
specifically targeted at preventing hate crimes.
Finally, the bill addresses the growing problem of adults who recruit
juveniles to committee hate crimes. In Montgomery County, Tennessee, a
white supremacist founded a hate group known as the ``Aryan Faction,''
and recruited new members by going into local high schools. The group
then embarded on a violent spree of firebombings and arsons before
being apprehended. Hate crimes disproportionately involve juveniles,
and the bill directs the Sentencing Commission to study this problem
and determine appropriate additional sentencing enhancements for adults
who recruit juveniles to commit hate crimes.
The structure of this bill is modeled after the Church Arson
Prevention Act, the bipartisan bill enacted by the Senate unanimously
last year in response to the epidemic of church arson crimes. Combating
hate crimes has always been a bipartisan issue in the Senate. The Hate
Crimes Statistics Act has overwhelming bipartisan support, and it was
extended last year by a unanimous vote. The Hate Crimes Sentencing
Enhancement Act was enacted in 1994 by a 92-4 vote in the Senate.
The bill we are introducing today is the next step in our bipartisan
effort to combat hate violence. This bill is an essential part of the
battle against bigotry, and I urge the Senate to give high priority
when Congress returns to session in January.
Mr. WYDEN. Mr. President, I am pleased to join my colleagues,
Senators Kennedy and Specter, in introducing a bill that will make it
clear that this country will no more tolerate violence directed at
gays, women, or people with disabilities. This legislation will end the
bizarre double standard which says that hate crimes motivated by one
sort of prejudice are a Federal crime, while those motivated by other
biases are not. It will assure that every American who becomes a victim
of a hate crime has equal standing under Federal law, because hatred
and violence are always wrong.
This bipartisan bill is based on a common conviction that this
country still has work to do in rooting out hatred, prejudice and the
violence they generate. Hate crimes--the threat or use of force to
injure, intimidate or interfere with another person solely because of
the person's race, color, religion or national origin--cannot be
tolerated in our society. That point has already been enshrined in law
and passage of the Hate Crimes Statistics Reporting Act in 1990,
followed by the Hate Crimes Penalty Enhancement Act in 1993 and the
1996 resolution condemning church burnings.
Our bill simply seeks to offer the same protection to victims of gay
bashing, woman beating and crimes against people with disabilities that
has already been offered to victims of bias crimes based on racial and
ethnic discrimination.
Today, the perpetrator who hurls a brick at someone because he is
Asian-American can be prosecuted under Federal law. The one who attacks
gay men to ``teach them a lesson'' cannot. The perpetrator who burns a
black church or defaces a synagogue can be prosecuted under Federal
law. The one who targets people in wheelchairs or blind people cannot.
This legislation would erase that double standard from the books. Hate
crimes are all the same, and they are never acceptable.
I urge my colleagues to join us in moving forward with this important
legislation when we return here next year.
______

By Mr. HATCH:
S. 1530. A bill to resolve ongoing tobacco litigation, to reform the
civil justice system responsible for adjudicating tort claims against
companies that manufacture tobacco products, and establish a national
tobacco policy for the United States that will decrease youth tobacco
use and reduce the marketing of tobacco products to young Americans;
read the first time.

THE PLACING RESTRAINTS ON TOBACCO'S ENDANGERMENT OF CHILDREN AND TEENS
ACT

Mr. HATCH. Mr. President, perhaps the most important legacy this
Congress can leave for future generations is implementation of a strong
plan to curb tobacco use, and especially its use by children and teens.
Quite simply, something needs to be done to get tobacco out of the
hands of children--or perhaps more accurately, out of the lungs and
mouths of children.

TEENS AND TOBACCO USE

The numbers of children who smoke cigarettes and use other tobacco
products such as snuff and chewing tobacco are truly alarming. And
these numbers are on the rise.
According to the Centers for Disease Control and Prevention, most
youths who take up tobacco products begin between the ages of 13 and
15. It is astounding that up to 70% of children have tried smoking by
age 16.
Again according to the CDC, nearly 6,000 kids a day try their first
cigarette, and 3,000 of them will continue to smoke. One-thousand of
them will die from smoking.
At the Judiciary Committee's October 29 hearing, Dr. Frank Chaloupa,
a renowned researcher who has spent the last decade studying the effect
of prices and policies on tobacco use, told us that ``there is an
alarming upward trend in youth cigarette smoking over the past several
years. Between 1993 and 1996, for example, the number of high school
seniors who smoke grew by 14%, the number of 10th grade smokers rose by
23%, and the number of eighth grade smokers increased 26%.''
During the time between the issuance of the first Surgeon General's
report in 1964 and 1990, the number of kids smoking was on the decline.
Unfortunately, at that time, the number of children who try tobacco
products started to rise.
Nearly all first use of tobacco occurs before high school graduation,
which suggests to me that if that first use can be prevented, perhaps
we can wean future generations off these harmful tobacco products.
We also know that adolescents with lower levels of school
achievement, those with friends who use tobacco, and children with
lower self-images are more likely to use tobacco. Experts have found no
proven correlation between socio-economic status and smoking.
An element that is compelling to me as Chairman of the Judiciary
Committee is the fact that tobacco use is associated with alcohol and
illicit drug use and is generally the first substance used by young
people who enter a sequence of drug use.
Public health experts have found a number of factors associated with
youth smoking. Among them are: the availability of cigarettes; the
widespread perception that tobacco use is the norm; peer and sibling
attitudes; and lack of parental support.
Unfortunately, what many young people fail to appreciate is that
cigarette smoking at an early age causes significant health problems
during childhood and adolescence, and increased risk factors for adult
health problems as well.
Smoking reduces the rate of lung growth and maximum lung functioning.
Young smokers are less likely to be fit. In fact, the more and the
longer they smoke, the less healthy they are. Adolescent smokers are
more likely to have overall diminished health, not to mention shortness
of breath, coughing and wheezing.

The Health Effects of Smoking

We all know that tobacco is unhealthy. Just how unhealthy is hard to
imagine.
According to a 1988 Surgeon General's report, the nicotine in tobacco
is as addictive as heroin or cocaine.
Cigarette smoking is the leading cause of premature death and disease
in the United States.

[[Page S12578]]

Each year, smoking kills more Americans than alcohol, heroin, crack,
automobile and airplane accidents, homicides, suicides, and AIDS--
combined. Cigarettes also have a huge impact on fire fatalities in the
United States. In 1992, cigarettes were responsible for almost 23% of
all residential fires, resulting in over 1,000 deaths and over 3,200
injuries.
And, Mr. President, too many Americans smoke.
According to the CDC, one-quarter of the adult population--almost 50
million persons--regularly smoke cigarettes.
In my home state of Utah, there are 30,000 youth smokers, grades 7-
12, and 163,000 adult smokers. The Utah Department of Health has found
that over 90% of current adult Utah smokers began smoking before age
18; 60% started before age 16. And I would note that it is note legal
to smoke in Utah until age 19.
And, so, it has been established that tobacco products are harmful,
that children continue to use them despite that fact, and that
cigarettes can provide the gateway through which our youth pass to even
more harmful behaviors such as illicit drugs.

Curbing Tobacco Use

How can we reverse these trends? Many in the Congress have heeded the
public health community's advice that increases in the price of tobacco
products are the most important way that youth tobacco use can be
curbed.
According to testimony that Dr. Chaloupa presented to us, for each
10% increase in price, there is corresponding overall reduction in
youth cigarette consumption of about 13%. For adult smoking, Dr.
Chaloupa has found, a 10% price increase only corresponds to a 4%
decrease in smoking.
As Dr. Chaloupa relates, there are several factors which cause
teenagers to be more responsive to cigarette prices, including: their
lack of disposable income; the effect of peer pressure; the tendency of
youth to deny the future; and the addictive nature of tobacco products.
The important thing about a price increase is not that it keep
smokers from buying cigarettes, it is that it can help keep people from
starting to smoke. If we can keep a teen from smoking, we may very well
be keeping an adult from smoking. The important thing to keep in mind
is that There is an exponential increase in risk based on when you
start smoking. The earlier you start, the worse it is for your health.
Kids who smoke start out smoking less and then build up. After a few
years, they are pack a day smokers. The national average for smokers is
19 cigarettes a day, one fewer than a pack.
Much has been debated about the effect of advertising on teen
smoking. The plain fact is that kids prefer to smoke the most
advertised brands. One study indicates that 85% of kids smoke the top
three advertised brands, whereas only about a third of adults smoke
those brands.
We also know that children are three times more affected by
advertising expenditures than adults (in terms of brand preference).
Research is unclear on the effect of advertising in terms of getting
kids to start smoking. Movies, TV and peer pressure seem to be key
factors, but kids deny that.
These facts lead me to conclude that it is in the national interest
for us to undertake a campaign which will discourage the advertising of
tobacco products to children and youth. In so doing, however, we must
be mindful of the Constitution's First Amendment freedom of speech
protections.
In fact, we also need to take advantage of the power that media hold
over youth, and undertake counter-advertising on tobacco products.
Public health experts advise me that there is good evidence that
counter-advertising has a measurable and positive effect on teen
smoking. However, the U.S. has never had a national counter-advertising
campaign.
Restrictions on youth access are also an important part of the no-
teen-smoking equation. While there is not a solid body of knowledge on
this issue, it is important to note that Florida has an aggressive
policy on enforcement of laws against youth smoking, and they now have
a success rate of 10% for youths who try to buy tobacco products
illegally vs. a 50% national average.
An equally important factor is the influence of the family in
developing an atmosphere in which kids don't want to smoke. That is
something we will never be able to legislate, any more than we can
legislate against teen pregnancy. However, we can help families develop
the skills and have the information they need to create as favorable a
no-tobacco climate as possible in the home.

For example, we know that the more directed information kids receive,
the less likely they are to smoke. We also know that kids are very
attuned to hypocritical messages. For example, if a school has a no-
smoking policy, but the teachers smoke, that can have a very
detrimental effect.

Work by the State Attorneys General

Against that backdrop, a very courageous cadre of State Attorneys
General began filing suits against the tobacco industry. Most of these
suits, but not all, were based on the fact that the States' Medicaid
costs were rising dramatically because of the costs of treating
unhealthy smokers.
Subsequent to those suits, negotiations began with the tobacco
industry, the AGs, a representative from the public health community,
and the litigants from a large class-action tobacco suit, the Castano
suit.
As some of my colleagues may be aware, Mrs. Castano is the lead
plaintiff in the first class action lawsuit filed against the tobacco
company in March 1994. She has testified before our Committee in favor
of the proposed settlement and has presented a very compelling story.
Quite simply, Mrs. Castano related to us that her goal is to raise
the public awareness about the power of nicotine. She told the
Committee she believes that if the proposed agreement's health
provisions were enacted, it would have prevented her husband's death.
Peter Castano began smoking at 14, attempted to quit numerous times,
and died of lung cancer at the age of 47 after smoking 33 years.
Mrs. Castano's legal team organized 64 law firms with individual
pending cases and combined them into a large class eventually
representing 60% of smokers, and this large class was had a place at
the negotiation table.
Many of us watched the progress of those negotiations as we would
watch a cliff-hanger sports event. We wanted a victory, but we couldn't
believe our team could come from behind and win.
On June 20, those Attorneys General, led by Mississippi General Mike
Moore, who had brought the first suit, made a dramatic announcement
that a settlement had been reached. Six days later, the Senate
Judiciary Committee held the first of the 16 congressional hearings
that have been held thus far, during which we heard testimony from the
tobacco industry, the State Attorneys General, and the public health
community.
The settlement, which was ratified by the five major tobacco
companies and which must have many of its provisions approved by
Congress through implementing legislation, offers our Nation a once-in-
a-generation opportunity to reduce teen smoking and to undertake a
major anti-tobacco, anti-addiction initiative never before thought
possible.
At this point, it would be useful to give a brief summary of the
proposal which has been submitted to the Congress.
As proposed by the 40 State Attorneys General on June 20, 1997, this
global tobacco settlement would require participating tobacco companies
to pay $368.5 billion (not including attorneys' fees) over a 25-year
period, the major of which will go to fund a major new national anti-
tobacco initiative. Part of the money would also be used to establish
an industry fund that would be used to pay damage claims and treatment
and health costs to smokers.
During negotiations on the June 20 proposal, parties agreed there
would be significant new restrictions on tobacco advertising. It would
be banned outright on billboards, in store promotions and displays, and
over the Internet. Use of the human images, such as the Marlboro Man,
and cartoon characters, such as Joe Camel, would be prohibited. The
tobacco companies would also be banned from sponsoring sports events or
selling or distributing clothing that bears the corporate logo or
trademark. The sale of cigarettes from

[[Page S12579]]

vending machines would be banned, and self service displays would be
restricted. Cigarette and other tobacco packages must carry strong
warning labels concerning the ill effects of cigarettes (such as, its
use causes cancer) that cover 25% of the packages. The tobacco
companies would have to pay for the anti-tobacco advertising campaigns.

Parties to the agreement would consent to the FDA's jurisdiction over
nicotine. The FDA would have the authority to reduce nicotine levels
over time. The FDA, however, could not eliminate nicotine from
cigarettes before 2009. Furthermore, as part of the settlement, tobacco
companies would have to demonstrate a 30 percent decline of aggregate
cigarette and smokeless tobacco use by minors within 5 years, a 50
percent reduction within 7 years, and a 60 percent reduction within 10
years. If not successful, penalties may be assessed against the tobacco
companies up to $2 billion a year.
In return, future class-action lawsuits involving tobacco company
liability would be banned. This would settle suits brought by 40 States
and Puerto Rico seeking to recover Medicaid funds spent treating
smokers. Also settled would be one State class action against industry
and 16 others seeking certification. Current class actions, therefore,
would be settled, unless they are reduced to final judgment prior to
the enactment of legislation implementing the agreement. Claimants who
opt out of existing class actions would be permitted to sue for
compensatory damages individually, but the total annual award would be
capped at $5 billion. These amounts would be paid from the industry
fund. In return for a payment (to be used as part of the industry
fund), punitive damage awards would be banned. Nevertheless, claimants
could seek punitive damages for conduct taking place after the
settlement is adopted and implementing legislation is passed.
That is an overview of the settlement, as explained to the Judiciary
Committee at our June 26 hearing.
Even a cursory examination of the settlement presents Congress with a
clear question: should we seize the opportunity to undertake a serious
new national war on tobacco by implementing certain liability reforms
in exchange for enhanced FDA regulation, substantial industry payments,
and, in short, a new national commitment.

Judiciary Committee consideration

Our Committee has examined this in great detail, during four
hearings.
At our second hearing, in July, we heard testimony from two
constitutional experts, who advised the Committee on the
constitutionality of the settlement, including its advertising
provisions. That testimony was extremely valuable in both reassuring me
that legislation could be written which would pass constitutional
muster, and in guiding me on how an appropriate legislative framework
should be crafted.
But as important as the legal issues are, we must never lose sight of
the fact that this proposed settlement must be a public health
document, a public health statement, a commitment on the part of our
country.
At our third hearing, the Committee heard additional testimony from
public health experts about the proposed settlement.
I recall with great clarity a very vivid statement made by Dr. Lonnie
Bristow, the immediate past president of the American Medical
Association and the only physician to participate in the global
settlement discussions, who said this settlement has the potential to
produce greater public health benefits than the polio vaccine.
In apprising the Committee about the enormous potential of the public
health provisions contained in the settlement, Dr. Bristow recommended
that our public health agenda with respect to smoking be guided by
three ultimate objectives: First, significantly reducing the number of
children who start smoking, second, reducing the number of existing
smokers who will die from their addiction; and third, making the
industry pay for the damage it has done.
Dr. Bristow also addressed the fundamental question of who will
benefit from the proposed settlement, relating that the American Cancer
Society has estimated one million children will be saved from premature
death if certain key provision of the settlement are implemented. These
include enforcement of proof-of-age laws, requiring point-of-purchase
sales, mandatory licensing of retailers, dramatic restrictions on
advertising, and stronger warning labels.

And so, it appears to me that the elements are there for development
of a new national tobacco policy which will make unprecedented gains in
public health. The question is whether this Congress has the
wherewithal to make the tough decisions, with all the attendant
political implications, in order to codify the settlement and move us
toward a substantial new commitment to improving public health.
Three years ago, on the 30th anniversary of the first Surgeon
General's Advisory Committee on Smoking and Health report, I received a
letter from seven past Surgeon Generals of the United States,
representing the Administrations spanning Eisenhower through Bush. In
that letter, the Surgeon Generals said:

While the scientific evidence is overwhelming and
indisputable, significant policy changes in how this product
is manufactured, sold, distributed, labeled, advertised and
promoted have been slow in coming. There has been little
federal leadership for policy changes for the last 30 years.
It seems inconceivable to those of us in the public health
community that this nation's single most preventable cause of
death is also its least regulated.

They continued:

As past Surgeons General of the United States we have had
great hopes that a day would come before the year 2000 when
we will achieve the goal of a smoke-free society. However, it
is very clear from the past 30 years that such a goal will
not be achieved unless there is federal leadership and a
commitment to change that has as its goal the health and
welfare of the American public.

And now the question before this body is whether we are willing to
accelerate our efforts and rise up to the challenge offered us by the
Surgeons General.
If ever there were to be such a time, it is now.
I believe that the June 20 proposal offers us the solid basis for
such a national initiative.
I think it behooves the Congress to seize upon that initiative, to
improve it where we can without jeopardizing any of its basic
components, and to pass legislation immediately upon our return in
January.
That task will not be easy. Since the settlement has provisions that
span the jurisdiction of more than half the Senate committees, it will
be a monumental procedural undertaking.
Nevertheless, after my considerable study of this issue, I have
concluded it is in the national interest for us to approve the
settlement, and I intend to do everything I can to move us toward the
public health goals it offers.

Introduction of the PROTECT Act

Accordingly, I am today introducing legislation I have drafted as a
discussion vehicle and which I hope will engender the public debate we
need on all the fine points of this massive issue so that we are ready
to move legislation upon our return.
I expect this bill to be a ``lightening rod,'' a draft work product
which can be refined over the next 2 months.
The proposed global tobacco settlement is incredibly complex.
Drafting this legislation has required 101 decisions, many of them
interrelated.
I am willing, indeed eager, to work with all interested parties to
refine this legislation as it moves forward. What I am not willing to
do, however, is further delay action on what could be the most
important opportunity to advance public health in decades.
I have entitled the legislation I introduce today the ``PROTECT''
Act, or ``Placing Restraints on Tobacco's Endangerment of Children and
Teens Act.''
I consider this to be a ``settlement plus'' bill. It retains and,
indeed, strengthens the major provisions of the settlement; but, it
does so in a carefully balanced way which I believe will not only pass
constitutional muster but also could be enacted.
Let me be clear about what this bill is.
I consider this to be a discussion draft, a vehicle for the dialogue
we must have about this important issue during the next 2 months when
Congress is not in session and when we are able to consult with our
constituents back home.
At the outset, let me say that I have aimed for a consensus document,
a

[[Page S12580]]

piece of legislation which bridges the divide over contentious issues
in a way that is legislatively viable.
Because it starts with this as a goal, I am painfully aware that this
bill will totally please no one. Interest groups, by their very
definition, advocate a particular position. Enactment of a tobacco
settlement bill will require us to meld many of those positions, to
develop a consensus around the center.
As a consensus document put out for discussion purposes, it is my
intention that the PROTECT Act would be a useful departure point for
future, productive discussions.
I am also cognizant of the anti-tobacco groups' interest in seeing a
piece of legislation that does its utmost to discourage tobacco use.
I would like to do that as well.
That is my primary goal.
I say that not only as a Senator who represents a State which has the
lowest smoking rates in the country, not only as a member of a Church
which condemns the use of tobacco, but also as a Senator who has
devoted the majority of his career to the public health.
Yet, many anti-tobacco groups may be disappointed because this bill
is not as stringent as they would like. But I urge those who might
believe this to keep an open mind. I think they will find that, in many
cases, my bill is more stringent than the AG's proposal.
I would also urge them to keep in mind our primary goal of helping
future generations of children. The only way to do that is to approve
legislation, which necessitates legislation which is approvable. That
is my goal--to get a good bill enacted. A bill that is ``perfect'' from
the point of view of one side or the other cannot be enacted; it must
be a consensus.
For that reason, the bill must also contain the legal reform
provisions put forward by the attorneys' general. Those liability
provisions were agreed to not only the industry, but also by the
representatives of 40 states, by the public health community, and some
members of the plaintiff's bar.
We should not fool ourselves into believing that such a massive anti-
tobacco policy as is embodied in either the AG's proposal or the
PROTECT Act can be enacted absent the liability provisions agreed to in
June.
Yes, we should keep the pressure on for as anti-tobacco bill as we
can. But if we are to enact this bill next year, which is my goal, we
must be realistic. There are very few legislative days left, believe it
or not.

General Description of PROTECT Act

Accordingly, I have drafted my bill as a global tobacco settlement,
which mirrors in many ways the key components of the proposal put
before us on June 20.
Unlike other bills introduced thus far this session, it is a
comprehensive bill.
It contains all of the elements of the June 20 document, embodying
the critical balance among the punitive, the preventive, and the
realistic. It combines strong penalties on the tobacco industry with
strict regulation of tobacco products by the FDA, implementation of a
major national anti-tobacco, anti-addiction campaign, and defined
liability protections for the tobacco industry.
The PROTECT Act requires substantial industry payments to fund state
and federal public health activities, contains restrictions on tobacco
advertising aimed at youth, and provides continuing oversight of the
industry through a strong ``look-back'' provision.
In addition, the PROTECT Act improves on the state attorneys general
June 20 settlement, in a number of key areas:
First, industry payments over 25 years will total $398.3 billion. Of
those payments, $95 billion will represent the punitive damages for
the tobacco industry's past reprehensible conduct. These funds will be
devoted toward a National Institutes of Health Trust Fund for
biomedical research, similar to the legislation drafted by our
colleagues Senator Connie Mack and Senator Tom Harkin.

Second, I have inserted a strong provision to preclude youth access
to tobacco products, sponsored by our colleague Senator Gordon Smith.
Since the States have a substantial role in enforcing the laws
precluding youth smoking, I have also made State receipt of the public
health funds contained in this bill contingent upon enforcement of
those youth anti-tobacco provisions.
Third, to address a concern expressed by members on both sides of the
aisle, as well as the President, this bill provides transitional
assistance to farmers modeled after the legislation introduced by
Agriculture Committee Chairman Dick Lugar, combined with educational
assistance for retraining taken from the ``LEAF'' Act, drafted by
Senators McConnell, Ford, Faircloth, and Helms. There is much to
commend both of these bills, and I look forward to working with
proponents of each to refine further these provisions as the
legislation moves forward.
Fourth, a National Institutes of Health [NIH] Trust Fund is
established with funds paid by tobacco companies for the settlement of
punitive damages for their past reprehensible marketing of tobacco. It
will significantly enhance research related to diseases associated with
tobacco use, such as cancer, lung, cardiovascular and stroke--similar
to Mack-Harkin. This fund would provide an additional $95 billion for
biomedical research, a goal which clearly must rank at the top of our
national agenda in this day of ever-emerging medical discoveries.
In earlier versions of this legislation, I had considered making
these punitive damages not tax-deductible. However, upon further
reflection about the precedent this would set in tax law, and the fact
that the June 20 proposal was intended to be tax deductible, the bill I
am introducing today does not contain that provision at this time.
Fifth, my legislation contains a substantial new program to enhance
significantly Indian health care efforts, particularly related to
tobacco use. This provision will be funded at $200 million per year.
Sixth, significant new funding is provided to States for anti-
smoking, anti-addiction efforts. States will receive $186 billion
directly. These funds will be allocated based on the agreement of the
State attorneys general. States will be able to use whatever portion of
the funds that would have been attributable to their State Medicaid
match with no strings whatsoever. The portion that would be
attributable to the Federal Medicaid match must be used for delineated
health-related anti-tobacco programs. None of these funds are
considered to be part of the Medicaid program, however. The Federal
anti-tobacco program, administered by HHS, will provide an additional
$92 billion to States, half of which will be administered through a
block grant program.
Seventh, in a departure from the AG's agreement and the FDA rule,
which regulates tobacco as a restricted medical device, the bill treats
tobacco products as their own class and as unapproved drugs. However,
the bill provides the FDA with substantial new authority over tobacco
products, including the authority to control their composition through
reductions or eliminations of all constituents. Unlike the AG
agreement, though, which gives FDA the authority to ban tobacco
products after 12 years, my proposal allows the Secretary to make that
recommendation in any year, but it cannot be implemented unless
approved by Congress.
Eighth, the ``look-back'' surcharge on tobacco manufacturers has been
significantly strengthened with penalties more than doubled and the cap
on payments removed. The Secretary may abate all or part of a penalty,
totally at her discretion.
Ninth, after funding is provided for a limited program on tobacco-
related asbestos liability, transitional agricultural assistance, and
the new Indian health program, my bill divides the remaining funding in
half. Fifty percent will be provided to the Federal Government for our
new war on tobacco addiction and tobacco use. Fifty percent will be
provided to the States for anti-tobacco programs.

These funds will be provided to each state by a formula agreed upon
by the Attorneys General Allocation Subcommittee on September 16. My
bill does not treat these payments to the states as Medicaid recoveries
per se, and indeed, my bill waives the Medicaid subrogation law.
However, for purposes of use of these State funds, the States will be
able to retain that portion of the funds which would have

[[Page S12581]]

been attributable to their Medicaid matching rate, and use those funds
with absolutely no restrictions. The portion of the funds which would
have represented the Federal share under Medicaid, generally the larger
share, must be used for certain anti-tobacco public health purposes
delineated in the bill.
I want to take the opportunity today to discuss many of these areas
in more detail.

National Tobacco Settlement Trust Fund

The bill establishes a Trust Fund--termed the ``National Tobacco
Settlement Trust Fund.'' This is the apparatus that takes the inflow of
proceeds made by the participating tobacco manufacturers and makes
payments to the states and various federal health programs.
Here is how the fund works: The participating manufacturers must
deposit $398.3 billion in the Trust Fund. Of this amount, $303 billion
reflects settlement for compensatory damages and $95 billion for the
settlement of punitive damages for bad acts of the tobacco industry
prior to the legislative settlement of the claims.
These amounts are deposited into two accounts: a state account for
use to pay back the states for Medicaid expenditures and a federal
account to fund health and tobacco anti-cessation programs. A detailed
expenditure table is provided in the bill which earmarks where the
payments are being made.
These payments represent a licensing fee, of which $10 billion is
paid ``up front'' to the Trust Fund by the participating tobacco
manufacturers and the remainder will be paid in annual amounts
stipulated in the bill. The bill thereafter sets the base amount
licensing fee that the participating manufacturers must pay to the
Trust Fund for the 25 year base period.
The bill also provides for penalties and the possible loss of the
civil liability protections of the Act if the participating
manufacturers default on payments.
The U.S. Attorney General shall administer the Trust and the
Secretaries of Treasury and Health and Human Services shall be co-
trustees. To ensure that each participant of the tobacco settlement has
a fair say, an advisory board is created to advise the Trustees in the
administration of the Trust Fund. Four members are to be appointed by
the House and Senate majority and minority leadership, and one member
each representing the state attorneys general, the tobacco industry,
the health industry, and the Castano plaintiffs' class.

National Tobacco Protocol

The bill establishes a Protocol--in essence a binding contract among
the federal government, the States, the participating tobacco
manufacturers, and the Castano private class.
The primary purpose of the Protocol is to effectuate the consent
decrees, which terminate the underlying tobacco suits. To receive the
civil liability protections of the bill, the participating
manufacturers must sign the Protocol. This works as a powerful
incentive for the participating members of the tobacco industry to
abide by the restrictions contained in the protocol.
Basically, the Protocol establishes restrictions on advertising by
industry and includes general and specific restrictions, format and
content requirements for labeling and advertising, and sets a ban on
nontobacco items and services, contents and games of chance, and
sponsorship of events.
Because these restrictions raise serious First Amendment concerns,
and to avoid years of litigation that would surely tie up the
implementation of the bill, we have placed these restrictions in the
Protocol contract provision.
More specifically, here is how the Protocol works.
To be eligible for liability protection, each participating tobacco
manufacturer must sign the Protocol and thus contractually agree to the
provisions restricting their tobacco advertising.
The Protocol will also bind the manufacturer's distributors and
retailers to agree to the restrictions by requiring that in any
distribution or sales contract between these parties, the restrictions
will become material terms. If a tobacco manufacturer, or one of his
distributors or retailers, violates any provision contained in the
Protocol, liability protection for the manufacturer is no longer
afforded. The restrictions on advertising include prohibitions on
outdoor advertising, in the use of human and cartoon figures, on
advertising in the Internet, on point of sale advertising, and in
sporting events. Advertising is also subject to brand name, types of
media, and FDA restrictions
As I stated, the restrictions were placed in the Protocol because
current statutory restrictions on tobacco advertising contained in a
FDA final rule, and in other proposed legislation, raise serious
constitutional questions.
It remains unclear whether such statutory restrictions violate the
First Amendment's guarantee of freedom of speech. And this doubt
invites years of litigation to determine whether or not the statutory
restrictions are constitutional.
Rather than open the door to endless litigation, which could delay
the implementation of the restrictions for years, I have made the
restrictions contractual. Because the Protocol is a binding and
enforceable contractual agreement between the interested parties, a
challenge to the constitutionality of the restrictions is avoided.
This, I believe, the wisest and most effective approach in dealing with
tobacco advertising restrictions.
As a type of commercial speech, tobacco advertising is entitled to
some, but not full, First Amendment protection. The law provides that
commercial speech may be banned if it advertises an illegal product or
service, and unlike fully protected speech, may be banned if it is
unfair or deceptive. Even when it advertises a legal product and is not
unfair or deceptive, the government may regulate commercial speech more
than it may regulate fully protected speech. This is the case of
tobacco advertising.
In May 1996, in 44 Liquormart, Inc. v. Rhode Island, the Supreme
Court increased the protection that the Supreme Court in its Central
Hudson test guarantees to commercial speech by making clear that a
total prohibition on the ``dissemination of truthful, nonmisleading
commercial messages for reasons unrelated to the preservation of a fair
bargaining process'' will be subject to a stricter review than a
regulation designed to ``protect consumers from misleading, deceptive,
or aggressive sales practices.''
This case may evidence a trend on the part of the Supreme Court's
part to increase the First Amendment protection it accords to
commercial speech. If this trend continues, a court is more likely to
find that restrictions on tobacco--a legal product--is subject to
stricter scrutiny than the traditional antifraud type commercial free
speech cases, particularly when the tobacco advertising is truthful and
nondeceptive.
The Protocol also contains a provision establishing an arbitration
panel to determine the legal fees for the tobacco settlement and caps
such awards to 5 percent of the amounts annually paid to the Trust
Fund, any remainder to be paid the next fiscal year. The attorney fees
are to paid by the manufacturers and are not to be counted against the
Trust Fund fees and deposits. Finally, the Protocol may be enforced by
the Attorney General, the State attorneys general, and the private
signatories in the applicable courts.

The Consent Decrees

The primary purpose of this section is to settle existing claims
against the participating tobacco manufacturers. Once signed by the
parties (federal and state governments, the Castano class private
litigants, and the participating tobacco manufacturers) as
an enforceable contract, the consent decree becomes effective on the
date of the bill's enactment and allows for three important things: (1)
a state receives Settlement Trust funding; (2) a manufacturer receives
liability protection; and (3) the Castano claims are settled.

The consent decrees require the parties to agree to various
restrictions, including restrictions on tobacco advertising, and on
trade associations and lobbying, the disclosure of tobacco smoke
constituents and nontobacco ingredients in tobacco products, the
disclosure of important health documents, the dismissals of the various
underlying tobacco suits, requirements for warning labels and other
packaging restrictions, and the obligation to make payments for the
benefit of the States, the private litigants, and the general public.

[[Page S12582]]

Pursuant to the consent decrees, the parties waive their right to
bring constitutional claims. It also provides that the provisions are
severable. The Attorney General must approve the consent decrees, and a
state may bring an action to enforce provisions contained in the
consent decree, if appropriate. Civil Liability Provisions
In exchange for payments and other concessions, of which I already
spoke, the tobacco manufacturers will gain certain benefits from the
bill. It is these benefits which have given the tobacco companies the
incentive to come forward and participate in the negotiations which
were necessary to resolve the massive litigation surrounding tobacco
use. Keep in mind that these benefits only apply to those tobacco
manufacturers who voluntarily enter into the Protocol and consent
decrees. There are several aspects to this section of the bill:
First, all actions which are currently pending against the
manufacturers will be dismissed. Those actions include actions by
states or local governments, class actions, or actions based on
addiction to tobacco or dependency on tobacco. The tobacco companies
will be immune from such class action claims in the future. I want to
emphasize that personal injury claims will still be viable. An
individual will still be able to make claims directly against tobacco
companies after the enactment of the bill.
Second, the primary benefit which the tobacco companies will receive
under this bill is relief from liability for punitive damages. This
relief only applies to punitive damages for actions which the tobacco
companies took prior to this bill's enactment. If, at some future date,
the tobacco companies take some action or commit some wrong that would
subject them to punitive damages, this bill will not relieve them of
that future liability.
Third, this bill makes the participating manufacturers jointly and
severally liable for damages arising out of claims by individuals. Of
course, manufacturers who do not voluntarily consent to the terms of
the protocol and consent decree will be treated separately and lawsuits
involving both types of tobacco companies will be tried separately.
Fourth, the bill includes a cap on the amount of damages that can be
paid out on individual claims each year. The cap is one-third of the
total annual payments that are due from all the participating tobacco
manufacturers. The excess over the cap and the excess of any individual
claim over $1 million will be paid in the following year. Eighty
percent of those payments to individuals will be credited toward
payments due to the fund. These provisions were all drawn from the June
20th proposal and are drafted to be identical to that agreement.
Finally, as an enforcement mechanism, if a tobacco company which has
signed the protocol and consent decree is delinquent in payment by more
than 12 months, the benefits granted under this bill will no longer
apply. The bill also contains enforcement mechanisms for material
breaches of the protocol and consent decree. I must point out that
nonsignatories--such as tobacco companies that refuse to sign the
protocol and consent decrees--are not eligible to receive the civil
liability protections in the bill.
With regard to a state's eligibility to receive funds under this
bill, it is relatively simple. A state must dismiss any claims it has
pending against the participating tobacco companies and it must adopt
provisions in its state code which mirror the benefits granted to
the participating tobacco companies in this bill. On an annual basis,
the Attorney General will certify each state which is eligible to
receive funds.

FDA Jurisdiction Over Tobacco Products

It is may surprise some in this body to learn that the current
provision in food and drug law that established the efficacy standard
for drugs was enacted in 1962 through Judiciary Committee leadership
when Senator Kefauver was chairman.
As the current chairman of the committee, I has great reservation
about embarking down a path that appears to turn the world upside down
and gut the normal safety and efficacy requirements as applied to
medical devices by creating an exception that swallows the rule.
Using the restricted device law--a law whose purpose is to regulate a
class of products that require special controls to help patients--to
keep an inherently dangerous product on the market troubles me. I am
not certain what kind of precedent this will be but I fear that it will
be significant and of questionable necessity and benefit.
As I understand it, the only product that has been regulated under
the restricted device provisions of the law are hearing aids. I am not
sure why some apparently feel a compelling need to equate the treatment
of cigarettes with hearing aids. I don't share this enthusiasm.
Judging by some of the public rhetoric since the June 20 announcement
of the Attorney General's agreement, one of the most hotly contested
areas of the proposed settlement concerns the provision addressing the
Federal Government's authority to regulate tobacco products.
Since June 20 some have adopted the rallying cry of ``unfettered FDA
authority'' and have suggested that there are major deficiencies in the
proposed agreement relating to the ability of FDA to regulate tobacco
products.
I suggest that the quality and substance of this debate would improve
if we focus on the real issues.
As far as I am concerned, the substantive issue is not whether FDA
should have authority over tobacco products; the real question is
precisely how much and precisely what kind of authority that FDA should
be delegated over these dangerous products.
Frankly, I am of the school that unfettered FDA authority is a bad
idea. As a conservative, the notion of giving any Federal agency
unfettered authority is a not a good idea.
Anyone who argues for the principle of unfettered FDA authority
apparently has not ever read FDA's organic statute, the Federal, Food,
Drug, and Cosmetic Act. This important law has its origins in the 1906
Pure Food and Drugs Act safeguards our Nation's supply of food, drugs,
cosmetic, medical and radiological devices. My version of this law
contains 254 pages of ``fetters'' on the FDA. And this does not even
include the many pages of additional ``fetters'' placed on FDA in the
Public Health Service Act provisions relating to the regulation of
biologicals.
Frankly, I am not sure that many other executive agencies have as
many fetters placed upon it as FDA. And that is a good thing. FDA
performs such critical public health missions as approving new drugs
and medical devices.
In a democratic society it is only reasonable to expect that the
American public--which has some much at stake with respect to FDA's
decisions--will require its elected representatives to watch closely
what FDA is doing and enact legislation that will improve the
efficiency of its operations.
Just this last Sunday, Congress completed its latest exercise in
fettering the FDA when this Senate passed, and passed by a unanimous
voice vote I must add, the FDA Modernization Act of 1997. This bill
takes up fully 22 pages in the Congressional Record.
So if anyone is under the false impression that ``unfettered FDA
authority'' is the norm, I would only invite them to read the statute
and its latest modification.
The Congress would not, and should not, pass a bill that says
in essence that FDA has unfettered authority over tobacco any more than
we would pass laws that said that FDA has plenary, unfettered power
over drugs and devices.

As I said earlier, the real question tobacco products is not if but
what precise authority we give FDA over these products.
I think that Attorney General Mike Moore got it right as when he told
several Senate Committees that all he asked from the public health
community is to be told exactly how tobacco should be regulated.
There was no intent by the Attorney Generals, the Castano plaintiffs
group, the public health representatives to act to undermine FDA's
ability to regulate tobacco. For that matter, we must recognize that,
even while they were, and are, litigating the issue of FDA authority in
the Federal courts, the industry negotiators made unprecedented
concessions in terms of FDA's authority in the June 20 agreement.
It is possible, as many legal experts believe, that the Fourth
Circuit Court will rule that FDA does not have the authority to
regulate tobacco.

[[Page S12583]]

One thing that I do know is that whatever happens at the court of
appeals, the loser will likely appeal its decision.
This will take time, time in which more and more young children will
start a lifetime addiction to tobacco products that will lead to
illness and premature death.
Regardless of the outcome of this litigation, I am convinced that
this Congress has a public duty to act, and act now.
Title IV of my bill describes in detail what I think is the
appropriate way for FDA to regulate tobacco products.
First of all, let me start by taking my hat off to FDA and the
Department of Health and Human Services under the leadership of
Secretary Shalala for its creativity of using the existing food and
drug laws in fashioning its final rules on youth tobacco.
In many ways, these regulations created the environment that made it
possible for the negotiators to sit at the table and bring us the
settlement proposal that we are considering today. So I take my hat off
to the negotiators as well.
As fully explained in the preamble to the final rule and accompanying
legal justification, one of the major reasons why FDA regulated tobacco
products as restricted medical devices was because of the relative
inflexibility of the drug laws versus the flexibility of the medical
device laws.
We all know that this question is before the Fourth Circuit, and we
expect a decision very soon. But regardless of the outcome of that
case, many have expressed the concern that FDA has stretched the
statute beyond the breaking point when it uses a statutory provision
whose hallmark is the safety and efficacy standard in a fashion to
reach products that are inherently unsafe and ineffective.
Call it what it is: A tobacco product is a tobacco product, not a
medical device.
My proposal is to create a new regulatory chapter that exclusively
addresses tobacco products. New chapter IX contains the rules that will
apply to tobacco products.
If a tobacco product is not in compliance with this chapter it will
run afoul of the FDC statute by the two new prohibited acts that S.
1530 creates in section 301 of the act. It will be against the law to
introduce into interstate commerce any tobacco product that does not
comply with these tough new provisions.
In addition, S. 1530 proposes to alter the definition of drug to
include tobacco products that do not comply with new chapter IX. That
means that nonconforming tobacco products will be subject to the rigid
treatment accorded drugs. Talk about an incentive to comply with the
new chapter.
My new proposed chapter IX includes many tough provisions including,
tobacco product health risk management standards, good manufacturing
standards, tobacco product labeling, warning, and packaging standards,
reduced risk tobacco product standards, tobacco product marketing.
As well, my bill creates a Tobacco Products Scientific Advisory
Committee that will advise the Secretary and FDA on all of these new
standards.
I want to highlight that unlike the proposed settlement that my bill
would allow the Secretary to recommend that tobacco products be banned
at any time. The AG agreement had a 12-year bar to any such actions.
But because this decision is a major public health decisions with
considerable political, social economic, and even philosophical
consequences, I require that any such decision to ban products to be
made personally by the Secretary and require the concurrence of
Congress.
So please examine my proposal. I want to hear the comments and
constructive criticism of all of my colleagues in this body and other
interested parties and citizens.
From my experience, I know that FDA legislation is always
controversial and contentious. There are always a lot of devilish
details.
I put out this proposal in the interest of moving the tobacco debate
forward in the Senate and in public debate.
I challenge those who have in an interest in FDA prevailing in court
in the current litigation to put that litigation aside as you read my
FDA language and consider what law you would write if you were not
constrained by the current drug and device paradigms.
I salute those many public health groups and officials who have
brought the antitobacco use battle so far in the last few years.
Let us start from a clean blackboard. I believe that my approach is
preferable than to continue to stretch a perhaps already overstretched
statute.
If any in this body believe that my proposal falls short, I hope they
will tell me how. If some believe it is too lenient here and too rigid
there, I hope they will respond with fixes, not with shouts.
I look forward to this aspect to the debate because of my long term
interest in the FDA and the Federal Food, Drug, and Cosmetic Act. Let
us take particular care in crafting this language and do so in a way
that does not distract FDA from its core missions, including its
central role in getting the latest in medical technology to the
American public.

The Price of Tobacco Products

Another issue of keen concern to the public health community is the
price of tobacco products. Earlier this year, I joined with several of
my colleagues on both sides of the aisle to propose the Child Health
Insurance and Lower Deficit Act, the CHILD bill. That bill, most of
which has now been enacted as part of the Balanced Budget Act, made
huge strides toward providing uninsured children with health care
services, and it was predicated on a 43 cents increase in the excise
tax on cigarettes.
We had a bipartisan coalition under the best of circumstances, and in
the end, our 43 cents was whittled down to 10 cents phased up to 15
cents.
In that climate, I do not think it is reasonable for anyone to expect
that this Congress will enact a cigarette excise tax of $1 or $1.50.
I do, believe, however, that there is consensus that it would be an
important public health goal for the price of cigarettes and other
tobacco products to be raised significantly to discourage youth
consumption.
It is possible to do that without an excise tax, and that is what my
bill does. Under my proposal, which predicates payments upon a Federal
licensing fee, I estimate that when fully phased in year six, cigarette
prices will go up an additional $1.09 per pack at the manufacturer
level, which will be reflected in a retail level of $1.50 or more.
Economists have found that markups by cigarette manufacturers are
always accompanied by increases down the distribution chain, including
state excise tax increases. Thus, for purposes of this debate, I
think it is critical that we discuss potential price increases in net
terms, rather than the manufacturer markup.

There is an important reason to implement the agreement through a
licensing payment, as opposed to a tax. Law enforcement officials have
noted that the closer the price rise is to the source of the
cigarettes, the less opportunity there is for diversion.
For example, if this bill were predicated on an excise tax,
manufacturer sales to distributors would not reflect the higher price,
and there would be ample opportunity for diversion into the black
market of the cheaper goods.
In sum, I believe that my proposal will bring the price of cigarettes
to a high level and do so in a way that discourages black market
diversion.
Another issue of keen concern to the Congress are the tobacco
farmers, most of whom could be displaced if this legislation is
successful.

Agricultural Provisions

Mr. President, we cannot forget about our country's tobacco farmers.
Even though the tobacco farmers have the most to lose from the tobacco
settlement, they were completely left out of the settlement
negotiations.
Tobacco farms in this country are often small family run businesses,
and in many cases, the entire economic foundation of a community is
tied up in the production or processing of tobacco.
As many of my colleagues in the Senate know, I would probably be the
last person to stand up and defend the tobacco industry or our nation's
tobacco program. I feel strongly, though, that we should not turn our
backs on tobacco farmers and their communities at a time when many will
be harmed as a consequence of the tobacco settlement.

[[Page S12584]]

Senator Lugar, the Chairman of the Senate Agriculture Committee, has
introduced a bill that would end the tobacco program while providing
payments and other assistance to tobacco farmers over a three-year
transition period. His proposal follows the pattern established by the
1996 farm bill, by getting the government out the farming business and
by making temporary assistance available to farmers as they adjust to
the free market.
Senator Ford has introduced the LEAF Act, which provides some of the
same assistance contained in Senator Lugar's bill but adds additional
grants and assistance for tobacco farmers and workers employed in the
processing of tobacco. However, Senator Ford's bill maintains the
tobacco program largely intact.
Frankly, Mr. President, I believe our tobacco communities have tough
challenges ahead of them. For that reason, I have combined what I think
are the best parts of each of these two bills into the PROTECT Act to
ensure that we care for our nation's tobacco farmers and our tobacco
dependent communities.
My bill establishes a Tobacco Transition Account, funded through the
Trust Fund. The Transition Account will provide buyout payments to
tobacco quota owners, who will lose their quotas, and assistance
payments to farmers who lease their quotas from these owners. In
addition, the PROTECT Act creates Farmer Opportunity Grants. These will
be available to eligible family members of tobacco farmers to help pay
for higher education. Eligibility requirements for Farmer Opportunity
Grants will be similar to those of the Pell Grant program.
Mr. President, we should also remember the workers in the tobacco
processing industry who could be displaced as a result of the tobacco
settlement. The PROTECT Act sets up the Tobacco Worker Transition
program. Patterned after the NAFTA Trade Adjustment Assistance program,
the Tobacco Worker Transition program will provide assistance to
displaced workers and help them receive job retraining.
Finally, Mr. President, the PROTECT Act will provide a total of $300
million over three years in block grants to affected states for
economic assistance. Governors will be able to use these grants to help
rural areas and tobacco dependent communities make the transition to
broader based economies and to the free market.

Native American Health Provisions

Let me next turn toward another component of my legislation which
relates to American Indians and Alaska Natives.
Tobacco use and abuse are significant health issues in Indian
country. Native Americans smoke more than any other ethnic group--more
than twofold for Indian men and more than fourfold for Indian women
over non-Indians. The Centers for Disease Control estimate that 40
percent of all adult American Indians and Alaska Natives smoke an
average of 25 or more cigarettes daily.
Moreover, according to the Indian Health Service [IHS] lung cancer
remains the leading cause of cancer mortality. The IHS further reports
that in some parts of the country 80 percent of Indian high school
students smoke or chew tobacco. The statistics further show that
smoking by American Indians is actually increasing while it is on the
decline among other groups.
Clearly, in the context of this global tobacco settlement, measures
must be taken to address the unique problems Indian country faces with
the use and regulation of tobacco products.
Accordingly, my bill contains several Indian specific provisions that
ensure tribal governments will have the regulatory authority to address
issues of particular concern to tribal health officials while
maintaining the interest of the tribe in its sovereign authority over
activities occurring on its reservation.
These provisions have been developed, in part, on recommendations
made at an October 6, 1997, oversight hearing on the tobacco settlement
by the Committee on Indian Affairs on which I serve.
Let me also add that I welcome additional input from Indian country
on these important provisions. Overall, my provisions are designed to
recognize the unique interests of Indian country in the implementation
of the act as well as provide assistance to improve the health status
of native Americans.
Specifically, my bill makes clear that the provisions of the act
relating to the manufacture, distribution and sale of tobacco products
will apply on Indian lands as defined in section 1151 of title 18 of
the U.S. Code.
The fundamental precept of the Indian provisions is that tribal
governments will be treated as States in the implementation of the
provisions of the act.
The Secretary of HHS, in consultation with the Secretary of the
Interior, will be required to develop regulations to permit tribes to
implement the licensing requirements of the act in the same manner by
which the States are accorded this authority.
Indian tribes will also be considered as a State for purposes of
receiving public health payments in order to carry out the provisions
of the act and in accordance with a plan submitted and approved by the
Secretary.
Indian tribes are permitted flexibility to utilize these funds to
meet the unique health needs of their members as long as their programs
meet the fundamental health requirements of the act.
The amount of public health payment funds for tribes will be
determined by the Secretary based on the proportion of the total number
of Indians residing on a reservation in a State as compared to the
total population of the State. Moreover, a State may not impose
obligations or requirements relating to the application of this act to
Indian tribes.
Tobacco use remains a significant health factor for Indians and the
costs associated for patient care and treatment are extremely high and
result in a disproportionate allocation of limited IHS dollars for
tobacco related illnesses.
Accordingly, my bill establishes a supplemental fund for the IHS to
augment its program mission of providing health care services to
Indians. A $5 billion account is established to be allotted to the IHS
in increments of $200 million annually for 25 years.

Antitrust Provision

Let me also discuss another issue briefly. The proposed settlement is
predicated upon the tobacco companies receiving immunity from antitrust
laws in a number of limited areas. For example, in order to determine
the price increase that will be passed on to consumers due to the
settlement licensing fee. Another area in which such antitrust
clarification will be needed is in enforcement of the protocol which
accompanies the settlement legislation.

In introducing the bill today, I want to acknowledge that this
language may need to be refined and tightened up. I do not intend to
give the tobacco companies blanket antitrust immunity. That would be
totally unwarranted.
I intend to work closely with Senators Mike DeWine and Herb Kohl, the
chairman and ranking member of the Judiciary Subcommittee on Antitrust,
to further polish this language. They have indicated their willingness
to work with me on this issue, and I appreciate their expertise and
assistance.

Asbestos

There exists medical evidence that tobacco use is a contributory
factor in asbestos-related diseases and injuries. This bill contains a
program to provide limited compensation for individuals who are exposed
to asbestos and whose condition proven to have been exacerbated by
tobacco use. The asbestos program is administered by the Secretary of
Labor, who will establish standards whereby it can be demonstrated that
tobacco is a significant factor in the cause of asbestos-related
diseases. This program would be funded at $200 million per year and
would complement the existing system for payments related to asbestos.

Closing

As I close, I would like to make one final observation. Three
thousand kids a day start smoking; countless others start using
smokeless tobacco products like snuff.
These children are becoming addicted to powerful tobacco products
which can only harm them. The scientific evidence is clear.
I am extremely cognizant of the fact that there is a long history of
legal use of tobacco products in this country.
Millions have used them; millions do use them.

[[Page S12585]]

I am trying to strike a delicate balance here: That of allowing
adults to continue to use these products as they choose, but of
discouraging it whenever we can and helping those who are addicted wean
themselves from these powerful tobacco products.
But most importantly, we have to renew our efforts aimed at teen
tobacco use. The funds provided in the global tobacco settlement will
allow us to set that course.
Let me say right now that I fully anticipate criticism of my proposal
from those who are afraid it is too large, and perhaps too
bureaucratic.
To them I would say that the value of this proposal is in its size.
We need to show that we are serious about stopping kids from smoking.
We need to penalize the tobacco industry as part of that effort.
I have tried to rely upon the existing administrative structure
wherever possible in the implementation of my plan. If others have a
better way to run the program, I welcome their advice.
But to those who would advocate a smaller program, let me share my
serious concerns about lowering the amount the tobacco industry has
already agreed to pay.
I would also have serious concerns about raising the amount and using
the funds for unrelated purposes. This is not the pot of money under
the rainbow which will allow us to fund 60's-era left-leaning
initiatives. This is a tobacco settlement which will provide us with
significant new funding for new war on tobacco. A war to save our
children.
My bill differs markedly from the others that have been introduced in
that it is comprehensive, it includes all the components of the
settlement in one piece of legislation, and it makes all the hard
choices necessary to delineate how a settlement will operate. Further,
it is drafted to be constitutional.
Many have begun to criticize my bill before they have even read it.
It happened with the CHILD bill. It will happen again.
But to those who wish to sling barbs at my bill, I urge you to study
it carefully. It is not the Kennedy bill. And, by the way, it was never
intended to be. It is not the Lautenberg bill, nor the McCain bill.

It is a discussion draft intended to embrace, and improve, the
proposed global tobacco settlement recommended to the Congress by 40
states this June. I welcome any suggestions for improvements which may
be offered to my bill. That is why I am putting it forward today as a
discussion vehicle.
I hope that the majority of Congress will agree with me that this
should become a national priority, and begin to move legislation
immediately upon our return in January.
In closing, Mr. President, I want to thank all of my colleagues who
provide advice and assistance in drafting this legislation. It is clear
that we must have a collaborative process if this legislation is to
move forward, and I look forward to being a part of that process in the
months to come. We can leave no greater legacy to our children.
I want to say a special thanks to Bill Baird in the Office of
Legislative Counsel. He worked day and night to get this bill drafted
for us, and I want to say publicly how much I appreciate this extra
effort.
Anyone who wishes to read the entire text of the bill will soon be
able to access it on the Hatch web page which can be reached at:
``www.senate.gov/hatch/''. It will take us a day or two, but it will
be available to the public. Since it is 308 pages, I think this is the
most efficient way to make it available to the public. And, as I just
said, I welcome suggestions.
Finally, for those who just want the digest version, I ask unanimous
consent to insert a section-by-section summary of the PROTECT Act in
the Record.
There being no objection, the section-by-section analysis was ordered
to be printed in the Record, as follows:

Section-by-Section Analysis

Section 1. SHORT TITLE; TABLE OF CONTENTS. Entitles the
bill ``Placing Restraints on Tobacco's Endangerment of
Children and Teens'' Act ``PROTECT'') and lists a table of
contents.
Section 2. FINDINGS. Makes a series of congressional
findings with respect to tobacco, its harmful health effects
on children and adults, and the role of government in
regulating tobacco products.
Section 3. GOALS AND PURPOSES. Sets forth the goals and
purposes of the legislation, including decreasing tobacco use
by youth and adults, enhancing biomedical research efforts,
setting forth Federal standards for smoking in public
establishments, establishing the authority of the Food and
Drug Administration to regulate tobacco products, providing
transitional assistance to farmers, and reforming tobacco
litigation practices.
Section 4. NATIONAL GOALS FOR THE REDUCTION IN UNDERAGE
TOBACCO USE. Sets out national goals for reduction in youth
tobacco use. For cigarettes, the national goals, measured
from the baseline year, will be a 30% reduction in use in
2003 and 2004; a 50% decrease in 2005, 2006 and 2007; and a
60% reduction thereafter. For smokeless tobacco, the national
goals, measured from the baseline year, will be a 25%
reduction in use in 2003 and 2004; a 35% reduction in 2005,
2006, and 2007; and a 45% reduction thereafter.
Section 5. DEFINITIONS. Defines pertinent terms used in the
bill.

TITLE I--NATIONAL TOBACCO SETTLEMENT TRUST FUND

Section 101. ESTABLISHMENT OF TRUST FUND. Creates a
National Tobacco Settlement Trust Fund that will receive
payments from tobacco manufacturers according to a schedule
set out in the bill. Over the next 25 years, deposits will be
$398 billion, of which $95 billion are considered punitive
damages and will be used to fund a biomedical research trust
fund.
The National Tobacco Settlement Trust Fund will be
administered by the Attorney General, the Secretary of Health
and Human Services, and the Secretary of Treasury, and will
be advised by a board composed of the Trustees and
representatives of State attorneys general, public health
experts, the Castano plaintiffs, and the tobacco industry.
The initial $10 billion down payment from the tobacco
industry, the continued annual payments, and any look-back or
surcharge payments or penalties will be deposited into the
Settlement Trust Fund.
The Settlement Trust Fund consists of a State Account and a
Federal Account. Generally, as specified in section 101(c),
the funds are distributed as follows: First, a portion of the
total funds are set aside in the Federal Account for a
transitional agriculture assistance program, a limited fund
for asbestos-related litigation (where it can be proven that
tobacco use was a cause of injury), and a new program to
enhance Native American health. The remaining funds are
divided equally with one-half provided to the States and one-
half to the Federal government. In addition to the set aside
funds for tobacco farmers, tobacco/asbestos plaintiffs, and
Native American activities, the remaining funds from the
Federal Account will be essentially divided equally between
tobacco-related biomedical research and public health
activities as provided in sections 521 and 522, respectively.
Funds from the State Account may be used by the states for
both general purposes and for tobacco related programs as
specified in sections 501 and 502, respectively. The Trustees
are precluded from making an expenditure for programs which
are currently being funded at either the Federal or State
levels, so that the funds provided in this Act are
supplemental to any on-going activities and not a
substitution.
Section 102. PAYMENT SCHEDULE. As a condition of receiving
the liability provisions contained in Title II, participating
manufacturers must execute a protocol with the Secretary of
Health and Human Services, each respective state attorney
general, and Castano litigants, sign consent decrees with
States and Castano plaintiffs, and deposit an initial $10
billion payment into the Trust Fund. In addition, to be
eligible for the liability protections, manufacturers must
make payments according to a schedule listed in the bill. The
Trustees are authorized to adjust those continuing payments
in two cases: 1) an annual inflation adjustment; 2) a volume
adjustment which could either increase or reduce the base
payments. The amount that each participating manufacturer
will pay will be determined under the protocol appended to
the agreement.
Section 103. ADMINISTRATIVE PROVISIONS. The Attorney
General will hold the Trust Fund and will report annually to
the relevant congressional committees on the financial
condition of the Trust Fund. The Trustees will invest excess
balances of the Fund in interest-bearing obligations of the
U.S. and proceeds therefrom will become a part of the
account. Members of the Trustees' advisory board shall serve
without compensation, although travel expenses will be
reimbursed, and overall costs of the advisory board are
capped. Receipts and disbursements from the Trust Fund
will not be included in the annual budget, and cannot be
transferred to the general fund of the Treasury.
Section 104. ENFORCEMENT. Any participating manufacturer
which fails to make payments required by the Act will be
subject to daily fines. If the manufacturer has not made the
required payment within one year, the manufacturer will be
considered non-participating, will lose the liability
protections contained in the Act, and will be ineligible from
becoming a participating manufacturer in the future.

[[Page S12586]]

TITLE II--NATIONAL PROTOCOL AND LIABILITY PROVISIONS

Subchapter A--Protocol Restrictions on Advertising

Section 201. REQUIREMENT. To be eligible for the liability
protections contained in Subtitle C, each tobacco
manufacturer shall enter into a binding and enforceable
contract (``the Protocol'') in each state, with the Attorney
General on behalf of the Chief Executive Officer of the state
and representatives of the Castano litigants. As part of the
protocol, a participating manufacturer shall agree, in any
contract entered into with a distributor and retailer, to
require the distributor and retailer to comply with the
applicable terms of the protocol.
Section 211. APPLICATION OF SUBCHAPTER. The following
provisions will be considered part of the Protocol.
Section 212. AGREEMENT TO PROHIBIT ADVERTISING. Parties to
the executed Protocol agree that they will not use any form
of outdoor product advertising, nor will they advertise in
any arena or stadium where athletic, musical, artistic or
other social or cultural events or activities occur. Parties
also agree not to use human images or cartoon characters in
tobacco-related advertising, labeling or promotional
materials, and not to advertise tobacco products on the
Internet. Parties also agree to limit point of sale
advertising of tobacco products both in terms of number of
advertisements and format, except in adult-only stores and
tobacco outlets.
Section 213. GENERAL RESTRICTIONS. Parties agreeing to the
Protocol will not use a trade or brand name of a non-tobacco
product as the trade or brand name for a cigarette or
smokeless tobacco product, except for products sold in the
United States before January 1, 1995. Parties further agree
to limit the media in which tobacco products will be
advertised and will not make payments for placement of
tobacco products in television programs, motion pictures,
videos or video game machines.
Section 214. AGREEMENT ON FORMAT AND CONTENT REQUIREMENTS
FOR LABELING AND ADVERTISING. Those signing the Protocol
agree to limit tobacco-related advertising to black text on
white background, except in certain cases such as vending
areas not visible from the outside and adult publications.
Further, parties using audio or video formats agree to
certain limits, such as restrictions on music or sound.
Section 215. AGREEMENT TO BAN NON-TOBACCO ITEMS AND
SERVICES, CONTESTS AND GAMES OF CHANCE, AND SPONSORSHIP OF
EVENTS. Parties to the Protocol agree to ban all non-tobacco
merchandise bearing the brand name, logo or other identifier
of tobacco products. They also agree not to offer any gift or
item in connection with the purchase of a tobacco product.
Parties agree not to sponsor any athletic, musical, artistic
or other social/cultural event in which identifiers of
tobacco products are used, although the use of a corporate
number in use in the United States prior to January 1, 1995
would be permissible.

Subchapter B--Provisions relating to Lobbying

Section 220. APPLICATION OF SUBCHAPTER. The provisions of
this subchapter will be considered part of the Protocol.
Section 221. AGREEMENT TO PROVISIONS RELATING TO LOBBYING.
A manufacturer signing the Protocol must require that any
lobbyists it retains will sign an agreement consenting to
comply with applicable laws and regulations governing tobacco
products, including this Act and the consent decree under
this Act, and agreeing not to support or oppose any Federal
or State legislation without express consent from the
manufacturer.
Section 222. AGREEMENT TO TERMINATE CERTAIN ENTITIES.
Parties to the Protocol agree that, within one year of
enactment, the Tobacco Institute and the Council for Tobacco
Research, U.S.A. will be terminated, and that any successor
organizations will meet strict guidelines with respect to
membership and activities and will be subject to oversight by
the Department of Justice.

Subchapter C--Other Provisions

Section 225. APPLICATION OF SUBCHAPTER. The provisions of
this subchapter will be considered part of the Protocol.
Section 226. DETERMINATION OF PAYMENT AMOUNT. Manufacturers
agreeing to the Protocol will determine the percentages each
specific manufacturer must pay.
Section 227. ATTORNEY'S FEES AND EXPENSES. Within 30 days
of enactment, an arbitration panel will be appointed by the
Trustees, the participating manufacturers, and State
Attorneys General participating in the June 20, 1997
memorandum of understanding and the Castano litigants. The
arbitration panel will establish procedures for its
operation, receive petitions for attorneys' fees and
expenses, and make awards based on enumerated criteria
subject to an annual cap which is equal to 5% of the
amount paid to the Trust Fund for the applicable year.
Awards made by the panel will be paid by the participating
manufacturers and will not be paid from the Trust Fund.
Section 228. LIMITATIONS WITH RESPECT TO INDIAN COUNTRY.
Participating manufacturers will agree not to conduct any
activity within Indian country that is otherwise prohibited
under this Act, and agrees to sell or otherwise distribute
tobacco products to an Indian tribe or tribal organization
under the same terms and conditions as the manufacturer
imposes on others.
Section 231. FEDERAL ENFORCEMENT OF THE PROTOCOL. Sets
forth the terms and conditions under which the Attorney
General may bring civil actions, including imposition of
stiff penalties, to enforce the Protocol. The Attorney
General may enter into contracts with state agencies to
assist in enforcement. The Attorney General is authorized to
utilize funds from the Trust Fund for performance of her
duties under this section.
Section 232. STATE ENFORCEMENT OF THE PROTOCOL. The chief
law enforcement officer of a state may bring actions to
enforce the protocol if the alleged violation is the subject
of a proceeding within that State. However, the State must
first give the Attorney General 30 days' notice before
commencing such a proceeding, and the State may not bring a
proceeding if the Attorney General is diligently prosecuting
or has settled a proceeding relating to the alleged
violation.
Section 233. PRIVATE ENFORCEMENT OF PROTOCOL. A
participating manufacturer may also seek a declaratory
judgment in Federal District Court to enforce its rights and
obligations under the Act, and may also bring a civil action
against other participating manufacturers to enforce or
restrain breaches of the contract. In general, no such
actions may be commenced, however, if the Attorney General or
applicable State is already pursuing an action on the same
alleged breach.
Section 234. REMOVAL. The Act allows removal to Federal
court of state claims which seek to enforce the Protocol.

SUBTITLE B--CONSENT DECREES

Section 241. CONSENT DECREES. For a State to receive
funding under Title V, for a manufacturer to receive
liability protections under subtitle C, and for settlement of
the Castano claims, consent decrees must be signed effective
on the date of enactment.
The consent decrees shall include provisions relating to
restrictions on tobacco advertising and youth access,
restrictions on trade associations and lobbying, disclosure
on tobacco smoke constituents, disclosure of nontobacco
ingredients in tobacco products, disclosure of all documents
relating to health, toxicity, and addiction, the obligation
of manufacturers to make payments for the benefit of States,
the obligation of manufacturers to deal only with
distributors and retailers that comply with all laws
regarding tobacco products, requirements for warnings,
labeling, and packaging, the dismissal of pending litigation
as required under this Act, and any other matters deemed
appropriate by the Secretary.
The consent decrees shall not include information on
tobacco product design, performance, or modification,
manufacturing standards and good manufacturing practices,
testing and regulation with respect to toxicity and
ingredients, and the national goals relating to reductions in
underage use of tobacco. Constitutional claims shall be
waived and the provisions are severable. The decree must be
approved by the Attorney General. The decree shall remain in
effect regardless of amendments to the Act, except as
superseded by said amendments. A state may only seek
injunctive enforcement of the consent decree in state court.
The Attorney General will regulate to ensure consistency of
state court rulings regarding consent decrees which are not
exclusively local.
Section 242. STATE ENFORCEMENT OF CONSENT DECREES. A State
may bring an injunctive action to enforce the terms of a
consent decree which falls within its jurisdiction. It can
only seek criminal or monetary relief for a subsequent
violation of an injunction previously granted.
Section 243. NON-PARTICIPATING MANUFACTURERS. Provides an
incentive for manufacturers to participate in the national
tobacco control protocol. Non-participating firms will not be
protected by the civil liability protections of this bill. A
non-participating company will be required to transfer funds
to the National Tobacco Settlement Trust Fund in an amount
based on the proportion of the market share of the sales of
the firm. Each non-participating manufacturer shall place
into an escrow reserve fund each year an amount equal to 150%
of its share of the annual payment required of participating
manufacturers.

SUBTITLE C--LIABILITY PROVISIONS

Section 251. DEFINITIONS. Defines pertinent terms used in
Subtitle C.

CHAPTER 1--IMMUNITY AND LIABILITY FOR PAST CONDUCT

Section 255. APPLICATION OF CHAPTER. This chapter is the
sole enforcement mechanism and exclusive remedy for any
claims against any participating manufacturer which have not
reached final judgment or settlement by the effective date
of this act. Any court judgment entered subsequent to this
bill's enactment shall include express language subjecting
the judgment to the act. No bond, penalty, or increased
interest shall be required in connection with appeal of
any judgment arising under this act.
Section 256. LIMITED IMMUNITY. All pending actions against
participating manufacturers whether brought by a State or
local government entity, as a class action, or as a civil
action based on addition to or dependence, are hereby
terminated. All participating manufacturers are hereby immune
from any future action brought by a State or local
governmental entity, as a class action,

[[Page S12587]]

or as a civil action based on tobacco addiction or
dependence. Individual personal injury claims arising from
the use of tobacco are preserved.
Section 257. CIVIL LIABILITY FOR PAST CONDUCT. This section
applies to all actions permitted under section 256 for
conduct before enactment. Punitive damages are prohibited.
All actions must be brought by individuals and may not be
consolidated without consent of defendants. The only means to
remove an action is if a defendant removes it to Federal
court. Participating manufacturers must jointly share in
civil liability for damages; they shall not be jointly and
severally liable with non-participating manufacturers; and
actions involving participating and non-participating
manufacturers shall be severed. Permissible plaintiffs are
individuals, their heirs, and third-party payers who are
bringing individual claims for tobacco-related injuries and
third-party payers whose claims are not based on subrogation
that were pending on June 9, 1997. Defendants under this
section are participating manufacturers, their successors or
assigns, any future fraudulent transferees, or any entity for
suit designated to survive a defunct signatory. Vicarious
liability for agents applies. Subsequent development of
reduced risk tobacco is not admissible or discoverable.
Aggregate annual cap is 1/3 of annual payments required of
all signatories for the year involved. Excess amounts shall
be paid in the following year. Signatories shall receive
credit of 80% of amounts paid under judgments or settlements
for the year involved. Any amount awarded over $1,000,000 may
be paid in the following year. Each annual payment shall not
exceed $1,000,000, unless all judgments in the first year can
be paid without exceeding the aggregate annual cap.
Defendants shall bear their own attorneys' fees and costs.
Section 258. CIVIL LIABILITY FOR FUTURE CONDUCT. This
section applies to all actions permitted under section 256
for conduct after enactment. Sections 257(c ) and (e) through
(I) shall apply to actions under this section. Third-party
payor claims not based on subrogation shall not be commenced
under this section. There is no prohibition for punitive
damages under this section.
Section 259. NON-PARTICIPATING MANUFACTURERS. This title
shall not apply to non-signatories to the Protocol and
participating manufacturers who are 12 months delinquent in
payments due pursuant to the act.
Section 260. PAYMENT OF JUDGMENTS AND SETTLEMENTS. A
participating manufacturer may seek injunctive relief in
federal court to stop a state court from enforcing a judgment
which is unenforceable under this chapter. The federal court
shall issue an injunction if the participating manufacturer
demonstrates that the judgment or settlement is unenforceable
under this chapter.
Section 261. STATE ELIGIBILITY. A state shall be eligible
to receive funds under this act if (1) (by the effective date
of the act) it adopts sections 256 through 259 as unqualified
state law and any defendant in a civil action under this act
shall have a right to a prompt interlocutory appeal to the
highest court of the state to enforce the requirements of
state law; and (2) it withdraws and dismisses any claims
required to be dismissed under section 256.
Within 6 months of the effective date of this act (with
special provision for states whose legislature do not meet
within that time frame), and annually thereafter, the AG
shall certify that each state eligible to receive funds has
complied with this section--states not certified shall not
receive funds. No state claim may be maintained in any court
of that state if it does not comply with subsection (a)(1)
herein. This chapter governs any action by a state which is
not in compliance with subsection (a)(1) herein but is
otherwise maintainable in the state.
Section 262. REMOVAL. This section amends the existing code
to enact the removal provisions and give the federal court
jurisdiction.
Section 263. CONFORMING AMENDMENTS. The section conforms
existing code sections with this act.

TITLE III--REDUCTION IN UNDERAGE TOBACCO USE

Subtitle A--State Laws Regarding the Sale of Tobacco
Products to Minors
Section 301. STATE LAWS REGARDING SALE OF TOBACCO PRODUCTS
TO INDIVIDUALS UNDER THE AGE OF 18. Expands upon what is
popularly known as the ``Synar amendment'' (relating to the
sale or distribution of tobacco products to individuals under
the age of 18) P.L 102-321.
Effective in FY 1999 (or FY 2000 for States with
legislatures which do not convene in 1999) and thereafter, a
State which wishes to receive funding under Title V of this
Act must have in effect a State law consistent with the
provisions contained in the model law described in section
302. A State must enforce the law systematically and
conscientiously and in a manner which can reasonably be
expected to reduce the extent to which tobacco products
are available to individuals under age 18. A State must
also certify that enforcement of the law is a priority,
conduct random, unannounced inspections to ensure
compliance, and annually transmit to the Trustees a report
describing its operation of the program. As a funding
source for the program, States may use payments from the
Trust Fund, grants under sections 1901 and 1921 of the
Public Health Service Act, license fees or penalties
collected pursuant to this Act, or any other funding
authorized by the State legislature. The Trustees are
authorized to reduce payments to States for noncompliance.
Section 302. MODEL STATE LAW. Describes the provisions of
the model state law. Under that model, a series of conditions
are placed on the sale of tobacco to restrict use by persons
under age 18. It will be unlawful for a person to distribute
a tobacco product to an individual under age 18. Persons who
violate this section, and employers of employees who violate
the section, are liable for civil penalties. Under the model,
it is also unlawful for an individual under age 18 to
purchase, smoke or consume (or attempt such acts) in a public
place. Penalties are imposed for violations of this
provision. Law enforcement agencies are required to notify
promptly the parent(s) or guardians about such violations.
Persons who sell tobacco products at retail must post signs
communicating that the sale to individuals under 18 is
prohibited. It is also unlawful for product samples or opened
packages to be provided to anyone under 18, or for packages
to be displayed so that individuals have direct access. Civil
penalties for violations of these requirements apply.
The model law also requires employers who distribute
tobacco products at retail to implement a program to ensure
that employees are not distributing tobacco products to
minors in violation of the preceding requirements. The model
also requires appropriate state and local law enforcement
officials to enforce the Act in a manner reasonably expected
to reduce the extent to which individuals under age 18 have
access to tobacco products. Under certain conditions, states
are authorized to use individuals under age 18 to test
compliance with this act. The Act also sets forth
requirements for states to license persons engaged in the
distribution of tobacco products, and describes the
procedures which will be used for suspension, revocation,
denial and non-renewal of licenses. States are required to
report annually on compliance with the Act.

Subtitle B--Required Reduction in Underage Usage

Section 311. PURPOSE. Encourages achievement of dramatic
and immediate reductions in the number of underage consumers
of tobacco through substantial financial surcharges on
manufacturers if targets are not met.
Section 312. DETERMINATION OF UNDERAGE USE BASE
PERCENTAGES. Sets forth a methodology for the Secretary of
HHS to set base percentages for the calculation by age group
of children who use tobacco products.
Section 313. ANNUAL DAILY INCIDENCE OF UNDERAGE USE OF
TOBACCO PRODUCTS. Five years after enactment, and annually
thereafter, the Secretary shall make a determination
according to the methodology set out in this section of the
average annual incidence of daily tobacco use by individuals
under age 18.
Section 314. REQUIRED REDUCTION IN UNDERAGE TOBACCO USE.
Requires the Secretary to determine if the annual incidence
of the daily use of tobacco products exceeds the national
goals set forth in section 4.
Section 315. APPLICATION OF SURCHARGES. If the Secretary
determines that the national goals have not been met in any
year following year five, she will make a report to Congress
outlining changes to the national program established in this
act that she believes must be undertaken to move the country
toward achievement of the national goals. The Secretary is
authorized to impose a surcharge on cigarette manufacturers
of $100 million per percentage point for each of the first
five percentage points by which the goal is not met; the
surcharge will be $200 million for each of the next five
percentage points by which the goal is not met, and $300
million per percentage point for the amount that the goal is
not met by eleven or more percentage points. In the case of
smokeless tobacco products, which represent one-seventh of
youth use of tobacco products, the potential lookback
penalties will be $15 million per applicable percentage point
for each of the first five points by which the goal is not
met. The potential surcharge that could apply would be $30
million and $45 million for the next two five percentage
point increments, respectively.
Five years after the surcharge provisions are applicable
(the eleventh year after passage), the surcharge payments
will be increased. For cigarettes, the surcharge payment will
be $250 million for each of the first five percentage points
that the goal is not met and $500 million for each additional
percentage point by which the goal is not met. (E.g., If
cigarette usage failed to meet the applicable target by 6
percentage points, in year 6 the surcharge assessment is $700
million, and in year 11 is $1.75 billion.) For smokeless
tobacco products, the corresponding surcharge amounts will be
$30 million and $60 million, respectively. This section
provides an annual cap on surcharge payments for cigarettes
of $5 billion for the first five years in which the
surcharges apply under the Act (the sixth year after passage)
and $10 billion thereafter. For smokeless tobacco products,
the analogous caps are, $500 million and $1 billion,
respectively.
Any surcharge imposed under this section is the joint and
several obligation of all participating manufacturers
(subject to the abatement provisions contained in section

[[Page S12588]]

316) as allocated by the market share of each
manufacturer. Any funds generated under this section will
be available to the Trust Fund.
Section 316. ABATEMENT PROCEDURES. A manufacturer who
becomes subject to any surcharge that might be imposed under
section 315 must first pay the surcharge, and then may
petition the Secretary for abatement of the surcharge. The
Secretary is required to hold a hearing on the abatement
petition, during which the burden will be on the
participating manufacturer to prove by a preponderance of the
evidence that the manufacturer should be granted the
abatement. The Secretary will make her decision based on
criteria described in this section. She may abate all or part
of the surcharge, but this is totally at her discretion.
Judicial review of the Secretary's decision may be sought.
Section 317. INCENTIVES FOR EXCEEDING THE NATIONAL TOBACCO
PRODUCTS USE REDUCTION GOALS. In any year, including the
first five program years, that the ultimate national tobacco
product use reduction goals are exceeded (a 60% reduction for
cigarettes and a 45% reduction for smokeless tobacco
products, tobacco manufacturers will be assessed reduced
payments. This section provides that for payments related to
cigarettes, for each percentage point by which the 60%
reduction goal has been exceeded payments will be reduced by
a factor of \1/80\ per percentage point. (E.g., if cigarette
use dropped by 80% from the base year in a given year, the
payment would be reduced by 20/80th's, or 25%). The
corresponding factor for smokeless tobacco products is 1/110
per percentage point that the 45% goal is exceeded.

TITLE IV--HEALTH AND SAFETY REGULATION OF TOBACCO PRODUCTS

Subtitle A--General Authority

Section 401. Amendments to Definitions Contained in the
Federal Food, Drug, and Cosmetic Act. This title grants clear
jurisdiction over tobacco products and establishes the
framework for the Secretary of Health and Human Service,
acting through the Food and Drug Administration, to oversee a
new comprehensive regulatory system for tobacco products.
``Tobacco product'' and other relevant terms are defined for
the first time in the FDA's basic regulatory statute, the
Federal Food, Drug, and Cosmetic Act. This section adds two
important new prohibited acts to the FD&C statute that make
it illegal to manufacture and market tobacco products that do
not comply with the new Tobacco Products chapter, Chapter IX.
The bill amends the definition of ``drug'' to give FDA
authority to regulate tobacco products as unapproved drugs if
they do not comply with new Chapter IX. No change is made in
the definition of ``medical device'' and this bill does not
contemplate that tobacco products shall be regulated as
restricted medical devices.
Adds a new Chapter IX to the Federal Food, Drug and
Cosmetic Act, which will be entitled ``Health and Safety
Regulatory Requirements Relating to Tobacco Products. It will
contain the following new sections.
Section 900. Definitions. Definitions of the term
``cigarette,'' ``cigarette tobacco,'' ``nicotine,''
``smokeless tobacco,'' ``tar,'' ``tobacco additive,'' and
``tobacco product'' will be added to the FD&C Act.
Sec. 901. Statement of General Duties. The Secretary of HHS
is directed to undertake a number of regulatory activities,
detailed in section 902 through section 908, in furtherance
of the comprehensive health promotion and disease prevention
program that the PROTECT Act establishes for tobacco
products.
Sec. 902. Tobacco Product Health Risk Management Standards.
This section directs the Secretary to issue regulations,
through routine notice and comment rulemaking procedures and
in consultation with public health experts, that establish
rigorous controls over the composition of tobacco products.
These regulations will include provisions relating both to
the protection of confidential commercial information and for
the public disclosure of the ingredients of tobacco products.
Such regulations will grant the Secretary the authority to
issue regulations to assess and manage the risks presented by
nicotine and reduce or eliminate constituents of tobacco
products, or to ban tobacco products after the Secretary
considers relevant factors. These factors include: reduction
of public health risks; capacity of the health care system to
provide effective and accessible treatments to current
consumers of tobacco products; the potential creation of a
significant market for contraband tobacco products; and, the
technological feasibility of manufacturers to modify existing
products. Secretarial actions to ban tobacco products will
require a joint resolution of approval from both chambers of
the United States Congress.
Sec. 903. Good Manufacturing Practice Standards for Tobacco
Products. The Secretary shall issue regulations that specify
the good manufacturing practices (GMP) for tobacco products.
Such regulations will prescribe the methods used in, and the
facilities and management controls used for, the
manufacturing of tobacco products. The GMP regulations will
contain requirements for registration and inspection of the
tobacco product manufacturing establishments.
The GMP regulations promulgated by the Secretary shall
contain provisions relating to pesticide residue levels and
will provide for an advisory committee to recommend to the
Secretary whether to approve, consistent with the
public health, petitions for variances to the established
residue level standards. The GMP requirements established
by the Secretary shall include record keeping and
reporting standards for tobacco products.
Sec. 904. Tobacco Product Labeling, Warning, and Packaging
Standards. Section 904 stipulates new warning statements for
both cigarettes and smokeless tobacco products. Section 904
provides format and type-size requirements and stipulates
rotation schedules for tobacco product labels. Section 904
grants the Secretary the authority to issue regulations to
revise tobacco product labeling statements and exempts
tobacco product exports from these labeling requirements.
Sec. 905. Reduced Risk Tobacco Products. This section
requires the Secretary to issue regulations that create
incentives for the development and commercial distribution of
reduced risks tobacco products. Under section 905
manufacturers of new technologies that reduce the negative
health effects of using tobacco products notify, in
confidence, the Secretary of such technology. Upon a
determination that an innovation reduces the health risks of
tobacco products and is technologically feasible, the
Secretary may require that such risk reduction innovations be
incorporated, through a licensing program, into other tobacco
products.
Section 906. Tobacco Product Marketing Restrictions.
Section 906 prohibits the sale of tobacco products to persons
under 18 years of age and generally requires retailers to
conduct sales in a face-to-face manner and to verify the age
of tobacco purchasers. Under this section, cigarettes must be
sold in packages with no fewer than twenty cigarettes; no
free samples may be distributed; the vending machine sales
must be eliminated except in certain limited adult
facilities; and mail order sales must be accompanied by age
verification procedures.
Section 907. Tobacco Products Scientific Advisory
Committee. This requires the Secretary to establish a Tobacco
Products Scientific Review Committee to assist in the
development and in an on-going assessment of the
effectiveness of the tobacco product health risk management
standards required by section 902, the tobacco product good
manufacturing standards required by section 903, the tobacco
product labeling, warning, and packaging standards required
by section 904, the reduced risk tobacco product provisions
of section 905, and the tobacco product marketing
restrictions required by section 906. This committee will
primarily consist of experts in science, medicine, and public
health but will also include experts in law and ethics and
include representatives of both pro-, and anti- tobacco use
groups.
Section 908. Report to Congress. Section 908 requires the
Secretary to report to Congress biennially on the
effectiveness of new Chapter IX and the other relevant
provisions of the PROTECT Act, and other relevant laws and
policies that relate to the nation's effort to reduce use of,
and the health risks associated with, tobacco products. Such
report will contain information on current use patterns and
health effects of tobacco products with a particular emphasis
on use of these products by those under 18 years of age. The
Secretary shall also report to the Congress on recommended
changes in legislation that will increase the effectiveness.
Section 909. Judicial Review Standards. This new section
makes clear that in any judicial proceeding involving the
regulations issued under Chapter IX, the courts will use
procedures, apply standards of review, and grant the degree
of deference that it normally accords the Secretary under the
Federal Food, Drug, and Cosmetic Act.
Section 910. Preemption. This section permits state and
local governments to enact requirements with respect to
tobacco products so long as the state or local requirement
does not conflict with a requirement of section 902, 903,
904, or 905.
Section 402. Repeals. This section repeals the Federal
Cigarette Labeling and Advertising Act and the Comprehensive
Smokeless Tobacco Health Education Act.

TITLE V--PAYMENTS TO STATES AND PUBLIC HEALTH PROGRAMS

Subtitle A--Payments to States

Section 501. Reimbursement for State Expenditures. The
Trustees will make available to the states one-half of the
Trust Fund amounts each year (after payments have been
allocated for tobacco farmers, Native Americans, and certain
combined asbestos/tobacco plaintiffs), apportioned state-by-
state according to a table listed in the Act which is based
on the State Attorney Generals' agreement. The funds will be
utilized by the States under two sets of conditions.
Utilizing the Medicaid matching percentage rates, the portion
of the funds which would have been attributable to the state
matching share shall be used by the State for any purpose it
deems appropriate. Federal subrogation is waived, and the
amount that otherwise would have been returned to the Federal
government will be retained by the State, but may only be
used for certain specified anti-tobacco-related purposes as
outlined in section 502.
Section 502. Requirements for States' Use of Certain Funds.
As a condition of receiving funds which otherwise would have
been returned to the Federal government, a state must submit
to the Trustees a plan that describes the anti-tobacco
programs for which the funds will be used, the measurable
objectives that will be used to evaluate the program outcome,
the procedures which will be

[[Page S12589]]

used for outreach, and efforts which are made to
coordinate the new programs with existing Federal and
State programs. The state must also collect necessary data
and maintain records to allow the Trustees to evaluate the
plan and its effectiveness. State plans and amendments
thereto are deemed to be approved unless disapproved by
the Trustee within 90 days of submission. Each year, the
State must provide the Trustees with an assessment of the
plan, including the effectiveness of the plan in reducing
the number of children and adults who use tobacco
products. In addition, the Trustees will provide an annual
report on operations of the plan.
In order to retain the otherwise-Federal share, States must
use the funds for anti-tobacco programs in coordination with
existing Federal public health and social services programs,
including child nutrition programs, maternal and child
health, the State Children's Health Insurance Program, Head
Start, school lunch, Indian Health Service, Community Health
Centers, Ryan White, and social services block grant. States
may also use these funds for smoking cessation programs that
reimburse for medications or other therapeutic techniques,
and anti-tobacco products public education programs,
including counter-advertising campaigns.

Subtitle B--Public Health Programs

Section 521. National Institutes of Health Trust Fund for
Health Research. A National Institutes of Health Trust Fund
for Health Research is established which reflects the
settlement of punitive damages for past reprehensible
behavior of the tobacco industry. This punitive damages fund
will be funded from the National Settlement Trust Fund, and
overall funding will amount to $95 billion over the first 25
years. In year 5 and thereafter, a total of $4 billion
annually will be available under this section, subject to any
required adjustments due to inflation, sales volume
adjustments, and look-back penalties.
Section 521(e) requires the Director of the National
Institutes of Health, in consultation with leading experts,
to devise a National Tobacco and Other Abused Sustances
Research Agenda. Funds provided under this section are
expended as follows: NIH Director's Discretionary Fund, 2%;
Research Facilities, 2%; health information communications,
1%; national cancer research and demonstration centers under
section 414 of the Public Health Service Act, 10%; and, the
remaining 85% shall be allocated to the established
Institutes, Centers, and Divisions of NIH in the same
proportion as the annual appropriations bill for NIH.
Eligible research are stipulated in section 521(d)(2) and
include diseases associated with tobacco use including
cancer, cardiovascular diseases, and stroke.
Section 522. National Anti-Tobacco Product Consumption and
Tobacco Product Cessation Public Health Program. Under this
section, with the funds specified in section 101(c)(3)(C) of
Title I of this Act, the Secretary shall establish and
implement a national anti-tobacco product consumption and
tobacco product cessation program. This program will be
coordinated by the Office of Smoking and Health of the
Centers for Disease Control and Prevention. In year 6 and
thereafter, a total of $4 billion annually will be available
under this section, subject to any required adjustments due
to inflation, sales volume adjustments, and look-back
penalties.
The Secretary may use funds under this section to offset
HHS' administrative costs in carrying out the public health
components of the PROTECT Act, including the additional costs
attributable to the new regulatory responsibilities placed on
the Food and Drug Administration under this Act. In carrying
out this section, the Secretary may act under the general
authorities provided under section 301 of the Public Health
Service Act. In carrying out this program the Secretary must
act in concert with state and local public health officials
and non-governmental organizations and will consider, as
appropriate, the public health recommendations made by the
Castano class action plaintiffs.
This section requires the Secretary to undertake a
substantial public education program, including the
development and dissemination of materials that alert, in the
most appropriate and effective fashion, the public to the
risks of tobacco use, with a special emphasis on materials
and techniques that are targeted to young Americans. The
Secretary is also directed to make a special effort to inform
current adult users of tobacco products of the health
benefits of ceasing use of these products. Among the public
education and information techniques authorized by this
section is a publicly financed nationally directed counter-
advertising campaign. The Secretary is also directed to
develop and make available a model state anti-tobacco use and
tobacco cessation program.
Section 522 directs the Secretary to make available at
least one half the funds available under this section through
section 101(c)(3)(C) to states in the form of vountary anti-
tobacco use and tobacco cessation program block grants.
Eligible activities for this block grant will be the same as
those specified under 502(e). To the extent possible, the
Secretary will harmonize the program management requirements
under sections 502 and 522. The formula for the block grant
will be devised by the Secretary but shall include such
relevant factors as the number of children residing in each
participating state.

TITLE VI - STANDARDS TO REDUCE INVOLUNTARY EXPOSURE TO TOBACCO SMOKE

Section 601. DEFINITIONS. Defines pertinent terms used in
this section.
Section 602. SMOKE-FREE ENVIRONMENT POLICY. Requires a
public facility to implement a smoke-free environment policy,
which prohibits tobacco use within the facility and on
facility property within the immediate vicinity of the
facility's entrance. Requires the policy to be posted in a
clear and prominent manner. Exceptions are granted to
facilities which meets the requirements of a Specially
Designated Smoking Area. No exception would be granted for
restaurants, prisons, and congressional office buildings
and the Capitol Building. There are special rules for
schools and other facilities serving children.
Section 603. PREEMPTION. Precludes preemption of any other
Federal, State, or local law in this area.
Section 604. REGULATIONS. Sets a 6-month period to
promulgate the title's regulations.
Section 605. EFFECTIVE DATE. Sets an effective date of 6
months after the date the rules are promulgated, or 1 year
after date of Act's enactment, whichever is later.

TITLE VII--PUBLIC DISCLOSURE OF HEALTH RESEARCH

Section 701. PURPOSE. Sets the purpose of this title to
disclose previously nonpublic or confidential documents by
tobacco product manufacturers.
Section 702. NATIONAL TOBACCO DOCUMENT DEPOSITORY.
Establishes a National Tobacco Document Depository which will
be used as a resource for litigants, public health groups,
and other interested parties and which will contain documents
described in the statute. The section also creates a Tobacco
Documents Dispute Resolution Panel, to be composed of 3
Federal Judges appointed by the Congress, and outlines the
Panel's structure, including its basis for determining a
dispute, its final decision rule, and its assessment of fees
policy. Provides for the Panel to establish a procedure for
accelerated review and for a Special Masters.
Section 703. ENFORCEMENT. Allows the Attorney General to
bring a proceeding before the Tobacco Documents Dispute
Resolution Panel with appropriate notice requirements and
civil penalty levels.

TITLE VIII--AGRICULTURAL TRANSITION PROVISIONS

Section 801. SHORT TITLE: ``Tobacco Transition Act.''
Section 802. PURPOSES. Terminates the federal tobacco
program while making compensation to quota owners and tobacco
farmers. Provides economic assistance to affected counties
through block grants to affected states.
Section 803. DEFINITIONS. Defines pertinent terms used in
Title VIII.

Subtitle A--Tobacco Production Transition

CHAPTER 1--TOBACCO TRANSITION CONTRACTS

Section 811. TOBACCO TRANSITION ACCOUNT. Establishes the
Tobacco Transition Account within the Trust Fund. Through
this account, compensation will be made to quota owners and
tobacco farmers. Economic assistance block grants to affected
states will also be provided through the Transition Account.
Section 812. OFFER AND TERMS OF TOBACCO TRANSITION
CONTRACTS. The Secretary of Agriculture shall offer to buy
tobacco quotas from owners through a three-year payment
period. All restrictions on the production and marketing of
tobacco will be lifted in 1998, ending the tobacco quota
program.
Section 813. ELEMENTS OF CONTRACTS. Within 90 days of
enactment of this legislation, the Secretary to offer
contracts to quota owners until June 31, 1999. Buyout
payments and transition payments shall start at the beginning
of the 1999 marketing year and end at the end of the 2001
marketing year.
Section 814. BUYOUT PAYMENTS TO OWNERS. During the three-
year phaseout period, buyout payments will be made to quota
owners as a compensation for the lost value they experience
associated with the ending of the quota program. The payments
will be determined by multiplying $8.00 by the average annual
quantity of quota owned during the 1995-1997 crop years.
Section 815. TRANSITION PAYMENTS TO PRODUCERS. Provides
assistance to farmers who do not own quotas but who leased
from quota owners during three of the last four years.
Transition payments only apply to the leased portion of the
recipient's crop and will constitute a compensation to the
producer for lost revenue caused by this act. The payments
shall be determined by multiplying 40 cents by the average
quantity of tobacco produced during the three years of the
transition period.
Section 816. TOBACCO WORKER TRANSITION PROGRAM. Establishes
a retraining program for displaced tobacco workers involved
in the manufacture, processing or warehousing of tobacco or
tobacco products. Patterned after the NAFTA Trade Adjustment
Assistance program, the Governor and then the Secretary of
Labor shall determine a group's eligibility for the program.
The total amount of payments for the Tobacco Worker
Transition Program is capped at $50,000,000 for any fiscal
year, and after ten years the program will be terminated. Any
individual receiving tobacco quota buyout payments are
ineligible for this program.

[[Page S12590]]

Section 817. FARMER OPPORTUNITY GRANTS. Amends the Higher
Education Act of 1965 to establish a grant payment for
tobacco farmers and their families to pay for higher
education. Grants will be made in the amount of $1,700 per
year, rising to $2,900 annually by 2019. Academic eligibility
requirements will mirror the standards regulating Pell
Grants. Receipt of a Farmer Opportunity Grant will not affect
a student's eligibility to receive other income-based
assistance.

CHAPTER 2--RURAL ECONOMIC ASSISTANCE BLOCK GRANTS

Section 821. Rural Economic Assistance Block Grants. For
each of the three years of the transition period, 1999
through 2001, the Secretary shall provide block grants to
tobacco growing states to assist areas that are largely
dependent on tobacco production. The grants will total $100
million for each of the three years, with a total cost of
$300 million. The amount of each state's block grant will be
based on (1) the number of counties within the state
dependent on tobacco production and (2) the extent to which
the counties are dependent on tobacco production. The
Governor shall use a similar formula to apportion the state's
grant to the counties. Use of the grants by the counties
shall be approved by the Governor.

Subtitle B--Tobacco Price Support and Production Adjustment Programs

CHAPTER 1--TOBACCO PRICE SUPPORT PROGRAM

Section 831. INTERIM REFORM OF TOBACCO PRICE SUPPORT
PROGRAM. Amends Section 106 of the Agricultural Act of 1949
to phase out the tobacco price support program over the four
years following the enactment of this act. In 1999, the price
supports will decline by 25% and then by 10% in 2000 and in
2001, after which the price support program will be
terminated.
Section 832. TERMINATION OF TOBACCO PRICE SUPPORT PROGRAM.
Amends Section 101 of the Agricultural Act of 1949 to repeal
the tobacco price support program after 2001.

CHAPTER 2--TOBACCO PRODUCTION ADJUSTMENT PROGRAMS

Section 835. TERMINATION OF TOBACCO PRODUCTION ADJUSTMENT
PROGRAMS. Amends the Agricultural Adjustment Act of 1938 to
exclude tobacco from the provisions of the Act, effectively
ending the Tobacco Production Adjustment Program.

Subtitle C--Funding

Section 841. TRUST FUND. Provides for the transfer of funds
from Tobacco Transition Account (in the Trust Fund) to the
Commodity Credit Corporation (CCC).
Section 842. COMMODITY CREDIT CORPORATION. Allows the
Secretary to use the CCC in carrying out the provisions of
this title.

TITLE IX--MISCELLANEOUS PROVISIONS

Section 901. PROVISIONS RELATING TO NATIVE AMERICANS.
Provides that the requirements of this Act relating to the
manufacturer, distribution and sale of tobacco products will
apply on Indian lands as defined in section 1151 of title 18
of the U.S. Code. Any federal tax or fee imposed on the
manufacture, distribution or sale of tobacco products will be
paid by any Indian tribe engaged in such activities, or by
persons engaged in such activities on such Indian lands, to
the same extent such tax applies to other entities.
The Secretary, in consultation with the Secretary of the
Interior, is authorized to treat Indian tribes as a state for
purposes of this Act. The Secretary is authorized to provide
any such tribe grant assistance to carry out the licensing
and enforcement functions in accordance with a plan submitted
and approved by the Secretary as in compliance with the Act.
A participating tobacco manufacturer shall not engage in
any activity within Indian country that is prohibited under
the Protocol. A state may not impose obligations or
requirements relating to the application of this Act to
Indian tribes and organizations.
Recognizing that tobacco use remains a significant risk
factor for Indians and that cigarette smoking is more than
twofold for Indian men and more than fourfold for Indian
women over non-Indians, a supplemental fund is established
for the Indian Health Service to raise the health status of
Indians. The fund is established at $5 billion to be allotted
to IHS at increments of $200 million annually for 25 years.
Section 902. WHISTLEBLOWER PROTECTIONS. A tobacco
manufacturer or distributor may not retaliate against an
employee for disclosing a substantial violation of law
related to this Act to the Secretary, the Department of
Justice, or any State or local authority. Said employee may
file a civil action in federal court if he believes such
retaliation has occurred (within two years of the
retaliation). The court may order reinstatement of the
employee, order compensatory damages, or other appropriate
remedies. Employees who deliberately participate in the
violation or knowingly provide false information are excluded
from this section.
Section 903. LIMITED ANTITRUST EXEMPTION. Federal and state
antitrust laws shall not apply to certain actions by
manufacturers, which are taken pursuant to this Act,
including entering into the Protocol or consent decree,
refusing to deal with non-complying distributors, or other
actions meant to comply with plans or programs to reduce the
use of tobacco by children. In order for the exemption to
apply, such plans or programs must be approved by the
Attorney General pursuant to a process set forth in this
section.
Section 904. EFFECTIVE DATE. The effective date will be the
date of enactment.
______

By Mr. BREAUX (for himself and Mr. Cochran):
S. 1533. A bill to amend the Migratory Bird Treaty Act to clarify
restrictions under that act of baiting, and for other purposes; to the
Committee on Environment and Public Works.

The Migratory Bird Treaty Reform Act

Mr. BREAUX. Mr. President, I am pleased to join with the
distinguished senior Senator from the State of Mississippi, Senator
Cochran, in introducing the Migratory Bird Treaty Reform Act. I believe
it is legislation all of our colleagues should support.
As members of the Migratory Bird Conservation Commission, Senator
Cochran and I recognize the importance of protecting and conserving
migratory bird populations and habitat.
Eighty years ago, Congress enacted the Migratory Bird Treaty Act,
which implemented the 1916 Convention for the Protection of Migratory
Birds between Great Britain, for Canada, and the United States. Since
then, the United States, Mexico, and the former Soviet Union have
signed similar agreements. The Convention and the Act are designed to
protect and manage migratory birds and regulate the taking of that
renewable resource. They have had a positive impact, and we have
maintained viable migratory bird populations despite the loss of
natural habitat because of human activities.
Since passage of the Migratory Bird Treaty Act and development of the
regulatory program, several issues have been raised and resolved. One
has not--the issue concerning the hunting of migratory birds ``[b]y the
aid of baiting, or on or over any baited area.''
A doctrine has developed in the federal courts by which the intent or
knowledge of a person hunting migratory birds on a baited field is not
an issue. If bait is present, and the hunter is there, he is guilty
under the doctrine of strict liability. It is not relevant that the
hunter did not know or could not have known bait was present. I
question the basic fairness of this rule.
Mr. President, I do not want anyone to misunderstand me. I strongly
support the Migratory Bird Treaty Act. We must protect our migratory
bird resources from overexploitation. I would not weaken the Act's
protections.
The fundamental goal of the Migratory Bird Treaty Reform Act is to
address the baiting issue. It is the result of months of negotiation by
the International Association of Fish and Wildlife Agencies' Ad Hoc
Committee on Baiting. The Committee has representatives from each of
the migratory flyways, Ducks Unlimited, the National Wildlife
Federation, and the North American Wildlife Enforcement Officers
Association.
Under this legislation, no person may take migratory birds by the aid
of bait, or on or over bait, where that person knew or should have
known the bait was present. It removes the strict liability
interpretation presently followed by federal courts. In its stead, it
establishes a standard that permits a determination of the actual guilt
of the defendant. If the facts show the hunter knew or should have
known of the bait, liability, which includes fines and possible
incarceration, would be imposed. However, if the facts show the hunter
could not have reasonably known bait was present, the court would not
impose liability or assess penalties. This is a question of fact
determined by the court based on the evidence presented.
This legislation would require the U.S. Fish and Wildlife Service to
publish, in the Federal Register, a notice for public comment defining
what is a normal agricultural operation for that geographic area. The
Service would make this determination after consultation with state and
federal agencies and an opportunity for public comment. The purpose of
this provision is to provide guidance for landowners, farmers, wildlife
managers, law enforcement officials, and hunters so they know what a
normal agricultural operation is for their region.
The goal of the Migratory Bird Treaty Reform Act is to provide
guidance to landowners, farmers, wildlife managers, hunters, law
enforcement officials, and the courts on the restrictions

[[Page S12591]]

on the taking of migratory birds. It accomplishes that without
weakening the intent of current restrictions on the method and manner
of taking migratory birds; nor do the proposed provisions weaken
protection of the resource.
Mr. President, I urge my colleagues to join us in supporting this
important legislation, and I ask unanimous consent that the full text
of this legislation be printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 1533

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 ``Migratory Bird Treaty Reform
Act''.

SEC. 2. FINDINGS.

The Congress makes the following findings:
(1) The Migratory Bird Treaty Act was enacted in 1918 to
implement the 1916 Convention for the Protection of Migratory
Birds between the United States and Great Britain (for
Canada). The Act was later amended to reflect similar
agreements with Mexico, Japan, and the former Soviet Union.
(2) Pursuant to the Migratory Bird Treaty Act, the
Secretary of the Interior is authorized to promulgate
regulations specifying when, how, and whether migratory birds
may be hunted.
(3) Contained within these regulations are prohibitions on
certain methods of hunting migratory game birds to better
manage and conserve this resource. These prohibitions, many
of which were recommended by sportsmen, have been in place
for over 60 years and have received broad acceptance among
the hunting community with one principal exception relating
to the application and interpretation of the prohibitions on
the hunting of migratory game birds by the aid of baiting, or
on or over any baited area.
(4) The prohibitions regarding the hunting of migratory
game birds by the aid of bait, or on or over bait, have been
fraught with interpretive difficulties on the part of law
enforcement, the hunting community, and courts of law.
Hunters who desire to comply with applicable regulations have
been subject to citation for violations of the regulations
due to the lack of clarity, inconsistent interpretations, and
enforcement. The baiting regulations have been the subject of
multiple congressional hearings and a law enforcement
advisory commission.
(5) Restrictions on the hunting of migratory game birds by
the aid of baiting, or on or over any baited area, must be
clarified in a manner that recognizes the national and
international importance of protecting the migratory bird
resource while ensuring consistency and appropriate
enforcement including the principles of ``fair chase''.

SEC. 3. CLARIFYING HUNTING PROHIBITIONS.

Section 3 of the Migratory Bird Treaty Act (16 U.S.C. 704)
is amended--
(1) by inserting ``(a)'' after ``Sec. 3.''; and
(2) by adding at the end the following:
``(b)(1) No person shall--
``(A) take any migratory game bird by the aid of baiting,
or on or over any baited area, where the person knows or
reasonably should have known that the area is a baited area;
or
``(B) place or direct the placement of bait on or adjacent
to an area for the purpose of causing, inducing, or allowing
any person to take or attempt to take any migratory game bird
by the aid of baiting or on or over the baited area.
``(2) Nothing in this subsection prohibits any of the
following:
``(A) The taking of any migratory game bird, including
waterfowl, from a blind or other place of concealment
camouflaged with natural vegetation.
``(B) The taking of any migratory game bird, including
waterfowl, on or over--
``(i) standing crops, flooded standing crops (including
aquatics), flooded harvested croplands, grain crops properly
shocked on the field where grown; or
``(ii) grains, agricultural seeds, or other feed scattered
solely as a result of--
``(I) accepted soil stabilization practices or accepted
agricultural planting, harvesting, or manipulation after
harvest; or
``(II) entering or exiting of areas by hunters or normal
hunting activities such as decoy placement or bird retrieval,
if reasonable care is used to minimize the scattering of
grains, agricultural seeds, or other feed.
``(C) The taking of any migratory game bird, except
waterfowl, on or over any lands where salt, grain, or other
feed has been distributed or scattered as a result of--
``(i) accepted soil stabilization practices;
``(ii) accepted agricultural operations or procedures; or
``(iii) the alteration for wildlife management purposes of
a crop or other feed on the land where it was grown, other
than distribution of grain or other feed after the grain or
other feed is harvested or removed from the site where it was
grown.
``(3) As used in this subsection:
``(A)(i) Except as otherwise provided in this Act, the term
`baiting' means the intentional or unintentional placement of
salt, grain, or other feed capable of attracting migratory
game birds, in such a quantity and in such a manner as to
serve as an attractant to such birds to, on, or over an area
where hunters are attempting to take them, by--
``(I) placing, exposing, depositing, distributing, or
scattering salt, grain, or other feed grown off-site;
``(II) redistributing grain or other feed after it is
harvested or removed from the site where grown;
``(III) altering agricultural crops, other than by accepted
agricultural planting, harvesting, or manipulation after
harvest, altering millet planted for nonagricultural purposes
(planted millet), or altering other vegetation (as specified
in migratory bird hunting regulations issued by the Secretary
of the Interior) planted for nonagricultural purposes; or
``(IV) gathering, collecting, or concentrating natural
vegetation, planted millet, or other vegetation (as specified
in migratory bird hunting regulations issued by the Secretary
of the Interior) planted for nonagricultural purposes,
following alteration or harvest.
``(ii) The term `baiting' does not include--
``(I) redistribution, alteration, or concentration of grain
or other feed caused by flooding, whether natural or man
induced; or
``(II) alteration of natural vegetation on the site where
grown, other than alteration described in clause (i)(IV).
``(iii) With respect only to the taking of waterfowl, the
term `baiting'--
``(I) does not include, with respect to the first special
September waterfowl hunting season locally in effect or any
subsequent waterfowl hunting season, an alteration of planted
millet or other vegetation (as specified in such
regulations), other than an alteration described in clause
(i)(IV), occurring before the 10-day period preceding the
opening date (as published in the Federal Register) of that
first special season; and
``(II) does not include, with respect to the first regular
waterfowl hunting season locally in effect or any subsequent
waterfowl hunting season, such an alteration occurring before
the 10-day period preceding the opening date (as published in
the Federal Register) of that first regular season.
``(B) The term `baited area' means any area that contains
salt, grain, or other feed referred to in subparagraph (A)(i)
that was placed in that area by baiting. Such an area shall
remain a baited area for 10 days following complete removal
of such salt, grain, or other feed.
``(C) The term `accepted agricultural planting, harvesting,
and manipulation after harvest' means techniques of planting,
harvesting, and manipulation after harvest that are--
``(i) used by agricultural operators in the area for
agricultural purposes; and
``(ii) approved by the State fish and wildlife agency after
consultation with the Cooperative State Research, Education,
and Extension Service, the Natural Resources Conservation
Service, and the United States Fish and Wildlife Service.
``(D) The term `accepted agricultural operations or
procedures' means techniques that are--
``(i) used by agricultural operators in the area for
agricultural purposes; and
``(ii) approved by the State fish and wildlife agency after
consultation with the State Cooperative State Research,
Education, and Extension Service, the State Office of the
Natural Resources Conservation Service, and the United States
Fish and Wildlife Service.
``(E) The term `accepted soil stabilization practices'
means techniques that are--
``(i) used in the area solely for soil stabilization
purposes, including erosion control; and
``(ii) approved by the State fish and wildlife agency after
consultation with the State Cooperative State Research,
Education, and Extension Service, the State Office of the
Natural Resources Conservation Service, and the United States
Fish and Wildlife Service.
``(F) With respect only to planted millet or other
vegetation (as designated in migratory bird hunting
regulations issued by the Secretary of the Interior) planted
for nonagricultural purposes, the term `planted'--
``(i) subject to clause (ii), means sown with seeds that
have been harvested; and
``(ii) does not include alteration of mature stands of
planted millet or of such other vegetation planted for
nonagricultural purposes.
``(G) The term `migratory game bird' means any migratory
bird included in the term `migratory game birds' under part
20.11 of title 50, Code of Federal Regulations, as in effect
October 3, 1997.''.

SEC. 4. PENALTIES.

Section 6(c) of the Migratory Bird Treaty Act (16 U.S.C.
707(c)) is amended as follows:
(1) By striking ``All guns,'' and inserting ``(1) Except as
provided in paragraph (2), all guns''.
(2) By adding the following at the end:
``(2) In lieu of seizing any personal property not crucial
to the prosecution of the alleged offense, the Secretary of
the Interior shall permit the owner or operator of the
personal property to post bond or other collateral pending
the disposition of any proceeding under this Act.''.
______

By Mr. TORRICELLI:
S. 1534. A bill to amend the Higher Education Act of 1965 to delay
the commencement of the student loan repayment period for certain
students called to active duty in the Armed Forces; to the Committee on
Labor and Human Resources.

[[Page S12592]]

the veterans' student loan deferment act of 1997

Mr. TORRICELLI: Mr. President, I rise today to introduce the
Veterans' Student Loan Deferment Act of 1997. This important
legislation will amend the Higher Education Act to preserve the 6-month
grace period for repayment of federal student loans for reservists who
have been called into active duty.
Throughout my career as a public official, I have always supported
the brave men and women who serve our nation in the Reserve Components.
These forces represent all 50 States and four territories, and truly
embody our forefathers' vision of the American citizen-soldier.
Reservists are active participants in the full spectrum of U.S.
military operations, from the smallest of contingencies to full-scale
theater war, and no major operation can be successful without them.
However, under current law, students who receive orders to serve with
our military in places like Bosnia are returning home to discover that
they have lost the six month grace period on their federal student
loans and must begin making repayments immediately. I believe it is
patently unfair and inconsistent with our increased reliance on the
Reserve Forces to call up these students to serve in harm's way and, at
the same time, to keep the clock running on the six month grace period
for paying-back student loans. Enactment of my legislation would
eliminate this serious inequity confronting students in the Reserves.
Mr. President, hundreds upon hundreds of New Jerseyans have been
involved in Operation Joint Endeavor in Bosnia to date. Many of these
courageous individuals had to withdraw from classes in order to serve
their nation in uniform. Although the Department of Education can grant
deferments to these students, federal law prohibits reinstating their
grace period, so interest continues to accrue on their loans whenever
they are not attending classes. It is important to note that this
legislation will not provide these veterans with any special treatment
or benefit. My legislation will simply guarantee that the repayment
status on their student loans will be the same when they return home as
when they left for service.
I feel very strongly that students should not be punished for serving
in the Reserves, and believe that when they are called to serve our
country, their focus should be on the mission, not on the status of
their student loans. I am proud to offer this legislation on behalf of
the hundreds of thousands of Reservists in the United States, and look
forward to working with my colleagues to ensure its passage. 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. 1534

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

SECTION 1. DELAY IN COMMENCEMENT OF REPAYMENT PERIOD.

(a) Federal Stafford Loans and Federal Direct Stafford/Ford
Loans.--Section 428(b)(7) of the Higher Education Act of 1965
(20 U.S.C. 1078(b)(7)) is amended by adding at the end the
following:
``(D) There shall be excluded from the 6 month period that
begins on the date on which a student ceases to carry at
least one-half the normal full-time academic workload as
described in subparagraph (A)(i) any period not to exceed 3
years during which a borrower who is a member of a reserve
component of the Armed Forces named in section 10101 of title
10, United States Code, is called or ordered to active duty
for a period of more than 30 days (as defined in section
101(d)(2) of such title).''.
(b) Federal Perkins Loans.--Section 464(c) of the Higher
Education Act of 1965 (20 U.S.C. 1087dd(c)) is amended by
adding at the end the following:
``(7) There shall be excluded from the 9 month period that
begins on the date on which a student ceases to carry at
least one-half the normal full-time academic workload as
described in paragraph (1)(A) any period not to exceed 3
years during which a borrower who is a member of a reserve
component of the Armed Forces named in section 10101 of title
10, United States Code, is called or ordered to active duty
for a period of more than 30 days (as defined in section
101(d)(2) of such title).''.
______

By Mr, SANTORUM (for himself, Mr. Lautenberg, Mr. DeWine, Mr.
Chafee, Mr. Coats, Mr. Gregg, Mr. Feingold, and Mr. Specter):
S. 1535. A bill to provide marketing quotas and a market transition
program for the 1997 through 2001 crops of quota and additional
peanuts, to terminate marketing quotas for the 2002 and subsequent
crops of peanuts, and to make nonrecourse loans available to peanut
producers for the 2002 and subsequent crops of peanuts, and for other
purposes; to the Committee on Agriculture, Nutrition, and Forestry.

the peanut program improvement act of 1997

Mr. SANTORUM. Mr. President, I rise to introduce legislation that
will phase out the peanut quota program over 6 years, with the quota
system being eliminated beginning in crop year 2002. I am joined in
this effort by my colleague from New Jersey, Mr. Lautenberg, as well as
other original cosponsors.
Under our legislation, the price support for peanuts grown for edible
consumption is gradually reduced each year from the current support
price of $610 per ton to $445 per ton by 2001. In the year 2002 and
ensuing years, there would be no quotas on peanuts and the Secretary of
Agriculture would be required to make non-recourse loans available to
all peanut farmers at 85 percent of their estimated market value,
consistent with the non-recourse loan program available for other
agricultural commodities. In year 2002, and thereafter, the non-
recourse loan is capped at the current world price of $350 per ton.
In determining quotas for the crop years 1998 through 2001, the
Secretary would be required to consult with representatives of the
entire industry. The Secretary would also be required to consider
stocks in Commodity Credit Corporation's inventory at the beginning of
the new crop year as well as a reasonable carryover to permit orderly
marketing at the end of the crop year.
The bill also authorizes the complete sale, lease or transfer of
poundage quotas across county and state lines. It abolishes the current
limitation that now restricts sales, leases, and transfers to no more
than 40 percent of the total poundage quota in the county within a
state.
Under current law, additional peanuts (those produced in excess of
the farmers' poundage quota) may only be sold for export or crushing.
The bill would permit additional peanuts to also be used for sale to
the Department of Defense, as well as to other federal, state or local
government agencies, including for use in the school lunch program.
Mr. President, the federal peanut program is an anachronism. Born in
the 1930's during an era of massive change and dislocation in
agriculture, the program is sorely out of place in today's vibrant
agricultural sector. While other farm commodities are seeking new
export opportunities abroad, building new markets and helping to
improve our national balance of trade; the peanut industry is building
new barriers to protect its rapidly diminishing industry. Certainly
imports are a factor, but the true threat to America's peanut farmer is
the very quota system that he so stubbornly protects. Industry
statistics show that the quota program is causing the demand for
peanuts to fall sharply. The quota system stifles freedom for farmers,
and it fosters a set of economic expectations that cannot be sustained
without continued government intervention. Moreover, failure to reform
this program costs consumers $500 million annually, and adds to the
cost of feeding programs for low-income Americans.
This program must be changed. As sponsors of this measure, however,
my colleagues and I recognize that the peanut program cannot be
repealed overnight. That is why we are proposing a fair transition
period to enable farmers and lenders to adjust their expectations to
the marketplace. Following completion of the phase-out period, the
peanut program will operate like most other agricultural commodities.
I am pleased that Senators DeWine, Chafee, Coats, Gregg, and Feingold
have joined Senator Lautenberg and I as original sponsors of this
measure, and I encourage my colleagues to support swift enactment of
this important legislation.

[[Page S12593]]

______

By Mr. TORRICELLI (for himself and Ms. Snowe)
S. 1536. A bill to amend the Public Health Service Act and Employee
Retirement Income Security Act of 1974 to require that group and
individual health insurance coverage and group health plans provide
coverage for qualified individuals for bone mass measurement (bone
density testing) to prevent fractures associated with osteoporosis and
to help women make informed choices about their reproductive and post-
menopausal health care, and to otherwise provide for research and
information concerning osteopor-
osis and other related bone diseases; to the Committee on Labor and
Human Resources.

the early detection and prevention of osteoporosis and related bone
diseases act of 1997

Mr. TORRICELLI. Mr. President, I rise today to introduce the Early
Detection and Prevention of Osteoporosis and Related Bone Diseases Act
of 1997 along with my colleague from Maine, Ms. Snowe.
Osteoporosis and other related bone diseases pose a major public
health threat. More than 28 million Americans, 80 percent of whom are
women, suffer from, or are at risk for, osteoporosis. Between three and
four million Americans suffer from related bone diseases like Paget's
disease or osteogenesis imperfecta. Today, in the United States, 10
million individuals already have osteoporosis and 18 million more have
low bone mass, placing them at increased risk.
Osteoporosis is often called the ``silent disease'' because bone loss
occurs without symptoms. People often do not know they have
osteoporosis until their bones become so weak that a sudden bump or
fall causes a fracture or a vertebra to collapse. Every year, there are
1.5 million bone fractures caused by osteoporosis. Half of all women,
and one-eighth of all men, age 50 or older, will suffer a bone fracture
due to osteoporosis.
Osteoporosis is a progressive condition that has no known cure; thus,
prevention and treatment are key. The Early Detection and Prevention of
Osteoporosis and Related Bone Diseases Act of 1997 seeks to combat
osteoporosis, and related bone diseases like Paget's disease and
osteogenesis imperfecta, in two ways.
First, the bill requires private health plans to cover bone mass
measurement tests for qualified individuals who are at risk for
developing osteoporosis. Bone mass measurement is the only reliable
method of detecting osteoporosis in its early stages. The test is non-
invasive and painless and is as predictive of future fractures as high
cholesterol or high blood pressure is of heart disease or stroke. This
provision is similar to a provision in the Balanced Budget Act of 1997
that requires Medicare coverage of bone mass measurements.
Second, the Early Detection and Prevention of Osteoporosis and
Related Bone Diseases Act authorizes $1,000,000 to fund an information
clearinghouse and $50,000,000 in each fiscal year 1999 through 2001 for
the National Institutes of Health to expand and intensify its effort to
combat osteoporosis and other bone-related diseases.
Funding for research on osteoporosis and related bone diseases is
severely constrained at key research institutes like the National
Institute on Aging. Further research is needed to improve prevention
and treatment of these devastating diseases.
Money spent now on prevention and treatment will help defray the
enormous costs of these diseases in the future. Currently, osteoporosis
costs the United States $13,000,000,000 every year. The average cost of
repairing a hip fracture, a common effect of osteoporosis, is $32,000.
Because osteoporosis is a progressive condition and affects primarily
aging individuals, reductions in the incidence or severity of
osteoporosis will likely significantly reduce osteoporosis-related
costs under the Medicare program.
Medical experts agree that osteoporosis and related bone diseases are
highly preventable. However, if the toll of these diseases is to be
reduced, the commitment to prevention and treatment must be
significantly increased. With increased research and access to
preventive testing, the future for definitive treatment and prevention
is bright.
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. 1536

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

SECTION 1. SHORT TITLE; FINDINGS.

(a) Short Title.--This Act may be cited as the ``Early
Detection and Prevention of Osteoporosis and Related Bone
Diseases Act of 1997''.
(b) Findings.--Congress makes the following findings:
(1) Nature of osteoporosis.--
(A) Osteoporosis is a disease characterized by low bone
mass and structural deterioration of bone tissue leading to
bone fragility and increased susceptibility to fractures of
the hip, spine, and wrist.
(B) Osteoporosis has no symptoms and typically remains
undiagnosed until a fracture occurs.
(C) Once a fracture occurs, the condition has usually
advanced to the stage where the likelihood is high that
another fracture will occur.
(D) There is no cure for osteoporosis, but drug therapy has
been shown to reduce new hip and spine fractures by 50
percent and other treatments, such as nutrition therapy, have
also proven effective.
(2) Incidence of osteoporosis and related bone diseases.--
(A) 28 million Americans have (or are at risk for)
osteoporosis, 80 percent of which are women.
(B) Osteoporosis is responsible for 1.5 million bone
fractures annually, including more than 300,000 hip
fractures, 700,000 vertebral fractures and 200,000 fractures
of the wrists.
(C) Half of all women, and one-eighth of all men, age 50 or
older will have a bone fracture due to osteoporosis;
(D) Between 3 and 4 million Americans have Paget's disease,
osteogenesis imperfecta, hyperparathyroidism, and other
related metabolic bone diseases.
(3) Impact of osteoporosis.--The cost of treating
osteoporosis is significant:
(A) The annual cost of osteoporosis in the United States is
$13.8 billion and is expected to increase precipitously
because the proportion of the population comprised of older
persons is expanding and each generation of older persons
tends to have a higher incidence of osteoporosis than
preceding generations.
(B) The average cost in the United States of repairing a
hip fracture due to osteoporosis is $32,000.
(C) Fractures due to osteoporosis frequently result in
disability and institutionalization of individuals.
(D) Because osteoporosis is a progressive condition and
affects primarily aging individuals, reductions in the
incidence or severity of osteoporosis, particularly for post
menopausal women before they become eligible for medicare,
has a significant potential of reducing osteoporosis-related
costs under the medicare program.
(4) Use of bone mass measurement.--
(A) Bone mass measurement is the only reliable method of
detecting osteoporosis at an early stage.
(B) Low bone mass is as predictive of future fractures as
is high cholesterol or high blood pressure of heart disease
or stroke.
(C) Bone mass measurement is a non-invasive, painless, and
reliable way to diagnose osteoporosis before costly fractures
occur.
(D) Under section 4106 of the Balanced Budget Act of 1997,
Medicare will provide coverage, effective July 1, 1998, for
bone mass measurement for qualified individuals who are at
risk of developing osteoporosis.
(5) Research on osteoporosis and related bone diseases.--
(A) Technology now exists, and new technology is
developing, that will permit the early diagnosis and
prevention of osteoporosis and related bone diseases as well
as management of these conditions once they develop.
(B) Funding for research on osteoporosis and related bone
diseases is severely constrained at key research institutes,
including the National Institute of Arthritis and
Musculoskeletal and Skin Diseases, the National Institute on
Aging, the National Institute of Diabetics and Digestive and
Kidney Diseases, the National Institute of Dental Research,
and the National Institute of Child Health and Human
Development.
(C) Further research is needed to improve medical knowledge
concerning--
(i) cellular mechanisms related to the processes of bone
resorption and bone formation, and the effect of different
agents on bone remodeling;
(ii) risk factors for osteoporosis, including newly
discovered risk factors, risk factors related to groups not
ordinarily studied (such as men and minorities), risk factors
related to genes that help to control skeletal metabolism,
and risk factors relating to the relationship of aging
processes to the development of osteoporosis;
(iii) bone mass measurement technology, including more
widespread and cost-effective techniques for making more
precise measurements and for interpreting measurements;
(iv) calcium (including bioavailability, intake
requirements, and the role of calcium in building heavier and
denser skeletons),

[[Page S12594]]

and vitamin D and its role as an essential vitamin in adults;
(v) prevention and treatment, including the efficacy of
current therapies, alternative drug therapies for prevention
and treatment, and the role of exercise; and
(vi) rehabilitation.
(D) Further educational efforts are needed to increase
public and professional knowledge of the causes of, methods
for avoiding, and treatment of osteoporosis.

SEC. 2. REQUIRING COVERAGE OF BONE MASS MEASUREMENT UNDER
HEALTH PLANS.

(a) Group Health Plans.--
(1) Public health service act amendments.--
(A) In general.--Subpart 2 of part A of title XXVII of the
Public Health Service Act, as amended by section 703(a) of
Public Law 104-204, is amended by adding at the end the
following new section:

``SEC. 2706. STANDARDS RELATING TO BENEFITS FOR BONE MASS
MEASUREMENT.

``(a) Requirements for Coverage of Bone Mass Measurement.--
A group health plan, and a health insurance issuer offering
group health insurance coverage, shall include (consistent
with this section) coverage for bone mass measurement for
beneficiaries and participants who are qualified individuals.
``(b) Definitions Relating to Coverage.--In this section:
``(1) Bone mass measurement.--The term `bone mass
measurement' means a radiologic or radioisotopic procedure or
other procedure approved by the Food and Drug Administration
performed on an individual for the purpose of identifying
bone mass or detecting bone loss or determining bone quality,
and includes a physician's interpretation of the results of
the procedure. Nothing in this paragraph shall be construed
as requiring a bone mass measurement to be conducted in a
particular type of facility or to prevent such a measurement
from being conducted through the use of mobile facilities
that are otherwise qualified.
``(2) Qualified individual.--The term `qualified
individual' means an individual who--
``(A) is an estrogen-deficient woman at clinical risk for
osteoporosis;
``(B) has vertebral abnormalities;
``(C) is receiving chemotherapy or long-term
gluococorticoid (steroid) therapy;
``(D) has primary hyperparathyroidism, hyperthyroidism, or
excess thyroid replacement; or
``(E) is being monitored to assess the response to or
efficacy of approved osteoporosis drug therapy.
``(c) Limitation on Frequency Required.--Taking into
account the standards established under section 1861(rr)(3)
of the Social Security Act, the Secretary shall establish
standards regarding the frequency with which a qualified
individual shall be eligible to be provided benefits for bone
mass measurement under this section. The Secretary may vary
such standards based on the clinical and risk-related
characteristics of qualified individuals.
``(d) Restrictions on Cost-Sharing.--
``(1) In general.--Subject to paragraph (2), nothing in
this section shall be construed as preventing a group health
plan or issuer from imposing deductibles, coinsurance, or
other cost-sharing in relation to bone mass measurement under
the plan (or health insurance coverage offered in connection
with a plan).
``(2) Limitation.--Deductibles, coinsurance, and other
cost-sharing or other limitations for bone mass measurement
may not be imposed under paragraph (1) to the extent they
exceed the deductibles, coinsurance, and limitations that are
applied to similar services under the group health plan or
health insurance coverage.
``(e) Prohibitions.--A group health plan, and a health
insurance issuer offering group health insurance coverage in
connection with a group health plan, may not--
``(1) deny to an individual eligibility, or continued
eligibility, to enroll or to renew coverage under the terms
of the plan, solely for the purpose of avoiding the
requirements of this section;
``(2) provide incentives (monetary or otherwise) to
individuals to encourage such individuals not to be provided
bone mass measurements to which they are entitled under this
section or to providers to induce such providers not to
provide such measurements to qualified individuals;
``(3) prohibit a provider from discussing with a patient
osteoporosis preventive techniques or medical treatment
options relating to this section; or
``(4) penalize or otherwise reduce or limit the
reimbursement of a provider because such provider provided
bone mass measurements to a qualified individual in
accordance with this section.
``(f) Rule of Construction.--Nothing in this section shall
be construed to require an individual who is a participant or
beneficiary to undergo bone mass measurement.
``(g) Notice.--A group health plan under this part shall
comply with the notice requirement under section 713(g) of
the Employee Retirement Income Security Act of 1974 with
respect to the requirements of this section as if such
section applied to such plan.
``(h) Level and Type of Reimbursements.--Nothing in this
section shall be construed to prevent a group health plan or
a health insurance issuer offering group health insurance
coverage from negotiating the level and type of reimbursement
with a provider for care provided in accordance with this
section.
``(i) Preemption.--
``(1) In general.--The provisions of this section do not
preempt State law relating to health insurance coverage to
the extent such State law provides greater benefits with
respect to osteoporosis detection or prevention.
``(2) Construction.--Section 2723(a)(1) shall not be
construed as superseding a State law described in paragraph
(1).''.
(B) Conforming amendment.--Section 2723(c) of such Act (42
U.S.C. 300gg-23(c)), as amended by section 604(b)(2) of
Public Law 104-204, is amended by striking ``section 2704''
and inserting ``sections 2704 and 2706''.
(2) ERISA amendments.--
(A) In general.--Subpart B of part 7 of subtitle B of title
I of the Employee Retirement Income Security Act of 1974, as
amended by section 702(a) of Public Law 104-204, is amended
by adding at the end the following new section:

``SEC. 713. STANDARDS RELATING TO BENEFITS FOR BONE MASS
MEASUREMENT.

``(a) Requirements for Coverage of Bone Mass Measurement.--
A group health plan, and a health insurance issuer offering
group health insurance coverage, shall include (consistent
with this section) coverage for bone mass measurement for
beneficiaries and participants who are qualified individuals.
``(b) Definitions Relating to Coverage.--In this section:
``(1) Bone mass measurement.--The term `bone mass
measurement' means a radiologic or radioisotopic procedure or
other procedure approved by the Food and Drug Administration
performed on an individual for the purpose of identifying
bone mass or detecting bone loss or determining bone quality,
and includes a physician's interpretation of the results of
the procedure. Nothing in this paragraph shall be construed
as requiring a bone mass measurement to be conducted in a
particular type of facility or to prevent such a measurement
from being conducted through the use of mobile facilities
that are otherwise qualified.
``(2) Qualified individual.--The term `qualified
individual' means an individual who--
``(A) is an estrogen-deficient woman at clinical risk for
osteoporosis;
``(B) has vertebral abnormalities;
``(C) is receiving chemotherapy or long-term
gluococorticoid (steroid) therapy;
``(D) has primary hyperparathyroidism, hyperthyroidism, or
excess thyroid replacement; or
``(E) is being monitored to assess the response to or
efficacy of approved osteoporosis drug therapy.
``(c) Limitation on Frequency Required.--The standards
established under section 2706(c) of the Public Health
Service Act shall apply to benefits provided under this
section in the same manner as they apply to benefits provided
under section 2706 of such Act.
``(d) Restrictions on Cost-Sharing.--
``(1) In general.--Subject to paragraph (2), nothing in
this section shall be construed as preventing a group health
plan or issuer from imposing deductibles, coinsurance, or
other cost-sharing in relation to bone mass measurement under
the plan (or health insurance coverage offered in connection
with a plan).
``(2) Limitation.--Deductibles, coinsurance, and other
cost-sharing or other limitations for bone mass measurement
may not be imposed under paragraph (1) to the extent they
exceed the deductibles, coinsurance, and limitations that are
applied to similar services under the group health plan or
health insurance coverage.
``(e) Prohibitions.--A group health plan, and a health
insurance issuer offering group health insurance coverage in
connection with a group health plan, may not--
``(1) deny to an individual eligibility, or continued
eligibility, to enroll or to renew coverage under the terms
of the plan, solely for the purpose of avoiding the
requirements of this section;
``(2) provide incentives (monetary or otherwise) to
individuals to encourage such individuals not to be provided
bone mass measurements to which they are entitled under this
section or to providers to induce such providers not to
provide such measurements to qualified individuals;
``(3) prohibit a provider from discussing with a patient
osteoporosis preventive techniques or medical treatment
options relating to this section; or
``(4) penalize or otherwise reduce or limit the
reimbursement of a provider because such provider provided
bone mass measurements to a qualified individual in
accordance with this section.
``(f) Rule of Construction.--Nothing in this section shall
be construed to require an individual who is a participant or
beneficiary to undergo bone mass measurement.
``(g) Notice under Group Health Plan.--The imposition of
the requirements of this section shall be treated as a
material modification in the terms of the plan described in
section 102(a)(1), for purposes of assuring notice of such
requirements under the plan; except that the summary
description required to be provided under the last sentence
of section 104(b)(1) with respect to such modification shall
be provided by not later than 60 days after the first day of
the first plan year in which such requirements apply.
``(h) Preemption.--
``(1) In general.--The provisions of this section do not
preempt State law relating to

[[Page S12595]]

health insurance coverage to the extent such State law
provides greater benefits with respect to osteoporosis
detection or prevention.
``(2) Construction.--Section 731(a)(1) shall not be
construed as superseding a State law described in paragraph
(1).''.
(B) Conforming amendments.--
(i) Section 731(c) of such Act (29 U.S.C. 1191(c)), as
amended by section 603(b)(1) of Public Law 104-204, is
amended by striking ``section 711'' and inserting ``sections
711 and 713''.
(ii) Section 732(a) of such Act (29 U.S.C. 1191a(a)), as
amended by section 603(b)(2) of Public Law 104-204, is
amended by striking ``section 711'' and inserting ``sections
711 and 713''.
(iii) The table of contents in section 1 of such Act is
amended by inserting after the item relating to section 712
the following new item:

``Sec. 713. Standards relating to benefits for bone mass measurement.
(b) Individual Health Insurance.--

(1) In general.--Part B of title XXVII of the Public Health
Service Act, as amended by section 605(a) of Public Law 104-
204, is amended by inserting after section 2751 the following
new section:

``SEC. 2752. STANDARDS RELATING TO BENEFITS FOR BONE MASS
MEASUREMENT.

``(a) In General.--The provisions of section 2706 (other
than subsection (g)) shall apply to health insurance coverage
offered by a health insurance issuer in the individual market
in the same manner as it applies to health insurance coverage
offered by a health insurance issuer in connection with a
group health plan in the small or large group market.
``(b) Notice.--A health insurance issuer under this part
shall comply with the notice requirement under section 713(g)
of the Employee Retirement Income Security Act of 1974 with
respect to the requirements referred to in subsection (a) as
if such section applied to such issuer and such issuer were a
group health plan.
``(c) Preemption.--
``(1) In general.--The provisions of this section do not
preempt State law relating to health insurance coverage to
the extent such State law provides greater benefits with
respect to osteoporosis detection or prevention.
``(2) Construction.--Section 2762(a) shall not be construed
as superseding a State law described in paragraph (1).''.
(2) Conforming amendments.--Section 2762(b)(2) of such Act
(42 U.S.C. 300gg-62(b)(2)), as added by section 605(b)(3)(B)
of Public Law 104-204, is amended by striking ``section
2751'' and inserting ``sections 2751 and 2752''.
(c) Effective Dates.--
(1) Group health plans.--The amendments made by subsection
(a) shall apply with respect to group health plans for plan
years beginning on or after January 1, 1999.
(2) Individual market.--The amendments made by subsection
(b) shall apply with respect to health insurance coverage
offered, sold, issued, renewed, in effect, or operated in the
individual market on or after such date.

SEC. 3. OSTEOPOROSIS RESEARCH.

Subpart 4 of part C of title IV of the Public Health
Service Act (42 U.S.C. 285d et seq.) is amended by adding at
the end the following new section:

``research on osteoporosis and related diseases

``Sec. 442A. (a) Expansion of Research.--The Director of
the Institute, the Director of the National Institute on
Aging, the Director of the National Institute of Diabetes and
Digestive and Kidney Diseases, the Director of the National
Institute of Dental Research, and the Director of the
National Institute of Child Health and Human Development
shall expand and intensify research on osteoporosis and
related bone diseases. The research shall be in addition to
research that is authorized under any other provision of law.
``(b) Mechanisms for Expansion of Research.--Each of the
Directors specified in subsection (a) shall, in carrying out
such subsection, provide for one or more of the following:
``(1) Investigator-initiated research.
``(2) Funding for investigators beginning their research
careers.
``(3) Mentorship research grants.
``(c) Specialized Centers of Research.--
``(1) In general.--The Director of the Institute, after
consultation with the advisory council for the Institute,
shall make grants to, or enter into contracts with, public or
nonprofit private entities for the development and operation
of centers to conduct research on osteoporosis and related
bone diseases. Subject to the extent of amounts made
available in appropriations Acts, the Director shall provide
for not less than three such centers.
``(2) Activities.--Each center assisted under this
subsection--
``(A) shall, with respect to osteoporosis and related bone
diseases--
``(i) conduct basic and clinical research;
``(ii) develop protocols for training physicians,
scientists, nurses, and other health and allied health
professionals;
``(iii) conduct training programs for such individuals;
``(iv) develop model continuing education programs for such
professionals; and
``(v) disseminate information to such professionals and the
public;
``(B) may use the funds to provide stipends for health and
allied health professionals enrolled in training programs
described in subparagraph (A)(iii); and
``(C) shall use the facilities of a single institution, or
be formed from a consortium of cooperating institutions,
meeting such requirements as may be prescribed by the
Director of the Institute.
``(3) Duration of support.--Support of a center under this
subsection may be for a period not exceeding 5 years. Such
period may be extended for one or more additional periods not
exceeding 5 years if the operations of such center have been
reviewed by an appropriate technical and scientific peer
review group established by the Director and if such group
has recommended to the Director that such period should be
extended.
``(d) Definition of Related Bone Diseases.--For purposes of
this section, the term `related bone diseases' includes--
``(1) Paget's disease, a bone disease characterized by
enlargement and loss of density with bowing and deformity of
the bones;
``(2) osteogenesis imperfecta, a familial disease marked by
extreme brittleness of the long bones;
``(3) hyperparathyroidism, a condition characterized by the
presence of excess parathormone in the body resulting in
disturbance of calcium metabolism with loss of calcium from
bone and renal damage;
``(4) hypoparathyroidism, a condition characterized by the
absence of parathormone resulting in disturbances of calcium
metabolism;
``(5) renal bone disease, a disease characterized by
metabolic disturbances from dialysis, renal transplants, or
other renal disturbances;
``(6) primary or postmenopausal osteoporosis and secondary
osteoporosis, such as that induced by corticosteroids; and
``(7) other general diseases of bone and mineral metabolism
including abnormalities of vitamin D.
``(e) Authorizations of Appropriations.--
``(1) National institute of arthritis and musculoskeletal
and skin diseases.--For the purpose of carrying out this
section through the National Institute of Arthritis and
Musculoskeletal and Skin Diseases, there are authorized to be
appropriated $17,000,000 for each of the fiscal years 1999
through 2001, and such sums as may be necessary for each
subsequent fiscal year.
``(2) National institute on aging.--For the purpose of
carrying out this section through the National Institute on
Aging, there are authorized to be appropriated $10,000,000
for each of the fiscal years 1999 through 2001, and such sums
as may be necessary for each subsequent fiscal year.
``(3) National institute of diabetes and digestive and
kidney diseases.--For the purpose of carrying out this
section through the National Institute of Diabetes and
Digestive and Kidney Diseases, there are authorized to be
appropriated $10,000,000 for each of the fiscal years 1999
through 2001, and such sums as may be necessary for each
subsequent fiscal year.
``(4) National institute of dental research.--For the
purpose of carrying out this section through the National
Institute of Dental Research, there are authorized to be
appropriated $5,000,000 for each of the fiscal years 1999
through 2001, and such sums as may be necessary for each
subsequent fiscal year.
``(5) National institute of child health and human
development.--For the purpose of carrying out this section
through the National Institute of Child Health and Human
Development, there are authorized to be appropriated
$5,000,000 for each of the fiscal years 1999 through 2001,
and such sums as may be necessary for each subsequent fiscal
year.
``(6) Specialized centers of research.--For the purpose of
carrying out subsection (c), there are authorized to be
appropriated $3,000,000 for each of the fiscal years 1999
through 2001, and such sums as may be necessary for each
subsequent fiscal year.
``(7) Relation to other provisions.--Authorizations of
appropriations under this subsection are in addition to
amounts authorized to be appropriated for biomedical research
relating to osteoporosis and related bone diseases under any
other provision of law.''.

SEC. 4. FUNDING FOR INFORMATION CLEARINGHOUSE ON
OSTEOPOROSIS, PAGET'S DISEASE, AND RELATED BONE
DISORDERS.

Section 409A(d) of the Public Health Service Act (42 U.S.C.
284e(d)) is amended by adding at the end the following
sentence: ``In addition to other authorizations of
appropriations available for the purpose of the establishment
and operation of the information clearinghouse under
subsection (c), there are authorized to be appropriated for
such purpose $1,000,000 for fiscal year 1999, and such sums
as may be necessary for each of the fiscal years 2000 and
2001.''.
______

By Mr. SANTORUM:
S. 1538. A bill to amend the Honey Research, Promotion, and Consumer
Information Act to improve the honey research, promotion, and consumer
information program, and for other purposes; to the Committee on
Agriculture, Nutrition, and Forestry.

[[Page S12596]]

THE HONEY RESEARCH, PROMOTION, AND CONSUMER INFORMATION ACT AMENDMENTS
ACT OF 1997

Mr. SANTORUM. Mr. President, I rise to offer a measure to revise the
Honey Research, Promotion and Consumer Information Act, the statute
under which the National Honey Board is organized.
Briefly, my bill would impose a penny per pound assessment on
handlers and importers of honey. This will increase the research budget
of the Honey Board by approximately $500,000; and enable the industry
to fund research programs aimed at addressing the serious problems
caused by viruses, parasitic mites, and Africanized bees.
The bill also changes the constitution of the National Honey Board to
improve packer representation on the board to reflect the imposition of
a new assessment on honey handlers. Under my amendments, packers would
have a total of four seats versus the current two. Producer and
importer representation on the board will not change.
In developing my legislation, I worked the American Beekeeping
Federation, which represents more than 1,400 honey producers
nationwide. The amendments have the support of a broad coalition
including producers, packers, and importers, and I encourage my
colleagues to join me in this effort by approving this legislation.
______

By Mr. CHAFEE:
S. 1537. A bill to suspend until December 31, 2002, the duty on
Benzoic acid, 2-{{1-{{(2,3-dihydro-2-oxo-1H-benzimidozal-5-yl) amino};
to the Committee on Finance.
S. 1539. A bill to suspend until December 31, 2002, the duty on N-{4-
(Aminocarbonyl)phenyl}4-{{(2,3-dihydro-2-oxo-1H-benzimidazol-5-
yl)amino) carbonyl}-2-oxopropyl}azo}benzamide; to the Committee on
Finance.
S. 1540. A bill to suspend until December 21, 2002, the duty on
Butanamide, N-(2,3-dihydro-2-oxo-1H-benzimidazol-5-yl)-3-oxo-2-{{-
(trifluoro-methyl)phenyl}azo}-; to the Committee on Finance.
S. 1541. A bill to suspend until December 31, 2002, the duty on 1,4-
Benzenedicarboxylic acid,2-{{1-{{(2,3-di-hydro - 2 - oxo - 1H -
benzimidazol - 5-yl)amino carbonyl}-2-oxopropyl}azo}-, dimethyl ester;
to the Committee on Finance.
S. 1542. A bill to suspend until December 31, 2002, the duty on
Butanamide, 2,2'- { 1-2,-ethanediylbis ( oxy-2,1-phenyleneazo) }bis{N-
(2,3-dihydro-2-oxo-1H-benzimidazol-5-yl)-3-oxo-; to the Committee on
Finance.
S. 1543. A bill to suspend until December 31, 2002, the duty on
Benzenesulfonic acid, 4-chloro-2-{{5-hydroxy-3-methyl-1- ( 3-
sulfophenyl)-1H-pyrazol-4-yl}azo}-5-methyl-.calcium salt (1:1); to the
Committee on Finance.
S. 1544. A bill to suspend until December 31, 2002, the duty on 4 -
{{5-{{{4-(Aminocarbonyl)phenyl } amino } carbonyl } -2-
methoxyphenyl}azo}-N-(5-chloro-2, 4-dimethozyphenyl) -3-
hydroxynaphthalene-2-carboxamide; to the Committee on Finance.
S. 1545. A bill to suspend until December 31, 2002, the duty on
Benzenesulfonic acid, 4-{{3-{{2-hydroxy-3-{{4-methoxyphenyl ) amino }
carbonyl } -1-naphtha-lenyl}azo} -4-methylbenzoyl}amino}-, calcium salt
(2:1); to the Committee on Finance.
S. 1546. A bill to suspend until December 31, 2002, the duty on
Butanamide, 2,2'-{3,3'-dichloro{1,1'-biphenyl} -4,4'-diyl)bis(azo)
}bis{N-(2,3-dihydro-2-oxo-1H-benzimidazol-5yl)-3-oxo; to the Committee
on Finance.
S. 1547. A bill to suspend until December 31, 2002, the duty on
Butanamide, N,N'-(3,3'dimethyl{1,1'-byphenyl } -4,4' -diyl ) bis { 2,4-
dichlorophenyl)azo}-3-oxo-; to the Committee on Finance.
S. 1548. A bill to suspend until December 31, 2002, the duty on N-
(2,3-Dihydro-2-oxo-1H-benzimidazol-5-yl)-5-methyl-4-
{(methylamino)sulphonyl}phenyl}azo}naphthalene-2-carboxaminde; to the
Committee on Finance.
S. 1549. A bill to suspend until December 31, 2002, the duty on
Benzoic acid, 2-{{3-{{(2,3-dihydro-2-oxo-1H-1H-benzimidazol-5-
yl)amino}carbonyl}-2-hydroxyl-1-naphthalenyl}azo}-, butyl ester; to the
Committee on Finance.
S. 1550. A bill to suspend until December 31. 2002, the duty on
Benzoic acid, 4-{{(2,5-dichlorophenyl ) amino}carbonyl}-2{{2-hydroxy-3-
{{(2-methoxypheny)amino}carbonyl}-1-naphthalenyl}-, methyl ester; to
the Committee on Finance.

duty suspension legislation

Mr. CHAFEE. Mr. President, today I am introducing 13 bills to suspend
the duty on the importation of certain products that are used by
manufacturers in my home state of Rhode Island.
The products in question are organic replacements for colorants that
use heavy metals--such as lead, molybdenum, chrome, and cadmium--in the
plastics and coatings industries. Heavy metal colorants traditionally
have been used in the coloration of plastics and coatings, especially
where the applications are subjected to high heat, or where high
weatherfastness or lightfastness are required. Until recently, finding
substitutes for these heavy metal-based products was difficult.
However, thanks to new formulations, a number of organic products have
proved themselves to be satisfactory substitutes.
Reducing our reliance on heavy metal colorants makes sense
environmentally. However, none of the organic substitutes in question
are produced in the United States. Thus, our producers have no choice
but to import the substitutes and pay the requisite import taxes, which
range from 6.6 to 14.6 percent. The total price tag associated with
these duties, while relatively small in the context of our federal
budget, translates into a considerable business cost to the importing
manufacturers. The added cost hurts their ability to compete, and thus
their ability to maintain their workforce. Yet, given that there is no
domestic industry producing these substitutes, the duties serve little
purpose.
The package of bills I am introducing today would remedy this
situation by suspending the duty on these thirteen products. As I say,
none of these organic substitutes are produced in the United States,
and therefore lifting the current duties will not result in harm to any
domestic industry. Rather, suspending the duties will allow our
domestic manufacturers to reduce costs, thus maintaining U.S.
competitiveness and safeguarding Rhode Island jobs.
This is a critical point. I feel strongly that we in Rhode Island
should do all we can to keep the state's economy going by creating
jobs, encouraging business activity, and spurring new growth. These
bills will help contribute to a productive manufacturing sector in
Rhode Island, and aid our employers in keeping their costs down and
their sales--and employment--up.
It is my hope that by introducing this package of legislation now,
there will be ample time for review and comment on each bill, and that
as a result, should the Senate take up comprehensive duty suspension
legislation next year, these provisions will be ready for inclusion.
______

By Mr. CAMPBELL:
S. 1552. A bill to provide for the conveyance of an unused Air Force
housing facility in La Junta, Colorado, to the city of La Junta; to the
Committee on Armed Services.

the la junta air base land conveyance act of 1997

Mr. CAMPBELL. Mr. President, by way of legislation, I offer my
support to the city of La Junta, Colorado, for its innovative and
impressive response to the challenges facing the Lower Arkansas Valley.
City officials have seized a unique opportunity to alleviate La Junta's
housing crisis, expand the local Head Start program and increase access
to child care, and solve Otero Junior College's dormitory problems.
The city of La Junta, in conjunction with Otero Junior College, has
proposed to take over the recently closed La Junta Air Base family
housing site. Until one year ago, when it was farmed out to a civilian
defense contractor, the Air Force's test range for its bomber pilots
was housed in La Junta. Since then, several federal agencies have
expressed interest in the site, but none has asserted their formal
desire to reuse the facility.
Further, taxpayers are spending nearly $100,000 annually to maintain
an empty facility, while the city and residents of La Junta are losing
out on a significant supplement to the local tax

[[Page S12597]]

base. The reuse plan I am endorsing provides for a self-sustaining and
revenue generating housing and local services site, which is a well
developed and cooperative solution to some very real local concerns.
Given the lack of any formal initiative on the part of a federal
agency, which would be given priority consideration, I support the
efforts of the city. Our college, Congressman Bob Schaffer,
representing Colorado's 4th congressional district, has introduced
legislation in the House of Representatives to convey the unused Air
Force housing facility to the city of La Junta. Today, I am introducing
a companion measure in the Senate.
It is my hope that this bill will be referred to the appropriate
committee and receive expedited consideration through next year's
authorizing and appropriations process.
______

By Mr. D'AMATO (for himself and Mr. Moynihan):
S. 1553. A bill to amend the Marine Protection, Research, and
Sanctuaries Act of 1972 with respect to the dumping of dredged material
in Long Island Sound, and for other purposes; to the Committee on
Environment and Public Works.

the long island sound preservation and protection act

Mr. D'AMATO. Mr. President, I rise today to introduce legislation
along with my friend and colleague, Senator Moynihan, that will help
guarantee that one of our Nation's most important estuaries is no
longer used as a dumping ground for polluted dredged material. Long
Island Sound is a spectacular body of water located between Long
Island, New York and the State of Connecticut. Unfortunately, past
dumping of dredged material of questionable environmental impact has
occurred in the sound. It is high time that Congress put an end to any
future, willful pollution of the sound.
The legislation that we are introducing today will prevent any
individual of any government agency from randomly dumping sediments
into the ecologically sensitive sound. Specifically, the legislation
prevents all sediments that contain any constituents prohibited as
other than trace contaminants, as defined by federal regulations, from
being dumped into either Long Island Sound or Block Island Sound.
Exceptions to the act can be made only in circumstances where the
Administrator of the Environmental Protection Agency shows that the
material will not cause undesirable effects to the environment of
marine life.
In the fall of 1995, the U.S. Navy dumped over 1 million cubic yards
of dredged material from the Thames River into the New London dump site
located in the sound. Independent tests of that sediment indicated that
contaminants were present in that dredged material that now lies at the
bottom of the sound's New London dump site--contaminants such as
dioxin, cadmium, pesticides, polyaromatic hydrocarbons, PCB's, and
mercury. Right now, there is a question as to the long-term impact this
material will have on the aquatic life and the environment in that area
of the ocean. Such concerns should not have to occur. It has taken
years to come as far as we have in cleaning up Long Island Sound--we
should not jeopardize those gains by routinely allowing the dumping of
polluted sediments in these waters.

Vast amounts of federal, state, and local funds have been spent in
the State of New York in the last quarter century combating pollution
in the sound. However, at times over the last 25 years, we have looked
the other way when it comes to dumping in the sound. Such actions are
counter-productive in our efforts to restore the sound for recreational
activities such as swimming and boating as well as the economic
benefits of sportfishing and the shellfish industry--all of which bring
more than $5.5 billion to the region each year.
New Yorkers realize the importance of the sound and are stepping up
their efforts to make sure it is cleaned up. New York voters approved
an environmental bond initiative that, among other things, commits $200
million for sewage treatment plant upgrades, habitat restoration, and
nonpoint source pollution controls on Long Island Sound. New York is
doing its part; it is time now to get the support of the federal
government. With the actions taken by New York, and with the passage of
the legislation Senator Moynihan and I are introducing, I am confident
that Long Island Sound will move steadily forward on the road to
recovery. I urge my colleagues to join us in cosponsoring this bill,
and I encourage its swift passage in the Senate.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 1553

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 ``Long Island Sound
Preservation and Protection Act of 1997''.

SEC. 2. DUMPING OF DREDGED MATERIALS IN LONG ISLAND SOUND.

Section 106 of the Marine Protection, Research, and
Sanctuaries Act of 1972 (33 U.S.C. 1416) is amended by
striking subsection (f) and inserting the following:
``(f) Dumping of Dredged Material in Long Island Sound.--
``(1) Prohibition.--No dredged material from any Federal or
non-Federal project in a quantity exceeding 25,000 cubic
yards that contains any of the constituents prohibited as
other than trace contaminants (as defined by the Federal
ocean dumping criteria set forth in section 227.6 of title
40, Code of Federal Regulations) may be dumped in Long Island
Sound (including Fishers Island Sound) or Block Island Sound,
except in a case in which it is demonstrated to the
Administrator, and the Administrator certifies by publication
in the Federal Register, that the dumping of the dredged
material containing the constituents will not cause
significant undesirable effects, including the threat
associated with bioaccumulation of the constituents in marine
organisms.
``(2) Compliance with other requirements.--In addition to
other provisions of law and notwithstanding the specific
exclusion relating to dredged material of the first sentence
in section 102(a), any dumping of dredged material in Long
Island Sound (including Fishers Island Sound) or Block Island
Sound from a Federal project pursuant to Federal
authorization, or from a dredging project by a non-Federal
applicant, in a quantity exceeding 25,000 cubic yards, shall
comply with the requirements of this Act, including the
criteria established under the second sentence of section
102(a) relating to the effects of dumping.
``(3) Relation to other law.--Subsection (d) shall not
apply to this subsection.''.
______

By Mr. HATCH (for himself and Mr. Lieberman):
S. 1554. A bill to provide for relief from excessive punitive damage
awards in cases involving primarily financial loss by establishing
rules for proportionality between the amount of punitive damages and
the amount of economic loss; to the Committee on the Judiciary.

The Fairness in Punitive Damages Awards Act

Mr. HATCH. Mr. President, I rise today to introduce, along with
Senator Lieberman, the Fairness in Punitive Damages Awards Act. In
general, this bill limits the amount of punitive damages that may be
awarded in certain civil actions, primarily financial injury lawsuits,
to three times the amount awarded to the claimant for economic loss or
$250,000, whichever is greater.
These are cases where the claims essentially arise from breach of
contract or insurance ``bad-faith'' or fraud injuries. The punitive
damages limitation provision also excludes awards in cases where death,
loss of limb, bodily harm, or physical injury occur. It generally does
not encompass products liability and physical harm tort cases--cases
where supporters of punitive damage awards contend that exemplary
damages are needed to deter reckless behavior.
Thus, what sets this bill apart from previous measures is that it has
been narrowly tailored to address concerns raised by the Administration
and opponents of punitive damages limitations bills. We hope to attract
bipartisan support because of the narrow scope of the bill, and, more
significantly, because the bill addresses a major impediment to
economic growth--runaway punitive damage awards, particularly in
financial injury cases.
It is beyond doubt that our civil justice system is being plagued by
an epidemic of punitive damage awards. In recent testimony before the
Judiciary Committee, former Assistant Attorney General Theodore Olson
noted that throughout the 19th until the mid-20th century, punitive
damages were quite rare. ``For example, the highest punitive damages
award affirmed on appeal

[[Page S12598]]

in California through the 1950's was $10,000. But the punitive damage
landscape began to change dramatically in the 1960's. California's
record for punitive damage awards affirmed on appeal soared to $15
million in the 1980's, an increase of 1,500 fold in just 30 years.'' In
Alabama, according to Olson, an aggregate of only $409,000 in punitive
damages had been affirmed on appeal during the period 1974-1978. The
comparable total just 15 years later skyrocketed to $90 million.
Indeed, punitive damage lawyers have largely succeeded in taking over
the civil justice compensation system. In 1960, according to a Rand
study, punitive damages accounted for just 2% of total damages in civil
cases in San Francisco, California. Thirty years later, according to
Rand, punitive damages accounted for an amazing 59% of all damages in
financial injury cases, and an even more amazing 80% in Alabama.
And the size of these awards is staggering and, I must add,
irrational. Take the recent CSX Railroad case. Even though a federal
probe found the railroad blameless in a tank car explosion on CSX owned
tracks which caused relatively minor harm to some 20 plaintiffs in
Louisiana, a state jury awarded $2.3 million in compensatory and $2.5
billion in punitive damages against CSX. Although the Louisiana Supreme
Court at least temporarily barred this irrational verdict--because
under Louisiana law no verdict for damages may be made until all the
underlying claims are decided--a far more common practice is for courts
to halve or reduce the punitive portion of the award. Of course, half
of $2.5 billion is still a staggering amount to pay for any private
entity. From coffee spills at McDonald's to medical malpractice, in the
words of Morton Kondracke in a recent article in Roll Call, ``trial
lawyers reap exorbitant profits by trolling for clients and convincing
juries to sock it to supposedly deep-pocketed defendants. Consumers pay
the bill as companies pass on their massive insurance premiums through
higher prices.''

Indeed, the very efficiency of the American market has been weakened
by these trends. Certainly, increased litigation and unnecessarily
large punitive damage awards have increased the price of doing
business. Undoubtedly, these costs have been passed on to consumers and
have led to a decrease in productivity and a rise in unemployment. This
is supported by a fairly recent study done by Representative and law
professor Tom Campbell and other scholars, under the aegis of Stanford
University, which demonstrated that in jurisdictions that reform the
civil liability process--including placing caps on punitive damages--
productivity and employment rise.
Furthermore, untenable jury verdicts create what Rand calls a
``shadow effect'' whereby verdicts totaling tens of billions of dollars
send signals as to what other juries might do. Thousands of cases are
settled, regardless of their merits, for fear of irrational verdicts.
As a result of the shadow effect, consumers nationwide have been
adversely affected through the withdrawal of products, producers,
services, and service providers from the marketplace, and from
excessive liability costs passed on to consumers through higher prices.
But the worst cost to our society is the delegitimization of the
judicial process as a means of dispute resolution. Litigation today is
often seen as an unpredictable ``crap shoot,'' where awards are
rendered--not upon justice--but upon envy (who has the ``deep
pockets'') or upon blatant emotionalism. So why not sue? Why not spin
the wheel? Passage of this bill will help to ameliorate this
misconception and restore faith in our civil justice system--which I
believe is fundamentally sound.
Another reason for bipartisan support for this bill, one that I
anticipate will attract many of our colleagues to the bill, is that we
have addressed specific concerns which the Administration has expressed
about previous bills. You may recall that last year when President
Clinton vetoed the products liability bill, he claimed that the bill
would protect drunk drivers and terrorists. Our bill will not apply to
any case where the injury was caused by a person who was committing a
crime of violence, an act of terrorism, a hate crime, a felony sexual
offense, or that occurred when the defendant was under the influence of
alcohol or drugs. These exceptions, combined with the bill's
qualification that excludes cases where an individual has suffered a
permanent physical injury or impairment, will ensure that this bill
will not limit punitive damages in cases where such egregious conduct
has occurred or where a serious injury has been inflicted.
Finally, we have included in the bill a provision specifically
designed to protect small businesses, which form the backbone of Utah's
and our country's economy. Excessive, unpredictable, and often
arbitrary punitive damage awards jeopardize the financial well-being of
many individuals and companies, particularly the Nation's small
businesses. Under this bill, if the claim for damages is against an
individual whose net worth is less than $500,000 or against a business
with less than 25 full-time employees, then punitive damages are
limited to the lesser of 3 times the economic loss or $250,000.
Establishing a rule of proportionality between the amount of punitive
damages awarded and the amount of economic damages would be fair to
both plaintiffs and defendants. In addition, we will take a step
towards resolving the constitutional objection, raised by the United
States Supreme Court last year in BMW of North America v. Gore, to
punitive damages that are grossly excessive in relation to the harm
suffered.
Mr. President, we must restore rationality, certainty, and fairness
to the award of punitive damages. This bill is an important step in
that direction. I urge my colleagues to join me in cosponsoring this
legislation and encourage the Senate to act expeditiously on this
important bill.
Mr. President, I ask unanimous consent that the entire text of the
bill be placed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 1554

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 ``Fairness in Punitive Damage
Awards Act''.

SEC. 2. FINDINGS AND PURPOSES.

(a) Findings.--Congress finds that--
(1) punitive damage awards in jury verdicts in financial
injury cases are a serious and growing problem, and according
to a Rand Institute for Civil Justice study in 1997 of
punitive damage verdicts from calendar years 1985 through
1994 in States that represent 25 percent of the United States
population--
(A) nearly 50 percent of all punitive damage awards are
made in financial injury cases (those in which the plaintiff
is alleging a financial injury only and is not alleging
injuries to either person or property);
(B) punitive damages are awarded in 1 in every 7 financial
injury verdicts overall and 1 in every 5 financial injury
cases in the State of California;
(C) between calendar years 1985 through 1989 and calendar
years 1990 through 1994, the average punitive damage verdict
in financial injury cases increased from $3,400,000 to
$7,600,000;
(D) between calendar years 1985 through 1989 and calendar
years 1990 through 1994, the award of such damages at the
90th percentile increased from $3,900,000 to $12,100,000;
(E) between calendar years 1985 through 1989 and calendar
years 1990 through 1994, the total amount of punitive damages
awarded increased from $1,200,000,000 to $2,300,000,000, for
a 10-year total of $3,500,000,000;
(F) punitive damages represent a very large percentage of
total damages awarded in all financial injury verdicts,
increasing from 44 percent to 59 percent during the period
analyzed; and
(G) in the State of Alabama, punitive damages represent 82
percent of all damages awarded in financial injury cases;
(2)(A) punitive damage verdicts are only the tip of the
iceberg because only a small percentage of all complaints
filed (1.6 percent according to a Department of Justice study
in 1995) result in a jury verdict; and
(B) the Rand Institute of Civil Justice calls the impact of
these verdicts on settlements the ``shadow effect'' of
punitive damages;
(3) excessive, unpredictable, and often arbitrary punitive
damage awards have a direct and undesirable effect on
interstate commerce by increasing the cost and decreasing the
availability of goods and services;
(4) as a result of excessive, unpredictable, and often
arbitrary punitive damage awards, consumers have been
adversely affected through the withdrawal of products,
producers, services, and service providers from the
marketplace, and from excessive liability costs passed on to
consumers through higher prices;
(5) excessive, unpredictable, and often arbitrary punitive
damage awards jeopardize the financial well-being of many
individuals and companies, particularly the Nation's small
businesses, and adversely affect government and taxpayers;

[[Page S12599]]

(6) individual State legislatures can create only a partial
remedy to address these problems because each State lacks the
power to control the imposition of punitive damages in other
States;
(7) it is the constitutional role of the national
Government to remove barriers to interstate commerce and to
protect due process rights;
(8) there is a need to restore rationality, certainty, and
fairness to the award of punitive damages in order to protect
against excessive, arbitrary, and uncertain awards;
(9) establishing a rule of proportionality, in cases that
primarily involve financial injury, between the amount of
punitive damages awarded and the amount of compensatory
damages, as 15 States have established, would--
(A) be fair to both plaintiffs and defendants; and
(B) address the constitutional objection of the United
States Supreme Court in BMW of North America v. Gore 116 S.
Ct. 1589 (1996) to punitive damages that are grossly
excessive in relation to the harm suffered; and
(10) permitting a maximum for each claimant recovery for
punitive damages of the greater of 3 times the amount of
economic loss or $250,000 is a balanced solution that would
reduce grossly excessive punitive damage awards by as much as
40 percent, according to the Rand Institute for Civil
Justice.
(b) Purposes.--Based upon the powers contained in Article
I, section 8, clause 3 and section 5 of the 14th amendment of
the United States Constitution, the purposes of this Act are
to--
(1) promote the free flow of goods and services and to
lessen burdens on interstate commerce; and
(2) uphold constitutionally protected due process rights by
placing reasonable limits on damages over and above the
actual damages suffered by a claimant.

SEC. 3. DEFINITIONS.

For purposes of this Act, the term--
(1) ``act of terrorism'' means any activity that--
(A)(i) is a violation of the criminal laws of the United
States or any State; or
(ii) would be a criminal violation if committed within the
jurisdiction of the United States or any State; and
(B) appears to be intended to intimidate or coerce a
civilian population, to influence the policy of a government
by intimidation or coercion, or to affect the conduct of a
government by assassination or kidnaping;
(2) ``claimant''--
(A) means any person who brings a civil action that is
subject to this Act and any person on whose behalf such an
action is brought; and
(B) includes--
(i) a claimant's decedent if such action is brought through
or on behalf of an estate; and
(ii) a claimant's legal guardian if such action is brought
through or on behalf of a minor or incompetent;
(3) ``economic loss'' means objectively verifiable monetary
losses including medical expenses, loss of earnings, burial
costs, loss of use of property, costs of repair or
replacement, costs of obtaining substitute domestic services,
loss of employment, and loss of business or employment
opportunities, to the extent such recovery is allowed under
applicable Federal or State law;
(4) ``harm'' means any legally cognizable wrong or injury
for which punitive damages may be imposed;
(5) ``interstate commerce'' means commerce among the
several States or with foreign nations, or in any territory
of the United States or in the District of Columbia, or
between any such territory and another, or between any such
territory and any State or foreign nation, or between the
District of Columbia and any State or territory or foreign
nation;
(6) ``person'' means any individual, corporation, company,
association, firm, partnership, society, joint stock company,
or any other entity (including any governmental entity);
(7) ``punitive damages'' means damage awarded against any
person to punish or deter such person, or others, from
engaging in similar behavior in the future; and
(8) ``qualified charity'' means any organization exempt
from filing information returns pursuant to section 6033(a)
of the Internal Revenue Code of 1986 as that exemption exists
on the effective date of this Act.

SEC. 4. APPLICABILITY.

(a) General Rule.--
(1) Civil actions covered.--Except as provided in
subsection (b), this Act applies to any civil action brought
in any Federal or State court where such action affects
interstate commerce, charitable or religious activities, or
implicates rights or interests that may be protected by
Congress under section 5 of the 14th amendment of the United
States Constitution and where the claimant seeks to recover
punitive damages under any theory for harm that did not
result in death, serious and permanent physical scarring or
disfigurement, loss of a limb or organ, or serious and
permanent physical impairment of an important bodily
function. Punitive damages may, to the extent permitted by
applicable State law, be awarded against a person in such a
case only if the claimant establishes that the harm that is
the subject of the action was proximately caused by such
person. Notwithstanding any other provision of this Act,
punitive damages may, to the extent permitted by applicable
State law, be awarded against a qualified charity only if the
claimant established by clear and convincing evidence that
the harm that is the subject of the action was proximately
caused by an intentionally tortious act of such qualified
charity.
(2) Question of law.--What constitutes death, serious and
permanent physical scarring or disfigurement, loss of a limb
or organ, or serious and permanent physical impairment of an
important bodily function shall be a question of law for the
court.
(b) Exceptions.--
(1) In general.--The provisions of this Act shall not apply
to any person in a civil action described in subsection
(a)(1) if the misconduct for which punitive damages are
awarded against that person--
(A) constitutes a crime of violence (as that term is
defined in section 16 of title 18, United States Code) for
which the defendant has been convicted in any court;
(B) constitutes an act of terrorism for which the defendant
has been convicted in any court;
(C) constitutes a hate crime (as that term is used in the
Hate Crime Statistics Act, Public Law 101-275; 104 Stat. 140;
28 U.S.C. 534 note) for which the defendant has been
convicted in any court;
(D) occurred at a time when the defendant was under the
influence (as determined pursuant to applicable State law) of
intoxicating alcohol or any drug that may not lawfully be
sold without a prescription and had been taken by the
defendant other than in accordance with the terms of a lawful
prescription; or
(E) constitutes a felony sexual offense, as defined by
applicable Federal or State law, for which the defendant has
been convicted in any court.
(2) Question of law.--The applicability of this subsection
shall be a question of law for determination by the court.
The liability of any other person in such an action shall be
determined in accordance with this Act.

SEC. 5. PROPORTIONAL AWARDS.

(a) Amount.--
(1) In general.--The amount of punitive damages that may be
awarded to a claimant in any civil action that is subject to
this Act shall not exceed the greater of--
(A) 3 times the amount awarded to the claimant for economic
loss; or
(B) $250,000.
(2) Special rule.--
(A) In general.--Notwithstanding paragraph (1), in any
civil action that is subject to this Act against an
individual whose net worth does not exceed $500,000 or
against an owner of an unincorporated business, or any
partnership, corporation, association, unit of local
government, or organization that has fewer than 25 full-time
employees, the amount of punitive damages shall not exceed
the lesser of--
(i) 3 times the amount awarded to the claimant for economic
loss; or
(ii) $250,000.
(B) Applicability.--For purposes of determining the
applicability of this paragraph to a corporation, the number
of employees of a subsidiary of a wholly owned corporation
shall include all employees of a parent corporation or any
subsidiary of that parent corporation.
(b) Application of Limitations by the Court.--The
limitations in subsection (a) shall be applied by the court
and shall not be disclosed to the jury.

SEC. 6. PREEMPTION.

Nothing in this Act shall be construed to--
(1) create a cause of action for punitive damages;
(2) supersede or alter any Federal law;
(3) preempt or supersede any Federal or State law to the
extent such law would further limit the award of punitive
damages; or
(4) modify or reduce the ability of courts to order
remittitur.

SEC. 7. FEDERAL CAUSE OF ACTION PRECLUDED.

The district courts of the United States shall not have
jurisdiction pursuant to this Act based on section 1331 or
1337 of title 28, United States Code.

SEC. 8. EFFECTIVE DATE.

This Act applies to any civil action described in section 4
that is commenced on or after the date of enactment of this
Act, without regard to whether the harm that is the subject
of the action or the conduct that caused the harm occurred
before such date of enactment.
______

By Mr. FAIRCLOTH:
S. 1555. A bill to amend the Internal Revenue Code of 1986 to
restructure and reform the Internal Revenue Service, and for other
purposes; to the Committee on Finance.

the internal revenue service oversight, restructuring and tax code
elimination act of 1997

Mr. FAIRCLOTH. Mr. President, today I am introducing S. 1555, the
``Internal Revenue Service Oversight, Restructuring and Tax Code
Elimination Act of 1997.'' This legislation establishes an oversight
board composed of private citizens to review the policies and practices
of our nation's tax collection agency. The measure also eliminates the
existing tax code by December 31, 2000, and eliminates the Internal
Revenue Service by the end of the Year 2000 fiscal year.
Mr. President, the American people have been telling this Congress
that all

[[Page S12600]]

is not right at the Internal Revenue Service, and it is time for the
Congress to do something about it. Of course, no one enjoys paying
their taxes, but the American people voluntarily comply with the tax
code to a degree that is the envy of governments around the world. They
do so because they want to do what is right. They deserve to be treated
fairly, and they deserve a tax system that supports working families,
not one that punishes them.
This past September, the Senate Committee on Finance held hearings in
which taxpayers described the many abuses they have suffered at the
hands of the Internal Revenue Service. The general theme of those
hearings was an agency which has become arrogant and unresponsive to
the American people, ruining businesses and causing considerable
suffering to the men and women who were unlucky enough to be the focus
of IRS scrutiny. For most Americans, those hearings were an all too
familiar reflection of a painful episode in their own lives.
Mr. President, something must be done about the Internal Revenue
Service and the massive Internal Revenue Code of 1986. Our tax code is
incomprehensible to all but a few tax attorneys who make their living
off of the current chaos created by our tax laws. What is worse, the
agency charged with enforcing our tax laws has developed procedures to
target their auditing efforts at middle class taxpayers.
The time has come to get rid of the I.R.S., get rid of our
nightmarish tax code, and create an oversight board composed entirely
of citizens from outside of the I.R.S. to keep watch over that agency
until the date when it ceases to exist.
To carry out those objectives, I have introduced S. 1555, the
Internal Revenue Service Oversight, Restructuring and Tax Code
Elimination Act of 1997. This legislation establishes an oversight
board composed of nine members, each of whom are from the private
sector, and at least one of whom must be an owner or manager of a small
business. This oversight board will be responsible for reviewing the
policies and practices of the Internal Revenue Service.
Among the specific areas the board will oversee are the agency's
auditing procedures and collections practices, as well as the agency's
procurement policies for information technology. Procurement at the
I.R.S. has resulted in outrageous waste and misuse of taxpayer funds,
such as the decision to spend nearly $4 billion to develop a new
computer system, which officials now concede has been a complete
failure.
Creating an oversight board to rein in the IRS is just the first
step. S. 1555 also calls for the tax code to be terminated as of
December 31, 2000, with exceptions for Social Security and Railroad
Retirement.

My bill sets out several guidelines for the structure of a new tax
code. The new code should apply a low rate to all Americans; require a
supermajority of both Houses of Congress to raise taxes; provide tax
relief for working Americans; protect the rights of taxpayers and
reduce tax collection abuses; eliminate the bias against savings and
investment; promote economic growth and job creation; encourage rather
than penalize marriage and families; protect the integrity of Social
Security and Medicare; and provide for a taxpayer-friendly collections
process to replace the Internal Revenue Service.
Mr. President, it is time to get rid of the I.R.S. and the massive
and incomprehensible tax code in favor of a fairer, simpler system. I
firmly believe that we will never be rid of our tax code until Congress
sets out a specific deadline for its elimination. That is what my bill
does. We should begin the national debate now over the form a new tax
code should take. I have laid out a series of guidelines in this
legislation for the new tax code. Without the current tax code, there
is no need for the I.R.S., and it is my view that this agency is too
entrenched in its bureaucratic ways to be reformed. It should simply be
eliminated. Until the I.R.S. is gone, an oversight board is badly
needed to protect the interests of the taxpayers, and act as a watchdog
over this unaccountable agency. I urge my colleagues to support this
legislation.
______

By Mr. LEAHY:
S. 1556. A bill to improve child nutrition programs, and for other
purposes; to the Committee on Agriculture, Nutrition, and Forestry.

the child nutrition initiatives act

Mr. LEAHY. Mr. President, as the ranking member of the nutrition
subcommittee, I want to make very clear that I am looking forward to
working with the chairman of the Agriculture, Nutrition and Forestry
Committee, Senator Lugar, with the ranking member, Senator Harkin, and
with the chairman of the nutrition subcommittee, Senator McConnell, on
the child nutrition reauthorization bill next year.

When I was chairman of that committee, and continuing under the helm
of Senator Lugar, the Agriculture Committee worked together in a
bipartisan fashion on nutrition legislation.
I am proud of all the members of that committee who over the years
worked together on improving nutrition programs for children. I also
had the privilege of working with the former majority leader--Senator
Bob Dole--on many child nutrition matters.
The bill that I am introducing today does not represent my effort on
a reauthorization bill--I will work on that bill with members of the
committee, including the three leadership Members mentioned above.
Rather, this bill indicates changes that should be enacted into law
regardless of other actions the Congress might take regarding child
nutrition reauthorization.
It includes child nutrition provisions that were included, with some
modifications, in the Senate-passed research bill--which passed the
Senate by unanimous consent.
Over the recess I intend to consult with nutrition leaders in
Vermont, the Under Secretary for Food and Consumer Services, Shirley
Watkins, Secretary Glickman, national nutrition advocates and local
program directors to gather information for the reauthorization effort.
Also, I urge the President to include sufficient funding in his
budget proposals to fund this bill as well as other nutrition
initiatives which the Secretary and the Under Secretary for Food and
Consumer Services are working to develop.
I must compliment Under Secretary Shirley Watkins for the great job
she has done so far. She has taken strong command of an agency that was
adrift. Also, I continue to appreciate Secretary Dan Glickman's
leadership role in the administration regarding nutrition programs and
the strong support of his chief of staff, Greg Frazier.
I note also that Senator Tim Johnson has introduced a school lunch
program bill. I will carefully study that bill over the recess. I will
also look at the study conducted by the Minnesota Department of
Children, Families and Learning called Energizing the Classroom.
Over the years many Vermonters have provided me with outstanding
advice and guidance on child nutrition issues.
I intend to work with Jo Busha who heads the Child Nutrition Programs
for the Vermont Department of Education. She has done a remarkable job
in promoting school-based nutrition programs and was recently commended
by the Food Research and Action Center for her accomplishments. I was
very pleased to work with the committee on a bill that set up the
school breakfast startup grant program which has worked extremely well
in Vermont. It provided thousands of dollars to Vermont schools to
cover the one-time costs of setting up a breakfast program.
I look forward to receiving advice from Mary Carlson, president of
the National Association of Farmers' Markets Nutrition Programs, on the
WIC-Farmer's Market Program known as the Farm-to-Family program in
Vermont.
This program has helped in greatly expanding the number of
farmers markets in Vermont and helped low-income families provide their
children with healthy foods.

My bill would assure funding for this program and permit other States
to participate in the program, or to increase their participation
levels.
The bill provides assured funding for programs like the Vermont
Common Roots program of Food Works, a nonprofit educational
organization in Vermont which has been praised by educators and
administrators as an effective educational tool.

[[Page S12601]]

Robert Dostis has done an outstanding job as the executive director
of the Vermont Campaign to End Childhood Hunger. He also deserves a
great deal of credit regarding the effort to get more schools on the
school breakfast program. He has recently written a ``Report on
Childhood Hunger in Vermont: A Handbook for Action.''
He cites some startling statistics in this report. For example, he
notes that about 8,000 Vermont children are receiving food from local
Vermont food shelves--which is double the figure for 1990.
In addition, nearly 222,000 meals are being served yearly at two
dozen community kitchens in Vermont--that is 21 percent more than in
1994.
I will be also working with Donna Bister, as I have for years, on
issues related to the WIC program and with Alison Gardner who is the
Public Health Nutrition Chief, for the Vermont Department of Health.
I want to extend a special thanks to Dr. Richard Narkewicz of Vermont
who is a past president of the American Academy of Pediatrics. He
recently visited me with his grandson Corey.
Most of all I want to thank the hundreds of volunteers who run
Vermont's Food Shelves and Community Kitchens, and all of those helping
out at Vermont's Community Action Agencies.
For many years I have watched the tremendous contributions made by
the Vermont FoodBank in the fight against hunger. They have been a
first line of defense against child hunger in Vermont and I look
forward to working with their director, Deborah Flateman.
All of these Vermonters, and hundreds more who I have not mentioned,
carry out the true Vermont tradition of extending a helping hand to
neighbors in need.
My bill incorporates many ideas from Vermonters. I have often
designed nutrition legislation based on ideas from State and local
officials from around the Nation.
Since this bill is not a full reauthorization bill--which I will
cosponsor at a later date with other members of the Committee--I have
not automatically extended each expiration date in current law. I will
certainly support such extensions as appropriate at a later date and
will support many other improvements to the bill.
Section 101 is based on an idea provided to me by Joseph Keifer of
the Vermont Food Works program. It provides modest Federal funding to
help integrate food and nutrition projects with elementary school
curricula for a few pilot tests of this provision.
Section 102 increases the reimbursement rates for the summer food
service program to a level that should encourage strong participation.
At the recommendation of the Vermont Campaign to End Childhood Hunger
the bill also provides special funding to help defray the costs of
transporting children to the food service locations. This additional
financial support--of 75 cents per day for each child transported to
and from school--is only applicable in very rural areas, as defined by
USDA.
Vermont child care sponsors strongly recommended that I support
funding for an additional meal supplement for children who are in
a child care center for 8 hours or more. Section 103 of the bill does
just that and thus helps working parents.

The bill provides for the eligibility of additional schools for the
after school care meals program and expands funding for a program that
provides meals to homeless preschool children in emergency shelters.
Title II of the bill creates a grant program to assist schools and
others to establish or expand a school breakfast program, or a summer
food service program. $5 million, per year, in mandatory funding would
be made available for this effort.
The school breakfast start up program in Vermont, before it was
terminated by Congress, was a remarkable success in part due to the
hard work of Jo Busha, Bob Dostis, the Vermont School Food Service
Association, and many others.
Also under Title II of the bill, the WIC Farmers' Market Program is
provided guaranteed funding. I have worked on this program for a number
of years with Mary Carlson of Vermont. Mary is now the president of the
association that represents State farmers' market nutrition programs
such as the WIC Farmers' Market Program. Making this tremendous program
mandatory will assure funding and avoid any appearance of being in
competition with the WIC program for appropriated funds.
The bill also sets forth a sense of the Congress that the WIC program
should be fully funded, now and forever, for all eligible applicants
nationwide. I know that reaching this goal has taken a long time. I
appreciate all the help that Donna Bister, the Vermont WIC Director,
and many other Vermonters, as well as Bread for the World at the
national level, have provided on the WIC program. David Beckmann and
Barbara Howell of Bread for the World have worked for years toward this
goal.
Finally, I have heard from Alison Gardner about the problems she is
having with funding for the Nutrition, Education and Training Program.
Congress made that program mandatory but then changed its status back
to a program subject to appropriations. My bill will provide $10
million a year for that program and provide a State minimum grant of
$85,000 per year.
I want to emphasize again that my bill represents some important
child nutrition initiatives. I hope they will all be included in the
reauthorization bill. I look forward to working with Senators Lugar,
Harkin, McConnell and all the other members of the Agriculture,
Nutrition and Forestry Committee on this effort just as we worked
together on the child nutrition provisions in the Senate-passed
research bill.
I also look forward to working with all the Members of the House of
Representatives Education and the Workforce Committee. I know they have
a keen interest in protecting children and I have enjoyed working in
the past with Chairman Goodling and with the ranking minority member
Mr. Bill Clay.
The last reauthorization bill passed both the Senate and the House of
Representatives by unanimous consent. This shows how well the Congress
can work together when the interests of children are at stake.
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. 1556

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 ``Child
Nutrition Initiatives Act''.
(b) Table of Contents.--The table of contents of this Act
is as follows:

Sec. 1. Short title; table of contents.

TITLE I--NATIONAL SCHOOL LUNCH ACT

Sec. 101. Grants to integrate food and nutrition projects with
elementary school curricula.
Sec. 102. Summer food service program for children.
Sec. 103. Child and adult care food program.
Sec. 104. Meal supplements for children in afterschool care.
Sec. 105. Homeless children nutrition program.
Sec. 106. Boarder baby and other pilot projects.
Sec. 107. Information clearinghouse.

TITLE II--CHILD NUTRITION ACT OF 1966

Sec. 201. Area grant program.
Sec. 202. Special supplemental nutrition program for women, infants,
and children.
Sec. 203. Nutrition education and training.
TITLE I--NATIONAL SCHOOL LUNCH ACT

SEC. 101. GRANTS TO INTEGRATE FOOD AND NUTRITION PROJECTS
WITH ELEMENTARY SCHOOL CURRICULA.

Section 12(m) of the National School Lunch Act (42 U.S.C.
1760(m)) is amended--
(1) by striking ``(m)(1) The'' and inserting the following:
``(m) Grants to Integrate Food and Nutrition Projects With
Elementary School Curricula.--
``(1) In general.--Subject to paragraph (5), the'';
(2) by striking paragraph (3) and inserting the following:
``(3) Amount of grants.--Subject to paragraph (5), the
Secretary shall make grants to each of the 3 private
organizations or institutions selected under this subsection
in amounts of not less than $60,000, nor more than $130,000,
for each of fiscal years 1999 through 2001.''; and
(3) by striking paragraph (5) and inserting the following:
``(5) Payments.--
``(A) In general.--Out of any moneys in the Treasury not
otherwise appropriated, the Secretary of the Treasury shall
provide to the Secretary to carry out this subsection

[[Page S12602]]

$300,000 for each of fiscal years 1999 through 2001.
``(B) Entitlement to funds.--The Secretary shall be
entitled to receive the funds made available under
subparagraph (A) and shall accept the funds.
``(C) Insufficient number of applicants.--The Secretary may
expend less than the amount described in subparagraph (A) for
a fiscal year to the extent that there is an insufficient
number of suitable applicants for grants under this
subsection for the fiscal year.
``(D) Unobligated funds.--Of any funds that are made
available, but not obligated, for a fiscal year under this
paragraph--
``(i) 25 percent shall remain available until expended; and
``(ii) the remainder shall be returned to the general fund
of the Treasury.''.

SEC. 102. SUMMER FOOD SERVICE PROGRAM FOR CHILDREN.

(a) Purposes.--Section 13(a)(1) of the National School
Lunch Act (42 U.S.C. 1761(a)(1)) is amended in the first
sentence by striking ``initiate and maintain'' and inserting
``initiate, maintain, and expand''.
(b) Definition of Areas in Which Poor Economic Conditions
Exist.--Section 13(a)(1)(C) of the National School Lunch Act
(42 U.S.C. 1761(a)(1)(C)) is amended by striking ``50
percent'' and inserting ``40 percent''.
(c) Commercial Vendors.--Section 13(a)(2) of the National
School Lunch Act (42 U.S.C. 1761(a)(2)) is amended in the
first sentence--
(1) by striking ``institution or'' and inserting
``institution,''; and
(2) by inserting before the period at the end the
following: ``, or by commercial vendors''.
(d) Number of Private Nonprofit Organizations in a Rural
Area.--Section 13(a)(7)(B)(i)(II) of the National School
Lunch Act (42 U.S.C. 1761(a)(7)(B)(i)(II)) is amended by
striking ``20 sites'' and inserting ``25 sites''.
(e) Second Helpings.--Section 13(a) of the National School
Lunch Act (42 U.S.C. 1761(a)) is amended by adding at the end
the following:
``(8) Second helpings.--In carrying out this section, the
Secretary shall issue regulations that provide an allowance
for a second helping of up to 5 percent of the quantity of
the first helping served.''.
(f) Payments.--Section 13(b)(1) of the National School
Lunch Act (42 U.S.C. 1761(b)(1)) is amended--
(1) in subparagraph (B)(i), by striking ``$1.97'' and
inserting ``$2.23'';
(2) in subparagraph (C), by striking ``subparagraph (B)''
and inserting ``subparagraphs (B) and (D)''; and
(3) by adding at the end the following:
``(D) Reimbursement for transportation.--
``(i) In general.--The Secretary shall provide an
additional reimbursement to each eligible service institution
located in a very rural area (as defined by the Secretary)
for the cost of transporting each child to and from a feeding
site for children who are brought to the site by the service
institution or for whom transportation is arranged by the
service institution.
``(ii) Amount.--Subject to clause (iii), the amount of
reimbursement provided to a service institution under this
subparagraph may not exceed the lesser of--

``(I) 75 cents per day for each child transported to and
from a feeding site; or
``(II) the actual cost of transporting children to, and
home from, a feeding site.

``(iii) Adjustments.--The amounts specified in clause (ii)
shall be adjusted in accordance with subparagraph (C).''.
(g) Number of Meals and Supplements.--Section 13(b)(2) of
the National School Lunch Act (42 U.S.C. 1761(b)(2)) is
amended--
(1) by redesignating subparagraphs (A) and (B) as clauses
(i) and (ii), respectively;
(2) by striking ``(2) Any service'' and inserting the
following:
``(2) Meals and supplements.--
``(A) In general.--Any service'';
(3) by striking ``3 meals, or 2 meals and 1 supplement,''
and inserting ``4 meals''; and
(4) by adding at the end the following:
``(B) Camps and migrant programs.--A camp or migrant
program may serve a breakfast, a lunch, a supper, and meal
supplements.''.
(h) Extension.--Section 13(q) of the National School Lunch
Act (42 U.S.C. 1761(q)) is amended by striking ``1998'' and
inserting ``2003''.

SEC. 103. CHILD AND ADULT CARE FOOD PROGRAM.

(a) Extensions.--Section 17 of the National School Lunch
Act (42 U.S.C. 1766) is amended--
(1) in subsection (c)(6)(B), by striking ``1997'' and
inserting ``2003'';
(2) in subsection (f)(3)(D), by striking ``fiscal year
1997'' each place it appears and inserting ``each of fiscal
years 1997 through 2003''; and
(3) in subsection (p), by striking ``1998'' each place it
appears and inserting ``2003''.
(b) Number of Meals and Supplements.--Section 17(f)(2)(B)
of the National School Lunch Act (42 U.S.C. 1766(f)(2)(B)) is
amended by striking ``2 meals and 1 supplement'' and
inserting ``2 meals and 2 supplements, or 3 meals and 1
supplement,''.''.
(c) Grants to States to Provide Assistance to Family or
Group Day Care Homes.--Section 17(f)(3)(D)(ii)(I) of the
National School Lunch Act (42 U.S.C. 1766(f)(3)(D)(ii)(I)) is
amended by striking ``$30,000'' and inserting ``$45,000''.

SEC. 104. MEAL SUPPLEMENTS FOR CHILDREN IN AFTERSCHOOL CARE.

Section 17A(a)(2)(C) of the National School Lunch Act (42
U.S.C. 1766a(a)(2)(C))) is amended by striking ``on May 15,
1989''.

SEC. 105. HOMELESS CHILDREN NUTRITION PROGRAM.

Section 17B(g)(1) of the National School Lunch Act (42
U.S.C. 1766b(g)(1)) is amended in the first sentence by
striking ``and $3,700,000 for fiscal year 1999'' and
inserting ``$3,700,000 for fiscal year 1999, $4,000,000 for
fiscal year 2000, $4,100,000 for fiscal year 2001, and
$4,200,000 for fiscal year 2002''.

SEC. 106. BOARDER BABY AND OTHER PILOT PROJECTS.

Section 18 of the National School Lunch Act (42 U.S.C.
1769) is amended--
(1) in subsection (c)--
(A) by striking ``1998'' each place it appears and
inserting ``2003''; and
(B) in paragraph (3)(A)--
(i) in clause (v), by striking ``and'' at the end; and
(ii) by adding at the end the following:
``(vii) salaries and expenses of support staff, including
management, medical, nursing, janitorial, and other support
staff; and'';
(2) in subsection (e)(5), by striking ``and 1998'' and
inserting ``through 2003'';
(3) in subsections (g)(5) and (h)(5), by striking ``1997''
each place it appears and inserting ``2003''; and
(4) in subsection (i)(8), by striking ``1998'' and
inserting ``2003''.

SEC. 107. INFORMATION CLEARINGHOUSE.

Section 26(d) of the National School Lunch Act (42 U.S.C.
1769g(d)) is amended in the first sentence by striking
``$100,000 for fiscal year 1998'' and inserting ``$185,000
for each of fiscal years 1998 through 2003''.
TITLE II--CHILD NUTRITION ACT OF 1966

SEC. 201. AREA GRANT PROGRAM.

Section 4 of the Child Nutrition Act of 1966 (42 U.S.C.
1773) is amended by adding at the end the following:
``(f) Area Grant Program.--
``(1) Definitions.--In this subsection:
``(A) Eligible school.--The term `eligible school' means a
school--
``(i) attended by children, a significant percentage of
whom--

``(I) are members of low-income families, as determined by
the Secretary; or
``(II) live in rural areas and have unmet needs for
initiation or expansion of a school breakfast or summer food
service program for children; and

``(ii)(I) as used with respect to a school breakfast
program, that agrees to operate the school breakfast program
established or expanded with the assistance provided under
this subsection for a period of not less than 3 years; and
``(II) as used with respect to a summer food service
program for children, that agrees to operate the summer food
service program for children established or expanded with the
assistance provided under this subsection for a period of not
less than 3 years.
``(B) Service institution.--The term `service institution'
means an institution or organization described in paragraph
(1)(B) or (7) of section 13(a) of the National School Lunch
Act (42 U.S.C. 1761(a)).
``(C) Summer food service program for children.--The term
`summer food service program for children' means a program
authorized by section 13 of the National School Lunch Act (42
U.S.C. 1761).
``(2) Establishment.--The Secretary shall establish a
program under this subsection to be known as the `Area Grant
Program' (referred to in this subsection as the `Program') to
assist eligible schools and service institutions through
grants to initiate or expand programs under the school
breakfast program and the summer food service program for
children.
``(3) Payments.--
``(A) In general.--Out of any moneys in the Treasury not
otherwise appropriated, the Secretary of the Treasury shall
provide to the Secretary to carry out this subsection
$5,000,000 for fiscal year 1998 and each fiscal year
thereafter.
``(B) Entitlement to funds.--The Secretary shall be
entitled to receive the funds made available under
subparagraph (A) and shall accept the funds.
``(C) Use of funds.--The Secretary shall use the funds made
available under subparagraph (A) to make payments under the
Program--
``(i) in the case of the school breakfast program, to
school food authorities for eligible schools; and
``(ii) in the case of the summer food service program for
children, to service institutions.
``(D) Insufficient number of applicants.--The Secretary may
expend less than the amount described in subparagraph (A) for
a fiscal year to the extent that there is an insufficient
number of suitable applicants to initiate or expand programs
under this subsection for the fiscal year.
``(4) Priority.--The Secretary shall make payments under
the Program on a competitive basis and in the following order
of priority (subject to the other provisions of this
subsection) to:
``(A) School food authorities for eligible schools to
assist the schools with nonrecurring expenses incurred in--
``(i) initiating a school breakfast program under this
section; or
``(ii) expanding a school breakfast program.
``(B) Service institutions to assist the institutions with
nonrecurring expenses incurred in--
``(i) initiating a summer food service program for
children; or

[[Page S12603]]

``(ii) expanding a summer food service program for
children.
``(5) Additional payments.--Payments under the Program
shall be in addition to payments under subsection (b) of this
section and section 13 of the National School Lunch Act (42
U.S.C. 1761).
``(6) Preferences.--Consistent with paragraph (4), in
making payments under the Program for any fiscal year to
initiate or expand school breakfast programs or summer food
service programs for children, the Secretary shall provide a
preference to a school food authority for an eligible school
or service institution that--
``(A) in the case of a summer food service program for
children, is a public or private nonprofit school food
authority;
``(B) has significant public or private resources that will
be used to carry out the initiation or expansion of the
programs during the year;
``(C) serves an unmet need among low-income children, as
determined by the Secretary;
``(D) is not operating a school breakfast program or summer
food service program for children, as appropriate; or
``(E) is located in a rural area, as determined by the
Secretary.
``(7) Recovery and reallocation.--The Secretary shall act
in a timely manner to recover and reallocate to other school
food authorities for eligible schools or service institutions
any amounts under the Program that are not expended within a
reasonable period (as determined by the Secretary).
``(8) Maintenance of effort.--Expenditures of funds from
State, local, and private sources for the maintenance of the
school breakfast program and the summer food service program
for children shall not be diminished as a result of payments
received under the Program.''.

SEC. 202. SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN,
INFANTS, AND CHILDREN.

(a) Extensions.--Section 17 of the Child Nutrition Act of
1966 (42 U.S.C. 1786) is amended in subsections (g)(1),
(h)(2)(A), and (h)(10)(A) by striking ``1998'' each place it
appears and inserting ``2003''.
(b) Sense of Congress on Full Funding for WIC.--It is the
sense of Congress that the special supplemental nutrition
program for women, infants, and children established under
section 17 of the Child Nutrition Act of 1966 (42 U.S.C.
1786) should be fully funded for fiscal year 1998 and each
subsequent fiscal year so that all eligible participants for
the program will be permitted to participate at the full
level of participation for individuals in their category, in
accordance with regulations issued by the Secretary of
Agriculture.
(c) Farmers' Market Nutrition Program.--Section 17(m) of
the Child Nutrition Act of 1966 (42 U.S.C. 1786(m)) is
amended--
(1) in paragraph (1), by striking ``(m)(1) Subject'' and
all that follows through ``the Secretary'' and inserting the
following:
``(m) Farmers' Market Nutrition Program.--
``(1) In general.--The Secretary'';
(2) in paragraph (6)(B)--
(A) by striking ``(B)(i) Subject to the availability of
appropriations, if'' and inserting the following:
``(B) Minimum amount.--If''; and
(B) by striking clause (ii); and
(3) in paragraph (9), by striking ``(9)(A)'' and all that
follows through the end of subparagraph (A) and inserting the
following:
``(9) Funding.--
``(A) Payments.--
``(i) In general.--Out of any moneys in the Treasury not
otherwise appropriated, the Secretary of the Treasury shall
provide to the Secretary to carry out this subsection
$15,000,000 for fiscal year 1999, $19,000,000 for fiscal year
2000, and $24,000,000 for fiscal year 2001, $30,000,000 for
fiscal year 2002 and $37,000,000 for fiscal year 2003. Such
funds shall remain available for this program until expended.
``(ii) Entitlement to funds.--The Secretary shall be
entitled to receive the funds made available under
subparagraph (A) and shall accept the funds.''.

SEC. 203. NUTRITION EDUCATION AND TRAINING.

Section 19(i) of the Child Nutrition Act of 1966 (42 U.S.C.
1788(i)) is amended--
(1) in paragraph (2)--
(A) in the first sentence of subparagraph (A), by inserting
``and each succeeding fiscal year'' after ``1996''; and
(B) by striking subparagraph (B) and inserting the
following:
``(B) Minimum amount.--The minimum amount of a grant
provided to a State for a fiscal year under this section
shall be $85,000.'';
(2) by striking paragraph (3); and
(3) by redesignating paragraphs (4) and (5) as paragraph
(3) and (4), respectively.
______

By Mr. TORRICELLI (for himself, Mr. Akaka, Mr. Kerry, and Mrs.
Feinstein):
S. 1557. A bill to end the use of steel jaw leghold traps on animals
in the United States; to the Committee on Environment and Public Works.

the steel jaw leghold trap act of 1997

Mr. TORRICELLI. Mr. President, today, Senators, Akaka, Feinstein,
Kerry, and I rise to introduce legislation to end the use of the steel
jaw leghold trap. I rise to draw this country's attention to the many
liabilities of this outdated device and ask for my colleagues support
in ending its use.
This important and timely issue now takes on added importance as the
European Union proposes to ban the importation of U.S. fur caught with
this class of trap. By ending the use of the leghold trap within our
borders, we will effectively set a humane standard for trapping, as
well as protect the U.S. fur industry by keeping Europe's doors open to
U.S. fur.
While this bill does not prohibit trapping, it does outlaw a
particularly savage method of trapping by prohibiting the import or
export of, and the interstate shipment of steel jaw leghold traps and
articles of fur from animals caught in such traps.
The steel jaw leghold trap is a cruel and antiquated device for which
many alternatives exist. The American Veterinary Medical Association
and the American Animal Hospital Association have condemned leghold
traps as inhumane and the majority of Americans oppose the use of this
class of trap. Currently, 89 nations have banned these cruel devices,
and have done so with broad-based public support. In addition, Colorado
and Massachusetts have joined Rhode Island, Florida and my home State
of New Jersey in banning the trap.
One quarter of all U.S. fur exports, $44 million, go to the European
market. Of this $44 million, $21 million would be eliminated by the
ban. This would clearly cause considerable economic damage to the U.S.
fur industry, an important source of employment for many Americans.
Since many Americans rely on trapping for their livelihood, it is
imperative to find a solution which prevents the considerable damage
that this ban would cause to our fur industry. It is important to note
that since the steel-jaw leghold trap has been banned in Europe,
alternatives have been provided to protect and maintain the European
fur industry.
Our Nation would be far better served by ending the use of the
archaic and inhumane steel jaw leghold trap. By doing so, we are not
only setting a long-overdue humane standard for trapping, we are
ensuring that the European market remains open to all American fur
exports.
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. 1557

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

SECTION 1. DECLARATION OF POLICY.

It is the policy of the United States to end the needless
maiming and suffering inflicted upon animals through the use
of steel jaw leghold traps by prohibiting the import or
export of, and the shipment in interstate commerce of, such
traps and of articles of fur from animals that were trapped
in such traps.

SEC. 2. DEFINITIONS.

As used in this Act:
(1) Article of fur.--The term ``article of fur'' means--
(A) any furskin, whether raw or tanned or dressed; or
(B) any article, however produced, that consists in whole
or part of any furskin.

For purposes of subparagraph (A), the terms ``furskin'',
``raw'', and ``tanned or dressed'' have the same respective
meanings as those terms have under headnote 1 of chapter 43
of the Harmonized Tariff Schedule of the United States.
(2) Customs laws of the united states.--The term ``customs
laws of the United States'' means any law enforced or
administered by the Customs Service.
(3) Interstate commerce.--The term ``interstate commerce''
has the same meaning as given such term in section 10 of
title 18, United States Code.
(4) Import.--The term ``import'' means to land on, bring
into, or introduce into, any place subject to the
jurisdiction of the United States, whether or not such
landing, bringing, or introduction constitutes an entry into
the customs territory of the United States.
(5) Person.--The term ``person'' includes any individual,
partnership, association, corporation, trust, or any officer,
employee, agent, department, or instrumentality of the
Federal Government or of any State or political subdivision
thereof, or any other entity subject to the jurisdiction of
the United States.
(6) Secretary.--The term ``Secretary'' means the Secretary
of the Interior.
(7) Steel jaw leghold trap.--The term ``steel jaw leghold
trap'' means any spring-powered pan- or sear-activated device
with two opposing steel jaws which is designed to capture an
animal by snapping closed upon the animal's limb or part
thereof.

[[Page S12604]]

SEC. 3. PROHIBITED ACTS AND PENALTIES.

(a) Offenses.--It is unlawful for any person knowingly--
(1) to import, export, ship, or receive in interstate
commerce an article of fur if any part of the article of fur
is derived from an animal that was trapped in a steel jaw
leghold trap;
(2) to import, export, deliver, carry, transport, or ship
by any means whatever, in interstate commerce, any steel jaw
leghold trap; or
(3) to sell, receive, acquire, or purchase any steel jaw
leghold trap that was delivered, carried, transported, or
shipped in contravention of paragraph (2).
(b) Penalties.--A person who violates subsection (a), in
addition to any other penalty that may be imposed--
(1) for the first such violation, shall be guilty of an
infraction punishable under title 18, United States Code; and
(2) for each subsequent violation, shall be imprisoned not
more than 2 years, fined under title 18, United States Code,
or both.

SEC. 4. REWARDS.

The Secretary shall pay, to any person who furnishes
information which leads to a conviction of a violation of any
provision of this Act or any regulation issued thereunder, an
amount equal to one half of the fine paid pursuant to the
conviction. Any officer or employee of the United States or
of any State or local government who furnishes information or
renders service in the performance of his or her official
duties is not eligible for payment under this section.

SEC. 5. ENFORCEMENT.

(a) In General.--Except with respect to violations of this
Act to which subsection (b) applies, the provisions of this
Act and any regulations issued pursuant thereto shall be
enforced by the Secretary, who may use by agreement, with or
without reimbursement, the personnel, services, and
facilities of any other Federal agency or of any State agency
for purposes of enforcing this Act.
(b) Export and Import Violations.--
(1) Import violations.--The importation of articles in
contravention of section 3 shall be treated as a violation of
the customs laws of the United States, and the provisions of
law relating to violations of the customs laws shall apply
thereto.
(2) Export violations.--The provisions of the Export
Administration Act of 1979 (including the penalty provisions)
(50 U.S.C. App. 2401 et seq.) shall apply for purposes of
enforcing the prohibition relating to the export of articles
described in section 3.
(c) Judicial Process.--The district courts of the United
States may, within their respective jurisdictions, upon
proper oath or affirmation showing probable cause, issue such
warrants or other process as may be required for enforcement
of this Act and any regulation issued thereunder.
(d) Enforcement Authorities.--Any individual having
authority to enforce this Act (except with respect to
violations to which subsection (b) applies), may, in
exercising such authority--
(1) detain for inspection, search, and seize any package,
crate, or other container, including its contents, and all
accompanying documents, if such individual has reasonable
cause to suspect that in such package, crate, or other
container are articles with respect to which a violation of
this Act (except with respect to violations to which
subsection (b) applies) has occurred, is occurring, or is
about to occur;
(2) make arrests without a warrant for any violation of
this Act (except with respect to violations to which
subsection (b) applies) committed in his or her presence or
view or if the individual has probable cause to believe that
the person to be arrested has committed or is committing such
a violation; and
(3) execute and serve any arrest warrant, search warrant,
or other warrant or criminal process issued by any judge or
magistrate of any court of competent jurisdiction for
enforcement of this Act (except with respect to violations to
which subsection (b) applies).
(e) Forfeiture.--
(1) In general.--Except as provided in paragraph (3), any
article of fur or steel jaw leghold trap taken, possessed,
sold, purchased, offered for sale or purchase, transported,
delivered, received, carried, or shipped in violation of this
Act shall be subject to forfeiture to the United States.
(2) Applicable law.--The provisions of law relating to--
(A) the seizure, summary and judicial forfeiture, and
condemnation of property for violations of the customs laws,
(B) the disposition of such property or the proceeds from
the sale thereof,
(C) the remission or mitigation of such forfeitures, and
(D) the compromise of claims,

shall apply to seizures and forfeitures under this
subsection, except that the duties performed by a customs
officer or any other person with respect to the seizure and
forfeiture of property under the customs laws of the United
States may be performed with respect to seizures and
forfeitures of property under this subsection by the
Secretary or such officers and employees as the Secretary may
designate.
(3) Exception.--The provisions of the Export Administration
Act of 1979 shall apply with respect to the seizure and
forfeiture of any article of fur or steel jaw leghold trap
exported in violation of this Act and the customs laws of the
United States shall apply with respect to the seizure and
forfeiture of any such article or trap imported in violation
of this Act.
(f) Injunctions.--The Attorney General of the United States
may seek to enjoin any person who is alleged to be in
violation of any provision of this Act.
(g) Cooperation.--The Secretary of Commerce, the Secretary
of the Treasury, and the head of any other department or
agency with enforcement responsibilities under this Act shall
cooperate with the Secretary in ensuring that this Act is
enforced in the most effective and efficient manner.

SEC. 6. REGULATIONS.

The Secretary shall prescribe such regulations as are
necessary to carry out this Act.

SEC. 7. EFFECTIVE DATE.

This Act shall take effect on the date that is 1 year after
the date of enactment.
______

By Mr. D'AMATO:
S. 1558. A bill to amend the Harmonized Tariff Schedule of the United
States with respect to shadow mask steel; to the Committee on Finance.

THE SHADOW MASK STEEL HARMONIZED TARIFF SCHEDULE AMENDMENT ACT OF 1997

Mr. D'AMATO. Mr. President, I rise today to introduce legislation to
amend the Harmonized Tariff Schedule of the United States with respect
to shadow mask steel. Shadow mask steel, a vital component of color
television picture tubes and computer video monitors, is used to
produce ``shadow masks'' which prevent image distortion on the viewing
screens of televisions and computer video monitors. Unfortunately,
neither shadow mask steel, nor any viable substitute, is produced
within the United States. Therefore, United States shadow mask
producers must import this product from steel producers in Japan and
Germany.
Domestic shadow mask production faces a difficult challenge to stay
competitive in today's shadow mask market. Competition from foreign
shadow masks is increasing as foreign manufacturers aggressively pursue
the U.S. market. In addition, color picture tube and computer video
monitor manufacturers are increasing their efforts to reduce production
costs due to increased competition in the television and computer
markets.
These factors reinforce the vital need for competitively-priced
component materials, such as shadow masks. Eliminating the duty on
shadow mask steel, a product that is already subject to a gradual
tariff elimination schedule, would be an important step toward enabling
domestic manufacturers to remain competitive in the global market.
Major U.S. television picture tube and computer video monitor
manufacturers that employ thousands of workers throughout the United
States rely on a consistent supply of domestically-produced shadow
masks. If such companies were unable to count on such a supply, we run
the risk of supplanting domestic production of this product with
imported shadow masks from foreign competitors, resulting in higher
costs and delivery uncertainties associated with purchasing shadow mask
imports.
Such increased costs and uncertainty would certainly result in
reduced competitiveness of U.S. television picture tube and computer
video monitor manufacturers vis--vis foreign manufacturers. Reduced
competitiveness could lead to the transfer of existing U.S.
manufacturing operations abroad, and/or the closing of U.S. facilities,
resulting in the loss of thousands of actual and potential U.S. jobs in
the television and computer manufacturing industries.
______

By Mr. FAIRCLOTH:
S. 1560. A bill to require the Federal banking agencies to make
certain certifications to Congress regarding new accounting standards
for derivatives before they become effective; to the Committee on
Banking, Housing, and Urban Affairs.

the accurate accounting standards certification act of 1997

Mr. FAIRCLOTH. Mr. President, several times during this session, the
Securities Subcommittee of the Senate Banking Committee has held
hearings on the issue of the Financial Accounting Standards Board
(FASB) accounting standards for derivatives and other instruments.

The hearings have demonstrated that there is great concern in the
banking industry, and virtually every industry, about the FASB
standards as they are presently written.
In particular, there are concerns that the FASB will finalize these
standards

[[Page S12605]]

by the end of this year, without re-exposing its draft for further
public comment. FASB has received hundreds of comment letters
expressing concern about the new standards. Yet, the comments appear to
go unheeded. In particular, there is concern in the banking industry
that the standards are not taking into account the unique nature of
banks. Even Alan Greenspan has taken the unusual step of expressing his
concern to the FASB.
The Chairman of the Federal Reserve Board of Governors said in his
letter that ``FASB's planned approach would not improve the financial
reporting of derivatives activities and would constrain prudent risk
management practices.''
Mr. President, I am a strong supporter of Generally Accepted
Accounting Princples. I strongly believe that these standards should be
set by the private sector. I am concerned, however, that the FASB, a
private organization, is working too closely with the SEC, and
therefore, is ignoring the concerns raised by bank regulators. In
effect, this is not so much a dispute of a private body defying the
wishes of an industry--but it is a dispute between two parts of our
Government over how best to proceed on accounting for risk on the
balance sheet. The FASB appears to be ignoring the concerns of the bank
regulators, and by doing so, needlessly complicating disclosure to
investors. Investors and analysts right now are fully capable of
reviewing the balance sheets of depository institutions and determining
who is well run and who is not.
The Securities Subcommittee issued a report this year in which it
stated that ``by focusing on derivatives risk exposure in isolation
from the risk faced by companies, (the FASB proposals) are prone to
present investors a distorted and misleading picture of company
conditions and activities.''
In my view, the new standards will throw a wrench into the present
accounting rules that will only serve to confuse investors. It is
highly ironic that financial institutions, the principal users of
accounting information in order to make credit decisions, find the new
standards confusing and cumbersome.
For this reason I feel compelled to introduce legislation that would
provide the banking regulatory agencies with the authority to reject
the standards if they find that the new standards will not accurately
reflect assets, liabilities and earnings. Further, the regulators could
refuse to adopt the standards if the new rules would serve to diminish
the use of the risk management techniques, thus, actually reducing
safety and soundness in the operation of an insured depository
institution.
I think this is an appropriate solution to this problem. I have great
faith that the banking regulators, the primary users of financial
information from banks, can make the best determination if these
standards are appropriate. Thank you Mr. President.
By Mr. WARNER:
S. 1561. A bill to reform the conduct of Federal elections;
to the Committee on Rules and Administration.

THE CONSTITUTIONAL AND EFFECTIVE REFORM OF CAMPAIGNS ACT

Mr. WARNER. Mr. President, today I introduce the Constitutional and
Effective Reform of Campaigns Act, or ``CERCA''. This legislation is
the product of 2 years of hearings in the Rules Committee, discussions
with numerous experts, party officials, and candidates, and nearly two
decades of participating in campaigns and campaign finance debates in
the Senate. Many of the proposals in this bill have been made in some
form by several of my Senate colleagues and by Members of the House,
and I readily acknowledge drawing on their expertise. Most
particularly, the important discussions during the meetings of this
year's task force headed by Senator Nickles, at the request of Majority
Leader Lott, were invaluable.
This legislation offers an opportunity for bipartisan support. It is
a good faith effort to strike a middle ground between those who believe
public financing of campaigns is the solution, and those who believe
the solution is to remove current regulations. It offers a package of
proposals which realistically can be achieved with bipartisan support
and meet the desire of the majority of Americans who believe that our
present system can be reformed. In my judgment, we will not succeed
with any measure of campaign reform in this complicated field without a
bipartisan consensus.
In drafting this legislation, I began with four premises. First, all
provisions had to be consistent with the First Amendment: Congress
would be acting in bad faith to adopt provisions which have a
likelihood of being struck down by the federal courts. Second, I oppose
public financing and mandating ``free'' or reduced-cost media time
which in my mind is neither free nor a good policy idea. Why should
seekers of federal office get free time, while candidates for state
office or local office--from governors to local sheriffs--do not
receive comparable free benefits? Such an inequity and imbalance will
breed friction between federal and state office seekers. Third, I
believe we should try to increase the role of citizens and the
political parties. Fourth, any framework of campaign reform legislation
must respect and protect the constitutional right of individuals,
groups, and organizations to participate in advocacy concerning
political issues.
This bill is designed to be a ``bilateral disarmament'' on the tough
issues of soft money and union dues: each side must give up equivalent
ground. The Republicans should give ground by placing a cap on soft
money which has tended to favor our side. And Democrats should give
ground by allowing union members to decide voluntarily for themselves
whether to contribute the portion of dues which goes to political
contributions or activities.
Specifically, on the issue of soft money, no reform can be considered
true reform without placing limits on the corporate and union donations
to the national political parties. This bill places a $100,000 cap on
such donations. While this provision addresses the public's legitimate
concern over the propriety of these large donations, it allows the
political parties sufficient funds to maintain their headquarters and
conduct their grassroots efforts. In addition, the current limits on
``hard'' contributions must be updated. The ability of citizens to
contribute voluntarily to a wide range of candidates and to their
parties is fundamental.
At the same time, the practice of mandatory union dues going to
partisan politics without union members' consent must end: it is
counter to all the political freedoms that make America a true
democracy. The concept of ``paycheck protection'' must be included in
any campaign finance reform, so that these deductions are voluntary,
whether these dues fund direct contributions to candidates or parties,
or pay for undisclosed spending on phone banks, get-out-the-vote
efforts, literature, and television ads.
Under this legislation, unions would be required to obtain advance,
written consent before deducting money for political activities from
union members' paychecks. The present state of the law requires most
union workers to give up their rights to participate in the union if
they seek refunds of that portion of dues going to politics. In
addition, this section would strengthen the reporting requirements for
unions engaged in political activities and enhance an aggrieved union
member's right to challenge a union's determination of the portion of
dues going to political activities.
In the Senate debates thus far, there has been much discussion about
whether corporations should be required to obtain shareholder approval
to make political contributions. This is an issue which warrants
consideration. My proposal not only limits these corporate and union
contributions to $100,000, it also includes a requirement that
companies disclose their donations to federal political parties in
their annual reports. And under current policies of the Securities and
Exchange Commission, shareholders have the same rights to make
recommendations to boards of directors on the propriety of political
donations as they do on any business issue related to the company.
In addition, the SEC is in the process of making it easier for
shareholders to raise questions related to social policy matters at
annual meetings. I am monitoring how these changes are implemented: if
they are insufficient to guarantee adequate rights to shareholders, I
will consider amending my bill to protect these rights.
As an aside, I reject the notion that the status of union members is
similar to those who belong to groups such as the National Rifle
Association or the

[[Page S12606]]

Sierra Club. Nobody is compelled to join these types of organizations,
and those that do, know or should know that their dues are going in
part to political causes.
Furthermore, I considered including in this bill a narrowly-tailored
disclosure requirement for individuals and groups spending large sums
on public advertising affecting the public image of candidates during
election seasons. However, in keeping with my first basic premise that
reforms must pass the federal court test of constitutionality, I
concluded that such a provision, in view of a long line of Supreme
Court cases, likely would be declared unconstitutional, and thus I did
not include the provision.
The McCain-Feingold bill was thoroughly debated in the Senate, and
any objective observor of the Senate would agree that we are genuinely
deadlocked. This body needs to move beyond the debate of McCain-
Feingold. I hope that all Members will review my bill as an objective
and pragmatic approach to current problems with our campaign system. I
encourage other Members to come forward, as I have, with proposals
which objectively represent pragmatic approaches to what can be
achieved. I do not claim to have the only solution: those with other
ideas should come forward.
In addition to the issues of soft money and union dues discussed
above, nine other fundamental problems--all of which can be solved in a
constitutional manner--are the most pressing. Here are these problems,
in no particular order, and my proposed solutions:
Problem 1: Politicians spend too much time fundraising, at the
expense of their legislative duties for incumbents, and, for both
incumbents and challengers, at the expense of debating the issues with
voters.
Solution: The current individual contribution limit of $1,000 has not
been raised, or even indexed for inflation, for over 20 years. This
fact requires that candidates must spend more and more time seeking
more and more donors. The limit should be doubled, as well as indexed
for inflation.
Problem 2: The influence of voters on campaigns has been diminished
by the activities of political action committees and interest groups.
Solutions: I propose a $100 tax credit for contributions made by
citizens, with incomes under specified levels, to Senate and House
candidates in their states: this credit should spark an influx of small
dollar contributions to balance the greater ability of citizens with
higher incomes to participate.
In addition, the increased individual contribution limit should
balance the activities of political action committees.
Problem 3: The influence of voters on campaigns has been diminished
by contributions from those not eligible to vote.
Solution: If you are not eligible to vote, you should not contribute
to campaigns. My bill would prohibit contributions by those ineligible
to vote, including non-citizens, children, and persons under felony
convictions. It also codifies current regulations concerning political
donations by domestic subsidiaries of foreign companies.
Problem 4: Compared to incumbents, challengers face greater
difficulties raising funds and communicating with voters, particularly
at the outset of a campaign.
Solutions: This legislation will allow candidates to receive ``seed
money'' contributions of up to $10,000 from individuals and political
action committees. This provision should help get candidacies off the
ground. The total amount of these ``seed money'' contributions could
not exceed $100,000 for House candidates or $300,000 for Senate
candidates. To meet the constitutional test, this provision would apply
to both challengers and incumbents alike, but in the case of an
incumbent with money carried over from a prior cycle, those funds would
count against the seed money limit.
Second, Senate incumbents would be barred from using the franking
privilege to send out mass mailings during the election year, rather
than the sixty day ban in current law.
Problem 5: Candidates with personal wealth have a distinct advantage
through their constitutional right to spend their own funds.
Solution: If a candidate spends more than $25,000 of his or her own
money, the individual contribution limits would be raised to $10,000 so
that candidates could raise money to counter that personal spending.
Again, to meet constitutional review, this provision would apply to all
candidates.
Problem 6: Current laws prohibiting fundraising activities on federal
property are weak and insufficient.
Solution: The current ban on fundraising on federal property was
written before the law created such terms as ``hard'' and ``soft''
money. This bill updates this law to require that no fundraising take
place on federal property.
Problem 7: Reporting requirements and public access to disclosure
statements are weak and inadequate.
Solutions: Under this proposal, the FEC would be required to post
reports on the Internet for all to see, and to require that candidates,
and groups making independent expenditures, make faster and more
complete reports. In addition, registered lobbyists would be required
to report their campaign contributions and those of their employer on
their lobbyist disclosure reports.
Problem 8: The Federal Election Commission is in need of procedural
and substantive reform.
Solutions: This legislation contains a number of procedural and
substantive reforms of the FEC, including term limits for
commissioners, and increases in penalties for serious violations.
Problem 9: The safeguards designed to protect the integrity of our
elections are compromised by weak aspects of federal laws regulating
voter registration and voting.
Solutions: The investigations of contested elections in Louisiana and
California have shown significant weaknesses in federal laws designed
to safeguard the registration and voting processes. The requirement
that states allow registration by mail has undermined confidence that
only qualified voters are registering to vote and only registering
once: states should be allowed to decide whether to allow mail-in
registrations. In addition, states should be allowed to require proof
of citizenship when registering and proof of identification when
voting: we require a photo ID to buy beer or cigarettes and can
certainly allow states to protect the voting process by requiring a
photo ID. Lastly, this bill would allow states to purge inactive voters
and to allow state law to govern whether voters who move without
reregistering should be allowed to vote.
These are the problems which I believe can be solved in a bipartisan
fashion. Attached to this statement is a section by section review of
the legislation. I look forward to working with my colleagues to enact
meaningful campaign reform, by looking at reform beyond the usual
soundbites and addressing the real problems with our present system of
campaigns.
Mr. President, I ask unanimous consent that the text of the bill
summary be printed in the Record.
There being no objection, the item was ordered to be printed in the
Record, as follows:

Constitutional and Effective Reform of Campaigns Act--Section-by-
Section

title i--enhancement of citizen involvement

Section 101.--Prohibits those ineligible to vote (non-
citizens, minors, felons) from making contributions (``hard
money'') or donations (``soft money''). Also bans foreign
aliens making independent expenditures and codifies FEC
regulations on foreign control of domestic donations.
Section 102.--Updates maximum individual contribution limit
to $2000 per election (primary and general) and indexes both
individual and PAC limits in the future.
Section 103.--Provides a tax credit up to $100 for
contributions to in-state candidates for Senate and House for
incomes up to $60,000 ($200 for joint filers up to $120,000).

title ii--leveling the playing field for candidates

Section 201.--Seed money provision: Senate candidates may
collect $300,000 and House candidates $100,000 (minus any
funds carried over from a prior cycle) in contributions up to
$10,000 from individuals and PAC's.
Section 202.--``Anti-millionaires'' provision: when one
candidate spends over $25,000 of personal funds, a candidate
may accept contributions up to $10,000 from individuals and
PAC's up to the amount of personal spending minus a
candidate's funds carried over from a prior cycle and own use
of personal funds.
Section 203.--Bans use of Senate frank for mass mailings
from January 1 to election day for incumbents seeking
reelection.

[[Page S12607]]

title iii--voluntariness of political contributions

Section 301.--Union dues provision: Labor organizations
must obtain prior, written authorization for portion of dues
or fees not to be used for representation: Establishes civil
action for aggrieved employee. Requires employers to post
notice of rights. Amends reporting statute to require better
disclosure of expenses unrelated to representation.
Section 302.--Corporations must disclose soft money
donations in annual reports.

title iv--elimination of campaign excesses

Section 410.--Adds soft money donations to present ban on
fundraising on federal property and to other criminal
statutes.
Section 402.--Hard money contributions or soft money
donations over $500 which a political committee intends to
return because of illegality must be transferred to the FEC
and may be given to the Treasury as part of a civil or
criminal action.
Section 403.--``Soft'' and ``hard'' money provisions. Soft
money cap: no national party, congressional committee or
senatorial committee shall accept donations from any source
exceeding $100,000 per year. Hard money increases: limit
raised from $25,000 to $50,000 per individual per year with
no sub-limit to party committees.
Section 404.--Codifies FEC regulations banning conversion
of campaign funds to personal use.

title v--enhanced disclosure

Section 501.--Additional reporting requirements for
candidates: weekly reports for last month of general
election, 24-hour disclosure of large contributions extended
to 90 days before election, and end of ``best efforts''
waiver for failure to obtain occupation of contributors over
$200.
Section 502.--FEC shall make reports filed available on the
Internet.
Section 503.--24-hour disclosure of independent
expenditures over $1,000 in last 20 days before election, and
of those over $10,000 made anytime.
Section 504.--Registered lobbyists shall include their own
contributions and soft money donations and those of their
employers and the employers' coordinated PAC's on lobbyist
disclosure forms.

title vi--federal election commission reform

Section 601.--FEC shall develop and provide, at no cost,
software to file reports, and shall issue regulations
mandating electronic filing and allowing for filing by fax.
Section 602.--Limits commissioners to one term of eight
years.
Section 603.--Increases penalties for knowing and willful
violations to greater of $15,000 or 300 percent of the
contribution or expenditure.
Section 604.--Requires that FEC create a schedule of
penalties for minor reporting violations.
Section 605.--Establishes availability of oral arguments at
FEC when requested and two commissioners agree. Also requires
that FEC create index of Commission actions.
Section 606.--Changes reporting cycle for committees to
election cycle rather than calendar year.
Section 607.--Classifies FEC general counsel and executive
director as presidential appointments requiring Senate
confirmation.

title vii--improvements to national voter registration act

Section 701.--Repeals requirement that states allow
registration by mail.
Section 702.--Requires that registrants for federal
elections provide social security number and proof of
citizenship.
Section 703.--Provides states the option of removing
registrants from eligible list of federal voters who have not
voted in two federal elections and did not respond to
postcard.
Section 704.--Allows states to require photo ID at the
polls.
Section 705.--Repeals requirement that states allow people
to change their registration at the polls and still vote.
______

By Mr. BAUCUS:
S. 1562. A bill to authorize an exchange of land between the
Secretary of Agriculture and Secretary of the Interior and Big Sky
Lumber Co; to the Committee on Energy and Natural Resources.

THE GALLATIN RANGE CONSOLIDATION COMPLETION ACT OF 1997

Mr. BAUCUS. Mr. President, I rise today to introduce an important
piece of legislation for Montana. This bill is titled ``the Gallatin
Range Consolidation Completion Act of 1997.''
Mr. President, this legislation is similar to a bill introduced
earlier today by my colleague from Montana. While I am glad he has at
last staked out a public position in favor of this exchange, I believe
his approach is too little, too early. So I am introducing a bill which
more accurately reflects where discussions on this exchange have
progressed since Senator Burns' earlier involvement.
Completing the Gallatin Land Exchange is a top priority for me. The
land considered in this legislation is key wildlife habitat and is
among some of the most beautiful anywhere. When completed, this
exchange will result in improved habitat and will improve recreation
opportunities in the region. But, as with many land exchanges this will
not be a simple process.
The company involved, Big Sky Lumber has been pursuing this matter
for nearly 4 years. The Forest Service has collected public comment and
has worked to see that concerns of all parties affected, the recreation
interests, conservation groups, homeowners, and the business owners are
all addressed. I have been working with these groups drafting
legislation with the help of the Forest Service.
I was surprised that Senator Burns introduced a draft bill today
without notice. Contrary to an agreement among the State's
congressional delegation that no bill be introduced until we reached
agreement among ourselves and with other interested groups. The bill I
am introducing today is an updated version of the earlier draft I gave
to Senator Burns for his review. I look forward to working with Senator
Burns and all interested parties to get this process back on track so
that we can pass a fair and balanced bill soon after we convene the
next session of Congress.
Over the next 2 months, my staff and I will be meeting with people
about this exchange. My goal is to prepare a consensus bill that can be
introduced by the entire Montana delegation when Congress convenes come
January. Soon after the introduction of that consensus bill, I will
hold public hearings in the state to hear what people think about our
efforts. I am hopeful that in the future the entire Montana delegation
will work together to protect the Taylor Fork and other important
Montana lands in the Gallatin.
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. 1562

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 ``Gallatin Land Consolidation
Act of 1998''.

SEC. 2. FINDINGS.

Congress finds that--
(1) the land north of Yellowstone National Park possesses
outstanding natural characteristics and wildlife habitats
that would make the land a highly valuable addition to the
National Forest System;
(2) it is in the interest of the United States for the
Secretary of Agriculture to enter into an Option Agreement
for the acquisition of land owned by Big Sky Lumber Co.; and
(3) it is in the interest of the United States to--
(A) establish a logical and effective ownership pattern for
the Gallatin National Forest, substantially reducing long-
term costs for taxpayers; and
(B) consolidate the Gallatin National Forest in a manner
that will enable the public to have access to and enjoy the
many recreational uses of the land.

SEC. 3. DEFINITIONS.

In this Act:
(1) BSL.--The term ``BSL'' means Big Sky Lumber Co., an
Oregon joint venture, and its successors and assigns, and any
other entities having a property interest in the BSL land.
(2) BSL land.--The term ``BSL land'' means the up to
approximately 55,000 acres of land owned by BSL that is to be
acquired by the Secretary of Agriculture, as depicted in
Exhibit A to the Option Agreement.
(3) Exchange agreement.--The term ``Exchange Agreement''
means the agreement entered into between BSL and the
Secretary of Agriculture under section 4(e).
(4) Option agreement.--The term ``Option Agreement'' means
the agreement dated ____ and entitled ``Option Agreement for
the Acquisition of Big Sky Lumber Co. Lands Pursuant to the
Gallatin Range Consolidation and Protection Act of 1993'' and
the exhibits and maps attached to the agreement.

SEC. 4. GALLATIN LAND CONSOLIDATION COMPLETION.

(a) In General.--If BSL offers fee title to the BSL land,
including mineral interests, that is acceptable to the United
States--
(1) the Secretary of Agriculture shall accept a warranty
deed to the BSL land;
(2) the Secretary of Agriculture shall convey to BSL,
subject to valid existing rights and to such other terms,
conditions, reservations, and exceptions as may be agreed on
by the Secretary of Agriculture and BSL, fee title to up to
approximately 25,000 acres of National Forest System land and
appurtenances thereto as depicted in Exhibit B to the Option
Agreement;
(3) the Secretary of Agriculture shall grant to BSL timber
harvest rights to up to approximately 50,000,000 board feet
of timber in accordance with subsection (c) and as described
in Exhibit C to the Option Agreement;

[[Page S12608]]

(4) subject to availability of funds, the Secretary of
Agriculture shall purchase land belonging to BSL in the
Taylor Fork area, as depicted in Exhibit D, at a purchase
price of not more than $6,500,000; and
(5) the Secretary of the Interior shall convey to BSL, by
patent or otherwise, subject to valid existing rights and to
such other terms, conditions, reservations, and exceptions as
may be agreed to by the Secretary of the Interior and BSL,
fee title to approximately 1,860 acres of Bureau of Land
Management land, as depicted in Exhibit B to the Option
Agreement.
(b) Valuation.--The property and other assets exchanged by
BSL and the United States under subsection (a) shall be
approximately equal in value, as determined by the Secretary
of Agriculture.
(c) Timber Harvest Rights.--
(1) In general.--The Secretary of Agriculture shall
prepare, grant to BSL, and administer the timber harvest
rights identified in Exhibit C to the Option Agreement, over
a period of 5 consecutive years after the date of enactment
of this Act.
(2) Entire timber sale program of the gallatin national
forest.--Timber harvest volume shall constitute the timber
sale program for the Gallatin National Forest for that 5-year
period.
(3) Substitution.--If exceptional circumstances, such as
natural catastrophe, changes in law or policy, or
extraordinary environmental or financial circumstances
prevent the Secretary of Agriculture from conveying the
timber harvest rights identified in Exhibit C to the Option
Agreement, the Secretary of Agriculture shall replace the
value of the diminished harvest rights by--
(A) substituting equivalent timber harvest rights volume
from the same market area;
(B) conveying national forest lands containing merchantable
timber within the Gallatin National Forest; or
(C) making a payment from funds made available to the
Secretary of Agriculture out of the Land and Water
Conservation Fund.
(4) Procedures.--
(A) In general.--The following procedures shall apply to
all national forest timber harvest rights identified for
exchange under subsection (a):
(i) Identification of timber.--The Secretary of Agriculture
shall designate Federal timber, as depicted in Exhibit C to
the Option Agreement, for exchange to BSL.
(ii) Harvest schedule.--The Secretary of Agriculture and
BSL shall mutually develop and agree upon schedules for all
national forest timber to be conveyed to BSL in the exchange.
(iii) Open market.--All timber harvest rights granted to
BSL in the exchange shall be offered for sale by BSL through
the competitive bid process.
(iv) Small business.--All timber harvest rights granted to
BSL in the exchange shall be subject to compliance by BSL
with Forest Service small business program procedures in
effect as of the date of enactment of this Act, including
contractual provisions for payment schedules, harvest
schedules, and bonds.
(v) Compliance with option and exchange agreements.--All
timber harvest rights granted to BSL in the exchange and all
timber harvested under the exchange shall comply with the
terms of the Option Agreement and the Exchange Agreement.
(B) Binding effect.--The procedures under subparagraph (A)
shall be binding on BSL and its assigns, contractors, and
successors in interest.
(d) Exchange Agreement.--
(1) In general.--The Secretary of Agriculture shall offer
to enter into an Exchange Agreement with BSL that--
(A) describes the non-Federal and Federal land and
interests in lands to be exchanged;
(B) identifies the terms, conditions, reservations,
exceptions, and rights-of-way conveyances; and
(C) describes the terms for the harvest rights of timber
granted under subsection (a)(3).
(2) Consistency.--The Exchange Agreement shall be
consistent with this Act and the Option Agreement.
(3) Submission to congress.--
(A) In general.--On completion of the Exchange Agreement,
the Secretary of Agriculture shall submit the Exchange
Agreement to the Committee on Energy and Natural Resources of
the Senate, the Committee on Resources of the House of
Representatives, and each member of the Montana congressional
delegation; and
(B) Delayed effectiveness.--The Exchange Agreement shall
not take effect until 30 days after the date on which the
Exchange Agreement is submitted in accordance with
subparagraph (A).
(e) Rights-of-Way.--As part of the exchange under
subsection (a)--
(1) the Secretary of Agriculture, under the authority of
the Federal Land Policy and Management Act of 1976 (43 U.S.C.
1701 et seq.), shall convey to BSL such easements in or other
rights-of-way over National Forest System land as may be
agreed to by the Secretary of Agriculture and BSL in the
Exchange Agreement; and
(2) BSL shall convey to the United States such easements in
or rights-of-way over land owned by BSL as may be agreed to
by the Secretary of Agriculture and BSL in the Exchange
Agreement.
(f) Quality of Title.--
(1) Determination.--The Secretary of Agriculture shall
review the title for the BSL land described in subsection (a)
and, within 60 days after receipt of all applicable title
documents from BSL, determine whether--
(A) the applicable title standards for Federal land
acquisition have been satisfied or the quality of the title
is otherwise acceptable to the Secretary of Agriculture;
(B) all draft conveyances and closing documents have been
received and approved;
(C) a current title commitment verifying compliance with
applicable title standards has been issued to the Secretary
of Agriculture; and
(D) except as provided in section 8(b) (i)-(iii) of the
Gallatin Range Consolidation and Protection Act of 1993 (107
Stat. 992), the title includes both the surface and
subsurface estates without reservation or exception (except
by the United States or the State of Montana, by patent)
including--
(i) minerals, mineral rights, and mineral interests;
(ii) timber, timber rights, and timber interests;
(iii) water, water rights, and ditch conveyances; and
(iv) any other interest in the property.
(2) Conveyance of title.--If the quality of title does not
meet Federal standards or is otherwise determined to be
unacceptable to the Secretary of Agriculture, the Secretary
of Agriculture shall advise BSL regarding corrective actions
necessary to make an affirmative determination under
subparagraph (1).
(g) Timing of Implementation.--
(1) Exchange agreement.--The Exchange Agreement shall be
completed and executed not later than 60 days after the date
of enactment of this Act.
(2) Land-for-land exchange.--The Secretary of Agriculture
shall accept the conveyance of land described in subsection
(a) not later than 60 days after the Secretary of Agriculture
has entered into the Exchange Agreement and made an
affirmative determination of quality of title.
(3) Land-for-timber exchange.--The Secretary of Agriculture
shall make the timber harvest rights described in subsection
(a)(3) available over 5 consecutive years following the date
of enactment of this Act. Specific procedures for execution
of the harvest rights shall be specified in the Exchange
Agreement.
(4) Purchase.--The Secretary of Agriculture shall complete
the purchase of BSL land under subsection (a)(4) not later
than 60 days after the date on which appropriated funds are
made available and an affirmative determination of quality of
title is made with respect to the BSL land.

SEC. 5. GENERAL PROVISIONS.

(a) Minor Corrections.--
(1) In general.--The Option Agreement and the Exchange
Agreement shall be subject to such minor corrections as may
be agreed to by the Secretary of Agriculture and BSL.
(2) Notification.--The Secretary of Agriculture shall
notify the Committee on Energy and Natural Resources of the
Senate, the Committee on Resources of the House of
Representatives, and each member of the Montana congressional
delegation of any changes made pursuant to this subsection.
(b) Public Availability.--The Option Agreement and Exchange
Agreement shall be filed with the county clerks for Gallatin
County, Park County, Madison County, and Granite County,
Montana, and shall be on file and available for public
inspection in the appropriate offices of the Forest Service.
(c) Status of Land.--All land conveyed to the United States
under this Act shall be added to and administered as part of
the Gallatin National Forest and Deerlodge National Forest,
as appropriate, in accordance with the Act of March 1, 1911
(commonly known as the ``Weeks Act'') (36 Stat. 961, chapter
186), and other laws (including regulations) pertaining to
the National Forest System.
(d) Implementation.--The Secretary of Agriculture shall
ensure that sufficient funds are made available to the
Gallatin National Forest to carry out this Act.
______

By Mr. SMITH of Oregon (for himself, Mr. Craig, Mr. Gorton, Mr.
Roberts and Mr. Grams):
S. 1563. A bill to amend the Immigration and Nationality Act to
establish a 24-month pilot program permitting certain aliens to be
admitted into the United States to provide temporary or seasonal
agricultural services pursuant to a labor condition attestation; to the
Committee on the Judiciary.

THE TEMPORARY AGRICULTURAL WORKER ACT OF 1997

Mr. SMITH of Oregon. Mr. President, I rise today to introduce the
Temporary Agricultural Worker Act of 1997. I am joined by Senators
Craig, Gorton, and Roberts. Our bill would create a streamlined guest
worker pilot program which would allow for a reliable supply of legal,
temporary, agricultural immigrant workers.
Mr. President, we are facing a crisis in agriculture--a crisis born
of an inadequate labor supply, bureaucratic red tape, and burdensome
regulations. For many years, farmers and nurserymen

[[Page S12609]]

have struggled to hire enough legal agricultural labor to harvest their
produce and plants. This issue is not new to Congress. In the past,
Congress has introduced legislation to address this urgency, but no
workable solution has been implemented. The agriculture industry cannot
survive without a reliable and legal supply of agricultural workers.
The labor pool is tight and shortages are developing because of the
limited domestic workers willing to work in agricultural fields.
The United States has historically been faced with a need to
supplement the domestic work force, especially during peak harvesting
periods. Since domestic workers prefer the security of full-time
employment in year-round agriculture-related jobs, the shorter term
seasonal jobs are often left unfilled by domestic workers. These
domestic workers also prefer the working conditions involved in packing
and processing jobs, which are generally performed indoors and do not
involve the degree of strenuous physical labor associated with field
work.
Labor intensive agriculture is one of the most rapidly growing areas
of agricultural production in this country. Its growth not only creates
many production and harvest jobs, but also creates many more jobs
outside of agriculture. Approximately three off-farm jobs are directly
dependent upon each on-farm job.
Currently, the H-2A program is the only legal temporary foreign
agricultural worker program in the United States. This program is not
practicable for the agriculture and horticulture industry because it is
loaded with burdensome regulations, excessive paperwork, a bureaucratic
certification process, untimely and inconsistent decision-making by the
U.S. Department of Labor, and costly housing requirements. The H-2A
program has also been very small in relation to the total number of
U.S. farm workers. It is estimated that out of the 2.5 million farm
workers in the United States, only 23,496 H-2A job certifications have
been issued by the Department of Labor this year. In my State of
Oregon, only 12 sheepshearers and 62 sheepherders are currently using
the H-2A program.
It is time we address the shortfalls of current policy, and I believe
that our bill is a meaningful step in that direction.
Mr. President, the bill we are introducing today would not replace or
interfere with the current H-2A program, but would supplement the H-2A
program with a two-year pilot program that examines an alternative
approach to recruiting agricultural workers. The pilot program will be
limited to 25,000 participants per fiscal year and would protect the
domestic workers' rights and living standards.
Mr. President, let me briefly summarize the provisions of our bill.
The bill would establish a procedure by which an agricultural
employer anticipating a shortage of temporary or seasonal agricultural
workers may file a labor condition statement, or attestation, with the
state employment security agency. The attestation would provide
specified terms and conditions of employment in the occupation in which
a shortage is anticipated. Employers would also be required to file a
job order with the local job service and give preference to all
qualified U.S. domestic workers.
The Department of Labor would enforce compliance with the labor
condition requirements of the program and could impose back pay, civil
monetary penalties, and debarment from the program for violators.
The alien guest workers are issued an identification card, which is
counterfeit- and tamper-resistant, with biometric identifiers to assure
program integrity.
A portion of the alien guest workers' earnings would be paid into an
interest-bearing trust fund that would be rebated to the workers upon
evidence of timely return to their home country. This would ensure that
the aliens return to their countries of origin after the temporary job
is completed. The alien guest workers could also be debarred from
future participation in the program for violating the conditions of
their admission.
Our bill is endorsed by over 50 agriculture-related associations
including the National Council of Agricultural Employers, American Farm
Bureau, and the American Association of Nurserymen.
I urge my fellow colleagues to join Senators Craig, Gorton, Roberts,
and me as we introduce this important legislation today.
Mr. President, I ask unanimous consent that this legislation be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
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 ``Temporary Agricultural
Worker Act of 1997''.

SEC. 2. NEW NONIMMIGRANT CATEGORY FOR PILOT PROGRAM TEMPORARY
AND SEASONAL AGRICULTURAL WORKERS.

(a) Establishment of New Classification.--Section
101(a)(15)(H)(ii) of the Immigration and Nationality Act (8
U.S.C. 1101(a)(15)(H)(ii)) is amended--
(1) by striking ``or (b)'' and inserting ``(b)''; and
(2) by adding at the end the following:

``or (c) having a residence in a foreign country which he has
no intention of abandoning who is coming temporarily to the
United States pursuant to section 218A to perform such
agricultural labor or services of a temporary or seasonal
nature;''.
(b) No Family Members Permitted.--Section 101(a)(15)(H) of
the Immigration and Nationality Act (8 U.S.C. 1101(a)(15)(H))
is amended by striking ``specified in this paragraph'' and
inserting ``specified in this subparagraph (other than in
clause (ii)(c))''.

SEC. 3. PILOT PROGRAM FOR ALTERNATIVE AGRICULTURAL TEMPORARY
WORKER PROCESS USING ATTESTATION.

(a) In General.--The Immigration and Nationality Act is
amended by inserting after section 218 the following:

``alternative agricultural temporary worker program

``Sec. 218A. (a) Condition for Employment of Pilot Program
Aliens.--
``(1) Establishment of pilot program; restriction of
admissions to pilot program period.--
``(A) In general.--The Attorney General shall establish a
pilot program for the admission of aliens classified as a
nonimmigrant under section 101(a)(15)(H)(ii)(c) to perform
temporary or seasonal agricultural services pursuant to a
labor condition attestation filed by an employer or an
association for the occupation in which the alien will be
employed. No alien may be admitted or provided status as a
pilot program alien under this section after the last day of
the pilot program period specified in subparagraph (B).
``(B) Pilot program period.--The pilot program period under
this subparagraph is the 24-month period beginning 6 months
after the date of the enactment of the Temporary Agricultural
Worker Act of 1997.
``(2) Admission of aliens.--No alien may be admitted to the
United States or provided status as a pilot program alien (as
defined in subsection (n)(4)) unless--
``(A) the employment of the alien is covered by a currently
valid labor condition attestation which--
``(i) is filed by the employer, or by an association on
behalf of the employer, for the occupation in which the alien
will be employed;
``(ii) has been accepted by the State employment security
agency having jurisdiction over the area of intended
employment; and
``(iii) states each of the items described in paragraph (2)
and includes information identifying the employer or
association and agricultural job opportunities involved;
``(B) the employer is not disqualified from employing pilot
program aliens pursuant to subsection (h); and
``(C) the employer has not, during the pilot program
period, been found by the Attorney General to have employed
any aliens in violation of section 274A(a) or this
section.
``(3) Contents of labor condition attestation.--Each labor
condition attestation filed by or on behalf of, an employer
shall state the following:
``(A) Wage rate.--The employer will pay pilot program
aliens and all other workers in the occupation not less than
the prevailing wage for similarly employed workers in the
area of employment, and not less than the applicable Federal,
State or local statutory minimum wage.
``(B) Working conditions.--The employment of pilot program
aliens will not adversely affect the working conditions of
similarly employed workers in the area of employment.
``(C) Limitation on employment.--A pilot program alien will
not be employed in any job opportunity which is not temporary
or seasonal, and will not be employed by the employer in any
job opportunity for more than 10 months in any 12-
consecutive-month period.
``(D) No labor dispute.--No pilot program alien will be
employed in any job opportunity which is vacant because its
former occupant is involved in a strike, lockout or work
stoppage in the course of a labor dispute in the occupation
at the place of employment.

[[Page S12610]]

``(E) Notice.--The employer, at the time of filing the
attestation, has provided notice of the attestation to its
workers employed in the occupation in which, and at the place
of employment where, pilot program aliens will be employed.
``(F) Job orders.--The employer will file one or more job
orders for the occupation (or occupations) covered by the
attestation with the State employment security agency no
later than the day on which the employer first employs any
pilot program aliens in the occupation.
``(G) Preference to domestic workers.--The employer will
give preference to able, willing and qualified United States
workers who apply to the employer and are available at the
time and place needed, for the first 25 days after the filing
of the job order in an occupation or until 5 days before the
date employment of workers in the occupation begins,
whichever occurs later.
``(4) Limitation on number of visas.--In no case may the
number of aliens who are admitted or provided status as a
pilot program alien in a fiscal year exceed 25,000.
``(5) Operation of program in not less than 5 areas.--Alien
admissions under this section shall be allocated equally to
employers in not less than 5 geographically and
agriculturally diverse areas designated by the Secretary of
Agriculture. The entire United States shall be encompassed
within such areas.
``(6) General accounting office report.--
``(A) In general.--The Comptroller General of the United
States shall, concurrently with the operation of the pilot
program established by this section, review the
implementation and enforcement of the pilot program for the
purpose of determining if--
``(i) the program has ensured an adequate and timely supply
of qualified, eligible workers at the time and place needed
for employers;
``(ii) the program has ensured that pilot program aliens
are employed only in authorized employment and that they
timely depart the United States when their authorized stay
ends;
``(iii) the program has ensured that implementation of the
program is not displacing United States agricultural workers
or diminishing the terms and conditions of employment of
United States agricultural workers; and
``(iv) an unnecessary regulatory burden has been created
for employers hiring workers admitted under this section.
``(B) Report.--Not later than 90 days after the termination
of the pilot program established by this section, the
Comptroller General of the United States shall submit a
report to Congress setting forth the conclusions of the
Comptroller General from the review conducted under
subparagraph (A).
``(b) Filing a Labor Condition Attestation.--
``(1) Filing by employers--Any employer in the United
States is eligible to file a labor condition attestation.
``(2) Filing by associations on behalf of employer
members.--An agricultural association may file a labor
condition attestation as an agent on behalf of its members.
Such an attestation filed by an agricultural association
acting as an agent for its members, when accepted, shall
apply to those employer members of the association that the
association certifies to the State employment security agency
are members of the association and have agreed in writing to
comply with the requirements of this section.
``(3) Period of validity.--A labor condition attestation is
valid from the date on which it is accepted by the State
employment security agency for the period of time requested
by the employer, but not to exceed 12 months.
``(4) Where to file.--A labor condition attestation shall
be filed with the State employment security agency having
jurisdiction over the area of intended employment of the
workers covered by the attestation. If an employer, or the
members of an association of employers, will be employing
workers in an area or areas covered by more than one such
agency, the attestation shall be filed with each such agency
having jurisdiction over an area where the workers will be
employed.
``(5) Deadline for filing.--A labor condition attestation
may be filed at any time up to 12 months prior to the date of
the employer's anticipated need for workers in the occupation
(or occupations) covered by the attestation.
``(6) Filing for multiple occupations.--A labor condition
attestation may be filed for one or more occupations and
cover one or more periods of employment.
``(7) Maintaining required documentation.--
``(A) By employers.--Each employer covered by an accepted
labor condition attestation must maintain a file of the
documentation required in subsection (c) for each occupation
included in an accepted attestation covering the employer.
The documentation shall be retained for a period of one year
following the expiration of an accepted attestation. The
employer shall make the documentation available to
representatives of the Secretary during normal business
hours.
``(B) By associations.--In complying with subparagraph (A),
documentation maintained by an association filing a labor
condition attestation on behalf of an employer shall be
deemed to be maintained by the employer.
``(8) Withdrawal.--
``(A) Compliance with attestation obligations.--An employer
covered by an accepted labor condition attestation for an
occupation shall comply with the terms and conditions of the
attestation from the date the attestation is accepted and
continuing throughout the period any persons are employed in
an occupation covered by such an accepted attestation,
whether or not pilot program aliens are employed in the
occupation, unless the attestation is withdrawn.
``(B) Termination of obligations.--An employer may withdraw
a labor condition attestation in total, or with respect to a
particular occupation covered by the attestation. An
association may withdraw such an attestation with respect to
one or more of its members. To withdraw an attestation the
employer or association must notify in writing the State
employment security agency office with which the attestation
was filed of the withdrawal of the attestation. An employer
who withdraws an attestation, or on whose behalf an
attestation is withdrawn by an association, is relieved of
the obligations undertaken in the attestation with respect to
the occupation (or occupations) with respect to which the
attestation was withdrawn, upon acknowledgement by the
appropriate State employment security agency of receipt of
the withdrawal notice. An attestation may not be withdrawn
with respect to any occupation while any pilot program alien
covered by that attestation is employed in the occupation.
``(C) Obligations under other statutes.--Any obligation
incurred by the employer under any other law or regulation as
a result of recruitment of United States workers under an
offer of terms and conditions of employment required by the
pilot program under this section is unaffected by withdrawal
of a labor condition attestation.
``(c) Employer Responsibilities and Requirements for
Employing Pilot Program Aliens.--
``(1) Requirement to pay the prevailing wage.--
``(A) Effect of the attestation.--Employers shall pay each
worker in an occupation covered by an accepted labor
condition attestation at least the prevailing wage in the
occupation in the area of intended employment. The preceding
sentence does not require employers to pay all workers in the
occupation the same wage. The employer may, in the sole
discretion of the employer, maintain pay differentials based
on experience, tenure with the employer, skill, or any other
work-related factor, if the differential is not based on a
criterion for which discrimination is prohibited by the law
and all workers in the covered occupation receive at least
the prevailing wage.
``(B) Payment of state employment security agency
determined wage sufficient.--The employer may request and
obtain a prevailing wage determination from the State
employment security agency. If the employer requests such a
determination, and pays the wage determined, such payment
shall be considered sufficient to meet the requirement of
this paragraph if the pilot program aliens--
``(i) are employed in the occupation for which the employer
possesses an accepted labor condition attestation, and for
which the employer or association possesses a prevailing wage
determination by the State employment security agency, and
``(ii) are being paid at least the prevailing wage so
determined.
``(C) Reliance on wage survey.--In lieu of the procedures
of subparagraph (B), an employer may rely on other
information, such as an employer generated prevailing wage
survey and determination, which meets criteria specified
by the Secretary by regulation. In the event of a
complaint that the employer has failed to pay the required
wage, the Secretary shall investigate to determine if the
information upon which the employer relied complied with
the criteria for prevailing wage determinations.
``(D) Alternate methods of payment permitted.--
``(i) In general.--A prevailing wage may be expressed as an
hourly wage, a piece rate, a task rate (described in clause
(ii)), or other incentive pay system, including a group rate
(described in clause (iii)). The requirement to pay at least
the prevailing wage in the occupation and area of intended
employment does not require an employer to pay by the method
of pay in which the prevailing rate is expressed. However, if
the employer adopts a method of pay other than the prevailing
rate, the burden of proof is on the employer to demonstrate
that the employer's method of pay is designed to produce
earnings equivalent to the earnings that would result from
payment of the prevailing rate.
``(ii) Task rate.--For purposes of this subparagraph, a
task rate is an incentive payment based on a unit of work
performed such that the incentive rate varies with the level
of effort required to perform individual units of work.
``(iii) Group rate.--For purposes of this subparagraph, a
group rate is an incentive payment system in which the
payment is shared among a group of workers working together
to perform the task.
``(E) Required documentation.--The employer or association
shall document compliance with this paragraph by retaining on
file the employer or association's request for a
determination by a State employment security agency and the
prevailing wage determination received from such agency or
other

[[Page S12611]]

information upon which the employer or association relied to
assure compliance with the prevailing wage requirement.
``(2) Requirement to provide housing and transportation.--
``(A) Effect of the attestation.--The employment of pilot
program aliens shall not adversely affect the working
conditions of United States workers similarly employed in the
area of intended employment. The employer's obligation not to
adversely affect working conditions shall continue for the
duration of the period of employment by the employer of any
pilot program aliens in the occupation and area of intended
employment. An employer will be deemed to be in compliance
with this attestation if the employer offers at least the
benefits required by subparagraphs (B) through (D). The
previous sentence does not require an employer to offer more
than such benefits.
``(B) Housing required.--
``(i) Housing offer.--The employer must offer to pilot
program aliens and United States workers recruited from
beyond normal recruiting distance housing, or a housing
allowance, if it is prevailing practice in the occupation and
area of intended employment to offer housing or a housing
allowance to workers who are recruited from beyond normal
commuting distance.
``(ii) Housing standards.--If the employer offers housing
to such workers, the housing shall meet (at the option of the
employer) applicable Federal farm labor housing standards or
applicable local or State standards for rental, public
accommodation, or other substantially similar class of
habitation.
``(iii) Charges for housing.--An employer who offers
housing to such workers may charge an amount equal to the
fair market value (but not greater than the employer's actual
cost) for utilities and maintenance, or such lesser amount as
permitted by law.
``(iv) Housing allowance as alternative.--In lieu of
offering housing to such workers, at the employer's sole
discretion on an individual basis, the employer may provide a
reasonable housing allowance. An employer who offers a
housing allowance to such a worker under this subparagraph
shall not be deemed to be a housing provider under section
203 of the Migrant and Seasonal Agricultural Worker
Protection Act (29 U.S.C. 1823) merely by virtue of providing
such housing allowance.
``(v) Security deposit.--The requirement, if any, to offer
housing to such a worker under this subparagraph shall not
preclude an employer from requiring a reasonable deposit to
protect against gross negligence or willful destruction of
property, as a condition for providing such housing.
``(vi) Damages.--An employer who offers housing to such a
worker shall not be precluded from requiring a worker found
to have been responsible for damage to such housing which is
not the result of normal wear and tear related to habitation
to reimburse the employer for the reasonable cost of repair
of such damage.
``(C) Transportation.--If the employer provides
transportation arrangements or assistance to pilot program
aliens, the employer must offer to provide the same
transportation arrangements or assistance (generally
comparable in expense and scope) for other individuals
employed by the employer in the occupation at the place of
employment who were recruited from beyond normal commuting
distance.
``(D) Workers' compensation.--If the employment covered by
a labor condition attestation is not covered by the State
workers' compensation law, the employer must provide, at no
cost to the worker, insurance covering injury and disease
arising out of and in the course of the workers' employment
which will provide benefits at least equal to those provided
under the State workers' compensation law for comparable
employment.
``(E) Required documentation.--
``(i) Housing and transportation.--No specific
documentation is required to be maintained to evidence
compliance with the requirements of subparagraphs (B) and
(C). In the event of a complaint alleging a failure to comply
with such a requirement, the burden of proof shall be on the
employer to show that the employer offered the required
benefit to the complainant, or that the employer was not
required by the terms of this paragraph to offer such benefit
to the complainant.
``(ii) Workers' compensation.--The employer shall maintain
copies of certificates of insurance evidencing compliance
with subparagraph (D) throughout the period of validity of
the labor condition attestation.
``(3) Requirement to employ aliens in temporary or seasonal
agricultural job opportunities.--
``(A) Limitations.--
``(i) In general.--The employer may employ pilot program
aliens only in agricultural employment which is temporary or
seasonal.
``(ii) Seasonal basis.--For purposes of this section, labor
is performed on a seasonal basis where, ordinarily, the
employment pertains to or is of the kind exclusively
performed at certain seasons or periods of the year and
which, from its nature, may not be continuous or carried on
throughout the year.
``(iii) Temporary basis.--For purposes of this section, a
worker is employed on a temporary basis where the employment
is intended not to exceed 10 months.
``(B) Required documentation.--No specific documentation is
required to demonstrate compliance with the requirement of
subparagraph (A). In the event of a complaint, the burden of
proof shall fall on the employer to show that the employment
meets such requirement.
``(4) Requirement not to employ aliens in job opportunities
vacant because of a labor dispute.--
``(A) In general.--No pilot program alien may be employed
in any job opportunity which is vacant because its former
occupant is involved in a strike, lockout, or work stoppage
in the course of a labor dispute in the occupation at the
place of employment.
``(B) Required documentation.--No specific documentation is
required to demonstrate compliance with the requirement of
subparagraph (A). In the event of a complaint, the burden of
proof shall fall on the employer to show that the job
opportunity in which the pilot program alien was employed was
not vacant because the former occupant was on strike, locked
out, or participating in a work stoppage in the course of a
labor dispute in the occupation at the place of employment.
``(5) Notice of filing of labor condition attestation and
supporting documentation.--
``(A) In general.--The employer shall--
``(i) provide notice of the filing of a labor condition
attestation to the appropriate certified bargaining agent (if
any) which represents workers of the employer in the
occupation (or occupations) at the place of employment
covered by the attestation; or
``(ii) in the case where no such bargaining agent exists,
post notice of the filing of such an attestation in at least
two conspicuous locations where applications for employment
are accepted.
``(B) Period for posting.--The requirement for a posting
under subparagraph (A)(ii) begins on the day the attestation
is filed, and continues through the period during which the
employer's job order is required to remain active pursuant to
paragraph (6)(A).
``(C) Required documentation.--The employer shall maintain
a copy of the notice provided to the bargaining agent (if
any), together with evidence that the notice was provided
(such as a signed receipt of evidence of attempt to send the
notice by certified or registered mail). In the case where no
certified bargaining agent described in subparagraph (A)(i)
exists, the employer shall retain a copy of the posted
notice, together with information as to the dates and
locations where the notice was displayed.
``(6) Requirement to file a job order.--
``(A) Effect of the attestation.--The employer, or an
association acting as agent for its members, shall file the
information necessary to complete a local job order for each
occupation covered by an accepted labor condition attestation
with the appropriate local office of the State employment
security agency having jurisdiction over the area of intended
employment, or with the State office of such an agency if
workers will be employed in an area within the jurisdiction
of more than one local office of such an agency. The job
orders shall remain on file for 25 calendar days or until 5
calendar days before the anticipated date of need for workers
in the occupation covered by the job order, whichever occurs
later. The job order shall provide at least the minimum terms
and conditions of employment required for participation in
the pilot program.
``(B) Deadline for filing.--A job order shall be filed
under subparagraph (A) no later than the date on which the
employer files a petition with the Attorney General for
admission or extension of stay for aliens to be employed in
the occupation for which the order is filed.
``(C) Required documentation.--The office of the State
employment security agency which the employer or association
provides with information necessary to file a local job order
shall provide the employer with evidence that the information
was provided in a timely manner as required by this
paragraph, and the employer or association shall retain such
evidence for each occupation in which pilot program aliens
are employed.
``(7) Requirement to give preference to qualified united
states workers.--
``(A) Filing 30 days or more before date of need.--If a job
order is filed 30 days or more before the anticipated date of
need for workers in an occupation covered by a labor
condition attestation and for which the job order has been
filed, the employer shall offer to employ able, willing, and
qualified United States workers who apply to the employer and
who will be available at the time and place needed for the
job opportunities covered by the attestation until 5 calendar
days before the anticipated date of need for workers in the
occupation, or until the employer's job opportunities in the
occupation are filled with qualified United States workers,
if that occurs more than 5 days before the anticipated date
of need for workers in the occupation.
``(B) Filing fewer than 30 days before date of need.--If a
job order is filed fewer than 30 days before the anticipated
date of need for workers in an occupation covered by such an
attestation and for which a job order has been filed, the
employer shall offer to employ able, willing, and qualified
United States workers who are or will be available at the
time and place needed during the first 25 days after the job
order is filed or until the employer's job opportunities in
the occupation are filled with United States workers,

[[Page S12612]]

regardless of whether any of the job opportunities may
already be occupied by pilot program aliens.
``(C) Filing vacancies.--An employer may fill a job
opportunity in an occupation covered by an accepted labor
condition attestation which remains or becomes vacant after
expiration of the required preference period specified in
subparagraph (A) or (B) of paragraph (6) without regard to
such preference.
``(D) Job-related requirements.--No employer shall be
required to initially employ a worker who fails to meet
lawful job-related employment criteria, nor to continue the
employment of a worker who fails to meet lawful job-related
standards of conduct and performance, including failure to
meet minimum productivity standards after a 3-day break-in
period.
``(E) Required documentation.--No specific documentation is
required to demonstrate compliance with the requirements of
this paragraph. In the event of a complaint, the burden of
proof shall be on the complainant to show that the
complainant applied for the job and was available at the time
and place needed. If the complainant makes such a showing,
the burden of proof shall be on the employer to show that the
complainant was not qualified or that the preference period
had expired.
``(d) Requirements of Notice of Certain Breaks in
Employment.--
``(1) In general.--The employer (or the association acting
as agent for the employer) shall notify the Attorney General
within 7 days if a pilot program alien prematurely abandons
the alien's employment.
``(2) Out-of-status.--A pilot program alien who abandons
the alien's employment shall be considered to have failed to
maintain nonimmigrant status as an alien described in section
101(a)(15)(H)(ii)(c) and shall leave the United States or be
subject to removal under section 237(a)(1)(C)(i).
``(e) Acceptance by State Employment Security Agency.--The
State employment security agency shall review labor condition
attestations submitted by employers or associations pursuant
to this section only for completeness and obvious
inaccuracies. Unless such an agency finds that the
application is incomplete or obviously inaccurate, the agency
shall accept the attestation within 7 days of the date of
filing of the attestation, and return a copy to the applicant
marked `accepted'.
``(f) Public Registry.--The Secretary shall maintain a
registry of all accepted labor condition attestations and
make such registry available for public inspection.
``(g) Responsibilities of the State Employment Security
Agencies.--
``(1) Dissemination of labor market information.--The
Secretary shall direct State employment security agencies to
disseminate non-employer-specific information about potential
labor needs based on accepted attestations filed by
employers. Such dissemination shall be separate from the
clearance of job orders through the Interstate and Intrastate
Clearance Systems, and shall create no obligations for
employers except as provided in this section.
``(2) Referral of workers on state employment security
agency job orders.--
``(A) In general.--Such agencies holding job orders filed
by employers covered by approved labor condition attestations
shall be authorized to refer any able, willing, and qualified
eligible job applicant who will be available at the time and
place needed and who is authorized to work in the United
States, including pilot program aliens who are seeking
additional work in the United States and whose eligibility to
remain in the United States pursuant to subsection (i) has
not expired, on job orders filed by holders of accepted
attestations.
``(B) Procedures.--A State employment agency that refers
any individuals for employment pursuant to subsection
(g)(2)(A) shall comply with the procedures specified in
subsection (b) of section 274A. For purposes of the
attestation requirement in subsection (b)(1), the agency
employee who is primarily involved in the referral of the
individual shall make the attestation on behalf of the
agency. The agency shall retain the completed forms and make
them available for inspection as required in subsection
(b)(3) of section 274A.
``(C) Employment verification.--For purposes of complying
with subsection (b) of section 274A with respect to an
individual referred by a State employment agency, a pilot
program employer may, at the employer's option, fulfill the
requirements of subsection (b) of this section in lieu of
retaining the documentation described in section 274A(a)(5).
``(h) Enforcement and Penalties.--
``(1) Enforcement authority.--
``(A) Investigation of complaints.--The Secretary shall
establish a process for the receipt, investigation, and
disposition of complaints respecting an employer's failure to
meet a condition specified in subsection (a) or an employer's
misrepresentation of material facts in such an application.
Complaints may be filed by any aggrieved person or
organizations (including bargaining representatives). No
investigation or hearing shall be conducted on a complaint
concerning such a failure or misrepresentation unless the
complaint was filed not later than 2 years after the date of
the failure or misrepresentation, respectively. The Secretary
shall conduct an investigation under this subparagraph if
there is reasonable cause to believe that such a failure or
misrepresentation has occurred.
``(B) Written notice of findings and opportunity for
appeal.--After an investigation has been conducted, the
Secretary shall issue a written determination as to whether
or not any violation described in subparagraph (A) has been
committed. The Secretary's determination shall be served on
the complainant and the employer, and shall provide an
opportunity for an appeal of the Secretary's decision to an
administrative law judge, who may conduct a de novo hearing.
``(2) Remedies.--
``(A) Back wages.--Upon a final determination that the
employer has failed to pay wages as required under this
section, the Secretary may assess payment of back wages due
to any United States worker or pilot program alien employed
by the employer in the specific employment in question. The
back wages shall be equal to the difference between the
amount that should have been paid and the amount that
actually was paid to such worker.
``(B) Failure to pay wages.--Upon a final determination
that the employer has failed to pay the wages required under
this section, the Secretary may assess a civil money penalty
up to $1,000 for each failure, and may recommend to the
Attorney General the disqualification of the employer from
the employment of pilot program aliens for a period of time
determined by the Secretary not to exceed 1 year.
``(C) Other violations.--If the Secretary, as a result of
an investigation pursuant to a complaint, determines that an
employer covered by an accepted labor condition attestation
has--
``(i) filed an attestation which misrepresents a material
fact; or
``(ii) failed to meet a condition specified in subsection
(a),

the Secretary may assess a civil money penalty not to exceed
$1,000 for each violation. In determining the amount of civil
money penalty to be assessed, the Secretary shall consider
the seriousness of the violation, the good faith of the
employer, the size of the business of the employer being
charged, the history of previous violations by the employer,
whether the employer obtained a financial gain from the
violation, whether the violation was willful, and other
relevant factors.
``(D) Program disqualification.--Upon a second final
determination that an employer has failed to pay the wages
required under this section, the Secretary shall report such
determination to the Attorney General and the Attorney
General shall disqualify the employer from any subsequent
employment of pilot program aliens.
``(3) Role of associations.--
``(A) Violation by an association.--An employer on whose
behalf a labor condition attestation is filed by an
association acting as its agent is fully responsible for such
attestation, and for complying with the terms and conditions
of this section, as though the employer had filed the
attestation itself. If such an employer is determined to have
violated a requirement of this section, the penalty for such
violation shall be assessed against the employer who
committed the violation and not against the association or
other members of the association.
``(B) Violation by an association acting as an employer.--
If an association filing a labor condition attestation on its
own behalf as an employer is determined to have committed a
violation under this subsection which results in
disqualification from the program under paragraph (2)(D), no
individual member of such association may be the beneficiary
of the services of a pilot program alien in an occupation in
which such alien was employed by the association during the
period such disqualification is in effect, unless such member
files a labor condition attestation as an individual employer
or such an attestation is filed on the employer's behalf by
an association with which the employer has an agreement that
the employer will comply with the requirements of this
section.
``(i) Procedure for Admission or Extension of Pilot Program
Aliens.--
``(1) Aliens who are outside the united states.--
``(A) Petitioning for admission.--An employer or an
association acting as agent for its members who seeks the
admission into the United States of pilot program aliens may
file a petition with the District Director of the Immigration
and Naturalization Service having jurisdiction over the
location where the aliens will be employed. The petition
shall be accompanied by an accepted and currently valid labor
condition attestation covering the petitioner. The petition
may be for named or unnamed individual or multiple
beneficiaries.
``(B) Expedited adjudication by district director.--If an
employer's petition for admission of pilot program aliens is
correctly filled out, and the employer is not ineligible to
employ pilot program aliens, the District Director (or the
Director's designee) shall approve the petition within 3
working days of receipt of the petition and accepted labor
condition attestation and immediately (by fax, cable, or
other means assuring expedited delivery) transmit a copy of
the approved petition to the petitioner and to the
appropriate immigration officer at the port of entry or
United States consulate (as the case may be) where the
petitioner has indicated that the alien beneficiary (or
beneficiaries) will apply for a visa or admission to the
United States.

[[Page S12613]]

``(C) Unnamed beneficiaries selected by petitioner.--The
petitioning employer or association or its representative
shall approve the issuance of visas to beneficiaries who are
unnamed on a petition for admission granted to the employer
or association.
``(D) Criteria for admissibility.--
``(i) In general.--An alien shall be admissible under this
section if the alien is otherwise admissible under this Act
and the alien is not debarred pursuant to the provisions of
clause (ii).
``(ii) Disqualification.--An alien shall be debarred from
admission or being provided status as a pilot program alien
under this section if the alien has, at any time during the
past 5 years--

``(I) violated a material provision of this section,
including the requirement to promptly depart the United
States when the alien's authorized period of admission under
this section has expired; or
``(II) otherwise violated a term or condition of admission
to the United States as a nonimmigrant, including overstaying
the period of authorized admission as such a nonimmigrant.

``(E) Period of admission.--The alien shall be admitted for
the period requested by the petitioner not to exceed 10
months, or the remaining validity period of the petitioner's
approved labor condition attestation, whichever is less, plus
an additional period of 14 days, during which the alien shall
seek authorized employment in the United States. During the
14-day period following the expiration of the alien's work
authorization, the alien is not authorized to be employed
unless the original petitioner or a subsequent petitioner has
filed an extension of stay on behalf of the alien pursuant to
paragraph (2).
``(F) Issuance of identification and employment eligibility
document.--
``(i) In general.--The Attorney General shall cause to be
issued to each pilot program alien a card in a form which is
resistant to counterfeiting and tampering for the purpose of
providing proof of identity and employment eligibility under
section 274A.
``(ii) Design of card.--Each card issued pursuant to clause
(i) shall be designed in such a manner and contain a
photograph and other identifying information (such as date of
birth, sex, and distinguishing marks) that would allow an
employer to determine with reasonable certainty that the
bearer is not claiming the identity of another individual,
and shall--

``(I) contain a fingerprint or other biometric identifying
data (or both);
``(II) specify the date of the alien's authorization as a
pilot program alien;
``(III) specify the expiration date of the alien's work
authorization; and

``(IV) specify the alien's admission number or alien file
number.

``(2) Extension of stay.--
``(A) Application for extension of stay.--If a petitioner
seeks to employ a pilot program alien already in the United
States, the petitioner shall file with the Attorney General
an application for an extension of the alien's stay. The
application for extension of stay shall be accompanied by a
currently valid labor condition attestation.
``(B) Limitation on filing an application for extension of
stay.--An application may not be filed for an extension of an
alien's stay for a period of more than 10 months, or later
than a date which is 2 years from the date of the alien's
last admission to the United States as a pilot program alien,
whichever occurs first. An application for extension of stay
may not be filed during the pendency of an alien's previous
authorized period of employment, nor after the alien's
authorized stay in the United States has expired.
``(C) Work authorization upon filing an application for
extension of stay.--An employer may begin employing an alien
already in the United States in pilot program alien status on
the day the employer files its application for extension of
stay. For the purpose of this requirement, the term `filing'
means sending the application by certified mail via the
United States Postal Service, return receipt requested, or
delivered by guaranteed commercial delivery which will
provide the employer with a documented acknowledgment of the
date of sending and receipt of the application. The employer
shall provide a copy of the employer's application for
extension of stay to the alien, who shall keep the
application with the alien's identification and employment
eligibility document as evidence that the extension has been
filed and that the alien is authorized to work in the United
States. Upon approval of an application for extension of
stay, the Attorney General shall provide a new or updated
employment eligibility document to the alien indicating the
new validity date, after which the alien is not required to
retain a copy of the application for extension of stay.
``(D) Limitation on employment authorization of pilot
program aliens without valid identification and employment
eligibility card.--An expired identification and employment
eligibility document, together with a copy of an application
for extension of stay, shall constitute a valid work
authorization document for a period of not more than 60 days
from the date of application for the extension of stay, after
which time only a currently valid identification and
employment eligibility document shall be acceptable.
``(3) Limitation on an individual's stay in pilot program
status.--An alien having status as a pilot program alien may
not have the status extended for a continuous period longer
than 2 years unless the alien remains outside the United
States for an uninterrupted period of 6 months. An absence
from the United States may break the continuity of the period
for which a nonimmigrant visa issued under section
101(a)(15)(H)(ii)(c) is valid. If the alien has resided in
the United States 10 months or less, an absence breaks the
continuity of the period if its lasts for at least 2 months.
If the alien has resided in the United States 10 months or
more, an absence breaks the continuity of the period if it
lasts for at least one-fifth the duration of the stay.
``(j) Trust Fund To Assure Worker Return.--
``(1) Establishment.--There is established in the Treasury
of the United States a trust fund (in this section referred
to as the `Trust Fund') for the purpose of providing a
monetary incentive for pilot program aliens to return to
their country of origin upon expiration of their visas under
this section.
``(2) Withholding of wages; payment into the trust fund.--
``(A) In general.--Employers of pilot program aliens
shall--
``(i) withhold from the wages of their pilot program alien
workers an amount equivalent to 25 percent of the wages of
each pilot program alien worker and pay such withheld amount
into the Trust Fund in accordance with paragraph (3); and
``(ii) pay to the Trust Fund an amount equivalent to the
Federal tax on the wages paid to pilot program aliens that
the employer would be obligated to pay under the Federal
Unemployment Tax Act and the Federal Insurance Contributions
Act.

Amounts withheld under clause (i) shall be maintained in such
interest bearing account with such a financial institution as
the Attorney General shall specify.
``(3) Distribution of funds.--Amounts paid into the Trust
Fund on behalf of a worker, and held pursuant to paragraph
(2)(A)(i) and interest earned thereon, shall be paid by the
Attorney General to the worker if--
``(A) the worker applies to the Attorney General (or the
designee of the Attorney General) for payment within 30 days
of the expiration of the alien's last authorized stay in the
United States as a pilot program alien;
``(B) in such application the worker establishes that the
worker has complied with the terms and conditions of this
section; and
``(C) in connection with the application, the worker
tenders the identification and employment authorization card
issued to the worker pursuant to subsection (i)(1)(F) and
establishes that the worker is identified as the person to
whom the card was issued based on the biometric
identification information contained on the card.
``(4) Administrative expenses.--The amounts paid into the
Trust Fund and held pursuant to paragraph (2)(A)(ii), and
interest earned thereon, shall be paid to the Attorney
General, the Secretary of Labor, and the Secretary of State
in amounts equivalent to the expenses incurred by such
officials in the administration of section
101(a)(15)(H)(ii)(c) and this section.
``(5) Regulations.--The Attorney General shall prescribe
regulations to carry out this subsection.
``(k) Investment of Trust Fund.--
``(1) In general.--It shall be the duty of the Secretary of
the Treasury to invest such portion of the Trust Fund as is
not, in the Secretary's judgment, required to meet current
withdrawals. Such investments may be made only in interest-
bearing obligations of the United States or in obligations
guaranteed as to both principal and interest by the United
States. For such purpose, such obligations may be acquired--
``(A) on original issue at the price; or
``(B) by purchase of outstanding obligations at the market
price.

The purposes for which obligations of the United States may
be issued under chapter 31 of title 31, United States Code,
are hereby extended to authorize the issuance at par of
special obligations exclusively to the Trust Fund. Such
special obligations shall bear interest at a rate equal to
the average rate of interest, computed as to the end of the
calendar month next preceding the date of such issue, borne
by all marketable interest-bearing obligations of the United
States then forming a part of the public debt, except that
where such average rate is not a multiple of one-eighth of 1
percent next lower than such average rate. Such special
obligations shall be issued only if the Secretary of the
Treasury determines that the purchase of other interest-
bearing obligations of the United States, or of obligations
guaranteed as to both principal and interest by the United
States on original issue or at the market price, is not in
the public interest.
``(2) Sale of obligation.--Any obligation acquired by the
Trust Fund (except special obligations issued exclusively to
the Trust Fund) may be sold by the Secretary of the Treasury
at the market price, and such special obligations may be
redeemed at par plus accrued interest.
``(3) Credits to trust fund.--The interest on, and the
proceeds from the sale or redemption of, any obligations held
in the Trust Fund shall be credited to and form a part of the
Trust Fund.
``(4) Report to congress.--It shall be the duty of the
Secretary of the Treasury to hold the Trust Fund, and (after
consultation with the Attorney General) to report to the
Congress each year on the financial condition

[[Page S12614]]

and the results of the operations of the Trust Fund during
the preceding fiscal year and on its expected condition and
operations during the next fiscal year. Such report shall be
printed as both a House and a Senate document of the session
of the Congress to which the report is made.
``(l) Miscellaneous Provisions.--
``(1) Applicability of labor laws.--Except as provided in
paragraphs (2), (3), and (4), all Federal, State, and local
labor laws (including laws affecting migrant farm workers)
applicable to United States workers shall also apply to pilot
program aliens.
``(2) Limitation of written disclosure imposed upon
recruiters.--Any disclosure required of recruiters under
section of 201(a) of the Migrant and Seasonal Agricultural
Worker Protection Act (29 U.S.C. 1821(a)) need not be given
to pilot program aliens prior to the time their visa is
issued permitting entry into the United States.
``(3) Exemption from fica and futa taxes.--The wages paid
to pilot program aliens shall be excluded from wages subject
to taxation under the Federal Unemployment Tax Act and under
the Federal Insurance Contributions Act.
``(4) Ineligibility for certain public benefits programs.--
``(A) In general.--Notwithstanding any other provision of
law and except as provided in subparagraph (B), any alien
provided status as a pilot program alien shall not be
eligible for any Federal or State or local means-tested
public benefit program.
``(B) Exceptions.--Subparagraph (A) shall not apply to the
following:
``(i) Emergency medical services.--The provision of
emergency medical services (as defined by the Attorney
General in consultation with the Secretary of Health and
Human Services).
``(ii) Public health immunizations.--Public health
assistance for immunizations with respect to immunizable
diseases and for testing and treatment for communicable
diseases.
``(iii) Short-term emergency disaster relief.--The
provision of non-cash, in-kind, short-term emergency disaster
relief.
``(m) Regulations.--
``(1) Selection of areas.--The Secretary of Agriculture
shall select the areas under subsection (a)(4) not later than
60 days after the date of the enactment of the Temporary
Agricultural Worker Act of 1997.
``(2) Regulations of the secretary.--The Secretary shall
consult with the Secretary of Agriculture, and the Attorney
General shall approve, all regulations dealing with the
approval of labor condition attestations for pilot program
aliens and enforcement of the requirements for employing
pilot program aliens under an approved attestation. The
Secretary shall promulgate, and the Attorney General shall
approve, such regulations not later than 90 days after the
date of the enactment of the Temporary Agricultural Worker
Act of 1997.
``(3) Regulations of the attorney general.--The Attorney
General shall consult with the Secretary of Agriculture on
all regulations dealing with the approval of petitions for
admission or extension of stay of pilot program aliens and
the requirements for employing pilot program aliens and the
enforcement of such requirements. The Attorney General shall
promulgate such regulations not later than 90 days after the
date of the enactment of the Temporary Agricultural Worker
Act of 1997.
``(n) Definitions.--For the purpose of this section:
``(1) Agricultural association.--The term `agricultural
association' means any nonprofit or cooperative association
of farmers, growers, or ranchers incorporated or qualified
under applicable State law, which recruits, solicits, hires,
employs, furnishes, or transports any agricultural workers.
``(2) Agricultural employment.--The term `agricultural
employment' means any service or activity included within the
provisions of section 3(f) of the Fair Labor Standards Act of
1938 (29 U.S.C. 203(f)) or section 3121(g) of the Internal
Revenue Code of 1986 and the handling, planting, drying,
packing, packaging, processing, freezing, or grading prior to
delivery for storage of any agricultural or horticultural
commodity in its unmanufactured state.
``(3) Employer.--The term `employer' means any person or
entity, including any independent contractor and any
agricultural association, that employs workers.
``(4) Pilot program alien.--The term `pilot program alien'
means an alien admitted to the United States or provided
status as a nonimmigrant under section 101(a)(15)(H)(ii)(c).
``(5) Secretary.--The term `Secretary' means the Secretary
of Labor.
``(6) United states worker.--The term `United States
worker' means any worker, whether a United States citizen, a
United States national, or an alien, who is legally permitted
to work in the job opportunity within the United States other
than an alien admitted pursuant to this section.''.
(b) Clerical Amendment.--The table of contents of the
Immigration and Nationality Act is amended by inserting after
the item relating to section 218 the following new item:

``Sec. 218A. Alternative agricultural worker program.''.

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