[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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